The International Circulation of Resources and Development: The Case of Migrant Labour

Saskia Sassen-Koob

The international circulation of capital and goods and its role in producing and reproducing development inequalities has received considerable empirical and theoretical study. The international circulation of labour has not. International migrations of workers have traditionally been studied from the perspective of demography rather than as an instance of the international circulation of resources. There are several reasons for this. First, as a proportion of total labour, the internationally mobile segment of the labour force constitutes but a minor fraction, and hence may easily appear as irrelevant for the study of labour as a resource for development. Second, the largest share of internationally mobile labour is made up of manual workers who are generally viewed as a resource of little value for both the emigration and immigration countries. Third, emigration countries are generally seen as benefitting from labour emigration because they are poor, lowly industrialized countries with abundant labour supplies and high unemployment. These various facts contribute to a devaluation of labour as a resource and as a factor contributing to the reproduction of development inequalities between emigration and immigration countries. There are a number of instances in the world today which raise the possibility that (1) immigrant labour is a valuable resource for the labour-importing countries, and (2) that present patterns of
The author wishes to thank the Consortium for World Order Studies for a grant held at the Center for International Affairs, Harvard University, supporting the research

of which this paper is a part. Development and Change ISAGE, London and Beverly Hillsl, Vol. 9 119781, m 5 4 5 .

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labour imports and exports contribute to the reproduction of existing development inequalities. Regarding labour imports, besides the case of South Africa, perhaps the most significant such instances are those of Western Europe and the Arab OPEC countries. Western Europe has imported millions of foreign workers since World War I1 to reconstruct and operate its economies and even today in the deepest post-war recession employs over five million of these workers. The Arab OPEC countries have, since the so-called energy crisis, resorted to massive labour imports in order to transform oil revenues into means of production. In all these instances, labour imports have played a basic role in the process of capital accumulation. Regarding labour exports, the emergence in the last few years of some long-term negative consequences (OECD 1974) has led to the implementation of various policies designed to end indiscriminate labour exports and to protect employers from losing their workers. This is especially the case with countries exporting labour to the Arab OPEC countries given the recency of the process and the historical and cultural ties binding labour exporters and importers. ' The implementation of such protectionist policies points to a growing realization in the labour exporting countries that the import of their nationals by the highly industrialized countries of Western Europe may constitute a form of resource appropriation which contributes to reproduce the development inequalities between labour importing and exporting countries. * If this is the case, it would refute the generally accepted assumption that labour exports are beneficial because they alleviate unemployment and increase national income and foreign currency holdings through workers' remittances from abroad. My purpose here is to analyze the nature of labour circulation between the lowly and highly industrialized countries and to examine whether it reinforces the politico-economic dominance of the labour importing countries at the cost of the exporting countries. The first half of the paper seeks to specify the conceptual field within which to place the international circulation of labour in general and the employment of foreign workers in particular. The second half analyzes the place and the effects of respectively labour exports and imports for each type of country, labour importer or exporter. In the analysis of concrete cases I shall use the available data, though much of it has been compiled with purposes other

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than that of this paper. I shall focus on the international labour market made up of North Africa and Europe, this being the best documented and most highly structured of these markets; furthermore, this market falls within a discrete historical phase of growth, beginning after World War I1 and reaching stabilization in the early
1970s.

THE INTERNATIONAL TRANSFER OF LABOUR

Today there are at least three instances of the transfer of labour between countries. These are (a) the employment in the developed countries of highly trained professional and technical personnel from other, generally less developed countries-the brain drain; (b) the employment of nationals by foreign firms operating in the workers' country; and (c) the employment of foreign workers outside their country of origin-migrant labour. The fact that a resource is being transferred from one country to another is not as immediately obvious or visible in the case of the circulation of labour as it is in that of capital and raw materials. The exception is probably the brain drain with its high level of human capital investment and therewith economic visibility. ' But the brain drain constitutes a very small fraction of total international labour circulation. In the other two instances, the possibility of a resource transfer is more difficult to establish. There are several reasons for this invisibility. Labour power becomes value producing only upon employment; that is to say, when applied to the means of production. In the case of firms r totally operating abroad, these means of production are partially o foreign owned. Since from the perspective of the economy the nationality of labour is quite irrelevant, it is difficult to maintain that there is a transfer of resources from the labour providing country to the country whose firms own the means of production and employ the workers. Indeed, I think it is quite impossible to argue that there is a transfer of resources between countries so long as we focus on the relationship worker-employer. Regardless of the nationalities involved, there is going to be a transfer of value from worker to employer. But this transfer is basically internal to the economy in which it takes place, even though it is affected by factors external to that economy, such as the cheaper wages made

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possible by the foreign status of the worker or by the generally low level of wages in the countries where foreign capital operates. To identify the existence of a transfer of resources between countries we have to go beyond the relationship worker-employer and focus on the effects for a country of (a) the employment of foreign workers either through labour imports or through the establishment of firms in a foreign country, and (b) the transfer of a fraction of a countrys labour force into the employment of either a foreign firm in the same country or a foreign economy. In a class society these effects will be class specific. However, it would be incorrect to argue that capital as such will obtain all the positive and the working class all the negative effects. First, it is the capitalist class of the developed countries which will tend to benefit, often at the expense of capital in the underdeveloped countries. Second, beyond the general development effects that can result from such a transfer of labour, there are specific consequences for the working class and its different fractions ir \oth the importing and exporting countries. These specific consequences will vary according to the level of capital accumulation. I shall return to these issues in the second half of the paper. The class-specific nature of such effects notwithstanding, I would like to argue that we can focus on the relationship between and the effects on countries without necessarily assuming internal homogeneity or similar effects for all classes and fractions within them. One way of analyzing the effects of labour transfers is to examine the trade-offs to which such a transfer gives rise. In the case of the brain drain, this trade-off is rather clear in that it represents a loss of human capital investment for the country of origin and a corresponding-though not necessarily equal-saving for the importing country (e.g. Bhagwati 1976; Committee on Foreign Affairs 1974; Friedman 1973; Grubel and Scott 1966). But these trade-offs are far less clearly to the advantage of the labour importing country in the other two instances, those of firms operating in, and workers employed by foreign countries. In the case of firms, one of the basic difficulties lies in specifying factor contribution to production and to development. This entails two ,Apes of problems. One is to establish how valuable the foreign , labour is for the operation of the firm. The other is to specify the contribution the firm makes to the development of the country in ,
, /

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513

which it operates. This touches upon the complex issue of the role of foreign capital in poor, lowly industrialized countries. The comparison between the advantages obtained by a country due to the presence of foreign firms and the advantages for these firms of operating in such a foreign country could then be used to determine the trade-offs arising out of this transfer of resources for respectively the workers country and a firms country. Since this is a basic problem in the study of development, I do not need to elaborate as to the difficulty of determining such a trade-off, let alone that of isolating the contribution of the labour factor (made productive by the foreign capital) to respectively (1) production for the firm and (2) development for the country. Isolating factor contribution remains difficult even though the history of the last several decades has shown us that this kind of labour transfer benefits the owners of the means of production, foreign capital, and not the labour-providing country. A different approach is needed in the case of migrants employed abroad. I shall focus especially on Western Europe, this being the most developed case.

