‘Trade has made the world.’ Starting from this simple but important insight, Mathias Risse and Gabriel Wollner deliver an ambitious and wide-ranging account of what justice demands in the domain of international trade. The subtitle of the book alludes to post-war efforts to construct a fair, global economic system in the spirit of the American New Deal of the 1930s. Picking up where debates surrounding a New International Economic Order left off in the 1970s, the authors put forward a philosophical framework that sheds light on the role of firms, states and global governance institutions in achieving a fairer global economy.
Apart from being one of the very few book-length treatments of the topic in the recent literature, On Trade Justice stands out for two reasons. The first is that it attempts to integrate trade into a broader, pluralist theory of global justice. Drawing on Risse’s earlier work (Risse Reference Risse2012), the authors recognize several ‘grounds of justice’ – or reasons why claims of justice exist – and identify subjection to the trade regime as one such ground. The second key feature of the book is that it expresses the demands of trade justice in the language of exploitation: the gains of trade are distributed justly only if these gains are obtained without exploitation. Importantly, whereas rival views in the literature view trade either as a transaction between individuals or as a distributive question among states, an account focused on exploitation recognizes a multiplicity of actors. Having sketched an original theory of exploitation in the first section of the book, the authors go on to explore its implications for two actors in particular: states and firms. The chapters dealing with states consider issues such as reform of the WTO and domestic trade policy dilemmas; those dealing with firms examine questions such as fair wages and the permissibility of outsourcing and relocation.
Risse and Wollner’s account is one that does not shy away from complexity. From the pluralist approach to global justice, to their specific conception of exploitation, to methodological views on agency or non-ideal theory, there are many moving parts in the overall argument. The discussion engages with a broad set of theoretical debates, and the authors often offer carefully argued and nuanced positions that attempt to integrate the insights of competing views while steering clear of their flaws. It is commendable that they manage to pull the different strands of these debates into one overarching theory. Despite these evident virtues, however, several steps in the argument left me with the impression that there was more to say. And because some of the parts that hold the book together seem to me to require a stronger theoretical justification, I was also left with lingering doubts about the big picture. For the purposes of this review, let me focus on three issues in particular: the nature of exploitation, the place of trade within a theory of global justice, and whether exploitation is the right lens through which to view trade justice.
The nature of exploitation
Exploitation is unfair advantage-taking. If I offer a starving person food at an extortionate price, I wrongly benefit from her vulnerability. Although it is easy to agree on the wrongfulness of cases like this, it is hard to say what exactly makes them wrongful. Different theories offer different explanations, focusing, for example, on the violation of rights, the lack of voluntariness, or failures of respect. Risse and Wollner offer a novel account of exploitation, which has a general and a trade-specific formulation. The general account understands exploitation as unfairness through power, where unfairness means the failure to proportionately satisfy all relevant claims. This account is rather open-ended, since what count as relevant claims is precisely the question that other accounts of exploitation try to answer. Be that as it may, the authors opt, sensibly, to focus on the trade-specific version of this general definition. In the context of trade, the relevant claims are claims to a fair share of the benefits produced through structured cooperation for mutual gain. Hence, in the domain of trade, exploitation is a power-induced failure of reciprocity.
But even this formulation leaves much room for interpretation. When exactly are claims arising from cooperation satisfied in a reciprocal way? Consider exploitation among states. It is easy enough to tell what reciprocity is not. When the USA uses its greater bargaining power to impose lopsided trade arrangements on developing countries – for instance by demanding lower tariffs while insisting on protections for its own industries – it is plausible to describe the relationship as exploitative: power is used to establish non-reciprocal exchanges. Many people would agree with this claim. But the unfairness of this case seems overdetermined: the USA wields disproportionate power due to past and present injustices, developing countries struggle to satisfy human rights, and so on. It is harder to define on a conceptual level what forms of power are problematic, and what sorts of reciprocity are called for. For instance, is it generally impermissible for a country to use its greater market size, natural resources, or share of global trade to negotiate preferential trade arrangements, even if it is not otherwise treating other countries unjustly? Are countries that have invested in technology and innovation entitled to claim greater shares if these factors increase their contributions to the gains of trade? What if these technological advantages are in part a product of past distributive injustices? Clearly, the answers to these questions determine what trade justice requires in inter-state relations. But beyond clear-cut cases, Risse and Wollner’s account does not provide enough detail to get a sense of how they should be answered.
