International Business Environment

Global Labor Justice and the Limits of Economic Analysis

Joshua Preiss Minnesota State University

ABSTRACT: This article considers the economic case for so-called sweatshop wages and working conditions. My goal is not to defend or reject the economic case for sweatshops. Instead, proceeding from a broadly pluralist understanding of value, I make and defend a number of claims concerning the ethical relevance of economic analysis for values that different agents utilize to evaluate sweatshops. My arguments give special attention to a series of recent articles by Benjamin Powell and Matt Zwolinski, which represent the latest and best defense of the economic case for sweatshops. In the process, I challenge Zwolinski's "non-worseness claim" (NWC), and the idea that opposition to sweatshop wages and working conditions fails to respect that the autonomy of would-he sweatshop workers. Ultimately, I conclude that even if the economic case for sweatshops rests on a solid empirical foundation, agents possess good reason to advocate for better wages and work- ing conditions for sweatshop workers, and to prefer less exploitative or coercive relationships. Sweatshop labor undermines a compelling vision of free markets, according to both Kantian and republican conceptions of freedom, and the relation- ships formed by those who participate in such markets.

KEY WORDS: sweatshops, exploitation, background justice, supply chain ethics, labor rights

I. INTRODUCTION

THIS PAPER CONSIDERS THE ECONOMIC CASE for so-called sweatshop wages and working conditions. My goal is not to defend or reject the economic

case for sweatshops. Instead, proceeding from a broadly pluralist understanding of value, I make and defend a number of claims concerning the ethical relevance of economic analysis for values that different agents utilize to evaluate sweatshops, and their decision to enter into sweatshop relationships. The first type of agent, the managers of multinational enterprises (MNEs) and their partners, remains the near exclusive focus of business ethics scholars who criticize sweatshops. Section II presents the economic case for sweatshops. In section III, I consider the extent that the economic case for sweatshops repudiates the claim, made most famously by Detiis Arnold and Norman Bowie, that respect for persons produces a managerial or corporate obligation to voluntarily improve the wages and working conditions of sweatshops workers. Section IV continues this analysis, focusing on the oft- neglected but nonetheless central concern that owners and managers of MNEs

©2014 Business Ethics Quarterly 24:1 (lanuary 2014). ISSN 1052-150X pp. 55-83 DOI: 10.5840/beq20141272

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exploit sweatshop workers by taking advantage of background injustice. Section V concerns the obligations of managers of MNFs (and their partners) to respect human rights and the rule of law. These three sections give special attention to a series of recent articles by Benjamin Powell and Matt Zwolinski, which represent the latest and best defense of the economic case for sweatshops. In the process, I challenge Zwolinski's "non-worseness claim" (NWC), and the idea that opposition to sweatshop wages and working conditions fails to respect that the autonomy of would-be sweatshop workers.

In section VI, I discuss agents as political actors and consumers who advocate for policies that shape the basic structure of markets, and decide whether or not to purchase the products of sweatshop labor. Does the economic case for sweatshops, as Zwolinski and Powell assert, generate a moral obligation for individuals, in their roles as legislators, agents of NGOs, and consumers of more developed nations, to oppose legal mandates for higher wages or working conditions, or to purchase sweatshop goods? Do individuals who campaign for "sweat-free" goods really harm workers in developing countries? I argue that there are no good reasons for believing that such claims have validity.

The conclusions of this article inform both the positive duties (what we should do) and the negative duties (what we should refrain from doing) of a wide range of agents. Ultimately, I conclude that even if the economic case for sweatshops rests on a solid empirical foundation,^ agents possess good reason to advocate for better wages and working conditions for sweatshop workers, and to prefer less exploitative or coercive relationships. Sweatshop labor undermines a compelling vision of free markets, according to both Kantian and republican conceptions of freedom, and the relationships formed by those who participate in such markets.

