sassen-koob - the international circulation of resources and development - the case of migrant l.pdf

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The International Circulation ofResources and Development:The Case of Migrant LabourSaskia Sassen-Koob

The international circulation of capital and goods and its role inproducing and reproducing development inequalities has receivedconsiderable empirical and theoretical study. The international cir-culation of labour has not. International migrations of workershave traditionally been studied from the perspective ofdemography rather than as an instance of the international circula-tion of resources. There are several reasons for this. First, as a pro-portion of total labour, the internationally mobile segment of thelabour force constitutes but a minor fraction, and hence may easilyappear as irrelevant for the study of labour as a resource fordevelopment. Second, the largest share of internationally mobilelabour is made up of manual workers who are generally viewed as aresource of little value for both the emigration and immigrationcountries. Third, emigration countries are generally seen as benefit-ting from labour emigration because they are poor, lowly in-dustrialized countries with abundant labour supplies and highunemployment. These various facts contribute to a devaluation oflabour as a resource and as a factor contributing to the reproduc-tion of development inequalities between emigration and immigra-tion countries.

There are a number of instances in the world today which raisethe possibility that (1) immigrant labour is a valuable resource forthe labour-importing countries, and (2) that present patterns ofThe author wishes to thank the Consortium for World Order Studies for a grant heldat the Center for International Affairs, Harvard University, supporting the researchof which this paper is a part.Development and Change ISAGE, London and Beverly Hillsl, Vol. 9 119781,m-545.


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510 Saskia Sassen-Kooblabour imports and exports contribute to the reproduction of ex-isting development inequalities. Regarding labour imports, besidesthe case of South Africa, perhaps the most significant such in-stances are those of Western Europe and the Arab OPEC coun-tries. Western Europe has imported millions of foreign workerssince World War I1 to reconstruct and operate its economies andeven today in the deepest post-war recession employs over fivemillion of these workers. The Arab O PEC countries have, since theso-called energy crisis, resorted t o massive labour imports in orderto transform oil revenues into means of production. In all these in-stances, labour imports have played a basic role in the process ofcapital accumulation.

Regarding labour exports, the emergence in the last few years ofsome long-term negative consequences (OECD 1974) has led to theimplementation of various policies designed to end indiscriminatelabour exports and to protect employers from losing their workers.This is especially the case with countries exporting labour to theArab OPEC countries given the recency of the process and thehistorical and cultural ties binding labour exporters andimporters. ' The implementation of such protectionist policiespoints to a growing realization in the labour exporting countriesthat the import of their nationals by the highly industrialized coun-tries of Western Europe may constitute a form of resource ap-propriation which contributes to reproduce the development ine-qualities between labour importing and exporting countries. * Ifthis is the case, it would refute the generally accepted assumptionthat labour exports are beneficial because they alleviate unemploy-ment and increase national income and foreign currency holdingsthrough workers' remittances from abroad.My purpose here is to analyze the nature of labour circulationbetween the lowly and highly industrialized countries and to ex-amine whether it reinforces the politico-economic dominance of thelabour importing countries at the cost of the exporting countries.The first half of the paper seeks to specify the conceptual fieldwithin which to place the international circulation of labour ingeneral and the employment of foreign workers in particular. T hesecond half analyzes the place an d the effects of respectively labourexports and imports for each type of country, labour importer orexporter. In the analysis of concrete cases I shall use the availabledata, though much of it has been compiled with purposes other


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International Circulation of Resources and Developm ent 511than that of this paper. I shall focus on the international labourmarket made up of North Africa and Europe, this being the bestdocumented and most highly structured of these markets; further-more, this market falls within a discrete historical phase of growth,beginning after W orld W ar I1 and reaching stabilization in the early1970s.

THE INTERNAT IONAL TRANSFER OF LABOURToday there are at least three instances of the transfer of labourbetween countries. These are (a) the employment in the developedcountries of highly trained professional and technical personnelfrom other, generally less developed countries-the brain drain; (b)the employment of nationals by foreign firms operating in theworkers' country; and (c) the employment of foreign workers out-side their country of origin-migrant labour.The fact that a resource is being transferred from one coun try toanother is not a s immediately obvious or visible in the case of thecirculation of labour as it is in that of capital and raw materials.The exception is probably the brain drain with its high level ofhuman capital investment and therewith economic visibility.' utthe brain drain constitutes a very small fraction of total interna-tional labour circulation. In the other two instances, the possibilityof a resource transfer is more difficult t o establish.There are several reasons for this invisibility. Labour powerbecomes value producing only upon employment; that is to say,when applied to the means of production. In the case of firmsoperating abroad, these means of production a re partially or totallyforeign owned. Since from the perspective of the econom y the na-tionality of labour is quite irrelevant, it is difficult to maintain tha tthere is a transfer of resources from the labour providing countryto the country whose firms own the means of production andemploy the workers. Indeed, I think it is quite impossible to arguetha t there is a transfer of resources between countries so long as wefocus on the relationship worker-employer. Regardless of the na-tionalities involved, there is going to be a transfer of value fromworker to employer. But this transfer is basically internal to theeconom y in which it takes place, even though it is affected by fac-tors external to that economy, such as the cheaper wages made


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512 Saskia Sassen-Koobpossible by the foreign status of the worker or by the generally lowlevel of wages in the countries where foreign capital operates.To identify the existence of a transfer of resources between coun-tries we have to go beyond the relationship worker-employer andfocus on the effects for a country of (a) the employment of foreignworkers either through labour imports or through the establish-ment of firms in a foreign country, and (b) the transfer of a frac-tion of a countrys labour force into the employment of either aforeign firm in the same country or a foreign economy.In a class society these effects will be class specific. However, itwould be incorrect to argue that capital as such will obtain all thepositive and the working class all the negative effects. First, it is thecapitalist class of the developed countries which will tend tobenefit, often at the expense of capital in the underdeveloped coun-tries. Second, beyond the general development effects that canresult from such a transfer of labour, there are specific conse-quences for the working class and its different fractions ir \oth theimporting and exporting countries. These specific consequenceswill vary according to the level of capital accumulation. I shallreturn to these issues in the second half of the paper.The class-specific nature of such effects notwithstanding, Iwould like to a rgue that we can focus on the relationship betweenand the effects on countries without necessarily assuming internalhomogeneity or similar effects for all classes and fractions withinthem.One way of analyzing the effects of labour transfers is to ex-amine the trade-offs to which such a transfer gives rise. In the caseof the brain drain, this trade-off is rather clear in that it representsa loss of hum an cap ital investment for the country of origin and acorresponding-though not necessarily equal-saving for the im-porting country (e.g. Bhagwati 1976; Committee on Foreign Af-fairs 1974; Friedman 1973; Grubel and Scott 1966).But these trade-offs are far less clearly to the advantage of thelabour importing country in the other two instances, those of firmsoperating in, and workers employed by foreign countries. In thecase of firms, one of the basic difficulties lies in specifying factorcontribution to production and to development. This entails two,Apes of problems. One is to establish how valuable the foreignlabour is for the operation of the firm. The other is to specify thecontribution the firm makes to the development of the country in