Labour imports and exports In general the literature on international migrant labour has not focused on the relationship between labour-exporting and importing countries. It has dealt mostly with the relationship of employer and foreign worker, one which is internal to the importing country. Indeed until recently there were practically no studies on the effects of labour exports. Most of the literature has dealt with two subjects: (a) the migrant population itself, its conditions of existence and work, its lack of power, its various demographic characteristics (e.g. Castles and Kosack 1974), and (b) the variety of benefits and disadvantages of labour imports for the importing countries (e.g. BOhning and Maillat 1974; Jones and Smith 1970; Castells 1975). The paucity of studies on the effects of labour exports is probably in large part explained by the widely held assumption, referred to above, that labour exports are beneficial for the exporting countries. This assumption seemed so plausible that it dampened almost all critical examination until quite recently. But several events have led to a questioning of its validity. Most important among these are the protectionist policies implemented by the labour exporting countries and by the International Labour

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Saskia Sassen-Koob

Office of the UN (ILO 1975) and the results of several case studies documenting the disadvantages of labour exports (OECD 1974; Lohrman & Manfrass 1974; Paine 1974; Poinard & Roux 1977; Allaya 1974). If labour exports are not necessarily an unqualified benefit for the exporting countries, then we must consider the possibility of an unequal exchange between labour exporting and importing countries, given the well-documented benefits of labour imports for the latter (Castles and Kosack 1974; Castells 1975; BOhning 1974, 1976; Collard 1970). The key elements in such an exchange relationship are the two types of countries: the highly industrialized importing countries and the lowly industrialized exporting ones. The key components are not the employers and the foreign workers themselves, as is the case in Castles and Kosack (1974), Castells (1975), and others. The relationship of employer to foreign workers remains fundamentally an internal one wherein the foreign status of the worker increases the advantages of capital and weakens the working class. Exclusive attention to this relationship is inadequate for my purpose because it provides no information on the comparative situation of exporting and importing countries with respect to this trade. The relationship between exporting and importing countries can be seen as consisting of two analytically distinct elements. One is the economic factor which constitutes the relationship; the transfer of labour which takes the concrete form of the employment of foreign workers. The other, the effects of such a transfer for each type of country. Specifically, does such a transfer reinforce the position of politico-economic dominance of the importing countries and the dependence of the exporting countries? Here I want to analyze the first element, the second being the subject of the next half of the paper.

The category migrant labour The conditions for the emergence of an international migratory flow are embedded in the development inequalities between labourexporting and labour-importing countries. Once these conditions are produced, that flow will be reproduced so long as those conditions persist. Being historical, these conditions will vary over time and according to the characteristics of the particular countries involved. The nature of the migratory flow depends on the nature of

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515

those conditions, not on those of the migrants themselves, these being a consequence of those conditions. Thus the differences between the labour migrations into Western Europe today and those into the U.S.in the late 1800s and early 1900s do not derive from the differences between the migrants themselves-which in fact are not that markcd-but from the different conditions producing each kind of migratory flow. Migrants can be viewed as stepping or falling into a migratory flow, rather than initiating or constituting such a flow through their individual decisions and actions. Burawoy (1976: 1050-56) has provided a conceptual specification of the nature of such migratory flows, identifying those elements which define a migratory flow as a system of migrant labour. In his work he uses the cases of South Africa and farmworkers in California. I would add those of Western Europe since World War I1 and the Arab OPEC countries since the energy crisis. Startkg from the basic premise that for an economy to function, its labour force has to be maintained and reproduced, Burawoy analyzes the particular functions of migrant labour in this regard. What characterizes migrant labour is the institutional differentiation and physical separation of the two processes, that of maintenance and that of renewal of the labour force. That is to say, migrant labour carries with it a dual dependence: one on the economy of employment which provides for maintenance and one on the country of origin where the renewal process takes place. From the perspective of the economy of employment, the costs of labour force renewal are, in the case of migrant labour, externalized to another economy. The institutional differentiation of the renewal and maintenance processes constitutes the invariant characteristic of any system of migrant labour. The conditions which produce and reproduce the system vary. In the four cases mentioned, those of South Africa and California migrant farm labour analyzed by Burawoy (1976) and those of Western Europe and the Arab OPEC countries, such an institutional differentiation is present, even though the conditions producing and reproducing the system of migrant labour vary considerably in each of them. An analytical distinction between the individual migrants, the conditions producing and reproducing the system of migrant labour, and the system itself can in this way be maintained. The fact that the concrete individuals making up the migratory flow change, that some return, others stay, and new ones go, does not

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entail a transformation in the system of migrant labour or in the role it plays in the labour importing economy. Similarly, though the conditions producing and reproducing the system of migrant labour may vary over time, the characteristics of the individual migrants may remain the same (e.g. rural, unskilled, young, etc.). The effects of labour transfers As I mentioned earlier, one way of analyzing the effects of labour transfers is by examining the trade-offs to which it gives rise. Since I am particularly interested in seeing how such transfers contribute to reproduce positions of dominance or dependence in the world economy, examination of the value of this trade for each kind of country would seem adequate. I will argue that the value of labour imports is determined by the extent and nature of labour scarcities in the importing economy. The concept of labour scarcity has to be defined in relation to the role that a labour surplus plays in a capitalist mode of production and to the rate of capital accumulation. It should not be defined simply in relation to the total active population and its natural growth rate. A basic tendency in the capitalist mode of production is that the labour supply has to be adapted to the needs of capital accumulation, and not the latter to the labour supply. It is the rate and the level of capital accumulation which makes for high unemployment or labour shortages. This means that factors such as the degree of working class power, the kinds of concessions organized labour is capable of extracting from employers, play a role in defining a situation as being one of labour scaricity. If that power and those demands are excessive, then the level and rate of capital accumulation are threatened. An influx of foreign workers may weaken the working class, or fractions of it, may lower wages in those sectors most threatened by high wages (sectors which are often indispensable for the operation of other sectors) and may thereby restore capital accumulation to a healthy level. Furthermore, given the cyclical character of capital accumulation, in order to satisfy the labour needs in periods of expansion a labour surplus is necessary. The absence of a labour surplus and the various economic and political consequences it entails, define a situation of labour scarcity. In sum, the concept of labour scarcity in the context of a capitalist economy covers a number of situations which threaten existing or foreseeable levels and rates of capital accumulation.

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The conditions which define a situation of labour scarcity may thus vary greatly. They may include a situation of objective labour shortages as is the case in, for example, Switzerland, the German Federal Republic, the Arab OPEC countries, where the various factors mentioned above are further aggravated by the insufficiency of workers. Or they may include a situation where there is no objective labour shortage, but where capital wants to increase accumulation by increasing the rate of profit, weakening the working class, ensuring abundant labour supplies, as was the case, e.g., in France and the U.S. (for example, the bracero programme, impunity for employers of illegal aliens, etc.). Similarly, the costs or advantages of labour exports for the exporting countries depend on the present and foreseeable needs of the process of capital accumulation or centrally planned industrialization in those countries. The value of labour exports cannot be viewed simply as determined by the money remitted or brought back by the migrants and the addition to national income and hard foreign currency this represents. Nor can the value of labour exports simply be determined by subtracting the number of migrants employed abroad from a potential unemployment total to be expected in the absence of labour exports. I will argue that the value of labour exports is to be established in relation to the nature of the labour supply in the exporting country, the present and foreseeable rate and level of capital accumulation and, given these, the particular ways in which labour exports cut into the labour supply. Furthermore, a full appreciation of the meaning of labour exports for these countries entails examination of the consequences for society at large of the increase in national income due to remittances from abroad. There is little doubt that the individual migrants and their families benefit from the increase in their incomes. But some serious doubts are being raised as to, among others, the inflationary effects of an increase in national income which is not related to an increase in real productive capacity and which, given the kind of consumption it creates, does not have an economic growth function. These then are the issues involved in an examination of the effects of labour exports and imports, the subject of the next sections of the paper.

