Forthcoming in Moral Philosophy and Politics

Brian Berkey*

Exploitation, Trade Justice, and Corporate Obligations

Abstract: In On Trade Justice, Risse and Wollner defend an account of trade justice on which the central requirement, applying to both states and firms, is a requirement of non-exploitation. On their view, in the context of trade exploitation consists in ‘power-induced failure of reciprocity’, which generates an unfair distribution of the benefits and burdens associated with trade relationships. In this paper, I argue that while there are many appealing features of Risse and Wollner’s account, their discussion does not articulate and develop the unified picture of states’ and firms’ obligations that they aim to provide as clearly as it might have. In particular, it is, I claim, unclear exactly how they understand the relationship between the fairness-based requirements that apply to states and those that apply to firms. I argue that there are two types of accounts that they might accept: a transactional account and a structural account. I offer reasons to think that there are reasons to prefer a structural account. In addition, I note some of the key implications of accepting such an account, and suggest that if Risse and Wollner accept these implications and revise other aspects of their view accordingly, the result is a plausible and unified account of what trade justice requires.

Keywords: exploitation, trade justice, fairness, states, firms

1 Introduction

In their recent book On Trade Justice, Mathias Risse and Gabriel Wollner (2019) defend an account on which the central requirement of trade justice is a requirement of non-exploitation

(pp. 5, 79, 95).1 Trade, or more precisely ‘subjection to the global trade regime’ (pp. 4, 60) is, on their view, one of several ‘grounds of justice’, and this ground, like all of the others,2 gives rise to distinctive obligations and entitlements (pp. 4ff). These distinctive obligations and entitlements are to be understood in terms of non-exploitation, which they argue is itself best understood in the context of global trade as ‘power-induced failure of reciprocity’ (pp. 5, 88f,

94f). Failures of reciprocity occur in trading relationships when the benefits and burdens

* Corresponding author: Brian Berkey, Department of Legal Studies and Business Ethics, University of Pennsylvania, 3730 Walnut Street, Philadelphia, PA 19103 USA, E-mail: [email protected] 1 All further unattributed page references are also to Risse and Wollner (2019). 2 The other grounds are ‘common humanity, membership in states, membership in the world society, and humanity’s collective ownership of the earth’ (p. 5; see also Risse 2012).

1 Forthcoming in Moral Philosophy and Politics associated with the relevant cooperative activities are distributed unfairly – that is, when their distribution fails to proportionately satisfy all of the claims that the parties have (pp. 90f, 94f).

Failures of reciprocity are exploitative, and so violate the central principle of trade justice, when the parties that receive more than their fair share of the relevant benefits and/or shoulder less than their fair share of the relevant burdens employ power that they possess over other agents involved in trading relationships with them in order to ensure such an unfair outcome (pp. 90-

95). Agents subjected to the global trade regime, then, are, according to Risse and Wollner, obligated to refrain from using power that they might possess over other agents subjected to that regime in ways that will generate an unfair distribution of the benefits and burdens associated with the cooperative trading activities in which they are engaged. This, on their view, is the central requirement of trade justice.

As the most powerful agents within the global trade regime, states, according to Risse and Wollner, have the most significant and extensive obligations to contribute to the realization of trade justice (pp. 5, 121).3 And since wealthy states with developed economies have much greater abilities than poorer states to, for example, influence WTO policy, and their domestic policies have significant implications for the economic opportunities that will be available to, and the outcomes that will result for, those in developing countries, these states have obligations of trade justice that exceed those of other states.4 Despite the fact that states are, on their view,

3 The central obligations of states, on their view, are (1) to support reforms to the World Trade Organization (WTO) that would result in a fair (or at least fairer) distribution of power within the organization among developed and developing countries (pp. 5, 139, 141, 148-151), and would make development in poorer countries a more central aim, via a ‘development mandate’ (pp. 5, 151f); (2) to refrain from contributing to the growth of ‘mega-regionalism’ (i.e. large-scale trade agreements among clusters of countries, often within particular regions, such as the Trans- Pacific Partnership; p. 172) as an alternative to the global multilateralism embodied in the WTO framework (pp. 5, ch. 10); and (3) to adopt trade-relevant policies domestically that are consistent with trade justice (e.g. eliminating subsidies for certain domestic industries, such as agriculture; p. 166). 4 Their power makes it the case that they have a range of opportunities to engage in exploitative behavior with respect to other states that are not available to less powerful states, and this makes potentially exploitative actions available to them that are generally not available to states with less power.

