Fissured workplaces and the expansion of subcontracting

This chapter delves into the employment structure of subcontracting within the shipbuilding sector, a practice that has become widespread among conglomerate-led manufacturing industries. The chapter primarily investigates the transformation of the prevalent employment structure involving contractor– subcontractor agreements in the shipbuilding industry, an area dominated by conglomerate manufacturing companies that are part of the so-called Korean insider labour market. It also explores the experiences of subcontracted workers within Korea’s social safety net, examining elements such as the employment and wage structures, working patterns, and the relationship between subcontracted workers’ labour market experiences and social security. The case study in this chapter aims to bring attention to the employment status of subcontracted workers who are excluded from institutional protections typically afforded to regular employees, thereby highlighting the plight of nonregular and subcontracted workers within the context of a fissured workplace and inconsistent institutional protection policies.

Since the 1970s, traditional Fordism, based on a rigid mass production labour process, has been replaced by flexible scaling of resource inputs. This shift enhances flexibility in terms of geographical change, labour markets, production processes, consumer markets and work process decentralisation, except for core competence areas (Kalleberg et al, 2021). Changes in capital accumulation methods through micro-adjustments have significantly increased workers’ employment insecurity.

During the process of subcontracting or outsourcing all work processes, except for a few core competence areas, companies can exert pressure on subcontractors to reduce costs and increase efficiency. Developed countries have pursued capital accumulation by hiring subcontractors from developing countries for cost reduction. Similarly, at the national level, the subcontractor base has expanded, with large companies increasingly outsourcing their production processes, except for core competence areas. In their quest for higher flexibility and lower production costs, contractors outsource various competence areas and parts in the process of mass production of standardised goods.

Introduction: what constitutes sexual history evidence?

Sexual history evidence is a slippery concept which is difficult to define outside the contexts in which it is invoked. We saw in Chapter 3 that it took legal shape and form within broader consideration of the relevance of evidence relating to a rape complainant’s character or reputation: an accused might seek to introduce evidence of a complainant’s propensity to lie or thieve, for example, to challenge the reliability and credibility of her testimony. In practice, the easiest way to call a woman’s character into question was to expose her lack of chastity. In some contexts, too, prior sexual history with the accused functioned formally to restrict the scope of criminal proscription, as, for example, where a husband had nonconsensual sex with his wife or, in the opinion of at least some medieval and early modern legal commentators, a man had non-consensual sex with his mistress or concubine.

Modern legislative frameworks are surprisingly shy about defining sexual history evidence with any precision. In England and Wales, section 41 of the YJCEA 1999 applies to evidence concerning ‘any sexual behaviour of the complainant’. Section 42(1)(c) clarifies that ‘sexual behaviour’ encompasses ‘any sexual behaviour or other sexual experience, whether or not involving the accused or another person, but excluding anything alleged to have taken place as part of the event which is the subject matter of the charge against the accused’. This latter clause introduces an important temporal element, which explains why this evidence is often referred to as ‘history’. Technically though, and depending on the scope of what is legally permitted, sexual history evidence may also encompass sexual behaviour taking place after the alleged offence.

The 1999 Act does not define what is ‘sexual’. However, section 78 of the SOA 2003 – which governs the definition, scope and content of a variety of sexual offences – states that

penetration, touching or any other activity is sexual if a reasonable person would consider that –

• (a) whatever its circumstances or any person’s purpose in relation to it, it is because of its nature sexual, or

• (b) because of its nature it may be sexual and because of its circumstances or the purpose of any person in relation to it (or both) it is sexual.