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Saskia Sassen-Koob

THE VALUE OF LABOUR IMPORTS

The value of labour imports is determined by the nature of labour scarcities; that is to say, by a rather complex politico-economic situation which may or may not involve labour shortages, but which is basically disadvantageous for existing or desired rates and levels of capital accumulation. An analysis of the value of labour imports requires examination of the nature of labour scarcities and of the extent to which the problems this poses for capital can be solved through ways other than labour imports, most significantly capital substitution of labour. In the case of Western Europe there are two types of labour importing countries: those such as France, Belgium and Great Britain which did not have labour shortages, and those SUC-I as Switzerland, the German Federal Republic, Luxemburg and the Netherlands which did have labour shortages. In all these countries migrant labour has fulfilled two basic functions: (a) increasing the level of profits of certain fractions of capital, and (b) operating as an anti-cyclical mechanism. In those countries which had an objective labour shortage, migrant labour has played an additional role, that of being an indispensable factor in the construction and operation of sectors of the economy. I shall briefly discuss the first two and then focus on this last instance. There are several reasons for this choice. Both Castells (1975) and Castles and Kosack (1973) provide good and easily available analyses of the first two functions; furthermore, much of the work on the U.S.and Mexican immigration contains, explicitly or implicitly, an analysis of these functions (e.g. Samora 1971: Galarza 1964; Bustamante 1972: Burawoy 1976). Finally, an analysis of how foreign, often unskilled, rural, illiterate workers have been integrated into the highly industrialized economies of Western Europe seems of relevance for the U.S.The European experience would seem to invalidate the claim in the U.S. that important reasons for the exclusion of minority workers from the better jobs in industry are their lack of training and certain cultural traits, on the one hand, and the lack of sufficient manpower training programmes on the other.
Labour imports and profits The increase in the level of profits made possible by labour imports

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519

is related to (a) a lowering in the cost of the reproduction of the labour force, and (b) a lowering in the cost of labour for certain fractions of capital. For an examination of the first point it is necessary to look not at individual capitalists but at capital as a whole-as a historical category. Labour imports in Western Europe are controlled by capital and the pertinent governments. Migrants are recruited from among the young in their highly productive years. They have to pass strict medical examinations so that their health is above average for nationals of the importing country. A good many of the migrants are skilled or semi-skilled, and come from the more industrialized areas of their countries. The labour-importing countries are appropriating labour that has been raised and often trained by the state and capital of the labour exporting countries. These also bear the costs of raising the dependents of migrants left behind, and of maintaining returning migrants often sick from overwork and already in their less productive years or ready for retirement. The savings for the importing countries on social services and infrastructure are significant, especially since these are the kinds of needs that cannot be supplied at a profit. Insofar as the state in the importing countries does not have to appropriate a share of taxes for these expenditures, this is a politico-economic gain for capital if wages do not have to be increased to meet such taxes-especially in Western Europe with its politically powerful unions. A lowering in the cost of labour for certain fractions of capital is possible due to the low wages paid to migrants and the lower costs for the organization of production which their employment allows. Their status as foreigners, as temporary labour, their frequent segregation at work and at home from native workers, their lack of familiarity with union politics or the ways of an advanced industrial economy-all these facts make migrants exceptionally dependent on their employers and unlikely to become unionized. These facts also tend to exempt employers from their obligation to provide various kinds of benefits and permit the repatriation of laid-off or unabled workers. Regarding the organization of work, the availability of migrants makes possible the operation of production processes in conditions rejected by unions and the profitability of inherently labour intensive activities by lowering labour costs. Migrants are also far more willing to work on night shifts

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Saskia Sassen-Koob

and overtime thereby allowing firms to operate at higher capacity. These various factors have repercussions for the native labour force insofar as they will tend to exercise a downward pressure on wages and have a generally weakening effect on organized labour.

Labour imports as an anti-cyclical mechanism Migrants are imported on a temporary basis-even though many eventually become permanent residents. They can be repatriated when their labour becomes superfluous and imported when it is needed. This has several consequences. Besides allowing for the export of unemployment and some of its costs, it exempts the importing economy from the need to build the infrastructure and provide the services to accommodate the fraction of its labour force made up of migrants. This means that social capital as a whole can be kept more or less at a level equivalent to that of average periods in capital accumulation. This has significant deflationary effects and allows for considerable stability in total consumption. In periods of contraction when large numbers of workers have to be laid off, total demand will not contract in a corresponding degree if a significant share of laid-off workers are migrants which can be repatriated and whose demand for private and public goods and services was very small to start with (BOhning 1974; Salowsky 1972). One could say that from the perspective of capital, migrants are as close an approximation to the abstract commodity labour as is (humanly) possible. Labour imports as a solution to labour shortages Switzerland and the GFR are the most important cases in Western Europe where labour imports directly alleviated labour shortages, besides fulfilling the first two functions discussed above. Both countries have consistently maintained that they are not immigration countries and that labour imports were a temporary measure to cope with what was believed to be a temporary labour shortage. Yet imports have continued for two decades. And today, in the deepest post-war recession, over half of the migrants are still employed and from all indications seem to be quite irreplaceable (BOhning and Maillat 1974; OECD 1977). Furthermore, although initially workers were imported almost exclusively for the primary sector, their employment has spread to all sectors and today is concentrated in industry where they constitute a considerable share of

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all workers. The 1972 pre-recession sectoral distribution (Tables 2 & 3) remains the same today; the stabilization of the migrant labour force follows similar patterns in both countries. Regarding the extent of the labour shortage in Switzerland and the GRF we can assume that the employment levels (Table 1) and sectoral distribution (Tables 2, 3) of migrants are indicators of respectively the levels and types of labour shortages. This seems a tenable assumption in view of the highly restrictive migration policies of these two countries,6 the political costs of labour imports due to the widespread hostility against migrants e.g. the Swiss Schwarzenbach referendum), and the practice of repatriating excess migrants. This argument clearly holds only for a disaggregated model of the economy since the internal differentiation of industrialized economies limits the transferability of workers from one sector to another so that labour shortages in one may coexist with labour surpluses in another. This situation is reinforced by the hierarchical organization of work and the objectively and socially determined resistance to moving downward or into socially undesirable jobs. It should be noted that although a large share of migrants hold such undesirable jobs, there is also a growing segment in socially acceptable jobs (Bbhning 1975; 1976: 5-23). In a situation of labour scarcity, whether it includes a shortage or not, there would appear to be at least four alternatives to labour imports. These are (a) increasing imports in order to diminish labour needs by freeing labour presently used; (b) implementing labour mobility and manpower training policies, including mobilization of so-called marginal workers, e.g. teenagers, elderly, handicapped, etc.; (c) capital substitution of labour; (d) export of productive activities. The first is only partially feasible in view of the laws of capitalist development. The second has met with very little success in Western Europe generally (e.g. Klaassen 1972). But even if successful, such policies would have been insufficient to meet the labour shortage in Switzerland and the GFR. The last two alternatives are embedded in the logic of industrial economies. There is, however, a limit to the export of needed productive activities. In the long run, capital substitution of labour is the more likely alternative, especially because it is a tendency inherent to capitalist development irrespective of labour shortages or surpluses. Furthermore, in the case of the two countries here considered, the objective was the reconstruction and expansion of

