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Trade, Exploitation, and the Problem of Unequal Opportunity Costs
Abstract
This paper assesses the ‘power-induced failure of reciprocity’ account of exploitation in the domain of trade. I argue that its proponents face a dilemma. Either the cost variable of reciprocity is understood to include opportunity costs. Then, the account implausibly implies that those with more valuable outside options should get a larger part of the overall benefits of cooperation. Or the cost variable is understood to exclude opportunity costs. Then, the account has awkward implications in cases where direct costs and opportunity costs are substitutable. To evade this dilemma, the account could be amended to include a hypothetical baseline that equalizes opportunity costs. But then, the account ceases to be isolationist. Whether a cooperative interaction counts as exploitative is no longer independent of moral considerations about distributions outside the domain of trade.
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Trade has made the world. Still, trade remains an elusive and profoundly difficult area for philosophical thought. This account of trade justice stresses the role of exploitation, emphasizing philosophical ideas about global justice but also contributing to moral disputes about practical questions. The book is a philosophical plea for a new global deal, in continuation of, but also at appropriate distance to, postwar efforts to design a fair global-governance system in the spirit of the American New Deal of the 1930s. It is written in the tradition of contemporary analytical philosophy but also puts its subject into a historical perspective. The book covers the subject of trade justice, from its theoretical foundations to several specific issues on which this book throws light. The state as an actor in the domain of global justice is central to the discussion but the book also explores the obligations of business extensively, recognizing the importance of the modern corporation for trade. So, topics such as wages injustice, collusion with authoritarian regimes, relocation decisions, and obligations arising from interaction with suppliers and sub-contractors all enter prominently. Another central actor in the domain of trade is the World Trade Organization. The WTO needs to see itself as an agent of justice. This book explores how this organization should be reformed in light of proposals made herein. In particular, the WTO needs to endorse a human-rights and development-oriented mandate. Overall, the book hopes to make a theoretical contribution to the creation of an exploitation-free world.
This paper discusses the idea that trade – the practice of regularised exchange of goods or services between nation-states for mutual advantage under an orchestrated system of rules – can generate moral duties, duties that exist between only participants in the activity. It considers this idea across three duties often cited as duties of trade: duties not to harm; duties to provide certain basic goods; and duties to distribute (certain) benefits and burdens fairly. The paper argues that these three duties seem unlikely contenders for duties thought in some sense to supervene on trade, the former two because they seem to exist regardless of the existence of trade and the latter because it seems to apply to a group more widely conceived than to be coherently thought centred on trade. It concludes that, at least across these three duties, it is more plausible to think that they are duties which, although possibly having relevance for how trade is conducted, do not emerge from the practice and are, rather, grounded elsewhere.
If the global economy seems unfair, how should we understand what a fair global economy would be? What ideas of fairness, if any, apply, and what significance do they have for policy and law? Working within the social contract tradition, this book argues that fairness is best seen as a kind of equity in practice. The global economy as we know it is organized by an international social practice in which countries mutually rely upon common markets. This practice generates shared responsibilities of "structural equity," independently of humanitarian, human rights, or other justice concerns, for how benefits and burdens are distributed across different societies and their social classes. Equity in the practice of trade requires not only compensation of people harmed by their exposure to global economic forces, but also equal division of the "gains of trade," across and within societies, unless still greater gains flow to developing countries. Fairness therefore calls for strong social insurance schemes, international capital controls, policy flexibility for developing countries, and more-all as the "fair price" of free trade.
R. P. Wolff’s Reinterpretation of Marx’s Labor Theory of Value: Comment
- J E Roemer