Regarding exploitation at the level of firms, however, the authors are much more explicit. Towards the end of the book, Risse and Wollner examine the question of wages and compensation that firms must provide in order to satisfy the demands of trade justice. On the one hand, they argue, non-exploitation requires reciprocity in terms of costs incurred: since workers incur costs in order to reproduce their labour power, firms should provide wages that cover these costs. On the other hand, reciprocity also requires a fair division of the surplus generated by the firm. Here, the authors maintain that ‘value created in cooperative activity should be divided in line with time spent producing’ (210). I was struck by how radical the implications of this principle are: if a worker in a Nike factory in Indonesia spends the same time working as a Nike manager in Oregon, both the worker and the manager should earn the same wages. Although the authors recognize that the principle implies that capitalist employment relations may require ‘fundamental reconsideration’ (212), they also attempt to limit its demandingness by adding two caveats.
First, time should be multiplied if the work requires special preparation and training. This implies that the manager’s wages should be higher than the worker’s, reflecting time spent pursuing a higher education and developing management skills. While this caveat is plausible, it is not clear to me that it does much to curb the radical implications of the principle. For one thing, it may well be that sweatshop workers spend more time working than managers, even when we consider the time spent acquiring special training. What is more, the worker in Indonesia may not have had an opportunity to acquire the training and education of the manager in Oregon. Given that the rationale for using working time as the criterion for contribution is the fact that it is generally ‘under individuals’ control and hence a factor for which, ordinarily, individuals are responsible’ (210), it would seem unfair to expect workers to accept lower wages for factors beyond their control.Footnote 1
The second caveat appeals to what Risse and Wollner call ‘stepping stone’ and ‘price worth paying’ arguments. In an insightful discussion of justice in non-ideal circumstances, the authors argue that exploitation may be all-things-considered justified if it advances overall justice. For example, exploitative wages may be justified as stepping stones towards better working conditions, or as a price worth paying for the creation of benefits that would otherwise not have been available. They compare these kinds of arguments to Rawls’s defence of the Difference Principle, which famously allows an unequal distribution of economic rewards if these inequalities are of the greatest advantage to the least advantaged members of society (108; Rawls Reference Rawls1971). But it is worth noting that for Rawls, income inequalities – potentially very large ones – are permitted by justice in ideal circumstances. The Difference Principle is not a compromise with justice; it is simply what justice demands. For Risse and Wollner, on the other hand, ideal trade justice requires non-exploitative wages, defined as the division of surplus in proportion to time spent working. This seems to me a much more egalitarian principle than the Difference Principle. To be sure, that in itself is not an objection to it. But given that the authors endorse the Rawlsian principles of justice as the correct regulative principles for domestic societies, it raises questions about the relationship between trade justice and other considerations of justice. Let me turn to these questions now.
How trade fits into a broader pluralist picture of global justice
In On Global Justice, Risse defends a pluralist theory that identifies several ‘grounds’ of justice (Risse Reference Risse2012). Membership in states is one such ground, and it should be regulated by Rawls’s principles of justice. Membership in world society is another ground, and the associated principles concern the satisfaction of human rights. On Trade Justice is the attempt to specify the principles that ought to govern the domain of trade. Although I am sympathetic to this pluralist approach to global justice, demarcating different domains and explaining how they relate to one another is no easy task. Consider the relationship between domestic justice and trade justice. Risse and Wollner claim that domestic justice ‘eclipses’ trade justice. In other words, domestic economies should not be regulated by principles of non-exploitation, but rather by something akin to Rawls’s principles of social justice. This is the case, they argue, because the state’s coerciveness is profound, pervasive and more immediate than that exerted by the global trade regime (71). I have doubts about this rationale: it is plausible to think that human rights enjoy priority over domestic principles of justice, even if the relationships that ‘ground’ human rights – namely membership in world society – are less profound, pervasive and immediate than those within the state.