$ 5
m
.$

3
T o t a l
Countries

Table 1
1972: Migrant Population in Labour Receiving Countries of Western Europe (In Thousands)

s
National
Population Belgium France GFR United Kingdom Luxembourg Netherlands Switzerland Aggregates Resident Migrant Popnlatioa

&&of

Total
7.0 6.8 5.7 5.7 23.4 2.1 16.6

Employed Employed Civilian Migrant Labour Force Workers

As% of
3,783 20,834 25,934 23,560 i47.6 4.581 3,063 277.5 1,893.4 2.352.4 1,665 37.5 139 903.2

Total

Labour Force ParticipationRates National Migrant

9,711 5 1,485 61,669 53,826 342.4 13,330 6,385 196,748.4

749.8 3,500 3,500 3.100.3 80 282.4

1,060.2

7.3 9.1 9.1 7.0 25.4 3.0 29.5 12,272.7 6.2 81,902.6 7,268.0

39.1 39.5 40.5 43.1 41.9 34 40.5

37 54 67.2 53.7 46.8 49.2 85.2

8.8

40.5

59.2

Sources: Authors computations based on the following: Institut National de la Statistique, Belgium, various years; ON1 (France), various; INSEE (France) various years; Hornrnes el MigrutionsEtudes and Documents, various years; Statistiches Bundesamt Wiesbaden (GFR), various years; General Register Office (United Kingdom), various years; Department of Employment and Productivity (United Kindom), 1971; STATEC (Luxembourg), various years; Centraal Bureau voor de Statistiek (Netherlands),various years; EidgenossischenStatistischen Amt (Switerland)various years; OECD, 1974; ICMC, various years.

Table 2 Switzerland: Distribution of Total and (Controlled) Migrant Labour Force, By Sector, 1972 Sector

ISIC
Total Numbers
T o

Labour Force National Employed Migrant* % Numbers-

Numbers

As

70

of Total

Agriculture Hunting, Forestry Fishing

1

220,000 7.1

202,864

8.3

17,136 1,082

2.6

7.7

Mining, Quarrying
2

0.7

Manufacturing Electricity,

G a s and Water
Construction
5

3 4 1,440,000

46.8

1,012,6%

41.7

249,763

Transport Communications Hotels, Restaurants Domestic Services Other Services

6 8 9

176,459 427,304 7,432

27.2 66.4

1
1,418,000
46.1

1,213,455

50.0

75.639 19,643 101,831 204,545

14.5

15.5

31.11
3,078,000
100.0

Total

2,429,015

100.0

648,985

100.1

21.6

* International Standard Industrial Classification. ** Excludes workers with permanent permits, of which there were 254,191 in 1972. These are included in the figure for total and national
labour force.

Sources: OECD. 1974: 376-377; Eidgeniissischen Statistischen Amt. 1973: 104,108, 4042; Authors Computations.

Table 3

GFR Distribution of Total nad.Migmit Labour Force, By Sector, 1972

ISIC
qo

Total NlllUbeR
1,953,000 506,000 10,531,000 2,038,000 13,075,000 7.5 1.9 40.6 7.9 50.4

Labour Fom National EmDlored Migmit ' NlllUhR3 Y O .lo

1,930,557 429,461 9,154,890 1,618,333 11,202,684 8.2 1.8 38.8 6.9

As % of Total

I.
1 2 4
3 5

Agriculture, Hunting, Forestry Fishing Mining, Quarrying Electricity, G a s , Water Manufacturing Construction

22,443

0.9

1.1

I.

76,539

3.2

15.1

47.5

1,376,110 419,667

17.8

20.6

1,872,316

Services

6, 8, 9

9,376.000

36.2

8,970,605

38.0

405,395

T r a n s p o r t
1.
Communications Storage Total
7 1,530,000 5.9 42.1 100.0 1,477,762 10,448,367 23,581.608

44.3 100.0

6.3

52,238

2.2

457,633

19.4

2,352,392

99.8

9.1

Sources: OECD, 1974: 210-21 1; Statistisches Bundesamt, 1973: 144; Author's Computations (cf. Appendix I). ' Includes frontier workers.

International Circulation of Resources and Development

Table 4

525

Labour Exports as Percentage of Total National Labour Force 1973-1974 Active Population' in Exporting Country
12,732,000 19,571,000 3,423,55 1 3,638,600 13,613,580 8,340,400 2,564,700 3,254,400 1,093,700

Exporting Country
Spain Italy Portugal Greece Turkey Yugloslavia Algeria

Total' Workers Employed in Western Europe

546,700 1,172,775 541,300 246,600 85O,OOO3 735,500 500,000 400,000' 116,100

Migrants as % Active Population

4.3 6 15.8 6.8 5.2 8.8 19.5 12.3 10.6

Morocco

Tunisia

Sources:
OECD, Ibidem, OECD, ' Ibidem,
I

1975: 16, table I1 (2.3. 6 table I1 A.2 (1974 figures). 1974: 169. 116.

basic industries, a fact which set limits to the possibility of exporting productive activities. Thus, an adequate evaluation of the labour shortage in Switzerland and the GFR requires examination of the limits to capital substitution of labour. Switzerland and the GFR present an interesting contrast in this regard. In major investment decisions in the immediate post war, Switzerland opted for capital widening, maintaining its rather labour-intensive production apparatus and small scales of production. The GFR responded to the need of economic expansion through capital deepening and large scales of production. Investment decisions are not made in a natural economic space, but in a socio-historical context. In the postwar years in Western Europe this context was one in which the reconstruction boom and economic expansion in general were seen as temporary and expected to be followed by stabilization if not downswings. It had not been foreseen that expansion would continue up to the middle of the 1960s and then resume in the late 1960s after a brief recession. Thus the objective had been to maintain enough flexibility in the economy so as to accommodate temporary and permanent slowdowns (Bbhning and Maillat 1974). This was especially the case in the GFR, engaged in a large-scale reconstruction process after having been flattened by the war. And it was the case in Switzerland which, not having suffered physical destruction, found

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herself supplying foreign as well as national demand. Given the temporary nature attributed to both kinds of situation, the volume of labour needs associated with reconstruction and expansion was perceived to be temporary also. In Switzerland major decisions regarding the development of the production apparatus were taken before 1950 (Maillat 1974; Rossi and Thomas 1971: Ardenti and Reichenbach 1972). At the time the Swiss economy was characterized by small and medium size enterprises, often family owned, and with small scales of production. Given the temporary character attributed to postwar economic growth, it seemed profitable in the long run to maintain basically this format so as to avoid under-utilization later on. This decision was profitable in the short run because it allowed prompt satisfaction of the growing demand for consumer and capital goods. Extensive capital substitution of labour would have required considerable time and changes in the basic economic organization in order to accommodate the larger scales of production generally needed to ensure profitability in a capital intensive production apparatus. Throughout the 1950s and up to about 1963 the Swiss economy responded to growing demand predominantly through capital widening (maintenance of capital/labour ratios) rather than capital substitution of labour (Rossi and Thomas 1971). The availability of a large supply of cheap foreign labour was a factor contributing to the profitability and feasibility of this process, but it was not the dominant single cause. It should be viewed as an important factor within a larger conjecture having to do with the elements described above. Once these major investments in the direction of capital widening had been carried out and labour shortages became increasingly acute, the possibility of opting for capital substitution of labour was to a large extent merely a theoretical one. In practice it was no longer available insofar as the costs involved would make such a transformation towards capital intensity unprofitable. It was at this point that the availability of large supplies of cheap foreign labour played a crucial role in the comparative costs and hence desirability of maintaining the existing production apparatus and postponing substitution. The decision to increase labour imports in the face of continuing economic expansion and a growing labour shortage was to a considerable degree, an unavoidable one. Labour-imports had become a constraint embedded in the technology of production.