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International Circulationof Resources and D evelopment 513which it operates. This touches upon the complex issue of the roleof foreign capital in poor, lowly industrialized countries. The com-parison between the advantages obtained by a country due to thepresence of foreign firms and the advantages for these f i rms ofoperating in such a foreign country could then be used to determinethe trade-offs arising out of this transfer of resources for respec-tively the workers country and a firms country. Since this is abasic problem in the study of development, I do not need toelaborate as to the difficulty of determining such a trade-off, letalone that of isolating the contribution of the labour facto r (madeproductive by the foreign capital) to respectively (1) production forthe firm and (2) development for the country. Isolating factor con-tribution remains difficult even though the history of the lastseveral decades has shown us that this kind of labour transferbenefits 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 employedabroad. I shall focus especially on Western Europe, this being themost developed case.Labour imports and exportsIn general the literature on international migrant labour has notfocused on the relationship between labour-exporting and impor-ting countries. It has dealt mostly with the relationship of employerand foreign worker, one which is internal to the importing country.Indeed until recently there were practically no studies on the effectsof labour exports. Most of the literature has dealt with two sub-jects: (a) the migrant population itself, its conditions of existenceand work, its lack of power, its various demographic characteristics(e.g. Castles and Kosack 1974), and (b) the variety of benefits anddisadvantages 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 pro-bably in large part explained by the widely held assumption, refer-red to above, that labour exports are beneficial for the exportingcountries. This assumption seemed so plausible that it dampenedalmost all critical examination until quite recently. But severalevents have led to a questioning of its validity. Most importantamong these are the protectionist policies implemented by thelabour exporting countries and by the International Labour


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514 Saskia Sassen-KoobOffice of the U N (ILO 1975) and the results of several case studiesdocumenting 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 forthe exporting countries, then we must consider the possibility of anunequal exchange between labour exporting and importing coun-tries, given the well-documented benefits of labour imports for thelatter (Castles and Kosack 1974; Castells 1975; BOhning 1974, 1976;Collard 1970). The key elements in such an exchange relationshipare the two types of countries: the highly industrialized importingcountries and the lowly industrialized exporting ones. The key com-ponents are not the employers and the foreign workers themselves,as is the case in Castles and Kosack (1974), Castells (1975), andothers. The relationship of employer to foreign workers remainsfundamentally an internal one wherein the foreign status of theworker increases the advantages of capital and weakens the work-ing class. Exclusive attention to this relationship is inadequate formy purpose because it provides no information on the comparativesituation of exporting and importing countries with respect to thistrade.

The relationship between exporting and importing countries canbe seen as consisting of two analytically distinct elements. One isthe economic factor which constitutes the relationship; the transferof labour which takes the concrete form of the employment offoreign workers. The other, the effects of such a transfer for eachtype of country. Specifically, does such a transfer reinforce theposition of politico-economic dominance of the importing coun-tries and the dependence of the exporting countries? Here I want toanalyze the first element, the second being the subject of the nexthalf of the paper.The category migrant labourThe conditions for the emergence of an international migratoryflow are embedded in the development inequalities between labour-exporting and labour-importing countries. Once these conditionsare produced, that flow will be reproduced so long as those condi-tions persist. Being historical, these conditions will vary over timeand according to the characteristics of the particular countries in-volved. The nature of the migratory flow depends on the nature of


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International Circulation of Resources and Developm ent 515those conditions, not on those of the migrants themselves, these be-ing a consequence of those conditions. Thus the differences bet-ween the labour migrations into Western Europe today and thoseinto the U.S. n the late 1800s and early 1900s do not derive fromthe differences between the migrants themselves-which in fact arenot that markcd-but from the different conditions producing eachkind of migratory flow. Migrants can be viewed as stepping or fall-ing into a migratory flow, rather than initiating or constituting sucha flow through their individual decisions and actions.

Burawoy (1976: 1050-56) has provided a conceptual specificationof the nature of such migratory flows, identifying those elementswhich define a migratory flow as a system of migrant labour. In hiswork he uses the cases of South Africa and farmworkers in Califor-nia. I would add those of Western Europe since World War I1 andthe Arab OPEC countries since the energy crisis.

Star tkg from the basic premise that for an economy to function,its labour force has to be maintained and reproduced, Burawoyanalyzes the particular functions of migrant labour in this regard.What characterizes migrant labour is the institutional differentia-tion and physical separation of the two processes, that ofmaintenance and that of renewal of the labour force. That is to say,migrant labour carries with it a dual dependence: one on theeconomy of employment which provides for maintenance and oneon the country of origin where the renewal process takes place.From the perspective of the economy of employment, the costs oflabour force renewal are, in the case of migrant labour, externaliz-ed to another economy. The institutional differentiation of therenewal and maintenance processes constitutes the invariantcharacteristic of any system of migrant labour. The conditionswhich produce and reproduce the system vary. In the four casesmentioned, those of South Africa and California migrant farmlabour analyzed by Burawoy (1976) and those of Western Europeand the Arab OPEC countries, such an institutional differentiationis present, even though the conditions producing and reproducingthe system of migrant labour vary considerably in each of them.

An analytical distinction between the individual migrants, theconditions producing and reproducing the system of migrantlabour, and the system itself can in this way be maintained. Thefact that the concrete individuals making up the migratory flowchange, that some return, others stay, and new ones go, does not


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516 Saskia Sassen-Koobentail a transformation in the system of migrant labour or in the roleit plays in the labour importing economy. Similarly, though the con-ditions producing and reproducing the system of migrant labour mayvary over time, the characteristics of the individual migrants may re-main the same (e.g. rural, unskilled, young, etc.).The effects of labour transfersAs I m entioned earlier, one way of analyzing the effects of labourtransfers is by examining the trade-offs to which it gives rise. S inceI am particularly interested in seeing how such transfers con tributeto reproduce positions of dominance or dependence in the worldeconomy, examination of the value of this trade for each kind ofcountry would seem adequate.I will argue tha t the value of labour imports is determined by theextent and nature of labour scarcities in the importing economy. Theconcept of labour scarcity has to be defined in relation to the rolethat a labour surplus plays in a capitalist mode of production and tothe rate of capital accumulation. It should no t be defined simply inrelation to the total active population and its natural growth rate. Abasic tendency in the capitalist mode of production is that the laboursupply has to be adapted to the needs of capital accumulation, andnot the latter to the labour supply. It is the rate and the level ofcapital accumulation which makes for high unemployment or labourshortages. This means that factors such as the degree of workingclass power, the kinds of concessions organized labour is capable ofextracting from employers, play a role in defining a situation as be-ing one of labour scaricity. If that power and those demands are ex-cessive, then the level and rate of capital accumulation are threaten-ed. An influx of foreign workers may weaken the working class, orfractions of it, may lower wages in those sectors most threatened byhigh wages (sectors which are often indispensable for the operationof other sectors) and may thereby restore capital accumulation to ahealthy level. Furtherm ore, given the cyclical character of capitalaccumulation, in order to satisfy the labour needs in periods of ex-pansion a labour surplus is necessary. The absence of a laboursurplus and the various economic and political consequences it en-tails, define a situation of labour scarcity. In sum, the concept oflabour scarcity in the context of a capitalist economy covers anumber of situations which threaten existing or foreseeable levelsand rates of capital accumulation.


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International Circulation of Resources and Development 517The conditions which define a situation of labour scarcity maythus vary greatly. They may include a situation of objective labourshortages as is the case in, for example, Switzerland, the German

Federal Republic, the Arab OPEC countries, where the various fac-tors mentioned above are further aggravated by the insufficiency ofworkers. Or they may include a situation where there is no objec-tive labour shortage, but where capital wants to increase accumula-tion by increasing the rate of profit, weakening the working class,ensuring abundant labour supplies, as was the case, e.g., in Franceand the U.S. (for example, the bracero programme, impunity foremployers of illegal aliens, etc.).Similarly, the costs or advantages of labour exports for the ex-porting countries depend on the present and foreseeable needs ofthe process of capital accumulation or centrally planned in-dustrialization in those countries. The value of labour exports can-not be viewed simply as determined by the money remitted orbrought back by the migrants and the addition to national incomeand hard foreign currency this represents. Nor can the value oflabour exports simply be determined by subtracting the number ofmigrants employed abroad from a potential unemployment total tobe expected in the absence of labour exports. I will argue that thevalue of labour exports is to be established in relation to the natureof the labour supply in the exporting country, the present andforeseeable rate and level of capital accumulation and, given these,the particular ways in which labour exports cut into the labour sup-ply. Furthermore, a full appreciation of the meaning of labour ex-ports for these countries entails examination of the consequencesfor society at large of the increase in national income due to remit-tances from abroad. There is little doubt that the individualmigrants and their families benefit from the increase in their in-comes. But some serious doubts are being raised as to, amongothers, the inflationary effects of an increase in national incomewhich is not related to an increase in real productive capacity andwhich, given the kind of consumption it creates, does not have aneconomic growth function.These then are the issues involved in an examination of the ef-fects of labour exports and imports, the subject of the next sectionsof the paper.