n. THF FCONOMIC CASF FOR SWEATSHOPS

Fconomists at times proceed as though critics are either (1) hostile to free markets in general or (2) ignorant of basic econotnic principles. Frequently, they assert that critics simply do not realize that sweatshop labor is the best option available to such workers,^ that regulations and prohibitions of sweatshop labor will do more harm than good (by increasing unemployment) and that so-called sweatshops represent a natural stage in economic development (Wheelan 2010, Henderson 2006, Varley 1998, Powell 2008). A widely discussed example of these phenomena is economist Daniel Klein's recent op-ed in the Wall Street Journal titled "Are you Smarter than a Fifth Grader" (Klein 2010).^ Klein draws upon data from a survey designed and conducted by Zeljka Buturovic at Zogby International. Those surveyed were asked to respond to many prompts, including: "Third-world workers working for American companies overseas are being exploited" (Klein and Butarovic 2010). People who respond agree or strongly agree to this prompt, they conclude, are economically unenlightened, lacking even rudimentary knowledge of basic economic principles. Klein never provides a normative justification for this claim. This omission is not particularly surprising since, in order for Klein to assert that claims of exploitation refiect ignorance of basic economics, he must believe that critics fail to understand

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tbat sweatsbop wages and working conditions are mutually beneficial. He reasons tbat because workers volunteer for sucb jobs, wbicb often pay as well or better tban tbe available altematives, tbey are not exploited. Any altemative explanation would require normative justification.

If tbis explanation is correct, Klein makes an elementary pbilosopbical error conceming tbe link between rational cboice and exploitation. We migbt describe the error in two ways. First, we might say that Klein reasons tbat a choice is voluntary or free if it is rationally cbosen. An individual rationally chooses an option if, given ber circumstances in tbe status quo (and tbe information available to ber) she accepts it as tbe best option for furthering ber welfare. Her cboice, on tbis conception, is understood as tbe product of weigbing costs and benefits so as to select the option tbat best satisfies her preferences. "Voluntariness," however, is moral notion, closely connected to our ideas of freedom and personal responsibility. On my own view, following Pettit, an individual's cboice is free or voluntary to the extent she is fit to be held responsible for it.'' Eor our purposes bere, however, it is enough to point out that, in both everyday and pbilosopbical discourse, wbetber a choice is voluntary or free depends botb upon the quality of tbe altematives and on tbe circumstances tbat brougbt about that choice. Depending on tbe account, these factors determine wbetber a choice is free or coercive (Nozick 1969, Wertheimer 1987), wbetber an individual is fit to be beld responsible for her cboice (Pettit 2001 ), wbetber our action is autonomous (Meyers 1989) in a way tbat grounds moral obligations (Korsgaard 1996), is subject to praise or blame (Erankfurt 1988), and so on.̂ Second, even if we conflate voluntary or free cboice witb rational cboice, on most accounts of exploita- tion, including all of tbose tbat I address below, a cboice can be both voluntary and exploitative.^ Eor Klein, bowever, an offer is not exploitative (and obviously so) if an individual accepts it as her best available option. Klein seems to believe that if a transaction is rational and mutually beneficial then it is morally unproblematic.

Klein's conflation of rational cboice witb voluntary cboice, and bis assumption that because exchange is mutually beneficial excbange it is not exploitative, points us to some of the limitations of tbe economic case for sweatshops. Contemporary economic analysis is overwhelmingly consequentialist and welfarist (Hausman and McPberson 2006, Broome 1999, Beckertnan 2011, Sen 1982,1987,1999,2002, Sen and Williams 1982). Tbis legacy of utilitarianism stands in sharp contrast to many prominent theories of etbics. Consequentialists judge an action, policy, or institution, solely according to results. Most tbeories of ethics, however, treat processes as well as results as relevant. In terms of personal morality, many (following Kant) argue that motive is relevant, that is, tbat why someone acted as sbe did, and what sbe boped to accomplish, is at least as relevant as consequences to considering wbetber sbe acted morally, or whether sbe is a good person. In terms of tbe sweatsbop debate, many argue that tbe motives of managers are important, asking questions such as: Do managers regard sweatsbop workers as fellow humans worthy of respect? Or, instead, do tbey regard tbem as disposable tools in the pursuit of profit and other ends?