2 Forthcoming in Moral Philosophy and Politics the most important agents of trade justice, Risse and Wollner also hold that firms have direct obligations deriving from the same core principle of trade justice prohibiting exploitation (pp. 6,

191).5

There is a great deal in Risse and Wollner’s account of trade justice and the obligations that its central principle generates that is plausible and appealing. The claim that obligations of trade justice can be understood in a unified way, in terms of a requirement of non-exploitation, is theoretically significant, and in my view quite promising. The aim of developing this view on the basis of an account of exploitation that is fairly ecumenical, but nonetheless takes the value of fairness to be central, is also appealing. In addition, Risse and Wollner’s development of this fairness-based account, in contrast with other fairness-based views of the wrong of exploitation

(e.g. Wertheimer 1996; Meyers 2004; Faraci 2019; Kates 2019), seems to me to more consistently reflect the right kind of concern for the morally relevant interests of those who are unjustly disadvantaged and vulnerable to exploitation.6 Their commitment to taking seriously the implications of ‘constrained agency’ – that is, the fact that ‘most actors must choose what to do from a limited set of options’ (p. 106) – in thinking about the obligations of particular actors is

5 Firms’ central obligations of trade justice, they claim, are (1) to pay employees wages that provide them with a fair share of the surplus produced by the cooperative activity within the employment relationship (pp. 6, 208), which requires paying them in proportion to their contributions, understood in terms of labor time, including time spent acquiring the skills necessary to perform their work effectively (pp. 208-212); (2) to avoid using power that they possess over communities in which they have operated to make relocation decisions that constitute failures of reciprocity to those communities, and to refrain from lobbying for reduced taxes and regulations in order to make refraining from relocating (especially from a poor country) more profitable (pp. 223-226, 229ff); and (3) to refrain from wrongful involvement with exploitation perpetrated by other agents, such as subcontractors or oppressive states (pp. 232-239, 242-246). 6 See, for example, their discussions of the conditions in which exploitative conduct should be regarded as all- things-considered permissible, due to the fact that it can serve as a ‘stepping-stone’ to a future without exploitation, or to the fact that it benefits those who are exploited (pp. 108ff, 212ff, 226ff). Their claim that exploitation can only be justified in these ways if it satisfies a necessity condition – that is, if the benefits cannot be brought about by the exploiting agent without exploitation – ensures that the view is not overly permissive toward powerful states and firms, without implying that it can be morally preferable for those states and firms to behave in ways that are even worse for badly off people in developing countries (e.g. refraining from mutually beneficial trading relationships altogether) than exploiting them would be. I argue that fairness-based views of the wrong of exploitation tend not reflect the appropriate kind of concern for the interests of those vulnerable to exploitation in Berkey (2020a, 2021, forthcoming).

3 Forthcoming in Moral Philosophy and Politics also important.7 Whatever trade justice ultimately requires, no particular agent (e.g. a state, a firm, an individual person) can be obligated to do more to promote its realization than it is capable of doing, given what other agents will do. Risse and Wollner recognize, and their view properly reflects, the fact that, for example, the policies adopted by states can make it impossible for certain firms to benefit poor workers over time without paying wages that might intuitively seem objectionably low.8

Despite the many virtues of their account, however, in my view Risse and Wollner’s discussion does not articulate and develop the unified picture of states’ and firms’ obligations under their fairness-based principle of non-exploitation that they aim to provide as clearly as it might have. In particular, it is unclear exactly how they understand the relationship between the fairness-based requirements that apply to states and those that apply to firms. A clear account of this relationship, however, is essential in order to understand exactly what their view implies about the obligations of firms in conditions in which states have failed, and are failing, to satisfy their obligations of trade justice. When, for example, powerful states have ensured that WTO rules unfairly favor the interests of their wealthy citizens and multinational firms, and/or have adopted domestic policies that unfairly subsidize certain domestic industries, there is a question about precisely how the unfairness that this generates affects the content of firms’ obligations of trade justice. And the answer to this question depends, in turn, on the type of account of fairness

7 This commitment is fairly widely shared in the literature on exploitation (Meyers 2004, p. 329; Mayer 2007; Snyder 2008, pp. 390, 398, 400f, 404; Ferguson 2016; Kates 2019, p. 44). 8 Another aspect of Risse and Wollner’s account that aims to capture the normative significance of the constrained agency of some actors that results from the wrongful conduct of other, often more powerful actors, or from unjust circumstances more broadly, is their acceptance of the possibility of both non-agential and structural exploitation (pp. 97-101). In my view, while capturing the significance of constrained agency likely does require appealing to the concept of structural injustice, it can be captured without accepting that exploitation, strictly speaking, can take non- agential or structural forms. I will not, however, defend this claim here. For discussion of the significance of structural injustice for accounts of wrongful exploitation, as well as the possibility and potential importance of structural exploitation, see Young (2004); Zwolinski (2012); McKeown (2016); Wollner (2019); Gray (2020); Kuch (2020); Berkey (2021).

4 Forthcoming in Moral Philosophy and Politics on which the central principle of trade justice (that is, the principle of non-exploitation) is grounded.

