Dr. Dierk Hirschel is the chief economist of the Federation of German Trade Unions (FGTU) and a resolute Keynesian. He is known to the German public for his numerous commentaries in notable newspapers such as the Financial Times Germany, the “Frankfurter Allgemeine Zeitung” (FAZ) and the “tageszeitung” (taz). In this interview Dr. Hirschel represents his own opinion and not the official position of the FGTU. The interviewer on behalf of the editorial office was Mehrdad Payandeh.

Question: Dr. Hirschel, the Iran Referendum Movement is a young movement in the history of Iranian opposition dedicated to a referendum in Iran which shall take place on the basis of the United Nations’ Charta of Human Rights. The members of this movement are of the opinion that Non Governmental Organisations (NGOs) are indispensable for the democratisation of Iran.
After the Islamic regime had massively arrested bus drivers striking for the legalisation of their own trade union and pay increase, the question of the importance of trade unions for the functioning of a developed democracy has arisen. As the chief economist of the FGTU, please describe to us the economic, political and social functions of unions and especially of the trade unions.

Dr. Hirschel: In the first place, the task of trade unions is to remove the competition between employees. Thereby they improve the negotiating position of the dependent employees. After the Second World War the western-European trade unions have achieved to let employees benefit proportionately of the increasing social wealth. The real wages rose and the working hours were cut down. People were secured from the central risks of life (disability, disease, seniority, unemployment) by the expansion of the welfare state. Workers could participate in their company’s decision-making process due to the works- and staff councils and the boards of directors. Thereby, the democratisation of the economy was furthered. This social progress was given to the unions for free. It was the result of consensus and conflict under the special social circumstances after the end of fascism. In the 1980’s the tide turned. Following the increasing mass unemployment, the globalisation, the collapse of the Eastern bloc and the transformation of the European social democracy, the trade unions find themselves in a defensive position. Today they defend the democratic and social achievements of the past decades.

Question: My second question aims at the process of globalisation. How important is the internationalisation of the trade unions for a social balance of the global markets? We know examples like the world works council of VW. How do the labour representatives from different countries and cultures work together?

Dr. Hirschel: The Globalisation is a central challenge for the international movement of trade unions. The establishment of international production networks weakens national unions in their negotiating position. In many branches – automobile production, chemical industry- we are confronted with a new dimension of the competition for location within the companies. The global players let their industrial locations compete for investment- and production orders at the expense of the employees. Capital market orientated reconstruction of the companies – shareholder value orientation – tightens the pace of this development as the aims of return will be increased. Consequently, wages will be shortened and working hours extended. Hereto, the international movement of trade unions can only react by decreasing the cross-border competition between the workers. Therefore trade unions internationalise their wage and participation policy. The work of works council is increasingly co-ordinated internationally along supply- and value production- chains. There is an institutionalised dialog between the national trade unions within the EU25 concerning collective bargaining policy. The intention is to prevent the competition for lower wages. The results are not yet inebriant. Cultural barriers and national egoisms hamper the work. However, there is no alternative. The wealth of industrial countries and of many developing countries has increased because of the progressing international division of labour processes. Without any countervailing trade union power the “profits of globalisation” cannot be justly distributed.

Question: The history of the Islamic Republic is marked by a massive prosecution of the labour movement and their forced Islamisation by the foundation of “Islamic works councils” and trade unions. This forced Islamisation includes not only the Iranian labour movement but also all other kinds of unions like student unions and labour and farmer unions etc. Does German history know such mechanisms of suppression? How can such developments be prevented, or at least minimized, in the long term?

Dr. Hirschel: In German history the labour movement had been suppressed several times. During the imperial period Chancellor of the Reich Bismarck enacted the so-called Socialist Laws. The German Social Democracy was banned. After the Nazis came to power, social democrats, communists and trade unionists were put into concentration camps. Their organisations were eliminated. No constitution can guarantee that history does not repeat itself. The civil freedom rights (freedom of press, speech, association, etc.), the civil constitutional state and the rule of law, however, are important instruments against suppression mechanisms. But it is the democratically organised parties and unions who vitalize a democracy. Yet the precondition for a broad political commitment to parties and unions is securing individual people from the main risks of life. Therefore, constitutional states and welfare states interrelate.

Question: In the Iranian opposition there is a dividing line between those who are in favour of “freedom” and those supporting “social justice”. The first group pleads for a broadly deregulated free market economy. The latter group, mostly consisting of former communists, pleads for social justice with anti capitalistic arguments and is partly prepared to accept deficits of democracy in the Islamic Republic. Ahmadinedshad also used the issue of “social justice” for his election campaign. As a critical left-wing economist, please explain to us the economic and social functions of both categories for the functionality of a developed and modern democracy.