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Capital substitution of labour only became a profitable alternative after 1963 due to a number of factors. The main reason generally given is the rise in wages (Kindelberger 1967: 203-204; Bundesarnt 1964: 101 ff). But, once again, I think that the conjunctural factors supporting that decision were more complex. On the one hand, postwar investments had been operative for fifteen years, thus ensuring amortization. On the other hand, given the time elapsed at least partial obsoleteness of the equipment had set in by 1963 and hence the need for replacement. Furthermore, the time elapsed allowed for the use of more advanced technologies and the avoidance of intermediary steps (Bundesamt 1964: 104), a fact which explains in part the highly advanced nature of various sectors of the Swiss economy. At the same time, and as a consequence of continuous economic expansion and growing demand, the larger scales of production typical of capital intensity became feasible and profitable. This was especially so given a persistently tight labour market and strong political pressure to stop labour imports (e.g. the Schwarzenbach referendum) in a situation where additional labour imports would become necessary in the absence of capital substitution of labour (Maillat 1974). The stabilization in employment levels of migrants after 1963 is in large part related to this new direction towards capital intensity. Economic expansion in post-war Germany was a process quite different from that of Switzerland. Not only did it involve a drastic reconstruction programme, it also started from a basis containing remnants of the large scales of production typical of the war and pre-war economy (ShBnfield 1965: 240-246). This probably shaped and facilitated the post-war transition to a generally capital intensive economy (and also takes away some of the glamour of the socalled German miracle). But there are limits to capital substitution of labour. Absence of full automation, together with the continuous expansion of the production apparatus due to reconstruction, generate a need for workers. The GFR first had an abundant supply of labour in the political refugees and displaced persons from the lost Eastern provinces. This explains why labour imports began almost a decade later here than in the other European labour-importing countries. By the late 1950s the GFR began labour imports. These were seen as an exclusively temporary measure to cope with shortages in agriculture. Today, the employment of migrants has spread to all sectors and is a permanent

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feature of the economy (Table 3) (Bahning 1975: 7-21; 1976:

128- 134).

Notwithstanding the capital intensive emphasis, the need for labour imports became as much a constraint in the GFR as in the more labour intensive Swiss case. But whereas in the latter this constraint was embedded in its technologies of production, in the GFR it was more closely related to purely economic factors. On the one hand, the labour shortage would have caused slowdowns and partial standstills in some of the capital goods industries and hence in the construction of the capital intensive production apparatus (Balke 1966). Labour imports were one key factor allowing for rapid construction and speeding up of capital substitution of labour (Merx 1972). On the other hand, the costly capital-intensive production apparatus often requires fulltime and full capacity operation to be profitable, especially at the beginning during its amortization period. This was made possible by labour imports and the willingness of a large share of migrants to work at night. A key long-term economic issue regarding labour imports is the effect on advances in productivity which the availability of cheap, unskilled labour may entail. That is to say, do labour imports slow down capital substitution of labour or technical and organizational progress? The issues here are complex and controversial. Given space limitations, let me just cite one empirical study which throws some light on the matter. A 1973 study of 719 firms in the Southwest of the GFR where the use of labour imports has been most intense, had the following results (Bullinger and Huber 1974: 32 ff). A greater share of firms employing migrants (54 percent) had introduced technological or organizational innovations than firms not employing migrants (40 percent). The higher the share of migrants in their labour force, the more innovative the firms were. Capital-widening was more frequent in firms without migrants. Investments aimed at reducing labour shortages were more frequent in firms with migrants, to the point where degree of foreign employment correlated negatively with the tendency towards capital widening and positively with the tendency towards innovations aimed at reducing labour costs and shortages. One test was based on a direct question as to whether the firms would be able to substitute migrants with capital. The purpose was to establish unused substitution potential. Only 4 percent of the firms maintained they would be able to do so; 31 percent answered that they could

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reduce the number of migrants; and 60 percent that they would be unable to continue production without their employed migrants. These findings suggest that it is precisely firms with high levels of migrant employment which will tend to implement capital substitution of labour and labour-saving organizational innovations. The study also found that the workplaces occupied by migrants are to a large extent inconducive to further capital substitution (1974: 34). Hbpfner (1975), after evaluating the evidence as to the positive and negative effects of labour imports on technological and organizational progress, concluded that the positive outweigh the negative ones. In general, the GFR migrants are employed regardless of (1) capital intensity, (2) cyclical phase of employment, and (3) variations in the capital/labour ratio (Bohning, 1975). Capital substitution of migrant labour finds constraints in technological limitations, in the economics of operating a capital-intensive production apparatus, and in the inevitably labour-intensive nature of services. The cases of the GFR and Switzerland show that in a situation of labour scarcity which includes a significant labour shortage, labour imports are a valuable resource because there are economic and technological constraints to capital substitution of labour.

THE VALUE OF LABOUR EXPORTS

It seems to me that the existence of labour surpluses in most underdeveloped and developed countries has tended to devalue the significance of the labour factor for development. The fact that in the event of a labour shortage, a country can import labour without major difficulty and at a low price, has further contributed to this devaluation of the labour factor. Labour surpluses and the low price of imported labour have meant that the exporting countries find themselves exporting what is viewed as a lowly valued resource whose supply is plentiful. This is a situation similar to that of other resources exported by the underdeveloped countries. The fact that some of these resources are very valuable for the operation of the importing economies has not meant that they earned a high price in the international market. History has shown us that it takes the organization of exporters into a cartel to attain an international

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price which approximates the actual value of the resource for the importers. The general characteristics of the international circulation of resources suggest that it is not the nature of the resources being exported which determines price. It is the politico-economic situation of the exporter in the world economy which plays a far more decisive role (Emmanuel 1972). Whether this argument holds fully for the case of labour is still a question; yet there are some applicable elements. Thus it is quite probable that if the developed countries would export unskilled and semi-skilled workers to the underdeveloped countries, this would be more expensive labour than Third World labour exports.' Nor would this be surprising: the socio-economic context of origin plays an important role. The labour surpluses in the exporting countries and the low price of migrant labour in the importing countries should not be confused then with the value of this labour for the latter. In the market model price and value are the same. But the analysis of labour imports in the light of labour scarcities, especially if they include labour shortages, points to the value of labour imports notwithstanding the low price paid for it. Indeed, the low price further adds to the value of this import. Furthermore, the presence of labour surpluses in the exporting countries does not diminish the value of labour imports because this value is determined by the needs of the importing countries. In fact, the presence of a labour surplus in the exporting countries might contribute to the value of labour imports insofar as it makes for a cheap and abundant labour supply. But the notion of a labour surplus itself has to be analyzed in order to examine the place of labour exports in the exporting countries. It is generally assumed that exports are beneficial because they diminish the labour surplus. But a labour surplus is clearly not a homogenous category. In the next section I examine the nature of labour surpluses and their place in the process of industrialization. Furthermore, the assumption that labour exports actually come from the labour surplus needs to be examined. This is the subject of the second section.