On the one hand, the principle could be grounded in an account of fairness that is structural, and on which subjection to the trade regime as a whole generates fairness-based claims, such that both states’ and firms’ primary obligation of trade justice is to promote the satisfaction of these general claims. On this type of view, when states have failed to satisfy their obligations of trade justice, firms’ obligations consist primarily in ensuring, within the capabilities that they possess given their constrained agency, that the general claims that states ought to have done more to satisfy are satisfied as much as possible. Alternatively, the principle could be grounded in an account of fairness that is transactional, on which particular trading relationships generate fairness-based claims among the parties to those relationships, such that there need not be especially significant connections between the claims that states may have wrongly failed to satisfy and those that firms are obligated to satisfy within their own trading relationships. On this type of view, which is commonly accepted by proponents of fairness-based accounts of the wrong of exploitation (Meyers 2004; Faraci 2019; Kates 2019), the central fairness-based obligations of firms are conditional obligations (Kates 2019, pp. 34-41).9

Specifically, conditional on forming an economic relationship with another agent, for example an employee, a firm is obligated to ensure that the benefits of their cooperative activities are not distributed unfairly, where what counts as a fair distribution does not depend on the ways in which or the extent to which more general fairness-based claims of others who are not parties to the relationship are either satisfied or unsatisfied. On views of this kind, the content of the fairness-based requirements that apply within particular trading relationships are largely, if not

9 For discussion of important conceptual and normative issues regarding conditional obligations, see Pummer (2016, 2019): Horton (2017); Rulli (2020): Ferguson and Köhler (2020); Berkey (2020b).

5 Forthcoming in Moral Philosophy and Politics entirely, independent of the fairness-based requirements that apply amongst all of the parties subject to the global trade regime, and that explain at least many of the obligations of trade justice possessed by states.10 Risse and Wollner at times make claims that suggest that the first type of account informs their view, while other parts of their discussion suggest that they have in mind an account closer to the second type.

I have three central aims in the remainder of this paper. The first, which I pursue in section 2, is to highlight more precisely how this tension arises within Risse and Wollner’s view.

I do this by noting the ways in which they draw on key aspects of both structural and transactional accounts of the fairness-based considerations that explain the wrong of exploitation.

I argue that the relevant components of these accounts cannot be fully reconciled in an account of firms’ obligations in conditions of structural injustice. My second aim, which I pursue in section 3, is to argue that an account of obligations of trade justice that is genuinely unified under a principle of non-exploitation grounded in a fairness-based view of the wrong of exploitation must treat the fairness-based claims that agents have in virtue of being subjected to the global trade regime as a whole as central – that is, it must be grounded in a structural account of fairness. Lastly, my third aim, which I pursue in section 4, is to describe the central implications of a view grounded in a structural account, and to briefly suggest some reasons to think that such a view, on which corporate obligations of trade justice are at least primarily grounded in general considerations of fairness among the parties subjected to the global trade regime, rather than in fairness-based considerations that are ‘internal’ to the particular trading relationships to which they are parties, is plausible.

10 They may not explain all of states’ obligations of trade justice because states might also, on this type of view, acquire conditional obligations of trade justice to, for example, particular other states in virtue of engaging in trading relationships with them that they do not have with others.

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I take my argument to suggest that Risse and Wollner’s view requires some clarification, and, in light of that clarification, some significant (though, I think, far from radical) modification. My conclusion, then, is not that their view is in any deep sense mistaken. Instead, it is that if it is understood in a way that allows the same fundamental considerations of fairness to explain the central obligations of trade justice of both states and firms, it constitutes a plausible and appealingly unified account of what trade justice requires.

2 Exploitation and Fairness: Structural and Transactional

On Risse and Wollner’s view, subjection to the global trade regime is the ground of trade justice

– that is, it is the condition that gives those subjected both claims of trade justice against others similarly subjected and obligations of trade justice to them. Requirements of trade justice, then, apply within the global trade regime in virtue of the existence and operation of that regime. This suggests that the content of both the general requirements of trade justice and the obligations of particular agents (including both states and firms) should be explained in terms of the distinctive normative implications of subjection to and participation in trading practices that occur within the global trade regime. And this, in turn, suggests that the fairness-based non-exploitation principle at the core of Risse and Wollner’s account of trade justice should be understood structurally, such that exploitation in the context of trade consists, roughly, in taking advantage of power over others within the trade regime, with the result that those taken advantage of are denied benefits to which they have legitimate (justice or fairness-based) claims, while others obtain benefits to which they have no legitimate (justice or fairness-based) claims. This is a rather broad account, which is meant to capture Risse and Wollner’s commitment to the

7 Forthcoming in Moral Philosophy and Politics possibility of both non-agential and structural exploitation (pp. 97-101),11 in addition to the more familiar exploitation of one agent by another. It is also intended to capture the fact that exploitation that violates obligations of trade justice should be understood as violating fairness- based claims that those exploited have as a matter of trade justice, that is, in virtue of being subjected to the global trade regime.

