Third World Quarterly

Globalization and Transnational Class Relations: Some Problems of Conceptualization

Author(s): Abdul Rahman Embong
Source: Third World Quarterly, Vol. 21, No. 6, Capturing Globalization (Dec., 2000), pp. 989-
1000
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Third World Quarterly, Vol 21, No 6, pp 989-1000, 2000
Globalization and transnational c lass
relations: som e problem s of
c onc eptualization
ABDUL RAHMAN EMBONG
ABSTRACT This artic le argues that c lass analysis in the post-c old war era is
still valid and that transnational c lass relations is an im portant topic f or
investigation when studying globalization. However, suc h a study is replete with
m any theoretic al and m ethodologic al problem s whic h have yet to be resolved.
Using the pioneering works of Cox and Sklair as its starting point, this artic le
addresses the problem atic s of c onc eptualizing transnational c lass relations in
the c ontext of c apturing a globalization proc ess by f oc using on three interrelated
issues: (1) globalization and the rec onf iguration of c lass relations; (2) em erging
global c lass struc ture and the dom inant c lass; and (3) subordinate groups
vis-'a-vis the dom inant c lass. Cautioning that one should not overwork the
c onc ept in our theoretic al endeavour, and not to assum e the f orm ation of
transnational c lasses just bec ause there are dom estic c lasses that serve in global
f orc es of produc tion, this artic le raises several questions in the c onc eptualiza-
tion of transnational c lass relations and of f ers som e new propositions.
An edited volum e by Mc Nall et al, published in 1991, two years af ter the
c ollapse of the Berlin Wall, bears a provoc ative title, Bringing Class Bac k In:
Contem porary and Historic al Perspec tives. Two observations by its editors are
pertinent to our disc ussion of globalization and transnational c lass relations.
First, c lass is one of the m ost widely used and thoroughly c ontested c onc epts in
the soc ial sc ienc es, with little agreem ent am ong sc holars on its exac t m eaning or
its explanatory power; and sec ond, the study of c lass has been c onspic uously
absent in rec ent post-struc turalist, post-Marxist and state-c entred approac hes
em erging in historic al and soc iologic al sc holarship (Mc Nall et al, 1991).
However, does this m ean that c lass analysis has lost its analytic al and heuristic
power and usef ulness? Or is it only going out of f ashion, as som ething not
c urrently intellec tually trendy in the post-c old war era?
It will be argued that c lass analysis, while not trendy, is not losing its
analytic al power. Unlike c hanging c ultural tastes and f ashions, intellec tual
endeavours suc h as c lass analysis are som ething m ore lasting and prof ound,
sharpened through the proc ess of paradigm 'wars' and internal c ritic ism nec ess-
ary in advanc ing the f rontiers of knowledge. Class analysis not only takes into
ac c ount new approac hes to soc iologic al sc holarship, but also sustains itself as a
Abdul Rahm an Em bong is at the Institute of Malaysian and International Studies (IKAxs), Universiti Kebangsaan
Malaysia, 43600 UKM Bangi, Selangor DE, Malaysia. Em ail: rahm anhe@pkrisc .c c .ukm .m y.
ISSN 0143-6597 print; 1360-2241 online/00/060989-12 ? 2000 Third World Quarterly
DOI: 10.1080/01436590020011990 989
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ABDUL RAHMAN EMBONG
powerf ul, ref ined working tool in helping sc holars understand the c om plexities
of soc ial and historic al proc esses (Mc Nall et al, 1991: vii). Although there have
been som e def ec ts or inadequac ies in the uses of c lass analysis, it rem ains
relevant f or understanding soc iety provided that a f resh approac h to the dynam -
ic s of c lass f orm ation is adopted (Cox, 1987). However, it should be stated f rom
the outset that c lass analysis is not only c om plex and dif f ic ult, but its sc ope is
also not exhaustive when analysing various levels of soc ial struc ture. Class
analysis does not replac e other levels of analysis, inc luding ethnic ity, religion
and gender. It should be seen as c om plem entary to other analytic al f ram eworks
in exam ining various levels of soc ial struc ture.
One problem in c lass analysis is that its f oc us has understandably been
c onf ined to c lasses within national soc ieties, neglec ting the transnational dim en-
sions of c lass relations. These studies are of ten prem ised on the assum ption that
c lass f orm ations are c onditioned by the history, politic s and c ulture of their
respec tive soc ieties. Suc h c onf ines are in m any ways justif ied bec ause of
the im portant roles c lasses, espec ially the em ergent m iddle c lasses, play
within national soc ieties, and the signif ic anc e of c lass perspec tives f rom the
national viewpoint. This does not m ean that suc h studies do not ac knowledge
the presenc e of representatives of the international bourgeoisie, international
prof essionals and even international workers in their respec tive soc ieties. The
rec ognition of the international dim ensions of c lass was already m ade over a
c entury ago by the pioneers of c lass analysis. Marx and Engels, f or exam ple, did
talk of the international dim ensions of c lass. They highlighted the tendenc y of
c apital to nestle everywhere; representatives of the bourgeoisie went abroad to
m ake investm ents, searc h f or prof it and f orm internal allies; and the proletariat
also had their international c ounterpart, thus the slogan 'Workers of the world
unite!' Several other writers also rec ognized the international dim ensions of
c lass.