Labour surplus and development With growing capital accumulation, including increases in labour productivity, the elasticity of capital accumulation grows as well. This demands a parallel elasticity in the labour supply, that is to

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say, a continuously available supply sufficient to cover needs during an expansion phase. The wider these fluctuations, the wider the fluctuations in labour needs-though the latter will be proportionately smaller due to increases in labour productivity. Satisfaction of wide fluctuations in labour needs requires a large labour surplus. Within the labour surplus, I think it is important to distinguish between what could be described as (a) an apparent surplus, and (b) a hard core surplus. By the first term I will refer to those segments of the labour surplus which would become a necessary labour supply in the case of significantly expanded industrialization. By the second term I will refer to those segments of the labour surplus which would not be absorbed even in the event of such an expansion. This distinction is to a large extent analytical, though there are definitely segments of the working-age population which are more.msrrginal to the economy than others, e.g. the disabled, longterm unemployed, teenagers, etc. Identifying which types of workers fall into each category is a matter of empirical investigation. And so is the specification of what share of the surplus falls into each category. Precise measures are quite impossible and quite unnecessary as well. The share of apparent surplus in total surplus is increased not only by the contractions in capital expansion, but also by the longer than average workhours typical for fulltime jobs in underdeveloped countries. Underemployment has the opposite effect; it decreases the share of apparent surplus insofar as the underemployed could satisfy a larger labour need than they presently do. The main point is that a share of the labour surplus is necessary for capitalist development. If labour exports bite into this share, the effect is detrimental for development. Whether such development and the large scale industrialization it entails are desirable is a complex matter. For the purposes of this paper we can retreat a few steps and argue that (a) a labour surplus is necessary for capitalist development, and (b) in the case of a centrally planned economy abundant labour supplies will still be necessary if the purpose is industrialization, so that what was initially a surplus eventually would become needed productive labour. * In both cases a segment or the whole of the surplus is apparent surplus, a fact which should be taken into account in any examination of the effects of labour exports.

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Labour exports and development To examine the role of labour exports we would ideally use precise information on several matters. First, information on the exact composition of labour exports, specifically what share comes from the labour surplus and which from the employed labour force. Second, what share of the labour surplus component of labour exports is part of the apparent surplus and which of the hard core surplus. Third, what share of the employed labour component of labour exports comes from sectors of the economy that have labour shortages and which from sectors with labour surpluses. But precise information on each of these categories is not available. There are only partial bodies of data, often only indirectly related to these issues. Though incomplete, they provide an adequate starting point for the discussion in this section. The figures on the incidence of labour exports, both temporary and long term, suggest that the outflow of workers is considerable (see Table 4). The International Migration Commission indicates that in the 1960s, for every 100 persons entering the labour force in Portugal, Spain, Italy, Yugoslavia, Greece and Turkey, 50 to 75 migrated to the labour importing countries of Western Europe (Beijer 1971: 113). Overall about 5 to 10 percent of the labour force in each of the exporting countries is employed abroad. The return level among the more skilled, mostly urban and most adaptable to an industrial environment is low (OECD 1977; B6hning 1974; Paine 1974; etc.). Most migrants are on medium or long-term stays; given the recency of the process one cannot say whether permanently, though for all practical purposes this is the case, especially since the importing countries seek to stabilize their migrant labour force and promote the entry of dependents. If to these bare figures we add the selectivity of labour imports and the internal differentiation of the economy and hence labour force of the exporting countries, the figures become even more considerable. Although they vary in its extent, all the importing countries have been selective. Medical examinations are required and certain age groups and educational backgrounds are predominant. About 85 percent of all migrants employed in Western Europe in 0 . the late 1960s were under 39 years of age, and almost haIf under 3 The educational distribution of, for example, Yugoslav migrants is the same as that of the total population in the country, suggesting that a good share of labour exports involves highly and

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moderately qualified personnel. Further, although the incidence of emigration is generally higher in the less developed areas of the exporting countries, in absolute figures most of the migrants come from urban and more developed rural areas. That is to say, they involve those workers who could more easily be introduced into the industrial work process, and thus are more likely to come from the apparent surplus than the hard core surplus. Finally, a good share of labour exports involves employed skilled and unskilled workers and recent graduates from vocational schools (OECD 1974). In 1971, about 36 percent of all Italians, 46 percent of all Turks, 30 percent of all Yugoslavs, 34 percent of all Tunisians, and so on, working in the GFR were skilled workers (Schiller 1974: 147). The internal differentiation in the composition of labour exports can only be captured through a disaggregated model of the economy. The widespread assumption that labour exports must be of benefit only holds if we use an aggregated model of the economy and simply compare overall figures for employment, labour surplus and labour exports. One basic type of segmentation in the economy and hence in the labour force is that between the rural and urban segments. It is typical for migration flows to begin in the more developed regions, generally urban, of a country (Schiller 1974: 154; see also BOhnings model of labour emigration as a self-feeding process, 1972). Eventually such a migration flow will spread to the less developed areas of a given country and draw a larger share of migrants from these. The labour-exporting phase which stretched over two decades and came to a virtual close with the present recession, followed this pattern. The rural segment of the labour-exporting economy appears to benefit from such out-migration-but only in the short run. Labour exports directly alleviate unemployment and provide a regular income through remittances to the families left behind. This income growth stimulates demand for goods and thereby expands the market for consumer goods. But several of these migration flows have been going on long enough to allow for not so short a view. The data that are becoming available on several of the labour-exporting countries point to a generalized tendency: decreases in the rural labour surplus through workers emigration has not promoted the economic development of the pertinent regions (Baucic 1972; 1974; Allefresde 1972;

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Belguendouz 1974; Livi-Bacci 1974; Paine 1974; Tauriainen & Koivula 1973; Zolotas 1966; Poinard & Roux 1977; Bortucene & Ersoy 1974). The data suggest that a good proportion of labour exports have cut into what I have called the apparent labour surplus. This becomes especially visible in the seasonal labour demand during the planting and harvesting periods. Thus, labour surplus countries such as Greece, Turkey, Yugoslavia have regular labour shortages during these peak agricultural seasons, similarly with small, low-wage firms. Furthermore, in areas with a high incidence of labour outmigration there is a decrease in the intensity of land use. In Yugoslavia, for example, the decrease in the working agricultural and farm gardening land remained unworked. Since then there has been a marked increase in the rate at which such land remains unwoiked: between 1969 and 1971 it increased to almost 600,000hectares (ca. 1.5 million acres). At the same time Yugoslavias rate of food imports has increased considerably. According to one expert on labour migrations from Yugoslavia, there is no doubt that emigration plays the primary role in this process insofar as it provides alternatives to agricultural production in the form of employment abroad and remittances (Baucic 1974: 202-203). Portugal has experienced a similar disintegration of its rural economy and the need to import food (Poinard & Roux 1977). Decrease in land utilization has been found in all the rural areas with high incidence of workers out-migration. Decreased land utilization is in part the direct consequence of the loss of a share of the young, able-bodied agricultural labour force and in part the indirect consequence of an alternative source of income through remittances. There is less need for family members left behind to work the land, or to hire themselves out as seasonal or year-round agricultural workers. For a considerable share of the population in certain areas, the basis of their income has shifted from a local productive activity to one in aforeign country. This influx of money and hence consumption which is not the result of productive activities within the country cannot but have economic consequences. Employment abroad creates an artificial wellbeing for rural areas with high migration incidence. The history of the rural areas of Ireland and Italy, both veteran emigration and remittance receiving countries, are repeating themselves in North Africa, Turkey, Greece, Yugoslavia. Emigration did not shrink the labour

