Economic Justice in an Unfair World: Toward a Level Playing Field.
Jolly, Richard
Economic Justice in an Unfair World: Toward a Level Playing Field,
Ethan B. Kapstein (Princeton: Princeton University Press, 2006), 272
pp., $27.95 cloth.
Economic Justice in an Unfair World is a stimulating,
well-researched book combining economic analysis, political philosophy,
and contemporary policy, all focused on one key question: What does one
mean by economic justice in a world cut through by inequalities of
income, bargaining power, and human poverty? It is an ambitious theme
and the author pursues it with originality and an extraordinary wealth
of quotations and references, exploring the specifics in four key areas
of action: international trade, aid, migration and labor rights, and
private investment.
In the preface and introduction, Ethan Kapstein sets out the key
questions underlying his analysis: What possible meanings lie behind the
frequently expressed assertion that "the global economy operates in
a way that is fundamentally unfair, particularly to developing countries
and to the poor within them" (p. 1), and what sort of policies
would result from being clearer--and more rigorous--in defining these
meanings?
Kapstein identifies three models for thinking about economic
injustice:
* The communitarian model, which focuses on the nation-state and
seeks to ensure that equal opportunities for citizens within each
country are not set back by global influences.
* The cosmopolitan model, which focuses on the situation of
individuals in the world, ignores nationality and country borders, and
assesses global injustice in terms of the differing situations of
individuals worldwide. Kapstein also identifies a subgroup of the
cosmopolitans, which he calls the prioritarians. This group focuses on
poverty reduction as the key remedy of injustice in the world today.
* The liberal model, which focuses on the society of states and
seeks faster economic growth and convergence as the central goals of
policy.
Kapstein recognizes that these categories overlap somewhat. In
particular, since the adoption of the Millennium Development Goals (MDGs) for global poverty reduction at the UN's Millennium Summit in 2000, the MDGs serve as the declared priority for many governments
and, more particularly, for the Bretton Woods Institutions, even though
"mainstream economic theory and public policy analysis reflects the
communitarian perspective in important respects; after all, the state
remains the privileged site of policymaking and the actor with the
monopoly right to use coercive means over its own territory" (p.
9). In contrast, cosmopolitans focus directly on individuals, stress
human beings as the ultimate units of concern, and make equality of
status the driving force for policy. In line with this perspective,
cosmopolitans take seriously the problem of failed states in a way that
those working within other paradigms do not.
These paradigms are useful for understanding the different
approaches that analysts and policy-makers use to consider issues of
global inequality and what should be done about it. Perceptions
certainly matter, but ultimately one is left wondering whether the
conceptual frameworks lead to policy and action quite so clearly as
Kapstein's logic and analysis seem to imply. Mainstream economics,
for instance, suggests that free trade is in the interests of all
countries. But though this has been preached endlessly to the developing
countries, most of the developed countries practice protectionism and
trade-distorting subsidies. It is not the logic of general theory but
the power of domestic interests that explains this.
Kapstein's last chapter turns to policy. Emphasizing that the
playing field of negotiation is far from level, Kapstein makes a number
of proposals as to how the bargaining power of smaller, weaker, and
poorer countries could be strengthened. The proposals are useful, though
somewhat less original than the earlier sections of the book. Indeed,
the main disappointment is that his agenda appears somewhat limited.
Many other ways of strengthening the bargaining position of developing
countries have at times been suggested, such as the provision of
high-level independent analysis that is made publicly available to all
parties, the creation of an ombudsman, and the use of arbitration. Even
more important is to widen the whole field of action. Kapstein admirably
recognizes that the world is extremely unequal--and growing more so,
especially over the past quarter century.
Over the longer run, much bolder international policies in support
of the poorest and least-developed countries are needed if convergence
is to be achieved. In this regard, Kapstein poses the issues of growth
and redistribution in an unnecessarily narrow manner. In his preface, he
recognizes that some readers will argue that given "the fact of
widespread poverty and destitution, and tremendous income gaps between
rich and poor persons and countries, a case can be made that leveling
the playing field requires a lot more than I offer here; it demands a
significant reallocation of the world's wealth and resources"
(p. xiii). Kapstein rejects such proposals because, he argues, actions
that depend on economically meaningful redistributions from country A to
country B would be welfare-reducing from the perspective of country A
and thus politically unacceptable. Kapstein seems to ignore the fact
that policies of redistribution with growth over time can be
welfare-enhancing to all parties, by bringing economic and political
benefits in the form of expanding markets and greater social and
political stability. A range of policies could contribute to
redistribution with growth on a global scale--more open trade, rising
aid, support for pro-poor technologies, and a host of other measures
that would support pro-poor growth in poorer developing countries. With
these, poverty in poorer and least-developed countries could be reduced
at an accelerated rate, while extremes of income distribution nationally
and globally could be moderated. At the same time, the better-off groups
in all countries could also gain, though by a lesser amount over time
than might otherwise be the case. Kapstein ignores both such
redistribution over time and the policies that might give rise to it.
Admittedly, such policies are not easy and would require a different
long-term vision than the leading world powers mostly display at
present. But in economic terms, the budgetary costs would be a lot lower
than current expenditures on war and conflict prevention.
By not exploring such options and the policies that could support
them, Kapstein's final chapter is limited to little more than a
carefully stated reiteration of present economic orthodoxy--which itself
is too often argued for in theory and neglected in practice. It is this
that makes the book worth reading but ultimately leaves the reader
wanting more.
--RICHARD JOLLY
Institute of Development Studies,
University of Sussex
