Fairness in trade I: Obligations from trading and the Pauper-Labor Argument

Politics, Philosophy & Economics

Volumn 6, Issue 3, 2007, Pages 355-377

  Risse, Mathias ^a  

^a HARVARD UNIVERSITY   (United States)

Author keywords

development; exploitation; oppression; the state; World Trade Organization

Indexed keywords

EID: 51249140923     PISSN: 1470594X     EISSN: None     Source Type: Journal    
DOI: 10.1177/1470594X07081304     Document Type: Article

References (25)

1. Risse argues in support of states. See Mathias Risse, ‘What We Owe to the Global Poor’, Journal of Ethics 9 (2005): 81-117; Mathias Risse, ‘What to Say about the State’, Social Theory and Practice 32 (2006): 671-98. What ‘in principle’ means is, of course, at stake in this article, as well as, for instance, in Blake and Risse, ‘Is There a Human Right to Free Movement? Immigration and Original Ownership of the Earth’ (forthcoming), also available as Kennedy School of Government Working Paper RWP06-012. This stance does not propose that there are no legitimacy problems about particular countries or boundaries. Yet through this starting point I differ especially from James. See Aaron James, ‘Distributive Justice Without Sovereign Rule: The Case of Trade’, Social Theory and Practice 31 (2005): 533-59. James argues that trade amounts to practices to which principles of fairness apply, and that this shows the implausibility of views restricting concerns of socioeconomic distribution to states. Following Risse, ‘What We Owe to the Global Poor’, I argue the other way around: the legitimacy of states entails that principles of fairness, to the extent that they apply to trade, are constrained by the legitimacy of states.
2. David Held develops a global social democratic agenda, taking for granted that there should be such an agenda. See David Held, Global Covenant: The Social Democratic Alternative to the Washington Consensus (Cambridge: Polity, 2004). Thomas Pogge argues against states. Questions of fairness in trade look different on such views in Thomas Pogge, World Poverty and Human Rights (Oxford: Polity, 2002). The fair trade movement is explored in Kurjanska and Risse, ‘Fairness in Trade II’, and this does bear on how individuals ought to act. The WTO is discussed in detail in Stiglitz and Charlton, Fair Trade for All.
3. Kurjanska and Risse, ‘Fairness in Trade II’.
4. For a discussion of recent work on exploitation, compare Ruth Sample, Exploitation: What it is and Why it is Wrong (Boulder, CO: Rowman and Littlefield, 2003), who in addition to making a proposal of her own, assesses especially Alan Wertheimer, Exploitation (Princeton, NJ: Princeton University Press, 1996) and Robert Goodin, Protecting the Vulnerable: A Re-Analysis of Our Social Responsibilities (Chicago, IL: University of Chicago Press, 1985). While the proposals made in these works differ, and are developed in considerable detail, they all focus on spelling out the idea of unfair advantage-taking (as does Joel Feinberg, The Moral Limit of the Criminal Law, Vol. 4: Harmless Wrongdoing [Oxford: Oxford University Press, 1988], Ch. 31). For recent works on exploitation, compare Andrew Reeve (ed.), Modern Theories of Exploitation (London: Sage, 1987). For the view that the labor theory of value is not a suitable basis for the charge of exploitation, and that that charge can be motivated differently in a manner appealing to Marxists, compare G.A. Cohen, ‘The Labor Theory of Value and the Concept of Exploitation’, in History, Labor, and Freedom, edited by G.A. Cohen (Oxford: Clarendon Press, 1988). I do not claim that this study addresses all possible ways in which trade might be exploitative.
5. This account is inspired by John Broome, ‘Fairness’, in Ethics out of Economics, edited by John Broome (Cambridge: Cambridge University Press, 1999), but is more general by allowing for different bases on which stringent claims can rest and for the need to assess how claims made on different bases can be compared.
6. For an introduction, compare John Rawls, Justice as Fairness: A Restatement, edited by E. Kelly (Cambridge, MA: Harvard University Press, 2001).
7. Kurjanska and Risse, ‘Fairness in Trade II’.
8. For all that has been said so far, what governments owe foreign countries could be more than what they owe citizens. This would be so if Pogge is right that the global order harms the poor - a fact that would give the poor claims to rectification. See Pogge, World Poverty and Human Rights. For discussion of this, see Mathias Risse, ‘How Does the Global Order Harm the Poor?’ Philosophy and Public Affairs 33 (2005): 349-76.