Today, transnational c lass relations c annot be ignored. Just as c apital, pro-
duc tion, labour and c ulture have bec om e globalized, c lasses too are inc reasingly
bec om ing transnational. Globalization is a new phase in the developm ent of
f inanc e c apital in partic ular. In the c ontem porary era there is a strong m ovem ent
towards the integration of f inanc ial m arkets, with f inanc iers, f und m anagers and
f inanc e c onsultants, alongside powerf ul industrialists, playing a c ritic al role. At
the sam e tim e, the m edia and advertising industry, owned and c ontrolled by
powerf ul business tyc oons, have also bec om e global, shaping opinions ac ross the
globe, inf luenc ing attitudes and lif estyles of various c lasses. This new situation
throws down a f orm idable c hallenge to soc ial sc ientists everywhere not m erely
to study c lass relations nationally or regionally but, m ore im portantly, to study
them transnationally. As noted by Giddens (1997: 64), with the proc esses of
globalization bec om ing am ong the m ost im portant soc ial c hanges today, soc io-
logic al analysis that c onf ines itself to single soc ieties is bec om ing inc reasingly
arc haic .
While studying globalization and transnational c lass relations presents m any
theoretic al and m ethodologic al problem s, the c ore argum ent in this artic le is that
produc tion relations and the global system are dynam ic c onc epts f or starting the
analysis of transnational c lass relations. To develop the argum ent, I will attem pt
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GLOBALIZATION AND TRANSNATIONAL CLASS RELATIONS
to address the problem atic s of c onc eptualizing transnational c lass relations in the
c ontext of c apturing globalization by f oc using on three interrelated issues: (1)
globalization and the rec onf iguration of c lass relations; (2) em erging global c lass
struc ture and the dom inant c lass; and (3) subordinate groups vis a' vis the
dom inant c lass. In the c ourse of the disc ussion, as well as in the c onc lusion, I
will attem pt to show in what way the various ac tors involved in the globalization
proc ess are at the sam e tim e f orc es f or 'c apturing globalization'. The pioneering
works on transnational c lass relations by two em inent soc ial sc ientists-Robert
W Cox (1987, 1996, 1997) and Leslie Sklair (1991, 1997)-f orm the starting
point of m y analysis. Cautioning that one should be c aref ul not to overwork the
c onc epts in our theoretic al arsenal, this artic le raises several questions about the
c onc eptualization of transnational c lass relations and of f ers som e new proposi-
tions. Let us now address these issues in turn.
Globalization and the rec onf iguration of c lass relations
Although globalization itself is a c ontested c onc ept, this artic le does not take
issue with it sinc e it is the subjec t of earlier artic les. However, f or the purposes
of this artic le, globalization is def ined as the c om pression of tim e and spac e
aspec ts of soc ial relations. It involves the ac c eleration of tim e and the reduc tion
of spatial c onstraints, both of whic h have distinc t c onsequenc es f or all layers of
soc iety (Mittelm an, 1996a: 3; 1997: 14; Roberston 1992; Waters 1995).
The m ost powerf ul globalizing f orc e that has rec onf igured c lass relations is
the transnational c orporation, the em ergenc e and expansion of whic h has
unleashed the proc esses of deterritorialization of c apital. Although c apital had
already bec om e international, espec ially sinc e the 19th c entury, it was stam ped
with the c harac teristic s of a 'national hom e', and nation-states c ould to a c ertain
extent exerc ise som e c ontrol over it. One c ould talk of British c apital or US
c apital then. Sinc e the 1970s, with the advent of a new phase of c apitalism ,
c harac terized by the c onc entration of f inanc e c apital and the m ight of TNCs, it is
dif f ic ult to assign a 'nationality' to suc h c apital, exc ept the c ountry in whic h the
TNCS are dom ic iled. Seeing them selves as separate non-national entities, suc c ess-
f ul transnational c om panies do not c onsider them selves as belonging to any
c ountry (Druc ker, 1997).
TNCS are involved in various ac tivities on a worldwide sc ale, suc h as f oreign
direc t investm ents, produc tion, trade and f inanc ial transac tions. Ac c ording to
som e c alc ulations, the am ount of c apital and assets of m ega-TNc s has inc reased
sharply over the past two dec ades. Many of the TNCS have annual inc om es f ar
bigger than the gross national produc ts (GNPS) of m any developing c ountries. For
exam ple, the total sales in 1992 of General Motors (am ounting to alm ost
US$140 billion), or of Exxon (am ounting to alm ost $120 billion) were m uc h
bigger than the GNPS of the oil-ric h states of Saudi Arabia or Indonesia, or even
Norway in the sam e year.' At the sam e tim e, the developm ent of inf orm ation
tec hnology, nam ely c om puters and m ultim edia, f ac ilitates the m ovem ents of
f inanc e c apital, espec ially virtual m oney, at will with just with a c lic k of the
'm ouse' (Singh, 1999; Druc ker, 1997). Ac c ording to estim ates, m ore than $1.5
trillion are transac ted daily in the world's c urrenc y m arkets, and of this, only 5%
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ABDUL RAHMAN EMBONG
is used in real produc tion, while the rest is available to f und m anagers f or
spec ulative purposes. The TNCS, integrated with the global system in a variety of
ways, are run by m anagers and exec utives at dif f erent levels and f rom various
c ountries. With the penetration of TNc s into various parts of the world, they have
bec om e m ore c onspic uous and signif ic ant, exerting inf luenc e upon m em bers of
the dom estic c lasses in the various c ountries in whic h they operate. These
developm ents c learly dem onstrate that globalization has rec onf igured c lass
relations transnationally.