The three sections of this book move from local case studies of cooperativism to examples of systemic designs, especially in the form of CWB, that incorporate co-operation in the widest sense of the word. The Preston Model and its budding offshoot in Japan are just two examples of a changing mindset in how life, space and work can be organized, with human beings taking centre stage. The Preston Model is highlighted in this book because of recent attention to its successes and influence and its focus on co-operation. The Preston Model has captured the imagination and ignited hopes and desires for change. We do not claim that the Preston Model is uniquely innovative. Not only does it have its roots in Cleveland and Mondragon, but there are many versions of CWB or the social economy dotted around the world, each with its local touch. Some are recent, as in Barcelona or Cincinnati, and others have been established for several decades, as is the case of the ‘Chantier’ system of social and economic innovation in Quebec (Mendell, 2009). It does seem, however, that the development of the Preston Model is uniquely situated at a moment of social and economic change in the UK with significant outreach and influence – as in the national economies of Scotland and Wales – that is not common to all such systemic innovations.

It is no longer incontestably accepted that the neoliberal modality of the capitalist system based squarely on competition and hierarchical structures of reward can solve its own problems in a world beset by multiplying and recurring crises. This is why a growing number of academics and public intellectuals argue in favour of market plurality and many endorse the cooperative model of organizing as a promising alternative to market orthodoxy, capable of advancing more socially balanced and participatory practices (Stiglitz, 2002; Porritt, 2007; Restakis, 2010; Birchall, 2013). The authors of this book align with this thinking and have engaged with the task of outlining thoughts of an exciting future of co-operation as a force that can counteract the failures and shortcomings of the neoliberal way of engaging the market and the competition that accompanies it.

Introduction

Despite claims made by theories of degeneration (Cornforth et al, 1988; Mellor et al, 1988; Pendleton, 2001), the co-operatives of Mondragon appear to both sustain themselves and continue to grow in different ways. This apparently contradicts theories of degeneration that suggest that cooperative businesses ‘degenerate’ in time and either collapse or become little different to the straightforward capitalist model businesses that they were originally attempting to challenge. As Bretos and colleagues (2019) explain, academic studies of co-operatives in a capitalist setting often condemn cooperative businesses to failure through ‘degeneration’, which suggests that co-operatives ‘must adopt the same forms and priorities as capitalist firms if they are to survive in the market’, and that they eventually degenerate into oligarchies (Bretos et al, 2019, p 436). The final conclusion of this process is an eventual transformation into capitalist firms. Cornforth (1995) and more recently Langmead (2017), an author in this edition (see Langmead and Webster, Chapter 4), and others (Paton, 1989; Spear and Voets, 1995; Storey et al, 2014), have argued against the degeneration thesis through studies of worker co-operatives, both in the UK and Mondragón. It is the Mondragón case that is the focus of this chapter, the biggest and longest-lived network of worker-owned co-operatives in the world. Arguably, the worker-owned co-operative is the starkest alternative challenge to the neoliberal status quo in business organizational structures, with the hierarchical pyramidal structure of the cooperative organization being completely inverted from that of traditional business (see, too, Kuznetsova and Kuznetsov, Chapter 8). However, this alternative is no longer an alternative when or if it becomes mainstream (Parker et al, 2014), as would be the case according to degeneration thesis. Therefore, many predicted the beginning of the end for the Mondragon co-operatives after the fall into bankruptcy of the largest and the founding co-operative, Fagor Electrodomesticos (FED) in 2013. The extent of this disaster for the Mondragon system is palpable upon reading Molina's 2012 eulogistic article on FED, ironically published just before the co- operative's rapid demise (Molina, 2012).

Organizing is politics made durable. From co-operatives to corporations, Occupy to Meta, states and NGOs, organizations shape our lives. They shape the possible futures of governance, policy making and social change, and hence are central to understanding how human beings can deal with the challenges that face us, whether that be pandemics, populism or climate change. This book series publishes work that explore how politics happens within and because of organizations and organizing. We want to explore how activism is organized and how activists change organizations. We are also interested in the forms of resistance to activism, in the ways that powerful interests contest and reframe demands for change. These are questions of huge relevance to scholars in sociology, politics, geography, management and beyond, and are becoming ever more important as demands for impact and engagement change the way that academics imagine their work. They are also important to anyone who wants to understand more about the theory and practice of organizing, not just the abstracted ideologies of capitalism taught in business schools.