Mainstream economic analysis, again like its utilitarian predecessor, differs from most conceptions of ethics in tbat it is welfarist. Eor tbe utilitarian, a practice or institution is judged solely according to its impact on tbe utility, frequently under-

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stood in temis of the happiness or pleasure of people affected by it. Contemporary economists, on the other hand, typically understand welfare in terms of preference satisfaction. The idea of preference is purposefully broad so as to include not only consumer preferences, but also moral, social, and political preferences, and to include both egoist and benevolent preferences. Erequently, however, for tbe purposes of practical implementation (given issues of complexity and the availability of data) this more parsimonious understanding of preference is further reduced to willingness to pay or, even, income (Hausman and McPberson 2006, Broome 1999, Beckerman 2011, Layard and Glaister 1994).̂ Most understandings of ethics, however, concem values otber tban income, or welfare understood in tbis way. Such values include freedom, rights and entitlements, status and comparative well-being, and faimess or reciprocity. The voluminous work articulating and debating these values reveals tbat many of us believe tbat it not only matters tbat a practice most efficiently promotes the welfare of individuals, but also tbat such a policy respects our rights or entitle- ments, treats us with human dignity, respects us as free and equal citizens, and so on. As the sweatshops debate itself illustrates, we also care about exploitation, and exploitative relationships.

To be sure, some economists reject welfarism, and attempt to build such values and processes into tbeir accounts of well-being.** Amartya Sen, for example, presents a "freedom-centered" view of development (Sen 1999), and suggests a modification of the social choice framework to include process freedom and opportunity freedom as part of a. comprehensive outcome (Sen 2002,2009). Others argue that any reason- able economist or pbilosopher, including a utilitarian, must at least recognize such values.' Eor tbe purposes of this paper, I remain agnostic as to whether or not (and to what extent) welfarism can theoretically be expanded to incorporate processes and otber values. Wbat matters for our purposes is that the mainstream econotnic case for sweatshops fails to do so. Even if we recognize that few economists deny that individuals care about things such as rights and freedom, the economic case for sweatshops pushes such considerations aside to focus on welfare understood more narrowly in terms of wealth, willingness-to-pay, and preference-satisfaction. After all, if Klein and others understood concems for background justice, exploita- tion, buman rights, and so on as themselves important to their economic accounts of welfare, they would be unable to simply assert tbe economic ignorance of crit- ics of sweatshops, pointing out that sweatshop labor is the best option available to such workers (Klein 2010, Wheelan 2010, Henderson 2006). According to this reasoning, since sweatshop offers, in the status quo, provide the best results for the welfare of individuals who accept them, they are clearly not exploitative. Erom a consequentialist and welfarist perspective, mutually beneficial exchanges among rational actors are, by implication, good. It is for tbis reason tbat Klein and many other economists believe tbat those who call sweatshop offers exploitative are ig- norant of basic economic principles.

In summary, tbe economic case for sweatshops relies on a series of claims con- ceming the nature of sweatshops and the wrongheadedness of criticizing sweatshop wages and working conditions. An exponent of the economic case for sweatshops affirms some combination, if not all, of the following claims:

GLOBAL LABOR JUSTICE AND THE LIMITS OE ECONOMIC ANALYSIS 59

1. Sweatshop offers are frequently the best offers available. 2. Sweatshop workers freely aeeept those offers. 3. Sweatshops represent a natural stage in eeonomie development. 4. Legal and eonsumer efforts to raise sweatshop wages and improve sweat-

shop working eonditions, if sueeessful, will eause MNEs and their partners to either go out of business, hire fewer workers, or move their business out of a loeale altogether.

5. The eonsequenees of these sueeessful efforts will be devastating to many of the world's poorest individuals, harming the very people they are meant to protect.