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518 Saskia Sassen-KoobTHE VALUE OF LABOUR IMPORTSThe value of labour imports is determined by the nature of labourscarcities; that is to say, by a rather complex politico-economicsituation which may or may not involve labour shortages, butwhich is basically disadvantageous for existing or desired rates andlevels of capital accumulation. An analysis of the value of labourimports requires examination of the nature of labour scarcities andof the extent to which the problems this poses for capital can besolved through ways other than labour imports, most significantlycapital substitution of labour.In the case of Western Europe there are two types of labour im-porting countries: those such as France, Belgium and Great B ritainwhich did not have labour shortages, and those SUC-I asSwitzerland, the German Federal Republic, Luxemburg and theNetherlands which did have labour shortages.In all these countries m igrant labour has fulfilled two basic func-tions: (a) increasing the level of profits of certain fractions ofcapital, and (b) operating as an anti-cyclical mechanism. In thosecountries which had an objective labour shortage, migrant labourhas played an additional role, th at of being an indispensable factorin the construction and operation of sectors of the economy. I shallbriefly discuss the first two and then focus on this last instance.There are several reasons for this choice. Both Castells (1975) andCastles and Kosack (1973) provide good and easily availableanalyses of the first two functions; furthe rmore , much of the workon the U.S. nd Mexican immigration contains, explicitly or im-plicitly, an analysis of these functions (e.g. Samora 1971: Galarza1964; Bustamante 1972: Burawoy 1976). Finally, an analysis ofhow foreign, often unskilled, rural, illiterate workers have been in-tegrated into the highly industrialized economies of WesternEurope seems of relevance for the U.S.The European experiencewould seem to invalidate the claim in the U.S. hat importantreasons for the exclusion of minority workers from the better jobsin industry are their lack of training and certain cultural traits, onthe one hand, and the lack of sufficient manpower training pro-grammes on the other.Labour imports and profitsThe increase in the level of profits made possible by labour imports


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International Circulation of Resources and Developmen t 519is related to (a) a lowering in the cost of the reproduction of thelabour force, and (b) a lowering in the cost of labour for certainfractions of capital.

For an examination of the first point it is necessary to look not atindividual capitalists but at capital as a whole-as a historicalcategory. Labour imports in Western Europe are controlled bycapital and the pertinent governments. Migrants are recruitedfrom among the young in their highly productive years. They haveto pass strict medical examinations so that their health is aboveaverage for nationals of the importing country. A good many ofthe migrants are skilled or semi-skilled, and come from the more in-dustrialized areas of their countries. The labour-importing coun-tries are appropriating labour that has been raised and often train-ed by the state and capital of the labour exporting countries. Thesealso bear the costs of raising the dependents of migrants leftbehind, and of maintaining returning migrants often sick fromoverwork and already in their less productive years or ready forretirement. The savings for the importing countries on social ser-vices and infrastructure are significant, especially since these arethe kinds of needs that cannot be supplied at a profit. Insofar as thestate in the importing countries does not have to appropriate ashare of taxes for these expenditures, this is a politico-economicgain for capital if wages do not have to be increased to meet suchtaxes-especially in Western Europe with its politically powerfulunions.

A lowering in the cost of labour for certain fractions of capital ispossible due to the low wages paid to migrants and the lower costsfor the organization of production which their employment allows.Their status as foreigners, as temporary labour, their frequentsegregation at work and at home from native workers, their lack offamiliarity with union politics or the ways of an advanced in-dustrial economy-all these facts make migrants exceptionallydependent on their employers and unlikely to become unionized.These facts also tend to exempt employers from their obligation toprovide various kinds of benefits and permit the repatriation oflaid-off or unabled workers. Regarding the organization of work,the availability of migrants makes possible the operation of pro-duction processes in conditions rejected by unions and the pro-fitability of inherently labour intensive activities by lowering labourcosts. Migrants are also far more willing to work on night shifts


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520 Saskia Sassen-Kooband overtime thereby allowing firms to operate at higher capacity.These various factors have repercussions for the native labour forceinsofar as they will tend to exercise a downward pressure on wagesand have a generally weakening effect on organized labour.Labour imports as an anti-cyclical mechanismMigrants are imported on a temporary basis-even though manyeventually become permanent residents. They can be repatriatedwhen their labour becomes superfluous and imported when it isneeded. This has several consequences. Besides allowing for the ex-port of unemployment and some of its costs, it exempts the impor-ting economy from the need to build the infrastructure and providethe services to accommodate the fraction of its labour force madeup of migrants. This means that social capital as a whole can bekept more or less at a level equivalent to that of average periods incapital accumulation. This has significant deflationary effects andallows for considerable stability in total consumption. In periods ofcontraction when large numbers of workers have to be laid off,total demand will not contract in a corresponding degree if asignificant share of laid-off workers are migrants which can berepatriated and whose demand for private and public goods andservices was very small to start with (BOhning 1974; Salowsky1972). One could say that from the perspective of capital, migrantsare as close an approximation to the abstract commodity labour asis (humanly) possible.Labour imports as a solution to labour shortagesSwitzerland and the GFR are the most important cases in WesternEurope where labour imports directly alleviated labour shortages,besides fulfilling the first two functions discussed above.

Both countries have consistently maintained that they are not im-migration countries and that labour imports were a temporarymeasure to cope with what was believed to be a temporary labourshortage. Yet imports have continued for two decades. And today,in the deepest post-war recession, over half of the migrants are stillemployed and from all indications seem to be quite irreplaceable(BOhning and Maillat 1974; OECD 1977). Furthermore, althoughinitially workers were imported almost exclusively for the primarysector, their employment has spread to all sectors and today is con-centrated in industry where they constitute a considerable share of


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International Circulationof Resources and Development 521all workers. The 1972 pre-recession sectoral distribution (Tables 2& 3) remains the same today; the stabilization of the migrant labourforce follows similar patterns in both countries.

Regarding the extent of the labour shortage in Switzerland andthe GRF we can assume that the employment levels (Table 1) andsectoral distribution (Tables 2, 3) of migrants are indicators ofrespectively the levels and types of labour shortages. This seems atenable assumption in view of the highly restrictive migrationpolicies of these two countries,6 the political costs of labour im-ports due to the widespread hostility against migrants e.g. the SwissSchwarzenbach referendum), and the practice of repatriating ex-cess migrants. This argument clearly holds only for a disaggregatedmodel of the economy since the internal differentiation of in-dustrialized economies limits the transferability of workers fromone sector to another so that labour shortages in one may coexistwith labour surpluses in another. This situation is reinforced by thehierarchical organization of work and the objectively and sociallydetermined resistance to moving downward or into sociallyundesirable jobs. It should be noted that although a large share ofmigrants hold such undesirable jobs, there is also a growing seg-ment in socially acceptable jobs (Bbhning 1975; 1976: 5-23).