Dr. Hirschel: Freedom and social justice are interrelated. In terms of economy, this means that functioning markets need rules. The competition mechanism of the market economy has developed a historically unique economical dynamic in the past two centuries. However, the social and ecological regulation of this economic driving power is an essential condition for a sustainable development. For the market is relatively blind towards social and ecological questions. I would like to demonstrate this with the following examples: Without sufficient occupational safety and health protection, human manpower will be soon worn out. The costs will then be imposed on society in form of unemployment and chronicle diseases. Without state regulation of employment – i.e. in the form of minimum wages – precarious forms of employment will evolve. The affected persons will no longer be able to plan their future. Consequently fewer children will be born, the willingness to participate extended vocational training will sink, and the danger of age poverty will rise. The costs in this case will be socialized as well. Without ecological regulation – i.e. by public subsidization – the success of regenerative energy (wind, water, solar) in Western Europe would not have been possible. Market incomes do not pay any regard to limited individual capacity based on physical handicap, family problems or social discrimination. Additionally, the market incomes of all industrial societies are still dictated by social origin. This applies especially for income from capital. Public redistribution can balance this social injustice. In Germany the unequal distribution of market incomes are reduced by almost 50% by means of transfer income, taxes and social dues. But public action is also required in the field of education and early child education – free admission, advancement of children from low-income households – in order to provide for equal opportunities. This welfare-state fundament is the precondition therefore that personal freedom will not be dependent on the money-bag.

Question: My next question aims at Germany’s foreign-trade policy and that of the European Union. As you surely know, the EU practices a policy of the so called “critical dialog” towards many regimes like Iran, Lybia, Syria or China- the background to which form the successful experiences of western Europe and Germany during the Cold War with the policy of détente of Willy Brandt, Helmut Schmidt and also Helmut Kohl. In the eyes of many Iranians this doctrine resembles an excuse for the European countries to morally legitimise their economic interests in many countries in which human rights are violated on a daily basis. The insistence of the EU on the alleged effectiveness of the critical dialog in the environment of political repression in Iran lead to the intensification of the political and emotional anti-European, or at least mistrustful position against Europe in recent years within the Iranian opposition. Is it not true that German workers profit from the good economic relations of Germany to the countries with dubious and partly despotic regimes as well, for some jobs in the German export industry are dependent on those deals? What is the position of the FGTU regarding the “critical dialog”? What is your personal view?

Dr. Hirschel: International division of labour between industrialised and developing countries does not have to assume the form of exploitation. This is demonstrated by the development of the south-east Asian Tiger States or China. If the industrialised state opened their markets for export goods from developing countries a win-win situation could arise. The industrialised countries could profit from the export of own investment goods which the developing countries need for a faster industrialisation. The developing countries could export their labour-intensive products – textiles, clothing, furniture – in order to obtain the necessary profits for further development. In the industrial countries the prices for these goods sink. However, I certainly do not want to promote an extensive trade and capital market liberalisation. The point in time is always crucial. If developing countries regard the state as a development agency they do not blindly bank on the opening of borders. An intelligent protectionism saves the domestic infant industries until they are ready to compete internationally. The Chinese were extremely successful with this strategy.

When international concerns invest in developing countries they normally build modern manufacturing facilities. The wages are higher, the industrial safety is better, the working hours are shorter and the technology more modern than in similar factories of the respective country. This could be a contribution to modernisation. But it does not need to be so. Again the role of the state is the crucial point in this case. A developing country should prevent by transfer of technology – by the aid of joint ventures -, by involvement of local suppliers and service providers – local content clauses – as well by skimming of excess profits the development of sheer production isles – like the Maquiladores in north Mexico – that could vanish tomorrow already. Here as well, we can learn from the Chinese.

Therefore, economically nothing speaks against strong economic relations. Still, a political estimation is difficult. From my point of view, what is decisive is whether the international economic relations further the social modernisation process or not-- modernisation regarding the complete infrastructure of the country, the education and qualification of its citizens as well as the development of employment. If the latter can be affirmed, then there should be a critical dialog. Sooner or later the dictators will be expelled from their offices by an emancipated grassroots movement (see South Korea). If only the dominant elite profits from the economic integration than a boycott strategy could be successful. In the case of South Africa the German trade unions have decided for the economical isolation of the country. But it should not be forgotten that there has been a strong opposition in South Africa that was in favour of this strategy itself. Thus, such decisions should always, as far as possible, be made in accordance with the oppositional powers in the respective country.

Question: My last question is a personal one. Could you imagine becoming an honorary member of a consultative committee of the “Referendum Movement” that consists of well known non-Iranian personalities who morally and politically advocate the democratisation of Iran on the basis of the United Nations’ Human Rights Charta?

Dr. Hirschel: Yes.

Thank you very much for this interview, Dr. Hirschel.