Our books offer critical examinations of organizations as sites of or targets for activism, and we will also assume that our authors, and hopefully our readers, are themselves agents of change. Titles may focus on specific industries or fields, or they may be arranged around particular themes or challenges. Our topics might include the alternative economy; surveillance, whistleblowing and human rights; digital politics; religious groups; social movements; NGOs; feminism and anarchist organization; action research and co-production; activism and the neoliberal university, and any other subjects that are relevant and topical.

‘Organizations and Activism’ is also a multidisciplinary series. Contributions from all and any relevant academic fields will be welcomed. The series is international in outlook, and proposals from outside the English-speaking global north are particularly welcome.

This book, the fourth in our series so far, is the first to directly address one of the oldest forms of business-based activism – cooperative organizing. In the UK, The Rochdale Society of Equitable Pioneers, founded in 1844, is usually cited as the first example of an organization which was owned and controlled by workers.

Introduction

Both the 2008 economic and, more recently, the COVID-19 crisis have sparked much debate regarding systems of alternative socio-economic organization, new conceptualizations of economic development, as well as democratic participation and governance. The types and necessity of economic growth are being re-examined (Novkovic and Webb, 2014; Raworth, 2018; Trebeck and Williams, 2019), and worker-owned cooperatives have been enjoying a resurgence as a response to new forms of employment associated with work deficits such as lower and irregular earnings, reduced social protection and deteriorating working conditions (Deller et al, 2009; Erdal, 2011). This chapter looks at an alternative approach to economic organization, namely CWB and, in particular, the ‘Preston Model’ (PM). From the early 2000s, CWB has emerged as a potent approach to local economic development, where local economies are reorganized so that wealth is not extracted from the local area, but broadly held and income is recirculated (Haskel and Westlake, 2017). The PM is spearheaded by Preston City Council (PCC) and inspired by cooperative principles of economic democracy, focusing on leveraging social value and economic growth through the utilization of local economic assets, wide community participation, economic resilience and sustainability, job market fairness and environmental awareness (Manley, 2017).

Resonating with ‘new municipalism’, and in contrast with cost-benefit analyses guiding local economic development, an alternative paradigm is being formed, where economic democracy, a local adherence to a participatory cooperative ethos, social value and community benefit criteria and goals are at the forefront (Gilbert, 2020). More specifically, this model attempts to enhance the generation and retention of wealth within the local area, by combining the strengths and commitments of various local economic and social actors. This includes harnessing the potential of local ‘anchor institutions’ (major wealth creators, spenders and employers with long-standing historical ties and presence in the area such as universities, hospitals, local authorities, among others); stimulating public-private sector partnerships; engaging with civil society and the third sector; and encouraging the development of networks of worker-owned cooperative businesses. These coops will then ‘plug’ into the opportunities created by the economic activities of the anchor institutions in terms of goods, services and skills, enhancing the sustainability and resilience of the local economy.

Background to the book

The background to this book is an almost overwhelming and growing list of international tensions of various kinds: a pandemic, the climate emergency, the struggle for social justice as manifested in the Black Lives Matter movement, an alarming rise of extremist right-wing political positions, the politics of austerity, wage stagnation, growing inequalities, the refugee crises and, at the time of writing, the ‘cost of living’ crisis in Europe; all, combined with and partly as a result of the Russian military conflict with Ukraine, are causing serious social and economic uncertainties that bring into question previously held socio-economic expectations of citizens in 21st-century Europe. The present volume cannot hope to pretend to offer solutions to these multiple challenges, but nevertheless intends to present the reader with a consideration of the potential of co-operatives and cooperation as a means of reconstructing some of the damaged aspirations of the 20th century, as the 21st gets underway.