In a situation of labour scarcity, whether it includes a shortage ornot, there would appear to be at least four alternatives to labourimports. These are (a) increasing imports in order to diminishlabour needs by freeing labour presently used; (b) implementinglabour mobility and manpower training policies, includingmobilization of so-called marginal workers, e.g. teenagers, elderly,handicapped, etc.; (c) capital substitution of labour; (d) export ofproductive activities. The first is only partially feasible in view ofthe laws of capitalist development. The second has met with verylittle success in Western Europe generally (e.g. Klaassen 1972). Buteven if successful, such policies would have been insufficient tomeet the labour shortage in Switzerland and the GFR. The last twoalternatives are embedded in the logic of industrial economies.There is, however, a limit to the export of needed productive ac-tivities. In the long run, capital substitution of labour is the morelikely alternative, especially because it is a tendency inherent tocapitalist development irrespective of labour shortages orsurpluses. Furthermore, in the case of the two countries here con-sidered, the objective was the reconstruction and expansion of


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International Circulation of Resources and Development 525Table 4

Labour Exports as Percentage of Total National Labour Force 1973-1974Active Population' Total' WorkersExporting in Exporting Employed inCountry Country Western Europe

Spain 12,732,000 546,700Italy 19,571,000 1,172,775Portugal 3,423,551 541,300Greece 3,638,600 246,600Turkey 13,613,580 85O,OOO3Yugloslavia 8,340,400 735,500Algeria 2,564,700 500,000Morocco 3,254,400 400,000'Tunisia 1,093,700 116,100

Migrants as% ActivePopulation4.3615.86.85.28.819.512.310.6

Sources:I OECD, 1975: 16, table I1 (2.3.

' bidem, 116.basic industries, a fact which set limits to the possibility of expor-ting productive activities. Thus, an adequate evaluation of thelabour shortage in Switzerland and the GFR requires examinationof the limits to capital substitution of labour.

Switzerland and the GFR present an interesting contrast in thisregard. In major investment decisions in the immediate post war,Switzerland opted for capital widening, maintaining its ratherlabour-intensive production apparatus and small scales of produc-tion. The GFR responded to the need of economic expansionthrough 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 WesternEurope this context was one in which the reconstruction boom andeconomic expansion in general were seen as temporary and ex-pected to be followed by stabilization if not downswings. It had notbeen foreseen that expansion would continue up to the middle ofthe 1960s and then resume in the late 1960s after a brief recession.Thus the objective had been to maintain enough flexibility in theeconomy so as to accommodate temporary and permanentslowdowns (Bbhning and Maillat 1974). This was especially thecase in the GFR, engaged in a large-scale reconstruction processafter having been flattened by the war. And it was the case inSwitzerland which, not having suffered physical destruction, found

Ibidem, 6 table I1 A.2 (1974 figures).OECD, 1974: 169.


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International Circulation of Resources and Developm ent 527Capital substitution of labour only became a profitable alter-native after 1963 due to a number of factors. The main reasongenerally given is the rise in wages (Kindelberger 1967: 203-204;

Bundesarnt 1964: 101 ff). But, once again, I think tha t the conjunc-tural factors supporting that decision were more complex. On theone hand, postwar investments had been operative for fifteenyears, thus ensuring amortization. On the other hand, given thetime elapsed at least partial obsoleteness of the equipment had setin by 1963 and hence the need for replacement. Furthermore, thetime elapsed allowed for the use of more advanced technologiesand the avoidance of intermediary steps (Bundesamt 1964: 104), afact which explains in part the highly advanced nature of varioussectors of the Swiss economy. At the same time, and as a conse-quence of continuous economic expansion and growing demand,the larger scales of production typical of capital intensity becamefeasible and profitable. This was especially so given a persistentlytight labour m arket and strong political pressure to stop labour im-ports (e.g. the Schw arzenbach referendum) in a situation where ad-ditional labour imports would become necessary in the absence ofcapital substitution of labour (Maillat 1974). The stabilization inemployment levels of migrants after 1963 is in large part related tothis new direction towards capital intensity.Economic expansion in post-war Germany was a process quitedifferent from tha t of Switzerland. Not only did it involve a drasticreconstruction programme, it also started from a basis containingremnants of the large scales of production typical of the war an dpre-war economy (ShBnfield 1965: 240-246). This probably shapedand facilitated the post-war transition to a generally capital inten-sive economy (and also takes away some of the glamour o f the so-called German m iracle). But there a re limits to capital substitutionof labour. Absence of full automation, together with the con-tinuous expansion of the production apparatus due to reconstruc-tion, generate a need for workers. The GFR first had a n abun dan tsupply of labour in the political refugees and displaced personsfrom th e lost Eastern provinces. This explains why labour im portsbegan almost a decade later here than in the other Europeanlabour-importing countries. By the late 1950s the GFR beganlabour imports. These were seen as an exclusively temporarymeasure to cope with shortages in agriculture. Today , the employ-ment of migrants has spread to all sectors and is a permanent


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528 Saskia Sassen-Koobfeature of the economy (Table 3) (Bahning 1975: 7-21; 1976:

Notwithstanding the capital intensive emphasis, the need forlabour imports became as much a constraint in the GFR as in themore labour intensive Swiss case. But whereas in the latter this con-straint was embedded in its technologies of production, in the GFRit was more closely related to purely economic factors. On the onehand, the labour shortage would have caused slowdowns and par-tial standstills in som e of the capital goods industries and hence inthe construction of the capital intensive production apparatus(Balke 1966). Labour imports were one key factor allowing forrapid construction and speeding up of capital substitution oflabour (Merx 1972). On the other hand, the costly capital-intensiveproduction apparatus often requires fulltime and full capacityoperation to be profitable, especially at the beginning during itsamortization period. This was made possible by labour imports andthe willingness of a large share of migrants to work at night.A key long-term economic issue regarding labour imports is theeffect on advances in productivity which the availability of cheap,unskilled labour may entail. Tha t is to say, do labour im ports slowdown capital substitution of labour o r technical and organizationalprogress? The issues here are complex and controversial. Givenspace limitations, let me just cite one em pirical study which throwssome light on the matter. A 1973 study of 719 firms in theSouthwest of the GFR where the use of labour imports has beenmost 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 thanfirms not employing migrants (40 percent). The higher the share ofmigrants in their labour force, the more innovative the firms were.Capital-widening was more frequent in firms without migrants. In-vestments aimed at reducing labour shortages were more frequentin firms with migrants, to the point where degree of foreignemployment correlated negatively with the tendency towardscapital widening and positively with the tendency towards innova-tions aimed at reducing labour costs and shortages. One test wasbased on a direct question as to whether the firms would be able tosubstitute migrants with capital. The purpose was to establish unus-ed substitution potential. Only 4 percent of the firms maintainedthey would be able to do so; 31 percent answered that they could

128- 134).


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International Circulation of Resources and Developm ent 529reduce the num ber of migrants; and 60 percent that they would beunable to continue production without their employed migrants.These findings suggest that it is precisely firms with high levels ofmigrant employment which will tend to implement capital substitu-tion of labour and labour-saving organizational innovations. Thestudy also found that the workplaces occupied by migrants are to alarge extent inconducive to further capital substitution (1974: 34).Hbpfner (1975), after evaluating the evidence as to the positive andnegative effects of labour imports on technological and organiza-tional progress, concluded that the positive outweigh the negativeones.In general, the GFR migrants are employed regardless of (1)capital intensity, (2) cyclical phase of employment, and (3) varia-tions in the capital/labour ratio (Bohning, 1975). Capital substitu-tion of migrant labour finds constraints in technological limita-tions, in the econom ics of operating a capital-intensive productionapparatu s, and in the inevitably labour-intensive nature of services.The cases of the GFR and Switzerland show that in a situation oflabour scarcity which includes a significant labour shortage, labourimports are a valuable resource because there are economic andtechnological constraints t o capital substitution of labour.

