[...] the most important effect of the hypermobility of capital on labor movements is not so much its direct impact on workers, but its indirect impact. In this view, the hypermobility of capital has weakened de facto state sovereignty . And as states become incapable of effectively controlling flows of capital, their capacity to protect their citizens' livelihoods and other workers' rights; including the welfare state and substantive democracy, also declines (Tilly 1995; Castells 1997: 252-4, 354-5). States that insist on maintaining expensive social compacts with their citizens, including their working classes, risk being abandoned en masse by investors scouring the world for the highest possible returns. From this perspective, the most consequential aspect of the "race to the bottom" takes the form of pressure on states to repeal social welfare provisions and other fetters on profit maximization within their borders. The rocky debut of the new European currency (the Euro) has been taken as one example of this process, with European countries being "punished" for failing to dismantle social protection schemes at a sufficiently rapid pace to suit a hypermobile capital.

Contentions about the state of world labor are based on assumptions about the impact of contemporary globalization on workers' bargaining power. A useful starting point for differentiating types of workers' bargaining power is Erik Olin Wright's (2 000: 962) distinction between associational and structural power. Associational power consists of "the various forms of power that result from the formation of collective organization of workers" (most importantly, trade unions and political parties). Structural power, in contrast, consists of the power that accrues to workers simply from their location ... in the economic system." Wright further divides "structural" power into two subtypes. The first subtype of structural power (which we shall call marketplace bargaining power) is the power that "results dIrectly from tight labor markets." The second subtype of structural power (which we shall call workplace bargaining power) is the power that results "from the strategic location of a particular group of workers within a key industrial sector." Marketplace bargaining power can take several forms including (1) the possession of scarce skills that are in demand by employers, (2) low levels of general unemployment, and (3) the ability of workers to pull out of the labor market entirely and survive on nonwage sources of income.8 Workplace bargaining power, on the other hand, accrues to workers who are enmeshed in tightly integrated production processes, where a localized work stoppage in a key node can cause disruptions on a much wider scale than the stoppage itself. Such bargaining power has been in evidence when enture assembly lines have been shut down by a stoppage in one segment of the line, and when entire corporations relying on the just-in-time delivery of parts have been brought to a standstill by railway workers' strikes.

If the hypermobility of capital is widely seen as having undermined mar­ketplace and associational bargaining power, related "post-Fordist" trans­formations in the organization of production and labor process are widely seen as having undermined labor's workplace bargaining power. Thus, sub­contracting and other forms of vertical disintegration are seen as having reversed the historical trend toward increased workplace bargaining power that was brought about through the spread of Fordist systems of mass production. Fordism tended to dramatically increase workplace bargaining power by increasing the vulnerability of capital to workers' direct action at the point of production. To be sure, continuous flow production (includ­ing the assembly line) tended to decrease labor's marketplace bargaining power by homogenizing and deskilling industrial work and by making it possible (indeed preferable) to draw on latent reserve armies of labor with little or no industrial experience. Moreover, continuous flow production tended to weaken associational power by bringing into the proletariat "a mass of unorganized workers" who could not be easily absorbed into the existing artisanal unions or left political parties.

[...] we can draw on Immanuel Wallerstein's notion that historical capitalism is characterized by a "system-level problem." That is, profits can be made - even with the partial de-commodification of labor and the establishment of expensive social contracts - as long as those concessions are made to only a small percentage of the world's workers. As Wallerstein put it, with reference to the post-Second World War social contracts: "One could cut in several-hundred-million western workers and still make the system profitable. But if one cut in several billion Third World workers, there would be nothing left for further capital accumulation" (1995: 25).

[...] The U.S. labor movement's success in having open immigration outlawed in the 1920s set the stage for the stabilization of the U.S. working class and contributed to the subsequent CIO (Congress of Industrial Organizations) victories in the 1930s. At the same time, however, this U.S. labor movement "success" shut off what had been an essential social safety valve for Europe in the nineteenth century. It thereby transformed the terrain on which workers' movements operated in Europe and, according to E. H. Carr (1945), helped set the stage for the defeat of European labor movements and the rise of fascism.