Em erging global c lass struc ture and the dom inant c lass
Given that globalization has rec onf igured c lass relations, a m ajor c hallenge in
analysing transnational c lass relations is to m ap the c lasses that have em erged or
are em erging transnationally. The global soc ial struc ture is one of struc tured
inequalities, c onsisting of dom inant and subordinate groups, c ausing both
c onf lic ts and c om prom ises between them . But what is the nature of this
em erging global c lass struc ture? Who c onstitutes the dom inant groups and the
subordinate groups, and have they developed c lass c onsc iousness?
To answer these questions, it is usef ul to undertake a m apping of the
transnational c lass relations so that we know the c ontours of the c lasses.
However, c onstruc ting a c lass m ap is problem atic not only f or national c lasses,
but even m ore so when analysing transnational c lass relations. Who are the
m em bers of the c lass that rem ains at the c ore of the global system ? Is it the
c apitalist c lass or som e other c lasses? In answering these questions, the
dif f ic ulties revolve not only around determ ining the appropriate term inology and
the c om ponents of suc h a c lass, but also its c harac teristic s, boundaries, c on-
sc iousness, etc . Suc h dif f ic ulties c an be seen in the attem pts m ade by several
sc holars, nam ely Cox (1987, 1996), who uses the term 'transnational m anagerial
c lass', and Sklair (1991, 1997), who ref ers to the 'transnational c apitalist c lass'.
The f irst problem to highlight here revolves around the question of the
c onstituent c om ponents of this c lass. The Coxian use of the term 'transnational
m anagerial c lass' im plies a group of m anagers operating transnationally, who
exerc ise c ontrol over c orporations. In this usage, ownership does not appear
c ritic al. In Cox's f orm ulation the dom inant soc ial groups c om prise (1) TNC
m anagerial c adres, ie those who c ontrol the big c orporations operating on a
world sc ale; (2) those who c ontrol big nation-based enterprises and industrial
groups; and (3) loc ally based petty c apitalists. Of the three that m ake up the
dom inant groups, the f irst, ie those c ontrolling big c orporations operating on a
world sc ale, is the m ost im portant.
In Sklair's f orm ulation, the term 'c apitalist' is used as opposed to 'm ana-
gerial'; thus he c oins the term the 'transnational c apitalist c lass'. However, to
Sklair, the transnational c apitalist c lass is not m ade up of c apitalists in the
traditional Marxist sense, def ined in term s of the ownership of the m eans of
produc tion. As he puts it, 'direc t ownership or c ontrol of the m eans of
produc tion is no longer the exc lusive c riterion f or serving the interests of c apital,
partic ularly not the global interests of c apital' (Sklair, 1991: 62). He lists f our
soc ial groups m aking up the transnational c apitalist c lass: (1) TNC exec utives, ie
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GLOBALIZATION AND TRANSNATIONAL CLASS RELATIONS
the leading exec utives of the world's biggest TNCS, supported by their loc al
af f iliates operating in various parts of the world; (2) globalizing bureauc rats
perf orm ing governanc e f unc tions f or the global c apitalist system at the loc al,
national, inter-state and eventually global levels, where individual states are not
direc tly involved; (3) c apitalist-inspired politic ians and prof essionals who per-
f orm a variety of personal and tec hnic al servic es f or the m aintenanc e of the
global system ; and (4) c onsum erist elites (m erc hants and m edia) who play
im portant roles prom oting global c apitalism .
My reservation c onc erning Cox's and Sklair's approac hes is their tendenc y to
overwork their analytic al tools, in partic ular their c ore c onc epts. Whatever the
term inology, the m ain dif f ic ulty with the c ore c onc epts used by both sc holars is
that the c onstituent c om ponents of the dom inant groups are too broad and
am orphous. For exam ple, the Coxian transnational m anagerial c lass inc ludes not
only the m anagerial c adres of TNCs and their f am ilies, but also public of f ic ials
in the national and international agenc ies involved with ec onom ic m anagem ent,
as well as experts and spec ialists involved with the m aintenanc e of the world
ec onom y in whic h the m ultinationals thrive and are supported by them . Am ong
these experts and spec ialists are m anagem ent c onsultants, business educ ators,
organizational psyc hologists, elec tronic operators who assem ble the inf orm ation
base f or business dec isions, and lawyers who put together international business
deals (Cox, 1987: 359-360). What should be pointed out is that the ability of
these various f rac tions to wield power and inf luenc e over the TNCS and the
m ultif ac eted arena in whic h they operate dif f ers. Thus, lum ping them into the
sam e c lass as though they are hom ogenous m asks the heterogeneity of the
groups and their dif f erential standing in the hierarc hy of power.
