Industrial Relations and Economic Development

In South-east Asia today, labour issues are fundamental to all political ideologies. Political leaders of the right and left have used labour issues in their political speeches. Furthermore, the solution of the economic problem of labour, particularly of rural labour, has become the avowed aim of all their programmes; labour welfare measures have become the platforms of Asian pressure groups of every political shade.

In recent years, in many under-developed countries, the state has assumed an important role in the sphere of industrial relations. This has raised several questions pertaining to the propriety and desirability of state action in this field which, in the advanced countries of the West, has traditionally remained outside the purview of state regulation. Such questions have become more prominent in India as state intervention was given.

This paper will deal with general issues in Indian industrial relations. We will first summarize those aspects of the Indian economic and political system which are pertinent to an appraisal of industrial relations. Industrial relations policies reflect the past record as well as future aspirations. This involves an understanding of the changing approaches of labour and management and current trends in policy formulation. A final section will consider the objectives which determine policy and conclude with a statement of needed new directions in research.

This paper will concern itself with certain aspects of the relations between the government, the dominant political party and the labour movement in Mexico. As in most countries, this set of relationships is complex. In Mexico perhaps more so than in many of the newly independent countries they are subtle and difficult to describe adequately. Formal institutions in independent Mexico have grown slowly over a period of more than a century, and below the crust of these formal institutions there has grown a body of custom and living practice, a knowledge and deep understanding of which is necessary to any interpretation of Mexican political and economic phenomena. For this reason, rather than to try to deal with the whole question on an abstract level, this paper will treat it selectively, and essentially by illustration from two cases.

The history of organized labour movements covers now about a century and a half or more. During that period various types of labour movements have appeared on the stage of history. Many have come and gone: highly political movements with heavy ideological commitments, bread-and-butter unions refusing to be involved in social reform movements, organizations committed to national liberation and rapid industrialization, others endeavouring to combine practical day-by-day activities with dedication to a long-run social ideal, etc. No type seems to be guaranteed survival; none is doomed from the outset. A few have survived as they were at the origins. Others, perhaps most, have changed their character with the passage of time.

The framing of an effective wages policy is nowhere easy, but is especially difficult, and especially important, in developing areas. The degree of government control over wage determination, whether direct or indirect, tends to be greater in these areas, so the impact of public policy decisions is sharper and more extensive. The consequences of error are greater, in both political and economic terms; no element of economic policy touches more sensitive political nerves, none is so capable of shaking the fragile foundations of the state itself. In the poor countries, furthermore, there is less income to distribute, at the same time that social goals tend to be generously defined; between social objectives and budget restraints or market imperatives the gap is distressingly large.

Before collective bargaining can take place certain conditions must be fulfilled. In a society where the number of persons employed is very small and where those who are employed for wages work on farms, in domestic households and for petty trades, there is little opportunity for collective bargaining to take place. Under these conditions the contracts of employment will be settled by convention and by individual negotiation. This situation changes as the size of the employed labour force becomes substantial and relatively large numbers of workers are employed by public authorities and private enterprises in a wide range of production and service activities. When economic development has reached this point the labour force will be structured in clearly identifiable categories of employment. At the same time the units of employment are likely to include many that have grown to a size that destroys the personal relationship between employer and worker that is a characteristic feature of the small-scale enterprise. When this position has been reached uniform conditions of employment that conform to the structure of the labour force that has emerged will, for a number of reasons, have to be established. In the first place it is administratively more convenient for management if they establish standards of wages and working conditions that are common to whole categories of employees rather than to individuals, since this enables them to pursue a more efficient hiring policy, to control and predict labour costs and to minimize personnel conflicts over wages.

This paper is intended to describe some aspects of Israel’s socio-economic planning and the roles played by interest groups in its formulation and implementation. While there are limits to the use of Israel’s experience as a model for all less developed areas, it nevertheless contains worth-while lessons. An understanding of the nature of Israel’s institutional relationships, and of the manner in which the policies, procedures and practices pursued advance or hinder development, might be helpful in drawing some general conclusions, and may even serve as a guide in socio-economic policy formulation.

The aim of this chapter is to present in broad outline the major themes of social research on labour relations and economic development which are considered in more detail in subsequent chapters.

The social problems of Africa were long studied by anthropologists and ethnographers only, but since the Second World War they have attracted increasing attention from social scientists.

Labour relations and economic development problems assume a very particular form in the countries of this region, due to various factors: nationalization of the means of production, the existence of a centralized planning system, single political parties and trade union organizations and a specific economic and social doctrine.

1. Most of the available studies on labour relations in the Arab-Moslem world are either by American social scientists or Arab authors trained in the American school, but these experts are not very numerous. Not a single social or industrial psychologist appears to have turned his attention to this field. French scholars have generally not touched upon the subject, apart from the works of the neo-orientalists (ME. 4, 5, 9, 10). The most interesting studies on economic and social development problems have come from regional research workers. However, with the development of universities and other research training centres, and the establishment outside the region of institutes for Middle Eastern studies, there is every reason to hope that there will soon be an adequate supply of research workers of Arab origin and culture.