TH E VALUE OF LABOUR EXPORTSIt seems to me that the existence of labour surpluses in mostunderdeveloped and developed countries has tended t o devalue thesignificance of the labour factor for development. The fact that inthe event of a labour shortage, a country can import labour withoutmajor difficulty and a t a low price, has further contributed to thisdevaluation of the labour factor. Labour surpluses and the lowprice of imported labour have meant that the exporting countriesfind themselves exporting what is viewed as a lowly valued resourcewhose supply is plentiful. This is a situation similar to that of o therresources exported by the underdeveloped countries. The fact thatsome of these resources are very valuable for the operation of theimporting economies has not meant that they earned a high price inthe international market. History has shown us that it takes theorganization of exporters into a cartel t o attain a n international


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530 Saskia Sassen-Koobprice which approximates the actual value of the resource for theimporters. The general characteristics of the international circula-tion of resources suggest that it is not the nature of the resourcesbeing exported which determines price. It is the politico-economicsituation of the exporter in the world economy which plays a farmore decisive role (Em manuel 1972). Whether this argument holdsfully for the case of labour is still a question; yet there are some ap-plicable elements. Thus it is quite probable that if the developedcountries would export unskilled and semi-skilled workers to theunderdeveloped countries, this would be more expensive labourthan 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 priceof migrant labour in the importing countries should not be confus-ed then with the value of this labour for the latter. In the marketmodel price and value are the same. But the analysis of labour im-ports in the light of labour scarcities, especially if they includelabour shortages, points to the value of labour imports not-withstanding the low price paid for it. Indeed, the low price furtheradds to the value of this import. Furthermore, the presence oflabour surpluses in the exporting countries does not diminish thevalue of labour imports because this value is determined by theneeds of the importing countries. In fact, the presence of a laboursurplus in the exporting countries might contribute to the value oflabour imports insofar as it makes for a cheap and abundant laboursupply.But the notion of a labour surplus itself has to be analyzed inorder to examine the p lace of labour exports in the exporting coun-tries. It is generally assumed that exports are beneficial becausethey diminish the labour surplus. But a labour surplus is clearly nota homogenous category. In the next section I examine the na ture oflabou r surpluses and their place in the process of industrialization.Furthermore, the assumption that labour exports actually comefrom the labour surplus needs to be examined. This is the subject ofthe second section.Labour surplus and developmentWith growing capital accumulation, including increases in labourproductivity, the elasticity of capital accumulation grows as well.This demands a parallel elasticity in the labour supply, that is to


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International Circulation of Resources and Development 531say, a continuously available supply sufficient to cover needs dur-ing an expansion phase. The wider these fluctuations, the wider thefluctuations in labour needs-though the latter will be propor-tionately smaller due to increases in labour productivity. Satisfac-tion of wide fluctuations in labour needs requires a large laboursurplus.

Within the labour surplus, I think it is important to distinguishbetween what could be described as (a) an apparent surplus, and (b)a hard core surplus. By the first term I will refer to those segmentsof the labour surplus which would become a necessary labour sup-ply in the case of significantly expanded industrialization. By thesecond term I will refer to those segments of the labour surpluswhich would not be absorbed even in the event of such an expan-sion. This distinction is to a large extent analytical, though thereare definitely segments of the working-age population which aremore.msrrginal to the economy than others, e.g. the disabled, long-term unemployed, teenagers, etc. Identifying which types ofworkers fall into each category is a matter of empirical investiga-tion. And so is the specification of what share of the surplus fallsinto each category. Precise measures are quite impossible and quiteunnecessary as well.

The share of apparent surplus in total surplus is increased not on-ly by the contractions in capital expansion, but also by the longerthan average workhours typical for fulltime jobs in underdevelopedcountries. Underemployment has the opposite effect; it decreasesthe share of apparent surplus insofar as the underemployed couldsatisfy a larger labour need than they presently do.

The main point is that a share of the labour surplus is necessaryfor capitalist development. If labour exports bite into this share,the effect is detrimental for development. Whether such develop-ment and the large scale industrialization it entails are desirable is acomplex matter. For the purposes of this paper we can retreat a fewsteps and argue that (a) a labour surplus is necessary for capitalistdevelopment, and (b) in the case of a centrally planned economyabundant labour supplies will still be necessary if the purpose is in-dustrialization, so that what was initially a surplus eventuallywould become needed productive labour. * In both cases a segmentor the whole of the surplus is apparent surplus, a fact which shouldbe taken into account in any examination of the effects of labourexports.


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532 Saskia Sassen-KoobLabour exports and developmentTo examine the role of labour exports we would ideally use preciseinformation on several matters. First, information on the exactcomposition of labour exports, specifically what share comes fromthe labour surplus and which from the employed labour force. Se-cond, what share of the labour surplus component of labour ex-ports is part of the apparent surplus and which of the hard coresurplus. Third, what share of the employed labour component oflabour exports comes from sectors of the economy that have labourshortages and which from sectors with labour surpluses.But precise information on each of these categories is notavailable. There are only partial bodies of da ta, often only indirect-ly related to these issues. Though incomplete, they provide an ade-qua te starting point for the discussion in this section.The figures on the incidence of labour exports, both temporaryand long term, suggest tha t the outflow of workers is considerable(see Table 4). The International Migration Commission indicatesthat in the 1960s, for every 100persons entering the labour force inPortugal, Spain, Italy, Yugoslavia, Greece and Turkey, 50 to 75migrated to the labour importing countries of Western Europe(Beijer 1971: 113). Overall about 5 to 10 percent of the labour forcein each of the exporting countries is employed abroad. The returnlevel among the more skilled, mostly urban and most adap table toan industrial environment is low (OECD 977; B6hning 1974;Paine 1974; etc.). Most migrants are on medium or long-term stays;given the recency of the process one cannot say whether permanent-ly, though for all practical purposes this is the case, especially sincethe importing countries seek to stabilize their migrant labour forceand promote the entry of dependents.If to these bare figures we add the selectivity of labour importsand the internal differentiation of the economy and hence labourforce of the exporting countries, the figures become even more con-siderable. Although they vary in its extent, all the importing coun-tries have been selective. Medical examinations are required andcertain age groups and educational backgrounds are predominant.About 85 percent of all migrants employed in Western Europe inthe late 1960s were under 39 years of age, and almost haIf under 30.The educational distribution of, for example, Yugoslav migrants isthe same as that of the total population in the country, suggestingthat a good share of labour exports involves highly and


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International Circulation ofResources and Development 533moderately qualified personnel. Further, although the incidence ofemigration is generally higher in the less developed areas of the ex-porting countries, in absolute figures most of the migrants comefrom urban and more developed rural areas. That is to say, they in-volve those workers who could more easily be introduced into theindustrial work process, and thus are more likely to come from theapparent surplus than the hard core surplus. Finally, a good shareof labour exports involves employed skilled and unskilled workersand recent graduates from vocational schools (OECD 1974). In1971, about 36 percent of all Italians, 46 percent of all Turks, 30percent 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 exportscan only be captured through a disaggregated model of theeconomy. The widespread assumption that labour exports must beof benefit only holds if we use an aggregated model of the economyand simply compare overall figures for employment, labour surplusand labour exports.One basic type of segmentation in the economy and hence in thelabour force is that between the rural and urban segments. It istypical for migration flows to begin in the more developed regions,generally urban, of a country (Schiller 1974: 154; see alsoBOhnings model of labour emigration as a self-feeding process,1972). Eventually such a migration flow will spread to the lessdeveloped areas of a given country and draw a larger share ofmigrants from these. The labour-exporting phase which stretchedover two decades and came to a virtual close with the present reces-sion, followed this pattern.The rural segment of the labour-exporting economy appears tobenefit from such out-migration-but only in the short run.Labour exports directly alleviate unemployment and provide aregular income through remittances to the families left behind. Thisincome growth stimulates demand for goods and thereby expandsthe market for consumer goods.But several of these migration flows have been going on longenough to allow for not so short a view. The data that are becomingavailable on several of the labour-exporting countries point to ageneralized tendency: decreases in the rural labour surplus throughworkers emigration has not promoted the economic developmentof the pertinent regions (Baucic 1972; 1974; Allefresde 1972;