The c onc ept bec om es m ore unwieldy when Cox also inc ludes in the transna-
tional m anagerial c lass two other c ategories-national c apitalists and petty
c apitalists. National c apitalists by def inition only operate on a national sc ale
within nation-states, although the m em bers m ay have an international dim ension
and their ac tivities m ay inc reasingly bec om e global in sc ope, being spurred by
the proc esses of the internationalization of produc tion, as argued by Cox. But
they do not m ake m uc h im pac t upon world order sinc e they do not possess
global c lout. So, too, with petty c apitalists, who are sm all c apitalists operating
on a m ore loc al sc ale. They are highly vulnerable to dem and c ontrac tion in the
dom estic m arket and to high interest rates, leading to lower prof its and even
bankruptc ies. They have little im pac t upon the global ec onom y. Henc e, it would
appear odd to inc lude both national and petty c apitalists in the sam e c ategory
with TNCS c adres as m em bers of the transnational m anagerial c lass.
A sim ilar c ritique c an be advanc ed with regard to Sklair's f orm ulation. His
c onc ept of the 'transnational c apitalist c lass' is also overworked bec ause too
m any f rac tions are inc luded in the sam e c ategory. His inc lusion of the leading
exec utives of the world's biggest TNCS (inc luding what he c alls the 'c onsum erist
elite' who c ontrol television networks and other m edia), supported by their loc al
af f iliates operating in various parts of the world in this c lass, is justif ied. Sklair
is right in his assertion that the TNC c adres have a strong ec onom ic base,
c onsisting of their c orporate salaries and their of ten-privileged ac c ess to shares
and other f inanc ial benef its in the c om panies they work f or either direc tly or as
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ABDUL RAHMAN EMBONG
nom inated board m em bers. They thus wield im m ense power to the extent that
they c ontrol parts of the global ec onom y and their ac tions and dec isions c an have
f undam ental ef f ec ts on the loc al c om m unities in whic h their TNCs are loc ated.
However, c an other f rac tions-what Sklair c alls 'globalising bureauc rats,
c apitalist-inspired politic ians and prof essionals'-be c onsidered as c onstituent
c om ponents of this c ore group or c lass? As he him self explains, globalizing
bureauc rats are of f ic ials perf orm ing governanc e f unc tions f or the global c apital-
ist system at the loc al, national, inter-state and eventually global levels, where
individual states are not direc tly involved. They either deal with or ac tually work
in loc al urban and regional growth c oalitions f uelled by f oreign investm ents, in
national bureauc rac ies responsible f or external ec onom ic relations or in inter-
national organizations suc h as the World Bank, International Monetary Fund
(IMF), Organisation f or Ec onom ic Co-operation and Developm ent (OECD), World
Trade Organization (wTo), regional developm ent banks and som e agenc ies of the
United Nations. Capitalist-inspired politic ians and prof essionals are a diverse
group who perf orm a variety of personal and tec hnic al servic es in the global
system . Sklair argues that while c apitalist-inspired politic ians respond to the
interests of the c orporations that provide em ploym ent and m ake prof its loc ally,
globalizing prof essionals have em erged as an im portant group in rec ent dec ades,
bec ause of the expansion of business servic es industries, inc luding think-tanks
assoc iated with neoliberal f ree trade and f ree enterprise agendas. Nevertheless,
it should be pointed out that this latter group is too diverse and does not enjoy
the strong ec onom ic base and power relations of TNC exec utives. Thus, assigning
m em bers of this group to the sam e c lass as the leading exec utives of the world's
biggest TNCS is to ignore the m ost im portant c riterion he him self uses ie a strong
ec onom ic base and the ability to wield power globally.
This does not m ean, however, that the c onc epts are not helpf ul. On the
c ontrary, they are novel c onc epts with strong analytic al value. It would,
nevertheless, be m ore usef ul and elegant to dif f erentiate analytic ally the two
c onc epts-the transnational c apitalist c lass and the transnational m anagerial
c lass-so that they are used to ref er to distinc t elem ents and that eac h c onc ept
bec om es m ore f oc used. The f irst should ref er basic ally to the TNC bosses and
senior exec utives who are the m ain players in the global arena, m aking dec isions
and taking ac tions on behalf of their c orporations: their ac tions c an have an
ef f ec t on the ec onom ies of the c ountries or regions in whic h they operate. Their
ec onom ic base is not only their c orporate salaries and various perks they rec eive
f rom the TNCS, but also their shares in the various c orporations they own or
c ontrol, or in whic h they work or serve as board m em bers. In term s of
personalities, they m ay range f rom people like Bill Gates, c hief exec utive of f ic er
(CEO) and f ounder of Mic rosof t Corporation; Akio Morita, f ounder and head of
Sony; Jun-Ic hiro Miyazu, president of Nippon Telegraph and Telephone Corpor-
ation (NTT); George Soros of Quantum Fund; Stan Shin, c hairm an and CEO of the
Ac er Group; and m any others who f eature in the Fortune 500. In f ac t, the
world's 225 ric hest people-identif ied by Forbes m agazine as 'the ultra-ric h'-
who have an estim ated c om bined wealth of over $1 trillion, equal to the annual
inc om es of 2.5 billion people, the poorest 47% of the world's population (UNDP,
1998: 30), c an be said to c onstitute the c ore of the transnational c apitalist c lass.