9. Compare Gary Burtless, Robert Lawrence, Robert Litan and Robert Shapiro, Globaphobia: Confronting Fears about Open Trade (Washington, DC: Brookings Institution, 1998), Ch. 5.
10. John Roemer, Equality of Opportunity (Cambridge, MA: Harvard University Press, 1998), p. 1.
11. Readers influenced by cosmopolitanism, as captured, for example, by Caney and Moellendorff, or by views arguing that the global order harms the poor (compare Pogge) will find the Strong Westphalian View obviously implausible. See Simon Caney, Justice Beyond Borders: A Global Political Theory (Oxford: Oxford University Press, 2005); Daniel Moellendorff, Cosmopolitan Justice (Boulder, CO: Westview Press, 2002); Pogge, World Poverty and Human Rights. Yet others do not share these starting points. I myself, for one, do not (for reasons explained in Risse, ‘What We Owe to the Global Poor’ and Risse, ‘How Does the Global Order Harm the Poor?’). Moreover, like it or not, the Strong Westphalian View is a hugely influential view among policy-makers, social scientists, and lawyers. The implausibility of the Strong Westphalian View cannot just be assumed, and arguing for it is nontrivial (as the objections to my sufficiency claim below should demonstrate). Also, mustering objections to the Strong Westphalian View is a convenient way of engaging the many considerations offered in the debates about fairness in trade.
12. Compare USITC, The Dynamic Effects of Trade Liberalization: An Empirical Analysis, Investigation 332-75, Publication 3069, Washington, DC: United States International Trade Commission. Compare R. Wacziarg and K.H. Welch, ‘Trade Liberalization and Growth: New Evidence’, NBER Working Paper 1052 (Cambridge, MA: NBER, 2003) and the discussion of the literature in Kym Anderson, ‘Subsidies and Trade Barriers’, in Global Crises, Global Solutions, edited by Bjorn Lomborg (Cambridge: Cambridge University Press, 2004), p. 343 ff. See also Arvind Panagariya, ‘Miracles and Debacles: In Defense of Trade Openness’, World Economy 27 (2004): 1149-71; Arvind Panagariya, ‘Miracles and Debacles: Do Free-Trade Skeptics Have a Case?’ (2004), URL (consulted June 2007): http://www.columbia.edu/~ap2231/policy.html. Winters et al. find that trade liberalization will be poverty alleviating in the long run and on average (but do not take this to imply that trade liberalization is always among the most important determinants of poverty reduction). See Alan Winters, Neil McCulloch and Andrew McKay, ‘Trade Liberalization and Poverty: The Evidence So Far’, Journal of Economic Literature 52 (2004): 72-115. Rodriguez and Rodrik agree that there is a positive relationship between trade and growth, but question whether it is due to trade policy, rather than transport costs or demand. Fancisco Rodriguez and Dani Rodrik, ‘Trade Policy and Economic Growth: A Skeptic's Guide to the Cross- National Evidence’, in Macroeconomics Annual 2000, edited by Ben Bernanke and Kenneth Rogoff (Cambridge, MA: MIT Press, 2000). Contrary to a widespread view, Nancy Birdsall, Dani Rodrik and Arvind Subramanian, ‘How to Help Poor Countries’, Foreign Affairs July/August (2005) question the importance of trade liberalization for growth. Instead, they emphasize the importance of domestic reform and argue that other measures, such as a temporary work-permit program, would be financially more beneficial for developing countries than trade liberalization. Stiglitz and Charlton, Fair Trade for All, p. 35 point out that the relationship between trade and growth is not simple. For a discussion of cases in which trade liberalization might not be advisable, at least in the short run, see Stiglitz and Charlton, Fair Trade for All, Ch. 2. Nevertheless, Stiglitz and Charlton consider trade liberalization sufficiently important that the crux of their position proposal is to ask each country to open its markets to any country smaller than itself (in economic terms). Compare Stiglitz and Charlton, Fair Trade for All, p. 94.
13. Compare United Nations Development Program, Human Development Report 2003 (New York: Oxford University Press, 2003) and World Bank, World Development Indicators 2004 (Washington, DC: World Bank, 2004), and references therein. Compare Dollar and Kraay for the view that growth is good for the poor. See David Dollar and Aart Kraay, ‘Growth is Good for the Poor’, Journal of Economic Growth 7 (2002): 195-225.