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534 Saskia Sassen-KoobBelguendouz 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 ex-ports have cut into what I have called the apparent labour surplus.This becomes especially visible in the seasonal labour demand dur-ing the planting and harvesting periods. Thus, labour surplus coun-tries such as Greece, Turkey, Yugoslavia have regular labour shor-tages during these peak agricultural seasons, similarly with small,low-wage firms.Furthermore, in areas with a high incidence of labour outmigra-tion there is a decrease in the intensity of land use. In Yugoslavia,for example, the decrease in the working agricultural and farmgardening land remained unworked. Since then there has been amarked increase in the rate at which such land remains unwoiked:between 1969 and 1971 it increased to almost 600,000 ectares (ca.1.5 million acres). At the same time Yugoslavias rate of food im-ports has increased considerably. According to one expert onlabour migrations from Yugoslavia, there is no doubt that emigra-tion plays the primary role in this process insofar as it providesalternatives to agricultural production in the form of employmentabroad and remittances (Baucic 1974: 202-203). Portugal has ex-perienced a similar disintegration of its rural economy and the needto import food (Poinard &Roux 1977). Decrease in land utilizationhas been found in all the rural areas with high incidence of workersout-migration.Decreased land utilization is in part the direct consequence of theloss of a share of the young, able-bodied agricultural labour forceand in part the indirect consequence of an alternative source of in-come through remittances. There is less need for family membersleft behind to work the land, or to hire themselves out as seasonalor year-round agricultural workers. For a considerable share of thepopulation in certain areas, the basis of their income has shiftedfrom a local productive activity to one in aforeign country. This in-flux of money and hence consumption which is not the result ofproductive activities within the country cannot but have economicconsequences. Employment abroad creates an artificial wellbeingfor rural areas with high migration incidence. The history of therural areas of Ireland and Italy, both veteran emigration and remit-tance receiving countries, are repeating themselves in North Africa,Turkey, Greece, Yugoslavia. Emigration did not shrink the labour


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536 Saskia Sassen-Koob& Costa 1974; Schiller 1974; Cetin 1974; Krane 1975; Poinard &Roux 1977). Over 40 percent of labour exports from Turkey areskilled labour (Krane 1975: 199-200); Paine (1974: 123) reports thatemigrants have been a relative elite group . , , better educated,more skilled, financially better off, employed in more modern oc-cupations and coming mostly from the middle and upper ranks ofthe peasantry and urban labour force in Turkey. The construction,shipbuilding, coalmining and textile industries in Turkey saw theirlabour force depleted by emigration, while the agricultural sectorprovided comparatively few emigrants (Cetin 1974; Varlier & Ilkin1974). Greece has reportedly had its industrialization processretarded due to export induced shortages of skilled labour (Mouly&Costa 1974: 216); there have been increasingly louder critiques oflabour-export policies and their negative effects on developmentsince the late 1960s (Zolotas 1966). The OECD economic survey ofYugoslavia (1973) stated that 230,000 skilled workers had left thecountry in the 1960s, leaving socialized manufacture with about600,000 skilled workers (Bbhning 1975b). In Yugoslavia there havebeen skilled labour shortages since 1969 (Poinard & Roux 1977:40-41). Schiller (1974) reports on one particular factory of vehiclesand steel products in Yugoslavia which lost 1,000 highly qualifiedworkers and engineers over a period of four years due to labouremigration. In Tunisia the government has trained what appears tobe an excess of skilled workers in certain job categories who arenow being recruited by the labour-importing countries directlyfrom vocational schools (Simon 1973); however, skilled workershave also been recruited directly off their jobs, which has led to theimplementation of protective legislation aimed at ensuring localemployers priority with regard to skilled workers. In Portugal,from 1964 onwards, more factory than rural workers haveemigrated; all surveys of employers from then on have shownlabour shortages, to the point that in 1967 factory workers lost theright to emigrate when that years survey found that 45% of firmswith more than 10 employees complained of shortages (e.g. con-struction firms indicated a 29% labour deficit) (Poinard & Roux

A number of issues are involved in the export of skilled and un-skilled labour from the urban segment. First, the export of skilledworkers is highly detrimental in labour-short sectors of theeconomy where they are difficult or almost impossible to replace

1977: 38-39).


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International Circulationof Resources and Developm ent 537and it takes time and resources to train them. A shortage of skilledworkers in a given sector has a number of secondary consequencesin addition to the direct obstacle to production which such a shor-tage entails: inflationary pressures, bottlenecks in the productionprocess, interruption or slowdown of related economic activities.The general effect will tend to be a decrease in employment and inthe level of economic activity. All the exporting countries have hadtheir skilled labour supply, including employed labour, negativelyaffected by labour exports.

Second, the export of skilled workers from labour-surplus sec-tors has far less serious consequences in the short run. But such ex-ports do constitute a transfer of human capital investment to theimporting country. And this is a loss even if the exporting countrycould not have exploited this resource at the time. The export ofemployed skilled workers from labour-surplus sectors creates costto the employer, varying according to the level of job specificityand need for on-the-job-training. Here it could be argued that thiswould lead to the inclusion of a larger segment of the labour forceinto productive activities through (a) exports and (b) use of a largersegment of the national labour supply insofar as export-inducedshortages lead to replacements. However, what little evidence isavailable suggests that indiscriminate labour exports of employedskilled (and unskilled) workers have created a certain reluctanceamong employers to hire replacements and train them and have ledto capital substitution of labour (e.g. Paine 1974: 146). Since all theexporting countries are intent on industrialization, it can be saidthat labour exports are cutting into the apparent surplus when theyinvolve skilled workers from the labour-surplus sectors; further-more, insofar as they induce employers to replace workers withmachines, labour exports contribute to increase that segmentof thelabour force that is structurally marginal to the economy-whichcannot be absorbed by the productive process.

Third, the export of unskilled workers is probably advantageousin the short run. There is generally a large surplus of unskilledworkers in all large cities. Exports alleviate unemployment and in-crease the wellbeing of the workers and their dependents left behindor taken along. However, at the macrosocial level, labour exportsmay have detrimental effects. Remittances create a consumptioncapacity which is dependent upon employment abroad; further-more, upon their return the workers may engage in consumption


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5 3 8 Saskia Sassen-Koobwhich stimulates imports or creates local inflationary demand forgoods. Finally, and perhaps most importantly, an excessive loss ofunskilled labour, even if surplus labour, may hinder industrial ex-pansion or the momentum of growth at a given time. In this regard,two cases are illustrative. On the one hand, that of WesternEurope, where the evidence is quite conclusive as to the key roleplayed by an abundant labour supply for economic growth(Kindleberger 1967; Castles and Kosack 1974). On the other, thecase of the Arab OPEC countries, where the lack of workers, in-cluding unskilled workers, was a major obstacle to transforming oilrevenues into means of production, leading to massive imports.However, moderate levels of export from the unskilled hurd-coresurplus are probably advantageous to almost everybody involved:the migrants, their families and the urban economy. Yet the selec-tivity of the labour-importing countries probably induces exportsof the apparent unskilled surplus.In looking at labour exports and their role in development, threeissues stand out: the role of labour exports in alleviating unemploy-ment, the contribution of remittances to economic growth orcapital formation, the use made of skills attained by migrants upontheir return. There is no significant correlation between labour ex-ports and decreases in unemployment as shown by the evidencecited in the above discussion and by econometric analyses (Allaya,1974). On the contrary, labour exports may add to unemploymentby shrinking the economic base of a region or sector of theeconomy. 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 tostimulate investments into productive activities, therebystimulating economic growth. The evidence shows that remittanceshave (a) gone overwhelmingly into final consumption, that is con-sumption which has no economic growth effect; (b) stimulated de-mand for imported consumption goods, therewith having anegative effect on the balance of trade as well as a demonstrationeffect that does not stimulate demand for goods from local in-dustries; and (c) had inflationary effects insofar as they have caus-ed an increase in the money supply and demand for consumptiongoods without there being a corresponding growth in the actualproductive capacity (see my discussion above) (Tapinos 1974;