But regardless of whether trade justice ‘eclipses’ domestic justice or vice-versa, it is not entirely clear how these two different domains can be separated in the first place. Recall the example of a worker in a Nike factory in Indonesia. Risse and Wollner argue that her wages should be determined by the principles of non-exploitation that trade justice demands. But given that the worker is part of Indonesian society, why shouldn’t we think instead that her wages should reflect the Difference Principle, or some other principle of domestic justice that applies to her society? The authors could perhaps reply that Nike is a multinational corporation with global supply chains, and that its activities therefore fall under the domain of trade justice. But if that is true, then it would also follow that the wages of the Nike manager in Oregon – as well as that of any other American citizen employed by a company engaged in international trade – should be regulated by principles of trade justice rather than domestic justice. The result would be an awkward patchwork of competing principles of justice within any given state.
The more general point here is that it is not easy to draw a neat circle around trade. Because ‘trade has made the world’, domestic economies and global trade are inextricably woven together. Incidentally, this is a point that the authors have previously directed at Aaron James’s theory of trade justice (James Reference James2012). James argues that the surplus produced by world trade ought to be divided equally among trading countries, but that domestic economic capacities ought to be exempted from global redistribution. Risse and Wollner rightly emphasize the challenges of separating the domestic product that a country would achieve on its own from that produced jointly with other countries (Risse and Wollner Reference Risse and Wollner2014). But a similar objection can be levelled against their own account: it is not easy to draw the contours of the domain of trade, within which its principles apply.Footnote 2
Is exploitation the right framework to think about trade justice?
Even if we found a plausible way to separate the domain of trade, why should we think of the moral demands associated with it exclusively or primarily in terms of exploitation? The authors distinguish between duties of justice that arise from trading and duties that arise in the context of trade. The former are part of trade justice proper, and should be thought of in terms of exploitation. The latter may arise from different grounds of justice. For example, duties of beneficence or human rights might guide trade policy in cases where people are in need, despite not being exploited. Although there is nothing wrong with drawing an analytic distinction along these lines, it highlights how narrow the authors’ understanding of trade justice is, and how many issues fall outside of its realm.
This becomes particularly clear in the chapters discussing the obligations of trade justice that fall upon states. In Chapter 9, for example, Risse and Wollner discuss several important trade policy issues faced by democratic governments. The authors put forward sophisticated and persuasive arguments in favour of banning exports of hazardous chemicals to developing countries, phasing out export subsidies, and restricting trade with authoritarian regimes. But it is striking that these arguments hardly invoke the idea of exploitation. What is primarily driving these judgements, instead, are considerations of human rights and development. The same could be said about other trade policy issues that are not typically analysed through the lens of exploitation, such as the environmental or cultural impacts of trade.
It is not even clear that exploitation is the primary concern driving the authors’ suggestions for reforming the WTO, the organization at the heart of the global trade regime and the primary instrument for implementing a New Global Deal. To be sure, the WTO currently allows powerful states to impose unfair or exploitative terms of trade on less powerful states, and the authors persuasively argue in favour of empowering the latter through greater participation and accountability. But these proposals seem at least in part instrumental for a different goal, namely, promoting development. Consider: would trade justice be satisfied if relations between trading countries were non-exploitative, but effects on people in developing countries were devastating? Indeed, the authors argue that the WTO should ‘put the development mandate front and center’ (151). This mandate is derived from a duty to help realise human rights, which is a principle that is not associated with trade, but rather with other grounds of justice. Now, it may be true that the trade regime is embedded in these other grounds, and that it therefore should not undermine principles associated with them. But it does not follow that its primary goal should be to actively promote those principles, as opposed to the principles associated with trade justice itself. None of this is to say that I disagree with the authors’ substantive proposals; it is merely to highlight the fact that exploitation does not seem to be the only, or perhaps even the most pressing, consideration in the domain of trade.
Despite these concerns, On Trade Justice is a thought-provoking book of considerable scope and ambition. There is a great deal to be learned from its sophisticated arguments, historical awareness, and commitment to linking philosophical theory with empirically informed discussions of trade policy. By articulating an original position centred around the concept of exploitation, it contributes a novel and important perspective on trade justice. For these reasons, the book is essential reading for anyone interested in the more recent literature on global justice in trade, within which it is sure to become a point of reference.
Johannes Kniess is a Lecturer in Political Philosophy at Newcastle University and currently a Max Weber Fellow at the European University Institute.