14. What about growth and democracy? Londregan and Poole suggest that in the short run growth supports whoever is in power, whereas in the long run increasing income has a small democratizing effect. See John Londregan and Keith Poole, ‘Does High Income Promote Democracy?’ World Politics 49 (1996): 1-30. Przeworski et al. are more reserved: they do not find that growing income makes democracies more likely to arise, but that democracies, regardless of how they have arisen, are more stable in wealthy countries once in existence. See Adam Przeworski, Michael Alvarez, Joses Cheiub and Fernando Limongi, Democracy and Development: Political Institutions and Well-Being in the World 1950-1990 (Cambridge: Cambridge University Press, 2000), Ch. 2.
15. Martin Wolf, Why Globalization Works (New Haven, CT: Yale University Press, 2004), p. 187.
16. Burtless et al., Globaphobia, p. 124. On labor standards, see also Oxfam, ‘Rigged Rules and Double Standards’, in The Legal and Moral Aspects of International Trade, edited by Parry Geraint, Asif Qureshi and Hillel Steiner (New York: Routledge, 1998), p. 196; Anderson, ‘Subsidies and Trade Barriers’, p. 546 (and references therein).
17. Archon Fung, Dara O'Rourke and Charles Sable, Can We Put an End to Sweatshops? (Boston, MA: Beacon Press, 2001).
18. Compare Frances Kamm, ‘Non-Consequentialism’, in The Blackwell Guide to Ethical Theory (Oxford: Blackwell, 2000), Section 8; T.M. Scanlon, What We Owe to Each Other (Cambridge, MA: Harvard University Press, 1998), Ch. 5.9. Compare D. Wasserman and A. Strudler, ‘Can a Nonconsequentialist Count Lives?’ Philosophy and Public Affairs 31 (2003): 71-94, for the view that attempts to integrate aggregation into deontological frameworks have so far failed.
19. Londregan and Poole, ‘Does High Income Promote Democracy?’
20. First, this discussion also addresses a point made by Scanlon: that in perceived trade-offs between human rights concerns and economic development, arguments that aim to speak on behalf of the people affected should generally go against human rights violations. See T.M. Scanlon, ‘Human Rights as a Neutral Concern’, in The Difficulty of Tolerance (Cambridge: Cambridge University Press, 2003). Scanlon's argument for this claim is that strengthening human rights will make it possible for the people affected to speak on their own behalf in the first place. My response to this is that outsiders are often not confronted with such a choice, but instead with a choice of helping economic development while otherwise not being able to do anything about the human rights situation anyway. Second, it has been objected that one may defend the Strong Westphalian View as follows. One could appeal to the Rawlsian insight that we should not assess specific institutions or policies in isolation, but assess them as they interact with background factors to produce morally desirable or undesirable consequences. Suppose the most effective way to ensure a decent minimum for the poor is to adopt a permissive attitude to trade policy that disregards its impact on oppression, possibly while adopting more restrictive attitudes to other foreign policies (which should be used to protect individuals from the potentially oppressive effects of trade policy). On such grounds, one may argue that the Strong Westphalian View is plausible after all. This view, however, does not strike me as a good account of the moral phenomena. There is still a moral problem about engaging in trade with oppressive governments, and this point can be captured well in my approach: the presence of this problem is not deemed to be conclusive for trade policy, but remains pro tanto a problem, and its presence is registered as a moral loss. On this alternative approach, it would remain true that certain fairness problems could not be registered as such, which strikes me as implausible.
21. Krugman and Obstfeld, International Economics.
22. Paul Krugman, ‘Global Free Trade’, in The Legal and Moral Aspects of International Trade, edited by Parry Geraint, Asif Qureshi and Hillel Steiner (New York: Routledge, 1998).
23. Wolf, Why Globalization Works, p. 24.
24. For the actual history of labor standards in Scandinavia, compare Karl-Ove Moene and Michael Wallerstein, ‘Legislation Versus Bargaining Power: The Evolution of Scandinavian Labor Standards’, in International Labor Standards, edited by Kaushik Basu, Henrik Horn, Lisa Roman and Judith Shapiro (Oxford: Blackwell, 2003): 9-105. What matters for this argument is, however, not how such standards have actually arisen, but whether a moral view about them can be ascribed to the public at the present time.
25. Kurjanska and Risse, ‘Fairness in Trade II’.