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International Circulation of Resources and Developm ent 539Allaya 1974; Bbhning 1975).O Remittances have had no quan-titative effect on economic growth trends (Allaya 1974); thisevidence together with the fact that the skill drain and remittancesrelate basically to the modern sector, suggest furthermore that thequal i ty of growth has also not been affected (B6hning 1975).Regarding the use of the skills attained by migrants during theiremployment abroad, the evidence suggests that the exporting coun-tries have failed to integrate these into productive processes. Thereappears to be a structural incapacity to do so insofar as in-dustrialization has not undergone significant expansion. I t is thisindustrial base which would allow for such an integration; in-dividual carriers of skills cannot promote development. This failurediscredits the notion, held by the labour-importing countries, thatdevelopment could be transmitted to the exporting countriesthrough the skills and behavioral patterns acquired by migrants.

CONCLUSIONGiven labour scarcities, with or without labour shortages, and con-straints to capital substitution of labour, labour imports are avaluable resource for the operation and growth of the importingeconomies. Furthermore, a plentiful labour supply tends to lowerproduction costs, prices and wages as well as permitting quick reliefof bottlenecks in production and distribution. This has a generallydeflationary effect. The fact that this labour supply is foreign per-mits repatriation of workers once they become superfluous,thereby diminishing the effects of recessions. Because of the tem-porary nature of a good share of labour imports and because oftheir powerlessness, the importing countries have not felt pressuretowards building the infrastructure to accommodate such additionsto the labour force or to provide the extent and level of services ex-pected by nationals.In contrast, the labour-exporting countries are experiencinglong-term disadvantages from labour exports - isadvantageswhich override some of the short-term benefits. The selectivity oflabour importers has cut into the younger, healthier, best educatedsegment of the labour force, mostly from the more developed ruraland urban areas of a country. Furthermore, in all of the exportingcountries, there has been a considerable skill drain, including


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540 Saskia Sassen-Koobemployed skilled workers. To this should be added the negativeselectivity of return migration: it is the less skilled, less adaptableworker who is most likely to retu rn or be repatriated. Finally, theincapacity to make use of skills acquired abroad, the fact thatremittances go into final consumption and have little if anyeconom ic growth effect, has added fu rther to the negative balanceinsofar as neither skills nor m oney have been used for capital for-mation.In sum, the available evidence on two decades of labour importsand exports indicates that (a) the labour-importing countries havebenefitted significantly, and (b) the labour-exporting countrieshave failed to experience the expected benefits and have, t o the con-trary, suffered a skill drain, lack of labour-export induced growth,and often an erosion in the economic base of regions with highlabour emigration. There is a noteworthy contrast between thehighly regulated process of labour import and the uncontrolledprocess of labour exports. The system of migrant labour as itoperates today in the European-North African labour market con-tributes to reproduce the position of politico-economic dominanceof the importing countries at the cost of that of the exporting coun-tries. Furthermore, its operation has produced a new type ofdependence in addition to the existing ones: dependence on thelabour-importing countries for the employment of a segment oftheir labour force and fo r a share of national income. Finally, on amore general level, the international circulation of labour as ittakes place in this market points to certain limits in the interna-tional division of labour: the importing countries, specifically theGFR and Switzerland, could not substitute their labour shortagesby capital, the export of productive activities or import trade.

0 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).In this contex t it is of interest to note that Syria, for exam ple, which used to.


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International Circulation of Resources and Developmen t 541be a labour exporter, is now trying to have its nationals abroad return.Besides this direct transfer of labour there is also an indirect transfer oflabo ur 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 havelow levels of capital intensity and high wage countries, high levels. (See the discus-sion in Marx on prices of production and transfers of value from backward sectorsof the economy to advanced sectors. Though this discussion relates to internaltransfers it has app lications for international transfers.)Fo r example, a 1974 U.S. House Report found tha t the savings in investmentcosts made possible by the immigration of technical, professional and kindred per-sonnel fro m less developed countries was of 850 million dollars annually for 1971and 1972 (Committee on Foreign Affairs 1974). UN CTA D estimates the net incomegained by the U.S. from such immigration at 3.7 billion dollars for 1970 (there ap-pear 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 thereceiving countries.What follows is based on nformation from the International Labour Officeand the OECD, with more detail provided below under The Value of Labour Ex-ports. The ILO has the best reservoir of information on the subject of migrantlabour in its Department of Working Conditions and Environment and in thevarious projects and working papers of the World Employment Programme. TheOECD has a system of permanent observation of migratory flows, SOPEMI.Fo r a sum mary o f migration policies see Bohning 1974. Most of these coun-tries have policies which link residence right with employment, in such a way as toensure return of unemployed or unwanted workers. After 1973 most West Europ eancountries changed their policies towards cessation of new recruitment and stabiliza-tion of the existing migrant labo ur force.

7. Th e case of V enezuela is quite illustrative. For the last two years it has triedto recruit skilled workers from Spain and Portugal and has met with little successbecause the workers were not quite convinced as to the economic advantage; in-cidentally, the offers include paid transportation. There is a marked contrast withthe 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, DemocraticRepublic of Germany) have had to resort to labour imports, including NorthAfricans, to satisfy their labour needs. (I have elaborated on this incapital Ac-cumulation and Labour Imports).Thus, for example, up to 65 percent of the labour imports projected by theUnited Arab Emirates in the next years represents unskilled labour. On the otherhand, some of the labour exporfing countries are beginning to import unskilledworkers: Spain, Italy, Portugal, Yugoslavia.The transfers of savings and social security payments that have beenregistered between the labour importing countries of Western E urope and those pro-viding the lab our, have amounted to over seven billion dollars. This figure does notinclude unrecorded transfers. In the case of Yugoslavia, for example, remittancesamounted to m ore than 10 percent of total personal expenditures in 1971 ( ILO 1976.11: 136, Bohning 1975: 25). See also Nikolanikos (1971). For a differing opinion seeGriffin (1976) and also Bohnings rejoinder (1976: 39-50).

3.

4.

5 .

6.

9.

10.