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GLOBALIZATION AND TRANSNATIONAL CLASS RELATIONS
The transnational m anagerial c lass, on the other hand, should be used to
designate the lower f rac tions within the dom inant groups. This is m ore appropri-
ate bec ause, in term s of their f unc tions and power, they exist m ore in a
'supportive', 'advisory' or 'tec hnic al' c apac ity with regard to the global sys-
tem -in short, they are 'm anagers' rather than 'c ontrollers'. In c ountries where
the TNc s have their loc ally based f irm s, those who c onstitute the top m anagem ent
m ay c onsist of loc al nationals. For exam ple, of the 16 m em ber f irm s of the
Malaysian Am eric an elec tronic s industry in the m id-1990s, nine were under
Malaysian m anagers, inc luding at the m anaging direc tor level (Mohd Nazri,
1995: 148). However, unlike m em bers of the transnational c apitalist c lass, they
do not dec ide on m ajor polic ies or m ake system -wide dec isions. Their ec onom ic
base is weaker than that of the transnational c apitalist c lass bec ause it c onsists
m ainly of salaries and perks f rom their respec tive organizations. Although they
m ay obtain earnings f rom shares, they are not substantial owners of the
c orporations in whic h they invest. This c lass is m uc h larger in num ber than the
transnational c apitalist c lass, and m ay c onsist of the c apitalist-inspired politi-
c ians, bureauc rats, c onsultants, lawyers and other prof essionals who operate
transnationally to servic e the TNc s in various ways. They are very inf luential, but
c annot be put in the sam e league as m em bers of the transnational c apitalist c lass,
as Cox and even Sklair's f orm ulation m akes them out to be.
In sum , at the upper levels of the global soc ial hierarc hy are two m ajor
c om ponents of the dom inant groups, the transnational c apitalist c lass and the
transnational m anagerial c lass, both of whic h operate to support the global
c apitalist system . The transnational m anagerial c lass is very im portant f or the
transnational c apitalist c lass; it of ten serves the latter. However, the positions of
these two c lasses are not f ixed or static . Classes are dynam ic entities that c hange
their positions over tim e. For exam ple, m em bers of the transnational m anagerial
c lass under c ertain c onditions c an asc end into the transnational c apitalist c lass,
while m em bers of the latter too c an f all into the transnational m anagerial c lass.
In def ining the c onstituents of transnational c lass relations, the m ain c riterion
is the sc ope and im pac t of their ac tivities, ie whether they are involved in what
is c alled 'transnational prac tic es' (Sklair, 1991). Classes that engage them selves
in transnational prac tic es c an be said to have gone beyond their national
boundaries and m erit c onsideration as part of the transnational c lasses. On the
other hand, c lasses that c onf ine their ac tivities m ainly within the bounds of
nation-states should be c onsidered as national c lasses, not transnational ones.
They m ay f orm part of the dom inant groups dom estic ally, but bec om e subordi-
nate groups when c ast transnationally. On this basis, one should be guarded
about inc luding the national c apitalists and the petty c apitalists (Cox, 1987) as
part of the transnational m anagerial c lass. While globalizing bureauc rats, politi-
c ians and prof essionals who partic ipate in transnational prac tic es (Sklair, 1991)
m ay c onstitute the transnational m anagerial c lass, the national c apitalists and
petty c apitalists are a dif f erent c ategory. Their prac tic es, in the m ain, are within
national boundaries and, although the f orm er m ay have trading relations with
som e f oreign partners, in the c ourse of their evolution and expansion they have
to intensif y and extend suc h relations bef ore they c an bec om e part of the
transnational m anagerial c lass or the transnational c apitalist c lass.
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The sec ond problem is the question of c lass c onsc iousness. A thorny issue
even in national c lass studies, it bec om es all the m ore c om plic ated in transna-
tional c lass analysis. Can one really talk of a sim ilar c onsc iousness binding
m em bers of the dom inant groups together? Or does the c onsc iousness vary, with
som e f rac tions within the dom inant groups wanting to m aintain the c apitalist
system as it is, while others m ay want to bring about ref orm s in global
c apitalism , giving it a m ore hum ane f ac e as in Japan or in the Sc andinavian
c ountries? If one begins with a unitary c onc eptualization of the dom inant groups,
the c onc lusion will be that they exude a c om m on c lass c onsc iousness, thus
downplaying their inherent dif f erenc es. However, if one regards the dom inant
groups as heterogeneous, c apable of c onc eptualization as two distinc t groups or
c lasses (the transnational c apitalist c lass and the transnational m anagerial c lass),
as suggested above, the inherent dif f erenc es c om e to the f ore.
Although both Cox and Sklair of f er nuanc ed analyses c onc erning the dif f er-
enc es within the dom inant groups, they f eel that they exist as a c oherent c lass
and possess a c om m on c lass c onsc iousness. Cox ac knowledges that, while TNC
exec utives and their assoc iates have interests that c onf lic t with those of other
c lass m em bers, they nevertheless share a c om m on c onc ern to m aintain the
system that enables the c lass to rem ain dom inant. Cox draws attention to various
institutions suc h as the OECD, the IMF and the World Bank that serve as f oc i f or
generating polic y c onsensus f or the m aintenanc e and def enc e of the world order.