6. Critieism of sweatshop wages and working eonditions, therefore, refleets ignoranee of basie eeonomies.

With this summary in plaee, the remainder of the paper eonsiders the relevanee of this eeonomie ease to various elaims regarding the ethies of sweatshops. Before eontinuing, I must highlight an important aspeet of my methodology. The ethies of sweatshops, in my view, fundamentally eoneems the relationships between different partieipants in markets. In an earlier review essay on exploitation, Arnold writes, "Moralized theories of soeial eoneepts maintain that at least one of the tmth eondi- tions of the eoneept at issue is moral. Moralized theories also settle the question of the moral status of an aet" (Amold 2003: 245). The moral analysis of sweatshops presented here makes a number of elaims eoneeming the morality of sweatshop wages and working eonditions. Nonetheless, it is not a moralized aeeount in one of the two ways Amold deseribes above. Like most relationships, following my pluralist understanding of value, the virtues and viees of these relationships ean- not be redueed to a single value or prineiple, whether it be welfare (as preferenee satisfaetion or as mental-state happiness), justiee (as faimess or in an entitlement eoneeption), freedom, reeiproeity (Kantian or otherwise), and so on.'° Following this understanding, I won't elaim that the employment of sweatshop labor is wrong if and only if eertain eonditions attain. Opposition to sweatshops is rooted in a number of values and sentiments that shape an agent's moral appraisal of these relationships. I will not present a theory that "setdes the quesdon" of the moral status of sweatshop wages and working eonditions. Instead, I will artieulate the ways in whieh eeonomie analysis, and the eeonomie ease for sweatshops, is or is not relevant to these appraisals.

ni. THE ECONOMIC CASE AND RESPECT FOR PERSONS

Despite the errors (and emde over-simplifieations) of Klein and others, the eeonomie ease for sweatshops remains relevant to many elaims that sweatshop labor is disre- speetful, exploitative, or otherwise unethieal. It ehallenges any eritie that (1) elaims that sweatshop wages and working eonditions are exploitative beeause they fail to further the welfare of those who aeeept them or (2) fails to reeognize that prohibit- ing or diseouraging sueh offers (at least absent some eorresponding ehange to the status quo) will have negative eonsequenees for the welfare of many sweatshop

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workers. This section considers the claim, forwarded by a number of authors, that a Kantian notion of respect for persons presents managers of MNFs with a number of obligations for sweatshop workers. According to Arnold and Bowie, "respect- ing the dignity of persons requires that MNFs and their contractors adhere to local labor laws, refrain from coercion, meet tninimum safety standards, and provide a livhig wage for employees" (Arnold and Bowie 2003: 222)." Respecting human dignity means treating human beings as ends-in-themselves, rather than merely as a means to end.

Arnold and Bowie argue that their "moral analysis is not undermined by economic considerations" (Arnold and Bowie 2003:239). In fact, a number of their arguments, their critical response to earlier work by Ian Maitland, and further efforts by Arnold and Laura Hartman (Arnold and Hartman 2003,2005,2006) to articulate the practical implications of Kantian respect, appear to trade on a series of claims regarding the economic facts (or counterfactuals) of sweatshop wages and working conditions. Powell and Zwolinski challenge a number of these claims. These include the fol- lowing: first, that in many cases sweatshop wages or working conditions could be improved without jeopardizing those jobs, because the circumstances of such offers are not the type of competitive markets described in economics textbooks (Arnold and Hartman 2005: 208-09). Second, Arnold, Bowie, and Hartman distinguish between market-clearing wages and efficiency wages, claiming that the efficiency wage will frequently be higher than current sweatshop offers (Arnold and Hartman 2005,2006; Arnold and Bowie 2007). Next, they deny that wages and working con- ditions are jointly determined (Arnold and Bowie 2003: 253). Finally, Powell and Zwolinski challenge Arnold, Bowie, and Hartman's implied assertion that there are many cases where owners can improve workplace safety conditions at little to no cost, or at a cost that is so small as to not have an impact on employment, because such improvements would represent an insignificant percentage of revenue (Arnold 2010b: 639). The lessons from the cases of "positive deviancy," (Arnold and Hart- man 2005,2006), on Powell and Zwolinski's reading of the literature, are not likely to be applicable to the majority of sweatshops.'-