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542 Saskia Sassen-Koob0 REFERENCES

Allaya, M. (1974): Les Migrations Internationales des Travailleurs du BassinMediterranean et la Croissance Economique (Montpellier: Institut Agro-nomique Mediterranean)Ardenti, J.C. and J .P. Reichenbach (1972): Estimation de la fonction deproduction CES pour la Suisse, Revue Suisse dEconomie Politique et deStatistiqueBalke, S. (1966): Die AuslanderbeschBftigung aus der Sicht der Wirtschaft,Magnet Bundesrepublik (Bundesvereinigung der Deutschen Arbeitgeber-verbgnde) 42: 168-172Baucic, IVO 1972): Th e Effects of Emigration from Yugoslavia and the Problemsof Returning Emigrant Workers (The Hague: Martinus Nijhoff)- 1974): Die Auswirkungen der Arbeitskraftawanderung in Jugoslawien171-206 in Lohrmann und Manfrass (eds)Beijer, G. (1971): Council of Europe: European Population Conference,International Migration, IX, No. 3-4: 109-116Belguendouz, A. (1974): Some Considerations on Moroccan Emigration inRelation to Development (Paris: OECD Development Centre)Belkaid, A. and K . Remili (1974): Emigration and Planned Development of theAlgerian Economy (Paris: OECD Development Centre)Bhagwati, .I . (1976): The Brain Drain, 139-160 in Tripartite W orld C on-ference on Employment, Income Distribution and Social Progress and theInternational Division of Labour (Geneva: International Labour Office,

Background Papers, 11)Bbhning, W .R. (1972): Th e Migration of Workers in the United Kingdom and theEuropean Community (London: Oxford University Press, Institute of RaceRelations)- 1974): The Economic Effects of the Employment of Foreign Workers, 41-123in BBhning and hlaillat: The Effects of the Employment of Foreign Workers(Paris: OECD )- 1974b) Immigration Policies of Western European Countries, InternationalMigration Review, VIII (Summer): 155-163- 1975): Mediterranean Workers in Western Europe: Effects on Home Countriesand Coun tries of Employment (Geneva: ILO, W orld Employment Programme;

Working Paper)- 197513): Some Thou gh ts on Emigration from the Mediterranean Basin, Inter-national Labour Review, I11 (March): 251-277- 1976): Migration f ro m Developing to High Incom e Countries, 119-138 inILO: Tripartite World Conference on Employment, Income Distribution andSocial Progress and the International Division of Labour (BackgroundPapers, 11)- 1976b): Basic Aspects of Migration from Poor to Rich Countries: Facts,Policies (Geneva: 1LO World Em ployment Program me; Working P ape r)Bbhning, W.R. and Denis Maillat (1974): The Effects of the Employment ofForeign Workers (Paris: OECD, Division of Manpower and Social Affairs)Bbrtilcene, I. and T. Ersoy (1974): Labour Migration in its Relationship to


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International Circulation of Resources and D evelopment 543Industrial and Adjustment Policies: The Turkish Case (Paris: OECD,Development Centre)Biillinger, S. and P. Huber (1974): Aushderbeschaftigung aus Unternehmersicht:Quantitative und Qualitative Ergebnisse einer Unterernehmerbefragung inBaden-Wilrtenberg (Tiibingen: lnstitut fur Angewandte Wirschaftsforschung)Bundesamt filr Industrie, Gewerbe und Arbeit (1964): Bericht der Studien-kommission filr das Problem der auslandische Arbeitskrafte (Bern: BICA)Burawoy, Michael The Functions and Reproduction of Migrant Labour:Com parative M aterial from Sou thern Africa an d the United States, Am ericanJournal of Sociology, 81 (March): 1050-1087Bustamante, Jorge A. (1972): The Historical Context of the UndocumentedImmigration from Mexico to the United States, Aztlan, 111 (Fall); 257-282Castells, Manuel (1975): Immigrant Workers and Class Struggles in AdvancedCapitalism: The Western European Experience, Politics and Society, 5 , 1:

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544 Saskia Sassen-KoobHapfner, K. (1975): Rationalisierung, Automatisierung und Verlagerung insAusland als Instrumente zur Lenkung dar Auslanderbeschilftigung (Tubingen:lnstitut fiir Angewandte Wirschaftsforschung)International Catholic Migration Commission: Various Migration News (Geneva:ICMC)International Labour Office of the United Nations (1975): Migrant Workers, I(Geneva: International Labour Conference, 60th Session)- 1976): Tripartite World Conference on Employment, Income Distribution andSocial Progress and the International Division of Labour. BackgroundPapers, 11Institut National de la Statistique et des Etudes Economiques: VariousAnnuaire Statistique de la France. (Paris: Ministere de IEconomie et desFinances)Jones, K. and A. Smith (1970): The Economic Impact of CommonwealthImmigration (London: Cambridge University Press, National Institute ofEconomic and Social Research)Kindleberger, C.P. (1967): Europes Postwar Growth: The Role of Labour-Supply(Cambridge: Harva rd University Press)Klassen, L.H. and P aul Drewe (1973): Migration Policy in Europe: A ComparativeStudy (Lexington: Lexington Books)Krane, R.E. (ed.) (1975): Manpower Mobility Across Cultural Boundaries: SocialEconomic and Legal Aspects. The Case of West Germany and Turkey.(Leiden: E.J. Brill)Lamartine Yates (ed.) (1974): Employment Policies in Developing Countries(London: Allen and Unwin for the International Labor Office, U.N.)Livi-Bacci, Massimo (1974): Die Italienische Auswanderung nach Europa:Elemente einer sozialen und wirtschaftlichen Bilanz, 235-252 in Lohrrnan andManfrass (eds.)Lohrmann, Reinhard and Klaus Manfrass (eds.) (1974): Auslanderbeschlftigungund Internationaler Politik. Zur Analyse transnationaler Sozial Prozesse(Miinchen: R. Oldenbourg Verlag)Maillat, Denis (1974): The Economic Effects of the Employment of ForeignWorkers: The Case of Switzerland, 127-190 in BOhning and Maillat: TheEffects of the Employment of Foreign Workers (Paris: OECD, Division ofManpower and Social Affairs)Merx, V. (1972): Auslhd erbesch ilftigung und Flexibilittlt des Arbe itsmarktes der

Bundesrepublik Deutschland (Kdln)Nikolanikos, M. (1971): Zur Frage der Auswanderungseffekte in den Emigrations-landern, Das Argument, 13 (December)Organisation of Economic Cooperation and Development (1974): InternationalMigration and its Relationship to Industrial and Agricultural AdjustmentPolicies (Paris: OECD)- 1975) A Fair Deal for Mediterranean Countries on the Redeployment ofManpower with Special Attention to their Absorptive Capacities andInvestment- 1977): SOPEMI (Paris: OEC D)Office National dlmmigration (Various): Statistiques de IImmigration (Paris:

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International CirculationofResources and Development 545Paine, Suzanne (1974): Exporting Workers: The Turkish Case (Cambridge:Camb ridge University Press)Poinard, Michel et Michel Roux (1977): Lemigration contre le developpement:Les cas Portugais et Yougoslave. Revue Tiers-Monde, 18 (Janvier-Mars):Salowsky, H. (1972): Sozialpolitische Aspekte der Auslllnderbeschllftigung,Berichte des Deutschen Industrie Institut fur Socialpolitik, 6Samora, Julian (with Jorge A. Bustamante and Gilbert0 Gardenas) (1971): Lo sMojados: The Wetback Story (Notre Dame, Ind.: University of Notre DamePress)Schiller, GUnter (1974): Auswirkungen der Arbeitskriftewanderungen in denHerkunt fs lhdern , 143-170 n Lohrmann and Manfrass (eds.)Schonfield, Andrew (1965):Modern Capitalism: The Changing Balance of Publicand Private Power (London: Oxford University Press)Simon, G. (1973): Lemigration tunisienne, Hommes et Migrations-Documents,April I5Tapinos, G. (1974): Leconomie des migrations internationales (Paris: FondationNationale des Sciences PolitiquesIArmand Colin)Varlier, 0. and S. Ilkin (1974): The Role of International Migration Within theTurkish Planning Perspective (Ankara: State Planning Organization;December; Mimeo)Zolotas, Xenophon, E. (1966): International Labour Migration and EconomicDevelopment (Athens: Bank of Greece, Papers and Lectures)

21-53.

Saskia Sassen-Koob is Assistant Professor inSociology, Queens College of the City University ofNew York. She has published in several scholarlyjournals and has two books forthcoming: The Dialec-tic According to S t Engels and Capital Accumulation

and Immigrant Labor.