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ACLS News

Focus on Research: Aaron James F’08 on Fairness in the Global Economy

5/10/2011

ACLS asked its fellows to describe their research: the knowledge it creates and how this knowledge benefits our understanding of the world. We are pleased to present this response from Aaron James, associate professor of philosophy at the University of California, Irvine, as the first in the series.


James_AaronAll too often, public debate on the issues of the day assumes a false dichotomy between science and politics. We rightly look to economic science for policy options, whether the issue is financial crises, unemployment, mounting public debt, or the balance of international trade. But we then often treat the question of what to do, of what is best or right, as though it is simply for politics to settle, as though there is little to say, except in the mode of persuasion, about what kind of society or international system we should have and why.

That is a mistake, because humanistic study does have much to say about our essential practical questions, in systematic, intellectually serious terms which look beyond political rhetoric. Political philosophy, for example, is concerned precisely with what we ought to do and why, with the basic principles that should guide social life, and with the different moral and practical arguments that can be marshaled on different sides of fundamental disputes.

My own research in political philosophy takes up the question of fairness in the global economy. It looks for principled ways of answering central practical questions about its organizing institutions. Should governments adopt aggressive controls on the flow of capital across borders in order to reduce the risk of increasingly frequent and enormously destructive financial crises? What system of money and credit is most fair to advanced and developing countries alike? To what extent can barriers to trade be fair, for the sake of reducing environmental degradation, or protecting displaced workers, or at least easing the difficulty of protracted unemployment and efforts to find a new career? To what extent are domestic social safety nets which reduce vulnerability to global economic forces the responsibility of all countries involved in the system of trade, as opposed to a simple question of domestic preference? ACLS’s support of my research gave me a valuable opportunity to more extensively study the international economics, law, and political theory needed to seriously engage these questions. (The result is a book presently entitled, Fairness in Practice: a Social Contract for a Global Economy, under contract with Oxford University Press.)

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[T]here is nothing unduly 'utopian' in the idea that fairness in the global economy can and should substantially guide public deliberation and choice about the kind of international world we should have and move towards.

 
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Neither science nor politics is suited to address these moral questions on its own. Economic science cannot tell us what we ought to do, but at most give us the facts we need to decide, while unruly politics hardly steers us toward the most sensible course automatically. At their best, economics and politics offer helpful suggestions for clear thinking about what course is good and right and why.

But while political philosophy has a rich trove of resources for addressing major practical questions, it has yet to systematically address the global economy, taken as a subject of normative inquiry in its own right, even as global economic life presents many of the greatest moral and practical challenges of our day.

My central proposition is that we should view the global economy and its basic question of fairness in a particular way. The global economy is organized by a kind of international social practice, a practice in which different countries each rely, mutually, on common markets, for the sake of economic advantage (the “gains of trade” due to specialization according to comparative advantage, economies of scale, and the spread of technology and ideas). The basic question of fairness—of “structural equity”—is about the structure of this market reliance relationship, about what system of domestic policies and international rules might distribute the advantages and disadvantages of global economic integration across different countries and their respective social classes in a way that is reasonably acceptable to each and to all.

Once we consider what is “reasonably acceptable” to all in the context of the international practice of trade, I argue that we are led to egalitarian conclusions about how trading countries should allow the benefits and burdens of the global economy to fall out. Several collective responsibilities result. Trading countries are to fully compensate “losers” with generous social insurance schemes, if need be, with international support. They are to distribute the “gains of trade” equally among countries similarly endowed, except where special reasons (such as special needs of development) justify inequality of gain. They are to adopt aggressive capital controls, in order to minimize the risks of financial crises. They are to eviscerate the emerging global system of intellectual property, by excepting all developing countries from established intellectual property rules. And they are to adopt aggressive, market-friendly means of optimizing wage and labor prospects for workers in the developing world. All of this follows as the “fair price” of a world of more or less free trade.

I defend these conclusions within a social contract framework inspired by John Rawls’s theory of justice. Rawls famously argued that we should decide the question of social justice by asking what principles members of a society would self-interestedly agree to in ignorance of their respective social positions. But it is unclear how or to what extent this idea can be applied beyond domestic society. In addressing the global economy, I steer a “middle course” between Rawls’s own parochial egalitarianism and attempts to “globalize” Rawls’s theory into a fully “cosmopolitan” view.

In particular, I suggest that we see the global economy as a distinctive kind of international social relationship, embedded within a system of states. This relationships itself generates responsibilities of socio-economic distribution which reach across borders. But it does so whether or not global life and its principles should be modeled upon something like a single domestic society or the relations each person bears to each other person of the world. Whether or not a fully “cosmopolitan” conception of justice is defensible, or even feasible, the global economy as we know it already gives rise to significant egalitarian demands, in its current international form. If we must sometimes be “realistic” about what can be accomplished given the prevailing state of political will, there is nothing unduly “utopian” in the idea that fairness in the global economy can and should substantially guide public deliberation and choice about the kind of international world we should have and move towards. 

Aaron James F’08 received a Frederick Burkhardt Fellowship for Recently Tenured Scholars for his project “Fairness in the Global Economy.” The complete series is available here.

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