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surplus and hence unemployment; it increased unemployment by shrinking the economic base of the area. It is questionable today whether an increase in money through remittances earned abroad can offset the losses in food produced in the home country. Although appropriation of food production by large landholders poses a problem of equitable distribution, it is also true that the production of an agricultural surplus is a basic factor for development. The general effects of emigration for the rural areas have included decreased land utilization and hence decreased agricultural production and, in view of this, a potentially higher unemployment upon the return of migrants. With the urban segment, it is necessary to distinguish labour exports by skill level and industrial sector. Although the data in this regard are quite incomplete, it is possible to detect some trends. In each of the labour-exporting countries, a good share of the migrants comes from the skilled segment of the labour force. This skill level may not be regarded as very high for the standards of the importing countries; yet this does not alter the fact that these workers can represent a comparatively high level of training and consequently investment and economic potential for the exporting countries. Furthermore, given the nature of the importing economies, it has been the more skilled, more urbanized, or at least most adaptable, segment of labour exports which has become successfully employed and is likely to remain on long-term stays. Return migrations will tend to have a disproportionally high component of workers who have failed to find employment, keep their jobs, adapt to the new environment, stay in good health, resist the mental and emotional stress. From the perspective of an industrial economy, the best workers stay abroad either for a long time or permanently, while the problem cases come back. The employment distribution of migrants in Western Europe shows that the largest share is in the secondary sector. Although a good share of their jobs require low skills, the industrial work process demands considerable flexibility on the part of the foreign, generally nonindustrial urban or rural workers. Those which adapt best are the least likely to return. And it is precisely these which the exporting countries could use best. Several of the labour-exporting countries are beginning to experience shortages of skilled labour attributable to labour exports and all of them have experienced a skill drain (OECD 1974; Mouly

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& Costa 1974; Schiller 1974; Cetin 1974; Krane 1975; Poinard & Roux 1977). Over 40 percent of labour exports from Turkey are skilled labour (Krane 1975: 199-200); Paine (1974: 123) reports that emigrants have been a relative elite group . , , better educated, more skilled, financially better off, employed in more modern occupations and coming mostly from the middle and upper ranks of the peasantry and urban labour force in Turkey. The construction, shipbuilding, coalmining and textile industries in Turkey saw their labour force depleted by emigration, while the agricultural sector provided comparatively few emigrants (Cetin 1974; Varlier & Ilkin 1974). Greece has reportedly had its industrialization process retarded due to export induced shortages of skilled labour (Mouly & Costa 1974: 216); there have been increasingly louder critiques of labour-export policies and their negative effects on development since the late 1960s (Zolotas 1966). The OECD economic survey of Yugoslavia (1973) stated that 230,000 skilled workers had left the country in the 1960s, leaving socialized manufacture with about 600,000 skilled workers (Bbhning 1975b). In Yugoslavia there have been skilled labour shortages since 1969 (Poinard & Roux 1977: 40-41). Schiller (1974) reports on one particular factory of vehicles and steel products in Yugoslavia which lost 1,000 highly qualified workers and engineers over a period of four years due to labour emigration. In Tunisia the government has trained what appears to be an excess of skilled workers in certain job categories who are now being recruited by the labour-importing countries directly from vocational schools (Simon 1973); however, skilled workers have also been recruited directly off their jobs, which has led to the implementation of protective legislation aimed at ensuring local employers priority with regard to skilled workers. In Portugal, from 1964 onwards, more factory than rural workers have emigrated; all surveys of employers from then on have shown labour shortages, to the point that in 1967 factory workers lost the right to emigrate when that years survey found that 45% of firms with more than 10 employees complained of shortages (e.g. construction firms indicated a 29% labour deficit) (Poinard & Roux 1977: 38-39). A number of issues are involved in the export of skilled and unskilled labour from the urban segment. First, the export of skilled workers is highly detrimental in labour-short sectors of the economy where they are difficult or almost impossible to replace

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and it takes time and resources to train them. A shortage of skilled workers in a given sector has a number of secondary consequences in addition to the direct obstacle to production which such a shortage entails: inflationary pressures, bottlenecks in the production process, interruption or slowdown of related economic activities. The general effect will tend to be a decrease in employment and in the level of economic activity. All the exporting countries have had their skilled labour supply, including employed labour, negatively affected by labour exports. Second, the export of skilled workers from labour-surplus sectors has far less serious consequences in the short run. But such exports do constitute a transfer of human capital investment to the importing country. And this is a loss even if the exporting country could not have exploited this resource at the time. The export of employed skilled workers from labour-surplus sectors creates cost to the employer, varying according to the level of job specificity and need for on-the-job-training. Here it could be argued that this would lead to the inclusion of a larger segment of the labour force into productive activities through (a) exports and (b) use of a larger segment of the national labour supply insofar as export-induced shortages lead to replacements. However, what little evidence is available suggests that indiscriminate labour exports of employed skilled (and unskilled) workers have created a certain reluctance among employers to hire replacements and train them and have led to capital substitution of labour (e.g. Paine 1974: 146). Since all the exporting countries are intent on industrialization, it can be said that labour exports are cutting into the apparent surplus when they involve skilled workers from the labour-surplus sectors; furthermore, insofar as they induce employers to replace workers with machines, labour exports contribute to increase that segment of the labour force that is structurally marginal to the economy-which cannot be absorbed by the productive process. Third, the export of unskilled workers is probably advantageous in the short run. There is generally a large surplus of unskilled workers in all large cities. Exports alleviate unemployment and increase the wellbeing of the workers and their dependents left behind or taken along. However, at the macrosocial level, labour exports may have detrimental effects. Remittances create a consumption capacity which is dependent upon employment abroad; furthermore, upon their return the workers may engage in consumption