It is true that m em bers of the dom inant groups m ay be able to generate som e
c onsensus through these institutions, but issue-spec if ic c onsensus and c lass
c onsc iousness m ay not m ean the sam e thing.
The question of c lass c onsc iousness bec om es m ore c ontentious in Sklair''s
analysis. Ac c ording to Sklair, the TNC exec utives and their assoc iates are
c onsidered as one c ohesive c entral c lass that m akes system -wide dec isions. The
c ohesiveness of this c lass is assum ed to exist bec ause m any of its m em bers
oc c upy a variety of interloc king positions in a m ultiplic ity of c om panies, and in
wide-ranging networks outside the c orporate sec tor. They are said to have
outward-oriented, global rather than inward-oriented national perspec tives on a
variety of issues; this c lass's m em bers tend to be people f rom m any c ountries,
who inc reasingly identif y them selves as 'c itizens of the world', as well as by
their plac es of birth; and they enjoy sim ilar lif estyles, and educ ation, espec ially
in business sc hools. They see their own interests and/or those of their nation as
best served by an identif ic ation with the interests of the global c apitalist system ,
in partic ular the interests of the c ountries of the c apitalist c ore and the
transnational c orporations dom ic iled in them (Sklair, 1991: 8). Sklair posits that
m em bers of the transnational c apitalist c lass, em brac ing a c ulture-ideology of
global c apitalist c onsum erism , do not identif y with any f oreign c ountry in
partic ular, or even nec essarily with the First World, or the white world, or the
Western world, but identif y with the global c apitalist system . They rec onc eptu-
alize their several national interests in term s of the global system , and take on
the politic al projec t of rec onc eptualizing the national interests of their c o-nation-
als in term s of the global c apitalist system (Sklair, 1991: 117-18).
The problem with this c onc eptualization is that it assum es that, in the era of
globalization, nation-states as well as regional and other interests have been
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GLOBALIZATION AND TRANSNATIONAL CLASS RELATIONS
reduc ed to m inor signif ic anc e and that national c lasses are throwing in their lot
with the transnational c apitalist c lass. While m any of the points raised by Sklair
are true, to downplay or ignore the other interests is not tenable. Nationalism and
regionalism are still f orc es to be rec koned with. It is true that the dom inant
groups share sim ilar lif estyles, have a c om m on interest in def ending the global
c apitalist system , and that their ac tivities m ay have bec om e transnational in
sc ope. But have they also bec om e transnational in their c onsc iousness and put
aside national or regional dif f erenc es? In what way do they rec onc eptualize their
several national interests in term s of the global system , and take on the politic al
projec t of rec onc eptualizing the national interests of their c o-nationals in term s
of the global c apitalist system as argued by Sklair?
While the dom inant groups m ay be united in their def enc e of the global
c apitalist system , it is doubtf ul whether they have bec om e a c ohesive c entral
c lass. The f ac t that they are not as c ohesive as they have been m ade out to be
c an be seen in the c ontroversies surrounding IMF polic ies and dec isions in
handling the 1997-98 f inanc ial c risis that began in Asia and spread to other
regions. Also, there have been sharp dif f erenc es, f or exam ple, between the TNCS
originating f rom c ertain c ountries, suc h as Franc e, and those f rom the USA, as
c an be seen in the c ase of the Frenc h oil c orporation c ontinuing to def y the US
em bargo on m aking c ontrac ts with Iran. At the sam e tim e, the Japanese
c orporations insist that the Japanese governm ent protec t the dom estic m arket by
erec ting protec tionist walls against the intrusion of US interests. These events
show that m em bers of the dom inant groups are not devoid of nation-state
c ontrols and inf luenc es. If we start f rom the prem ise that the dom inant groups
are heterogeneous, and their interests vary and of ten c ollide, then a c om m on
c lass c onsc iousness c annot be assum ed. They are c om m itted to supporting and
perpetuating the global c apitalist system , but we c annot underplay the f ac t that
they of ten operate f rom their own partic ular perspec tives and interests in their
ac tions. This f ac t of ten f orm s the basis f or c onf lic ts that interm ittently oc c ur
am ong the dif f erent f rac tions within the dom inant groups.
Subordinate groups vis 2 vis the dom inant c lass
Who c onstitutes the subordinate groups in transnational c lass relations? Do they
c onstitute c oherent c lasses and a global f orc e f or c hange?