It is a premise of this book to argue that co-operatives per se are an important and globally relevant organizational form for business. They are an economic force with a wide-ranging social and economic imprint. In Europe alone, agricultural co-operatives process 60 per cent of all agricultural produce and there are 4,000 co-operative banks with 50 million members and a market share of 20 per cent (Dilger et al, 2017; Gouveia, 2012; World Coop Monitor, nd). The UK co-operative sector alone showed a ￡39.7 billion turnover in 2021, employed 250,128 people and had 13.9 million members (Co-op Economy, 2021). Over time, co-operatives have credibly established a reputation of organizations being most resilient to calamities and highly productive in pooling resources to achieve both economic and social value-driven outcomes (Roelants, 2013). Despite these facts, business and management literature often give the impression that co-operatives exist on the periphery of the modern economy and, as a result, the contribution of co-operatives to the GDP and their wide-ranging social imprint does not translate into a matching societal recognition (Develtere et al, 2008).

Introduction

In the previous chapter, we saw how relevance operates as an ideologically imbued intellectual construct that purports to manage the admission of sexual history evidence in the rape trial. We argued that the doctrine and discourse of relevance, in governing the use and admission of sexual history evidence in the rape trial, is just as infused with gendered assumptions as other aspects of the framework that governs rape law and policy. Recognising the ways in which so many elements of law, policy and practice that touch sexual violence are shot through with the patriarchal legacy we have been tracing in this book shows how even ostensibly neutral legal concepts like relevance are liable to corruption or perversion where sexual violence is concerned. In this chapter, we shift register slightly to consider what a feminist philosophical and psychoanalytic frame can tell us about the ways in which the ‘patriarchal legacy’ continues to feature in rape law and practice.

Feminists have frequently observed that rape law reflects the perspective of the perpetrator rather than the victim. As Catharine MacKinnon bluntly puts it: ‘[T] he fact that the law of rape protects rapists and is written from their point of view to guarantee impunity for most rapes is officially regarded as a violation of the law of sex equality, national or international, by virtually nobody’ (2006: 25). Far from being neutrally drafted and applied, feminists have long pointed to burgeoning attrition rates and survivor narratives of trauma while engaging with the criminal justice system to evidence the claim that laws on rape simply do not work. Of critical importance here is the feminist insight that rape law and discourse mirror the offence itself by treating the victim of rape as an object rather than a subject, a designation which militates against their proper recognition before the court as a legal person. The operation of sexual history evidence in the rape trial further complicates this designation, disrupting the linearity of the story of violation a prosecutor might be trying to tell and often investing a complainant with a complex and contradictory form of agency.

The precariat in South Korea

The combination of the Korean welfare state and its labour market is puzzling. In this book, I embark on a journey to unravel the complex relationship between the evolving landscape of melting labour and the inadequacies of institutional protections in the Korean welfare state. South Korea (hereafter, Korea) is often recognised as the most typical case of the East Asian miracle, characterised by broadly fair income distribution without prominent welfare politics representing income, wealth redistribution or labour. The puzzle lies in understanding why, despite achieving economic affluence and rapid institutional development in welfare institutions, Korea has witnessed a distinctively high rate of new forms of precarious work since the 2000s. Why and how does the compressed institutional development of the welfare state fail to protect precarious workers in Korea? In this book, I argue that the mismatch between the institutional combination established during the compressed welfare state development and the melting labour, which has increased precarious work, is at the core of this issue. I will explain how this mismatch renders the old institutions obsolete, employing the concept of policy ‘drift’.

As the traditional boundaries of work disintegrate and give way to fissured workplaces, the Korean welfare state’s reliance on the standard employment relationship proves increasingly insufficient in addressing the challenges of the modern labour market. The central thesis of this book is that the inconsistencies between institutional decommodification and the evolving nature of labour contribute to the expansion of diverse forms of precarity.