On this type of view, there are entitlements of (trade) justice that agents have in virtue of being subjected to the global trade regime, and structures, non-agential groups, and other agents are all capable of violating or undermining the satisfaction of those entitlements by using power that they possess in ways that generate unfair distributions of the benefits and burdens associated with trade. The entitlements that agents have in virtue of being subjected to the global trade regime might plausibly include fair opportunities to compete within the global market (requiring, for example, that wealthy states refrain from subsidizing domestic industries in ways that give them unfair advantages over competitors in the developing world), and also a fair share of the benefits produced by the practice of trade12 – though there are other plausible candidates as

11 Non-agential exploitation occurs when ‘a pattern of action (amounting to unfair advantage taking) emerges through coordination among agents who do not constitute a group agent but perform various parts in some pattern’ (p. 99). For example, managers of a firm might enact certain policies with respect to employee pay and working conditions, while investors purchase shares in the firm and collect large dividends. Both groups’ actions might be necessary for the employees to be exploited, while the two groups do not together constitute a group agent. Structural exploitation occurs when some agents within a structure are systematically incentivized to take unfair advantage of others, while other agents are systematically incentivized to allow themselves to be taken unfair advantage of, and agents behave in accordance with those incentives (p. 100). As Risse and Wollner point out, exploitation within labor markets often takes this form, since firms are incentivized to pay workers as little as possible because of competitive pressures, while the lack of a legal requirement that employers pay living wages, combined with the fact that many individual workers (particularly unskilled workers) tend to be in competition with large numbers of others for a limited supply of jobs, gives workers strong incentives to accept employment on terms that are unfair to them. 12 Aaron James defends the view that gains from trade, measured relative to a baseline of autarkic production capacity, ought to be distributed equally among states unless greater gains go to poorer states (2012, chs. 5-7; 2014). On his view, states are the entitlement holders with regard to trade justice, and a separate principle of domestic justice, which may or not apply distinctively to gains from trade, governs the just distribution of each state’s share among its citizens (2014, p. 181, fn. 11). For an excellent critical discussion of James’s view, see Olson (2014).

8 Forthcoming in Moral Philosophy and Politics well.13 These entitlements, in turn, explain the obligations of trade justice possessed by all agents that have such obligations, including both states and firms. Trade justice, on this view, requires agents to avoid violating the claims that agents have in virtue of their subjection to the global trade regime, and to promote the satisfaction of those claims.

There is much in Risse and Wollner’s discussion that is consistent with an account with this structure, which assigns duties to avoid violating and to promote the satisfaction of the very same claims, grounded in agents’ subjection to the global trade regime, to all agents of trade justice. For example, they claim that wealthy states are obligated to support reforms to WTO policies that would make development in poor countries a more central priority (pp. 151f), that they ought to avoid enacting policies domestically that would unfairly undermine the development prospects of those countries (p. 166), and even that they ought to adopt policies aimed at facilitating the non-exploitative relocation of firm operations (and jobs) to developing countries (p. 230). At the same time, they argue that firms have reasons to operate (non- exploitatively) in developing countries, since their doing so can provide needed economic opportunities to badly off people (p. 245), and that they have obligations to refrain from lobbying for policies that would benefit them while undermining the development prospects of poor countries (pp. 223-226, 229ff, 246). All of these obligations can plausibly be understood as grounded in the very same fairness-based claims of developing countries and/or their citizens to, for example, fair opportunities to compete in the global market or (progress toward) fair shares of the benefits of global trade.

These claims suggest that Risse and Wollner’s view can be understood as fundamentally concerned with structural fairness, and therefore with exploitation as undermining structural

13 My argument in this paper does not depend on any particular view about what the relevant entitlements grounded in subjection to the global trade regime are.

9 Forthcoming in Moral Philosophy and Politics fairness within the global trade regime. This interpretation is also supported, it seems to me, by what seems to be Risse and Wollner’s primary motivation for holding that exploitation is sometimes justified as a stepping stone toward development that can bring about the possibility of non-exploitative trade in the future, or as a price worth paying for the benefits that badly off people can sometimes gain from transactions in which they are exploited. Their central line of thought seems to be roughly the following: Sometimes firms face conditions of constrained agency in which, perhaps because of WTO policy, policies of various states, and/or competitive pressures due to the behavior of other firms, they cannot promote development in poor countries or benefit badly off people without using their power to, for example, take advantage of those whom they might employ. When this is the case, the fact that the claims of poor countries and/or their citizens to development and/or greater shares of the benefits produced through global trade would be better satisfied (though still far from fully satisfied) if they exploit than they would be if they do not makes it the case that considerations of trade justice support permitting exploitation, all things considered (pp. 227f).

While some aspects of Risse’s and Wollner’s discussion supports the structural interpretation that I have described, there are also features that suggest that they take transactional fairness to be central to their view, in particular with respect to firms’ obligations of trade justice. Those who hold that transactional fairness is the central value that explains when wrongful exploitation has occurred believe, roughly, that the question that we must ask when attempting to determine whether a particular trade relationship is wrongfully exploitative is whether, considered (at least largely) in isolation from factors external to that particular relationship, the benefits and burdens associated with the trading activity within the relationship are distributed fairly (Meyers 2004; Faraci 2019; Kates 2019; for critical discussion see Berkey