Globalization af f ec ts various c ountries in a num ber of ways. With the
globalization of produc tion, sec tions of the dom estic c lasses have bec om e part
and parc el of the global workf orc e in the servic e of the various TNCs. However,
dom estic c lasses c onsist of those involved in produc tion in both the f orm al as
well as the inf orm al sec tors. The key question c onc erns the c riteria f or analysing
the relationship between the TNCS and the dom estic c lasses. Should we only
inc lude those direc tly in the servic e of the TNCS, or also those on the periphery,
ie indirec tly involved with the TNCs? To m y m ind, the em phasis should be on the
f orm er, but we c annot neglec t the latter sinc e they are also af f ec ted by
globalization. For exam ple, the 27 m illion elec tronic and other workers in the
800 export-proc essing zones (EPZS) worldwide (UNDP, 1999)-in Malaysia,
China, India, Brazil and other c ountries-share a c om m on relationship sinc e
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ABDUL RAHMAN EMBONG
they are in the servic e of the various TNCS operating in these zones. But the
c om m on relationship does not apply only to workers and other em ployees in the
EPZS. Others involved in servic e industries, suc h as banking, insuranc e, hotels,
travel and tourism , that operate transnationally (eg those working as m anagers,
exec utives, c ashiers, tour operators, etc ) also c onstitute part of the global
workf orc e. However, there are those on the periphery-hawkers, peasants,
f isherm en, the unem ployed, c asual labour and others-who rem ain outside the
f orm al sec tor. They are peripheral to the TNc s, yet the latter inf luenc e their lives
direc tly or indirec tly. These f orc es, together with workers in the f orm al sec tor,
c onstitute the m ajority of the world's population, whic h rem ains at the lower
rungs of the global soc ial hierarc hy.2
It has been proposed that the subordinate groups c onsist of (1) the new m iddle
stratum ; (2) established (unionized) and non-established (non-unionized) work-
ers; and (3) the peasantry and the m arginals (Cox 1987, 1996). The new m iddle
stratum , m ade up of tec hnic al, sc ientif ic and supervisory personnel in the m ost
tec hnologic ally advanc ed sec tors of industry, has been regarded-depending on
the researc hers' theoretic al perspec tives-both as a 'new m iddle c lass' and as a
'new working c lass'. Researc hers who label them as the 'new m iddle c lass' see
them as a buf f er layer between the owners of c apital or those who c ontrol the
ac c um ulation proc ess at the top and the m ass of produc tion workers below,
while those who regard them as the 'new working c lass' see them as a f orc e of
c hange to resist globalization. Established workers, being unionized, enjoy a
m ore sec ure position, while the f ate of the non-established or non-unionized
workers, is rather unc ertain. Together with them are large num bers of the
peasantry and the m arginals, ie those displac ed f rom their land who then f loc k
to c ities, swelling the ranks of the unem ployed and sem i-em ployed. These latter
people, f ound espec ially in peripheral c ountries, are exc luded f rom the global
ec onom y (Cox 1987, 1996, 1997).
Those f orc es working with the TNCs and their af f iliates objec tively c onstitute
the subordinate groups that are part and parc el of the global f orc es of produc tion.
Dom estic ally, they m ay ac t as c oherent c lasses, with the m ore advanc ed sec tions
having a c ertain degree of c lass c onsc iousness, but whether they c onstitute
subordinate transnational c lasses is another m atter. Unlike m em bers of the
transnational c apitalist c lass and the transnational m anagerial c lass who operate
transnationally and interac t with one another, and who are m ore m obile and
transf erable, the subordinate groups are m ostly workers operating within the
bounds of the sam e c ountry. This is not to deny the f ac t that m illions of workers
have partic ipated in transnational m igration in response to the re-ordering of
global produc tion (Tabak, 1996). There are m assive transnational m igrant f lows
into Europe, North Am eric a, Southeast Asia and elsewhere. In Malaysia, f or
exam ple, bef ore the July 1997 ec onom ic c risis, the num ber of legal and illegal
im m igrants (inc luding their f am ilies) was estim ated to be around two m illion, or
about 10% of the total population. Nevertheless, both dom estic and f oreign
workers, though standing on the sam e side of produc tion relations vis a vis the
TNCS, are not integrated with one another. Many do not share the sam e language
and lif estyles, and they of ten do not identif y with eac h other. More of ten than
not, the pull of ethnic ity, gender, religion and geography-dif f erenc es ac c entu-
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GLOBALIZATION AND TRANSNATIONAL CLASS RELATIONS
ated by globalization-is stronger than the tug of c lass. All these lim it their
interac tion and the possibility of them being c ollec tively organized to c onf ront
m anagem ent and the em ergenc e of c oherent subordinate transnational c lasses.
My point is that c lass m em bership is not suf f ic ient to bring m ost of these
f orc es together as subordinate transnational c lasses and to m ake them ac t as
c oherent c lasses. They have to be organized and their c onsc iousness raised. A
proportion of workers who are unionized and whose organizations are af f iliated
to world trade union m ovem ents m ay be quite outward-looking and global in
orientation, have developed c lass c onsc iousness and be in a better position to
resist the negative c onsequenc es of globalization. However, how they respond to
or resist the globalizing f orc es is c ontingent upon their national and loc al
experienc es. For exam ple, during the 1997-98 ec onom ic c risis, while workers in
South Korea and Thailand unf olded m ilitant struggles against retrenc hm ent and
other c ost-c utting m easures by their m anagem ent, Malaysian workers, through
the tripartite em ployer-union-governm ent m ac hinery, negotiated f or reduc tions
in pay and other benef its to save jobs.
For large m asses of workers in m any c ountries, unionization is still at issue.