In Korea, economic growth led to a rapid expansion of wage workers and increased real household income. Without the welfare politics of wealth redistribution, Korea achieved compressed development in its welfare institutions within 30 years, creating a social insurance system set in most major risk areas and adopting a universalistic family policy. The social insurance system started as loyalty incentives given to the ruling group of state institutions, such as bureaucrats, professional soldiers and police officers (Lee G.C., 2009). The modern Korean social insurance system stems from the social security laws introduced in the 1960s (Won S.J., 2013).

An increased interest in cooperative organization in the last couple of decades is attributed to a large extent to the undisputable failures of neoliberalism as well as new forms of capitalist exploitation of labour and resources, such as platform capitalism's manipulation of gig workers, or extraction and commodification of the commons. Rising discontent with existing economic systems, policies and their outcomes reflected in social inequities and ecological disasters have given rise to the search for an economic paradigm accompanied by an enterprise model fit for humans and the planet.

In the search for a new economic paradigm, cooperative enterprise has a lot to offer. Rooted in economic democracy and built on ethical values, the cooperative model provides an alternative to the supremacy of capital and individual ownership of equity as the foundation of a presumably efficient and well functioning capitalist market economy. In the neoclassical model, capital and labour mobility is required for efficient functioning of respective capital and labour markets. The ‘externality’ produced by this quest for efficiency, however, includes a rupture in communities, since labour is not a commodity and cannot be separated from the human being and their social relations. Further to negative community impact, voiding economic transactions of social and ecological concerns has resulted in broad-based discontent, giving rise to multiple social movements and actions of civil society attempting to change the course. Therefore, the ‘new economics’ now sought by many theorists and practitioners ought to be concerned with its impact on the planet and on human beings and their communities. It ought to internalize human rights and enhance human dignity. In the same vein, a model which understands work as the foundation of human expression and personal development, rather than merely an input in production, is resonating with current generations. Interest in social solidarity enterprises such as co-operatives has re-ignited from these movements.

The cooperative model can be thought of as a benchmark for enterprises in the social solidarity economy espousing ethical values. It is an association, jointly owned and controlled by members who join the enterprise for its use value as consumers, workers, producers, or supporters of its purpose. Democratically governed, it is people (instead of capital) centred, but not anthropocentric.

Introduction

Star & Shadow Cinema Co-op (S&S) in Newcastle upon Tyne exemplifies a recent pattern of the rediscovery of cinema as a form of dissent against neoliberalism, prefiguring different possibilities for cinema – and as an extension city-making as a spatially located ‘social practice’ celebrating community, democracy and freedom through the production of urban commons. Adopting an everyday utopian approach to the constituent relations of the cinema screening event – its place, apparatus, organization, audience relations and aesthetics – this mode has been defined as DIY film exhibition (Wallers, 2021). S&S is a 100 per cent volunteer-run cinema and social centre in Newcastle upon Tyne, that evolved out of screening projects between 2001 and 2005 at the Side Cinema and other artist-run spaces. It started as a loose collective of cinema enthusiasts who wanted to organize public film screenings, variously interested in alternative film, artists’ moving image, LGBTQ+ cinema and activist documentaries to inform and inspire direct action. They moved to derelict warehouse premises on the edge of one of Newcastle's urban regeneration zone, the Ouseburn, and built a screening space and music venue from scratch, all as volunteers, brushing up on (or teaching themselves) building skills as they went along. Their public programme diversified even more, and as a result the open organizational structure meant that over 1000 volunteers came through the doors and participated actively in sustaining the project. Caught in a typical gentrification cycle in a prime development location, S&S had its lease terminated in 2014, but the story was far from over.

A root urban problem for projects like S&S lies in the asymmetrical power structures that afford big capital the control to dictate the fate of urban space through private ownership. This poses questions for those who envision alternatives, about proactive legal approaches that can protect urban commons on a more long-term basis. In the case of Serbia for example, cinema spaces in Belgrade are but one of many previously state-owned assets that are at risk of top-down privatization, a pattern that commons-activists are doing their best to resist (Čukić and Timotijević, 2020). What models exist in the UK to contest and reverse this form of enclosure and increase democracy in how urban space is managed?