10 Forthcoming in Moral Philosophy and Politics

2020a). On views of this kind, a mutually beneficial trading relationship between two parties that are both unjustly advantaged within the global trade regime as a whole might be wrongfully exploitative because the more powerful party uses its power over the weaker party to ensure an internally unfair distribution of the benefits produced by their trading activity, while at the same time their transaction exacerbates unjust inequalities between both parties and many of those not involved in the transaction with respect to the global distribution of the benefits and burdens of global trade (Berkey 2020a, pp. 420f). In a case of this kind, the more powerful party’s being persuaded to remedy its wrongdoing by meeting the fairness-based claims of the weaker party, and thereby resolving the unfairness internal to their trading relationship, would do nothing to promote the satisfaction of requirements of structural fairness within the global trade regime as a whole.14 If considerations of fairness internal to particular transactions are relevant to trade justice, then, it would appear that the values served by the satisfaction of at least some of firms’ central obligations will be different from, and even potentially in some tension with, the values served by the satisfaction of states’ central obligations.15 For example, a firm might satisfy its transactional obligations of trade justice by increasing the prices it pays to a less powerful but nonetheless wealthy supplier based in a developed country, despite the fact that the supplier is only in a position to provide the firm with competitive prices due to government subsidies that undermine the ability of potential suppliers in the developing world to compete. In a case of this kind, while states ought, on Risse and Wollner’s view, to be guided by the value of promoting

14 This is possible because on transaction-focused views there is no necessary connection between, on the one hand, the considerations of transactional fairness that determine whether wrongful exploitation has occurred, and, on the other, the kinds of fairness-based considerations that plausibly ground general entitlements to, for example, fair opportunities or a fair share of the benefits produced through the practice of global trade as a whole. 15 The fact that both kinds of values can, consistent with common usage, be labeled ‘fairness-based’, does not show that this description is mistaken. For the reasons described in the text, structural fairness and transactional fairness are distinct, and can support different courses of action for particular agents.

11 Forthcoming in Moral Philosophy and Politics fairer competition between firms in developed and developing countries,16 transactional fairness does not require the purchasing firm to be guided that value at all. To the extent that transactional fairness is the central value that determines firms’ obligations, then, it will at least sometimes imply that firms can satisfy their central obligations in ways that may even exacerbate structural unfairness.

In their discussion of their approach to understanding the wrong of exploitation in general, Risse and Wollner follow the lead of much contemporary discussion of exploitation by describing the paradigmatic context in which the distinctive wrong of exploitation occurs as

‘mutually beneficial transactions’, or transactions that are both ‘voluntary and mutually beneficial’ (pp. 78f). An account of the wrong of exploitation, they suggest, should explain why such transactions can be wrongful despite being, for example, voluntary and mutually beneficial.

They go on to describe the central wrong of exploitation as ‘joint violation of an interactional and a distributive norm’ (p. 89), which suggests that the wrong is necessarily done to an interaction partner in particular, and that the values that explain the wrong must be ones that can be realized or undermined only within the relevant kinds of interaction.17 Later, they claim that while with respect to domestic justice, ‘transaction-specific requirements are more likely to be eclipsed by more comprehensive concerns of distributive justice’, trade justice more centrally features transaction-specific requirements, since the global trade regime lacks a ‘comprehensive scheme’ similar to that which exists to address domestic justice (p. 203). They also claim that their account of when the wages paid by an employer constitute a power-induced failure of

16 For example, the subsidy-providing state is, plausibly, obligated to cease providing the subsidies, and states generally are plausibly obligated to support changes to WTO rules that would prevent states from providing such subsidies. 17 See, for example, David Faraci’s claim that an employer’s hiring of a new employee ‘generates new obligations…because the…moral significance of fairness has become salient within their interaction’ (2019, p. 177). For critical discussion see Berkey (2020a, 2021, forthcoming).

12 Forthcoming in Moral Philosophy and Politics reciprocity, and thereby wrongful exploitation in violation of the central principle of trade justice, ‘may be developed internal to the trade relationship’ between the employer and its employees (p. 209). Finally, the account that they offer, according to which employees are entitled, as a matter of fairness, to compensation that amounts to a share of the firm’s surplus that reflects their contributions, which are in turn to be understood in terms of labor time, including time spent prior to or outside of their employment gaining the skills necessary to work effectively (pp. 209ff), suggests that the primary considerations of fairness that are relevant to firms’ obligations are internal to their trading relationships, and not the more general ones that might be thought to generate entitlements in virtue of subjection to the global trade regime itself.

There is, then, a tension in Risse and Wollner’s view between a more structural account of the fairness-based considerations that ground firms’ obligations, and a more transactional account. This is important to recognize because, at least in conditions of structural injustice, in which, for example, WTO policy and the policies of wealthy states systematically and unjustly favor the interests of the citizens of wealthy states and powerful multinational firms over the interests of developing countries and their citizens, the two types of account will tend to have very different implications. On the structural account, there will be reasons of trade justice for firms to choose to transact with certain parties rather than others (e.g. with worse off potential employees rather than better off ones), and reasons to ensure that the terms of their transactions meet certain conditions (e.g. providing for the employees’ basic needs). These reasons will, however, ultimately be grounded in the same general requirements of trade justice that provide reasons to change WTO policy and the policies of wealthy states. When states are failing to satisfy their obligations, firms ought, within the limits of their constrained agency, to aim to contribute to satisfying those requirements. This will, it would seem, often involve prioritizing

13 Forthcoming in Moral Philosophy and Politics the interests of those most unjustly disadvantaged by the failures of states to satisfy their obligations, for example by locating jobs in the most disadvantaged communities where it is feasible to do so, even if that involves moving them from communities that are less disadvantaged.