Not all workers are unionized. This exc lusion is espec ially pronounc ed am ong
elec tronic workers, workers with lower skills levels, and m ore so am ong m igrant
workers-thus m aking them m ore easily disposable and replac eable as a result
of the 'restruc turing' of produc tion of post-Fordism and during tim es of
ec onom ic c risis. These prec arious workers are an expanding c ategory. The
proc esses of exc lusion of subordinate groups f rom transnational c lass organiza-
tions suc h as trade unions-thus af f ec ting the growth and ef f ec tiveness of c ivil
soc iety-m akes them all the m ore vulnerable to the onslaught of c apital and its
representatives-the transnational c apitalist c lass and the transnational m ana-
gerial c lass.
Conc luding rem arks
In the prec eding disc ussion I have tried to show that c lass analysis in the
post-c old war era is still valid and that transnational c lass relations is an
im portant topic f or investigation today, espec ially in regard to globalization.
Pioneers in this f ield, nam ely Cox and Sklair, have provided usef ul analytic al
tools to understand c hanging global soc ial realities and the c harac teristic s and
roles of the transnational c lasses. The strength of their theories is not only that
they c an c apture the c om plex global realities and explain them , but also that they
attem pt to show a way out of the exc lusionary proc esses of globalization.
Nevertheless, studying transnational c lass relations is replete with theoretic al and
m ethodologic al problem s, whic h have yet to be resolved satisf ac torily. I have
argued that one should be c aref ul not to overwork our c onc epts, and at the sam e
tim e, not to assum e the f orm ation of transnational c lasses just bec ause there are
dom estic c lasses that serve the global f orc es of produc tion. It is im portant to bear
in m ind that, just as globalization is a historic al proc ess, c lasses too are
historic ally c onstituted in c om m on prac tic e or experienc e, of ten inf luenc ed by
national and other c harac teristic s. They are sim ultaneously objec tive and subjec -
tive phenom ena, both independent of their m em bers' c onsc iousness and
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ABDUL RAHMAN EMBONG
expressed in c onsc ious thought and prac tic e (Mc Nall et al, 1991: 3). Globaliza-
tion has rec onf igured c lass relations, and transnational c lasses are in the proc ess
of f orm ation, espec ially am ong the dom inant groups and the m ore c lass-c on-
sc ious and organized elem ents of the subordinate groups, but the proc ess is still
in its early stages.
In our analysis, we have shown that transnational c lass f orm ation am ong
subordinate groups is espec ially dif f ic ult. This is partly bec ause, in the era of
globalization, the lines am ong enem ies, f riends and allies are blurred, unlike the
situation three or f our dec ades ago when the targets of struggle were m uc h
c learer. At the sam e tim e, the exc lusionary proc esses of globalization, espec ially
the c ontinuous post-Fordist restruc turing, f ragm ent large sec tions of the subordi-
nate groups, espec ially the unorganized, peripheral and m igrant workers. Thus,
resistanc e to globalization am ong subordinate groups of ten rem ains unc o-ordi-
nated, dif f use and weak.
Our analysis has also shown that globalization proc esses have produc ed
c ontestations between dif f erent groups and c lasses dom estic ally and transnation-
ally. From the standpoint of c apturing globalization, our analytic al f ram ework
should take into ac c ount not only the subordinate groups, but also the various
f orc es in the m arket and the state to identif y the f ault lines of globalization. That
is why rec ognizing the inherent dif f erenc es am ong the dom inant groups and state
ac tors, and f ac toring them in our m ultidim ensional analysis of transnational c lass
f orc es, is im portant.
Notes
Note the f ollowing f ac ts whic h dem onstrate the im m ense power of TNCS. 'Half of the hundred largest
ec onom ic units in the world today are nations; the other half are transnational c orporations ... The 600
largest transnationals ac c ount f or m ore than one-f if th of the total industrial and agric ultural produc tion in
the global ec onom y. About seventy of these giant c om panies are responsible f or half of total global sales
... The revenues of the largest 200 c om panies rose tenf old between the m id-1970s and the 1990s. Over the
past twenty years, the transnational ac tivities have bec om e inc reasingly global: only three of the world's 315
largest c om panies in 1950 had m anuf ac turing subsidiaries in m ore than twenty c ountries; som e f if ty do so
today ... Eighty of the top 200 transnational c orporations in the world are based in the United States,
c ontributing just over half the total sales' (Giddens, 1997: 295-296).
2 Global inequality is inc reasing, oc c urring in both the developed and developing c ountries. For exam ple,
while in 1960 20% of the world's people who live in the ric hest c ountries had 30 tim es the inc om e of the
poorest 20%, by 1995 they had 82 tim es as m uc h inc om e. Today, while a sm all m inority are extrem ely ric h,
about 1.3 billion people are in poverty, living on less than US$1 a day. One in f our in developing c ountries
(and one in eight in developed c ountries) is af f ec ted by hum an poverty, and alm ost 1.3 billion people do
not have ac c ess to c lean water. Of 4.4 billion people who live in the developing c ountries, nearly 60% still
lac k basic sanitation. Many in the poor c ountries, suc h as in parts of Af ric a, are objec ts of global poverty
relief (UNDP, 1998, 1999). This shows the existenc e of a huge gap between the ric h and the powerf ul on the
one hand, and the poor and the weak on the other on a global sc ale.
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