Flexibility measures and precarious workers in Korea

In this chapter, I will examine the Korean social protection and labour market policies, as well as the empirical trend in the Korean labour market. The chapter will also provide legal and statistical definitions of various new forms of work in Korea, including platform work. Furthermore, I will explore the concept of melting labour by examining the characteristics of non-standard forms of work (NSFW) and their deviation from the traditional standard employment relationship. We will examine how the eligibility criteria for social security are inconsistent with new forms of work, conceptualised as melting labour, and the level of social protection benefits is low due to low wages and contributions. Additionally, employers’ non-compliance with the scheme and their ambiguous employment relationships make it difficult to determine who the employer is.

The Korean labour market underwent significant changes after the economic crisis in 1997. Measures to increase labour market flexibility led to a rise in non-standard employment and dualisation. The International Monetary Fund required restructuring of corporations, improving governance structures, privatising public enterprises and opening capital markets, leading to policies that lowered employment protection and increased the number of layoffs and non-regular workers (Peng I., 2012; Lee S.Y. et al, 2016). With this as the starting point, ‘dismissal for managerial reasons’ became possible through the amendment of the Labour Standards Act in 1996, and regulations and a flexible working hours system for parttime workers were added. The Act on the Protection of Temporary Agency Workers was introduced in 1998 to justify massive layoffs and increases in irregular employment (Lee S.Y. et al, 2019b). Moreover, many labour market flexibility policies were introduced with the passing of the Act on the Protection, etc. of Dispatched Workers in 1998, along with other measures. The purpose of introducing the policy was to enable the flexible operation of employment relations, provide a flexible working hours system and ensure the proper operation of workers’ dispatch business, among other measures.

However, the introduction of the policies lowered the level of employment protection, allowing for an increased number of layoffs and creating more significant numbers of non-regular workers. Notably, since then, the number of non-standard workers rapidly increased as many companies have started replacing regular with non-regular workers with short-term/fixed-term contracts (see Figure 1.3 for international comparison).

Introduction

This chapter explores the processing of environmental issues by democratically run organizations from the perspective of their members, be they active or retired, founding or new. It is specifically based upon a qualitative analysis of three French workers’ co-operatives from different backgrounds, operating in different sectors and of different sizes. A survey was carried out comprising of 16 individual, face-to-face interviews with members of all co-operatives playing various roles and fulfilling various functions within them. Questionnaires submitted to the interviewees were split into two parts: part 1 was made up of around 15 open questions – some of which were adapted to fit the peculiar history and socio-economic profile of the coop – to better understand the raison d’être of the organization and its members’ understanding of their missions; part 2 was a series of a dozen scaled-response questions to assess the co-operators’ political attitudes and personal stance regarding industrial democracy, ecology and the market economy. Each interview lasted two hours on average but time was unfortunately lacking to consider completing this work with field, let alone participatory, research.

This chapter also draws heavily upon an in-depth knowledge of workers’ co-operation and industrial democracy built up by the author over the last four years of academic research and a fairly regular record of the co-operatives’ activities during the same time span. The study suggests that, while a democratic structure alone might not be a determining or sufficient factor to promote and apply ambitious green reforms within a company, direct participation in collective decision-making enhances and strengthens members’ political consciousness and broadens their areas of concern through a process of collective empowerment and sharing of this political power. This political ‘awakening’ is likely to be even more acutely experienced in the presence of direct adversity. It will also most probably be efficiently maintained and nurtured by an unremitting horizontal questioning, both internally (of the daily working organization) and externally (relating to the social and political environment) oriented.

The impact of democratic decision-making in producers’ co-operatives has already been discussed in an extensive literature, especially in the late 20th century. Most of this focused on the quite narrow economic question of productivity, though (Stephen, 1982; Defourney et al, 1985; Grunberg, 1986; Estrin et al, 1987).