On the transactional account, by contrast, while there may be reasons grounded in considerations of trade justice for firms to choose to transact with some parties rather than others, their primary obligation is to ensure that whatever transactions they actually engage in meet the relevant internal standards of fairness. And firms can satisfy this requirement without, as the structural account will tend to require, prioritizing the interests of those most unjustly disadvantaged within the global trade regime.

The fact that Risse and Wollner are drawn to aspects of both accounts perhaps comes out most clearly in their discussion of firms’ obligations with respect to relocation (pp. 219-231). On the one hand, they reject arguments for the view that firms have duties not to outsource, in particular from richer to poorer countries, and claim that policy should facilitate non-exploitative relocation that would benefit poor countries. These are views that seem motivated by the considerations underlying the structural account. On the other hand, they suggest that relocating can constitute wrongful exploitation by firms of the workers and communities left behind, even if those who become employed in new locations are worse off and more unjustly disadvantaged by the failures of states to satisfy their obligations of trade justice. And this suggests that the kinds of considerations underlying the transactional account are relevant to firms’ obligations of trade justice regarding relocation. There is, then, at least some tension within Risse and

Wollner’s view, and it is important to consider how best to resolve it.

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3 A Unified Account of Obligations of Trade Justice

There are two central reasons to resolve the tension within Risse and Wollner’s discussion between the structural and the transactional accounts of the fairness-based considerations that ground firms’ obligations of trade justice in favor of the structural account. The first is that this resolution allows the overall account of trade justice and its obligations to be more clearly unified. And the second is that even if considerations of transactional fairness are relevant to what firms ought to do, all things considered, it is implausible that they are considerations of trade justice in particular, since their relevance within any particular transaction cannot plausibly depend on whether the parties to the transaction are subjected to the global trade regime.

Distinct values can provide reasons that guide agents in different directions. This is a familiar phenomenon, and it is a deep and difficult question in normative philosophy whether a fully unified account of normative reasons is possible. Many think that it is not possible, and that there are multiple normative domains, each with its own distinctive principles, that provide agents with potentially conflicting reasons for action, and even potentially conflicting obligations

(for discussion see Dorsey 2016). Even if this is correct, however, we should think that an account of what is required of an agent by a particular value, or by the principles of a particular normative domain, is at least preferable, all else equal, if it avoids the possibility of such conflicts. It is one thing to think, for example, that morality and prudence are distinctive normative domains, each with its own principles and authority over individuals, and that the principles of each can generate conflicting obligations. Even within morality, it is not implausible that distinct principles can generate authoritative yet conflicting obligations. The narrower the normative domain whose values and principles we are attempting to analyze, however, the more reason there is to aim for a unified analysis, if possible. If even fairly narrow

15 Forthcoming in Moral Philosophy and Politics domains, such as trade justice, can generate fundamentally incompatible demands, then conflicts at higher levels will not have the familiar form in which one sub-domain generates a particular demand, while another generates an incompatible demand. Instead, one sub-domain may itself generate several incompatible demands, and another may generate several more, and many or all of them may be incompatible with each other. The possibility that this is how we must understand the structure of the normative realm cannot, as a purely conceptual matter, be ruled out, but it is a result that there are reasons to avoid if plausible unified accounts of the obligations generated by particular values and domains can be developed.

An account of trade justice and its obligations that has at its core Risse and Wollner’s non-exploitation requirement, understood as a requirement to refrain from using power in ways that reinforce or exacerbate structural unfairness from which the agent benefits, can avoid generating conflicts in its implications for agents of trade justice, including firms. This is because all of their obligations of trade justice will, in the relevant sense, be obligations to eliminate, reduce, or avoid contributing to structural unfairness. So, just as firms are obligated to support the enactment by states and the WTO of policies required as a matter of trade justice (pp. 193,

246), they are obligated to conduct their transactions in ways that advance the same structural fairness-based values that explain why those policies are required. If a firm faces a choice between advancing those values by supporting policy changes or by engaging in certain transactions (where it cannot do both), what it ought to do, as a matter of trade justice, is simply determined by which option will better advance the relevant values.18

18 There may, of course, be considerations outside of trade justice that are relevant to what a firm ought to do, all things considered. But my point here is simply that a view grounded in a structural account of fairness can offer a unified account of what trade justice, in particular, requires of firms.