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which stimulates imports or creates local inflationary demand for goods. Finally, and perhaps most importantly, an excessive loss of unskilled labour, even if surplus labour, may hinder industrial expansion or the momentum of growth at a given time. In this regard, two cases are illustrative. On the one hand, that of Western Europe, where the evidence is quite conclusive as to the key role played by an abundant labour supply for economic growth (Kindleberger 1967; Castles and Kosack 1974). On the other, the case of the Arab OPEC countries, where the lack of workers, including unskilled workers, was a major obstacle to transforming oil revenues into means of production, leading to massive imports. However, moderate levels of export from the unskilled hurd-core surplus are probably advantageous to almost everybody involved: the migrants, their families and the urban economy. Yet the selectivity of the labour-importing countries probably induces exports of the apparent unskilled surplus. In looking at labour exports and their role in development, three issues stand out: the role of labour exports in alleviating unemployment, the contribution of remittances to economic growth or capital formation, the use made of skills attained by migrants upon their return. There is no significant correlation between labour exports and decreases in unemployment as shown by the evidence cited in the above discussion and by econometric analyses (Allaya, 1974). On the contrary, labour exports may add to unemployment by shrinking the economic base of a region or sector of the economy. The data show that labour exports cut into the skilled, including employed, labour supply of all the exporting countries; there is no doubt that such exports involve a significant skill drain. Regarding remittances, in principle these could have been used to stimulate investments into productive activities, thereby stimulating economic growth. The evidence shows that remittances have (a) gone overwhelmingly into final consumption, that is consumption which has no economic growth effect; (b) stimulated demand for imported consumption goods, therewith having a negative effect on the balance of trade as well as a demonstration effect that does not stimulate demand for goods from local industries; and (c) had inflationary effects insofar as they have caused an increase in the money supply and demand for consumption goods without there being a corresponding growth in the actual productive capacity (see my discussion above) (Tapinos 1974;

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Allaya 1974; Bbhning 1975).O Remittances have had no quantitative effect on economic growth trends (Allaya 1974); this evidence together with the fact that the skill drain and remittances relate basically to the modern sector, suggest furthermore that the quality of growth has also not been affected (B6hning 1975). Regarding the use of the skills attained by migrants during their employment abroad, the evidence suggests that the exporting countries have failed to integrate these into productive processes. There appears to be a structural incapacity to do so insofar as industrialization has not undergone significant expansion. It is this industrial base which would allow for such an integration; individual carriers of skills cannot promote development. This failure discredits the notion, held by the labour-importing countries, that development could be transmitted to the exporting countries through the skills and behavioral patterns acquired by migrants.

CONCLUSION
Given labour scarcities, with or without labour shortages, and constraints to capital substitution of labour, labour imports are a valuable resource for the operation and growth of the importing economies. Furthermore, a plentiful labour supply tends to lower production costs, prices and wages as well as permitting quick relief of bottlenecks in production and distribution. This has a generally deflationary effect. The fact that this labour supply is foreign permits repatriation of workers once they become superfluous, thereby diminishing the effects of recessions. Because of the temporary nature of a good share of labour imports and because of their powerlessness, the importing countries have not felt pressure towards building the infrastructure to accommodate such additions to the labour force or to provide the extent and level of services expected by nationals. In contrast, the labour-exporting countries are experiencing long-term disadvantages from labour exports - disadvantages which override some of the short-term benefits. The selectivity of labour importers has cut into the younger, healthier, best educated segment of the labour force, mostly from the more developed rural and urban areas of a country. Furthermore, in all of the exporting countries, there has been a considerable skill drain, including

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employed skilled workers. To this should be added the negative selectivity of return migration: it is the less skilled, less adaptable worker who is most likely to return or be repatriated. Finally, the incapacity to make use of skills acquired abroad, the fact that remittances go into final consumption and have little if any economic growth effect, has added further to the negative balance insofar as neither skills nor money have been used for capital formation. In sum, the available evidence on two decades of labour imports and exports indicates that (a) the labour-importing countries have benefitted significantly, and (b) the labour-exporting countries have failed to experience the expected benefits and have, to the contrary, suffered a skill drain, lack of labour-export induced growth, and often an erosion in the economic base of regions with high labour emigration. There is a noteworthy contrast between the highly regulated process of labour import and the uncontrolled process of labour exports. The system of migrant labour as it operates today in the European-North African labour market contributes to reproduce the position of politico-economic dominance of the importing countries at the cost of that of the exporting countries. Furthermore, its operation has produced a new type of dependence in addition to the existing ones: dependence on the labour-importing countries for the employment of a segment of their labour force and for a share of national income. Finally, on a more general level, the international circulation of labour as it takes place in this market points to certain limits in the international division of labour: the importing countries, specifically the GFR and Switzerland, could not substitute their labour shortages by capital, the export of productive activities or import trade.

NOTES

1 . Elsewhere I have a more detailed analysis of the case of the OPEC countries (Capital accumulation and labour imports, unpublished). In these countries. foreign workers represent very high shares: 37% in Bahrain, 74.6% in Kuwait, 33% in Saudi Arabia, 23% in Libya, 34% in Oman (see Halliday 1977). 2. In this context it is of interest to note that Syria, for example, which used to

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be a labour exporter, is now trying to have its nationals abroad return. 3. Besides this direct transfer of labour there is also an indirect transfer of labour as value from low wage countries to high wage countries (Emmanuel 1972). This transfer is further increased by the fact that low wage countries tend to have low levels of capital intensity and high wage countries, high levels. (See the discussion in Marx on prices of production and transfers of value from backward sectors of the economy to advanced sectors. Though this discussion relates to internal transfers it has applications for international transfers.) 4. For example, a 1974 U.S. House Report found that the savings in investment costs made possible by the immigration of technical, professional and kindred personnel from less developed countries was of 850 million dollars annually for 1971 and 1972 (Committee on Foreign Affairs 1974). UNCTAD estimates the net income gained by the U.S. from such immigration at 3.7 billion dollars for 1970 (there appear to be some problems with this estimate, however; see Bhagwati 1976: 151). There are a large number of studies showing the value of the brain drain for the receiving countries. 5 . What follows is based on information from the International Labour Office and the OECD, with more detail provided below under The Value of Labour Exports. The ILO has the best reservoir of information on the subject of migrant labour in its Department of Working Conditions and Environment and in the various projects and working papers of the World Employment Programme. The OECD has a system of permanent observation of migratory flows, SOPEMI. 6. For a summary of migration policies see Bohning 1974. Most of these countries have policies which link residence right with employment, in such a way as to ensure return of unemployed or unwanted workers. After 1973 most West European countries changed their policies towards cessation of new recruitment and stabilization of the existing migrant labour force. 7. The case of Venezuela is quite illustrative. For the last two years it has tried to recruit skilled workers from Spain and Portugal and has met with little success because the workers were not quite convinced as to the economic advantage; incidentally, the offers include paid transportation. There is a marked contrast with the migrations into Western Europe (which rarely include paid transportation), where migrants were often willing to wait several years before they were accepted. 8. Several socialist countries (Soviet Union, Czechoslovakia, Democratic Republic of Germany) have had to resort to labour imports, including North Africans, to satisfy their labour needs. (I have elaborated on this incapital Accumulation and Labour Imports). 9. Thus, for example, up to 65 percent of the labour imports projected by the United Arab Emirates in the next years represents unskilled labour. On the other hand, some of the labour exporfing countries are beginning to import unskilled workers: Spain, Italy, Portugal, Yugoslavia. 10. The transfers of savings and social security payments that have been registered between the labour importing countries of Western Europe and those providing the labour, have amounted to over seven billion dollars. This figure does not include unrecorded transfers. In the case of Yugoslavia, for example, remittances amounted to more than 10 percent of total personal expenditures in 1971 (ILO 1976. 11: 136, Bohning 1975: 25). See also Nikolanikos (1971). For a differing opinion see Griffin (1976) and also Bohnings rejoinder (1976: 39-50).

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0

REFERENCES

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Saskia Sassen-Koob is Assistant Professor in Sociology, Queens College of the City University of New York. She has published in several scholarly journals and has two books forthcoming: The Dialectic According to St Engels and Capital Accumulation and Immigrant Labor.