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On the other hand, an account that understands the non-exploitation requirement, as it applies to firms, primarily as a requirement to avoid using power in a way that generates transactional unfairness, is liable to generate conflicting reasons, and potentially conflicting requirements, within trade justice itself. Imagine, for example, that a multinational firm F has employed a group of moderately badly off people in country A for a period of time, and that considerations of transactional fairness suggest that it is obligated to continue to employ them, and to improve their wages and working conditions. Imagine also that policy changes at the

WTO and within a number of countries, including A, that are required as a matter of trade justice would, if enacted, make it impossible for F to continue to employ the people in A while remaining viable as a firm. The required policies, we can imagine, would make it necessary for F to move the jobs to a significantly poorer country, and to pay decent wages and provide decent working conditions there. If F must choose whether to direct resources either toward supporting the required policy changes or toward improving the wages and working conditions of its current employees in A, it appears that considerations of trade justice, understood as including a requirement that firms avoid transactional unfairness, present reasons and perhaps obligations that are fundamentally at odds.

This, it seems to me, provides a significant (though perhaps not entirely decisive) reason to prefer understanding the value of fairness within Risse and Wollner’s view of trade justice in structural terms. Importantly, this does not mean that transactional fairness does not provide firms with reasons for action that might compete with reasons grounded in structural fairness (or other values). It means only that these should not be considered reasons of trade justice in particular.19

19 They might, for example, be reasons of a more fundamentally relational kind to avoid transacting with particular agents on terms that fail to satisfy particular conditions, but which do not bear directly on trade justice.

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A second reason to think that transactional fairness should not be considered a part of trade justice, on Risse and Wollner’s view, is that the moral force of reasons of transactional fairness does not seem to depend on whether the parties to a transaction are subjected to the global trade regime. It is important that, for Risse and Wollner, entitlements and obligations of trade justice are grounded in subjection to the global trade regime. This means that only agents that are so subjected have the relevant entitlements and obligations. These entitlements and obligations, then, contrast with those that are grounded in, for example, our common humanity, which are necessarily possessed by everyone. If entitlements and obligations of transactional fairness were, in any way or to any extent, grounded in subjection to the global trade regime, then we should expect the content of those entitlements and obligations to differ depending on whether the parties are so subjected. It seems to me, however, that whatever view we take about the moral force of considerations of transactional fairness, it is implausible to think that it depends in any way on whether the parties are subjected to the global trade regime. In addition,

Risse and Wollner’s own understanding of what firms owe to their employees appears to support this claim. On their view, a firm ought, as a matter of fairness, to compensate employees proportionate to their contributions, understood in terms of labor time, including time spent acquiring necessary skills (pp. 209ff). This is a plausible view about what the value of fairness requires internal to a firm. Its plausibility, however, does not seem to depend in any way on an implicit assumption that a firm and its employees are subjected to the global trade regime. If we imagine a firm operating outside of that regime (in an economically isolated country, for example), that does not seem to have any effect on what we should think internal fairness within the firm requires.

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This suggests, I think, that while considerations of transactional fairness may well be relevant to what firms ought to do, all things considered (whether or not they are subjected to the global trade regime), they ought not be considered central to what trade justice in particular requires of them. Obligations of trade justice, as Risse and Wollner themselves suggest, are obligations that agents possess only in virtue of their subjection to, and participation in, the global trade regime.

4 Exploitation and Corporate Obligations of Trade Justice

If my argument thus far is correct, then on the most plausible understanding of Risse and

Wollner’s view, firms’ obligations of trade justice are explained, at least primarily, by considerations of structural fairness within the global trade regime. If we aim to articulate the implications of the view in a way that is consistent with the claim that obligations of trade justice should be understood in terms of non-exploitation, where exploitation is understood as unfairness through power, this has implications for how exploitation in the context of global trade must be conceived.20

Specifically, for a firm to be guilty of the kind of exploitation that violates obligations of trade justice, it must employ power that it possesses over other agents in a way that reinforces or exacerbates unfairness in the distribution of the benefits and burdens of trade within the trade regime as a whole. If a firm does as much as possible, given its constrained agency, to promote structural fairness within the global trade regime, then even if the terms of some of its transactions, considered in isolation, would seem to be unfair, whatever reasons there are that count against this transactional unfairness are not reasons of trade justice.

20 It remains possible to accept that there is also a separate wrong of transactional exploitation that is not directly relevant to trade justice.

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Exploitation is typically thought to involve the exploiter benefitting, or at least aiming to benefit, from its exploitative action more than, morally speaking, it is entitled to. In my view this thought should shape the account of exploitation within the global trade regime as well. Firms, like other agents, are entitled, in virtue of being subjected to the global trade regime, to benefit a certain amount as a result of their contributions to productive activity within that regime.21 When a firm uses power that it possesses over other agents within the regime in a way that results in the firm benefitting more than it is entitled to, it is, on my view, guilty of wrongful exploitation, in violation of its obligations of trade justice.22

The important difference between a view that explains the wrong of exploitation in terms of structural unfairness, and those that explain it in terms of transactional unfairness, is that on the structural account, the wrong is best understood as done to all of those that are both unjustly disadvantaged within the global trade regime (and, as a result, likely vulnerable to exploitation by the offending party and others) and whose unjust disadvantages could have been mitigated had the offending party behaved differently (Berkey forthcoming). On the transactional account, by contrast, the wrong must be understood as done only to the offending party’s transaction partners. For example, on the transactional account, a firm that benefits more than it is entitled to by paying very low wages to sweatshop workers wrongs only those workers whom it employs.

21 In my view firms are not themselves moral patients that can, strictly speaking, benefit in a morally relevant sense (Berkey 2019; for an argument that this view may be mistaken, see Silver 2019). Because of this, the claim that firms are entitled to benefit should be understood as, at least roughly, the claim that its members, in the aggregate, are entitled to benefit. 22 My thought here is in some ways similar to the one that informs views according to which benefitting from injustice generates remedial obligations (e.g. Butt 2007, 2014; Goodin and Barry 2014; Haydar and Øverland 2014). These accounts, however, are generally defended by appeal to examples involving benefitting from particular unjust acts, rather than to cases involving benefitting from structural injustice. My view, on the other hand, is that remedial obligations arise in virtue of benefitting, on net, in relation to a baseline of one’s overall entitlements of justice. The view that benefitting from injustice generates remedial obligations has also been debated in relation to obligations to contribute to climate justice (e.g. Gosseries 2004; Page 2012; Karnein 2017). In these debates the distinction between benefiting from unjust acts and benefiting from structural injustice is also important, but generally not discussed in much detail (Berkey 2017).

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On the structural account, by contrast, it wrongs all of those whose unjust vulnerability within the global trade regime contributes to driving down prevailing wages for sweatshop work.

The structural account is plausible, within a view about what trade justice requires of agents such as firms, for at least two reasons. First, it makes it the case that firms’ satisfaction of their obligations of trade justice will systematically tend to promote the satisfaction of the claims that unjustly disadvantaged agents have specifically in virtue of being subjected to the global trade regime. This seems like an important virtue of an account of obligations of trade justice, which is not possessed by accounts on which fairness is understood in transactional terms.

Second, it more accurately reflects the full range of the morally relevant effects of the use of power by firms and other powerful agents within the global trade regime. For example, firms are able to pay some workers wages that seem objectionably low, and thereby obtain benefits that exceed what they are entitled to, morally speaking, not only because they have power over the workers whom they in fact hire, but also because they have power over all of the other potential workers whom they could hire who, because of their unjustly disadvantaged circumstances, would also be willing to work for less than the firms should be paying. Their ability to obtain unfair benefits, then, depends on the power relations in which they stand to a much larger number of those who are unjustly disadvantaged than they actually transact with. In the relevant sense, then, it seems correct that, within the global trade regime, firms that are guilty of wrongful exploitation typically exploit not only the employees that they actually hire, but all of those whose unjust disadvantages make it possible for them to pay as little as they do. And because of this, it seems objectionably narrow to hold that their employment-related obligations of trade justice are owed only to those whom they actually employ.

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In addition, firms that satisfy their obligations grounded in considerations of structural fairness will at least sometimes not be guilty of wrongfully exploiting their employees (or anyone else), even if those employees are paid wages that are intuitively objectionable and lower than they are entitled to as a matter of structural fairness. To see why, consider two firms, A and

B, operating in different industries. Both firms devote the required amount of resources toward satisfying their obligations of structural fairness. Firm A, however, succeeds in generating a practice within its industry of paying the lowest paid employees what they are entitled to as a matter of structural fairness, while firm B fails in its effort to do the same.23 If, in the absence of compliance by competitors, firm B simply could not survive while paying its lowest paid employees what they are entitled to as a matter of structural fairness, then we should accept that it is not guilty of wrongful exploitation, in violation of its obligations of trade justice, if it pays them as much as it feasibly can, while continuing to work toward promoting structural fairness as much as it is obligated to.24

My discussion thus far suggests the following rough account of firms’ obligations of trade justice: Firms ought to ensure, within the limits of their constrained agency, that they do not benefit unfairly on net from global trade. They also ought to ensure that the potential gains that they forego in order to satisfy this obligation are directed, as much as possible, and prioritizing the most important claims, in ways that contribute to the satisfaction of the entitlements of those unjustly disadvantaged within the global trade regime as a whole. In my

23 I am grateful to an anonymous reviewer for suggesting an example with this structure. 24 It might be argued that by continuing to operate within a structurally unjust system in a way that unavoidably links itself to ongoing structural unfairness, the firm is wrongfully complicit in the exploitation that the operation of the system entails. While participating in an unjust system may generate obligations to contribute, to the extent that an agent can, to both reforming the system and limiting its unjust effects, in my view an agent should not be thought guilty of wrongdoing merely in virtue of participation, so long as it is doing what it can to avoid benefitting unfairly on net and address the injustices that the system generates (for defense of a similar principle, see Meckled-Garcia 2014, and, with respect to coercion, Valentini 2011, p. 211ff, 216).

22 Forthcoming in Moral Philosophy and Politics view this account is both plausible and consistent with much that seems to motivate Risse and

Wollner. It does require accepting some significant modifications to claims that they make, but in my view it represents the most plausible way to resolve the tension between structural and transactional considerations of fairness exhibited in their discussion.

Acknowledgements: For helpful written comments, I am grateful to Christina Skinner. I have also benefitted from discussions with Vince Buccola, Rob Hughes, Julian Jonker, and Amy Sepinwall.

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