When defending their view of the duty on managers of MNFs, Arnold and Bowie reference the power that such managers have to impact change. Their account of the ethics of sweatshops concerns the relationship between different parties in the business process. Referencing work by Michael Santoro, they claim that even in exchanges for mutual benefit, both parties to such an exchange acquire "a duty to ensure that those with whom they conduct business are properly respected" (Arnold and Bowie 2003: 226).'^ One of the central characteristics of this sweatshop rela- tionship, in addition, relies upon an economic claim: the unequal balance of power between different parties. They write,

As Kant acknowledges, individuals have unique duties as a result of their unique circum- stances. One feature in determining an individual's duties is the power they have to render assistance. Eor example, Kant famously argues that a wealthy person has a duty of charity that an impoverished person lacks.... MNEs are well positioned to help ensure that the employees of its business partners are respected because of this imbalance of power. In

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 61

additions, MNEs can draw upon substantial economic resources, management expertise, and technical knowledge to assist their business partners in creating a respectful work environment. (Amold and Bowie 2003: 226-27)

Tbe economic case for sweatshops, as a result, undermines tbe Kantian respect for persons view insofar as it contradicts claims of bargaining inequality, and tbat managers of MNEs possess tbe resources to belp create a more respectful work environment. Notice, bowever, tbat defenders of tbe economic case for sweatshops (including Powell and Zwolinski) do not deny tbat managers possess sucb resources. Instead, tbey argue tbat managers would be unable to deploy such resources with- out either (a) tbreatening the sbort-term or long-term bealtb of tbe company or (b) firing otber workers.

Wbile Amold, Bowie, and Hartman at times deny the accuracy of (a) and (b), it is not clear tbat their understanding of respect for persons depends upon tbat denial, in a way tbat Powell and Zwolinski's defense of the economic case for sweatshops implies. Eor example, Amold and Bowie contend tbat "Lax bealth and safety stan- dards violate the moral requirement tbat employers be concemed witb tbe safety of tbeir employees" (Amold and Bowie 2003: 232) and tbat "at a minimum, respect for employees entails tbat MNEs and tbeir suppliers bave a moral obligation to ensure tbat employees do not live under conditions of overall poverty by providing adequate wages for a 48 hour work week" (Amold and Bowie 2003: 234). A liberal or libertarian, of course, migbt claim tbat employers ought to be allowed to fire and bire at tbeir own discretion. Workers, in tum, sbould be free to choose to work for sucb employers, to accept wages and terms of employment that entail demands for overtime hours, production quotas, tbe freedom to be fired for not remaining on the job when hurt or injured, for jobs that lack access to medical care, and otber terms tbat Amold and Bowie describe as coercive.'" The economic case for sweatsbops does not appeal to sucb notions of freedom or autonomy. Instead, tbe claim is that efforts to enforce sucb conditions of employment will prevent MNEs and tbeir part- ners from making many sweatsbop offers. As a result, we migbt affirm a Kantian account of respect even if we reject the claims Arnold, Bowie, and Hartman make about the feasibility of altematives, including their examples of "positive deviancy." If tbe economic case for sweatshops is correct, bowever, we must grant tbat avoid- ing coercive relationsbips can produce negative consequences for those wbo migbt otherwise accept lower wages and worse safety conditions.'^

IV. THE ECONOMIC CASE, EXPLOITATION, AND BACKGROUND INJUSTICE

In my view, following Janet Sample, "one important form of exploitation involves taking advantage of injustice" (Sample 2003: 82).'" A central flaw for tbe economic case for sweatsbops is tbat it ignores tbe relevance of conditions of background justice to tbe etbics of sweatsbop relationships, including worker exploitation. Back- ground conditions entail tbe stmctural, historical, or institutional backdrop in wbicb workers accept so-called sweatsbop wages and working conditions. Defenders of

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sweatshops must address the following sort of claim: though sweatshop exchanges are mutually beneficial in the status quo, they are exploitative if they take advantage of stmctural or historical injustice. Many individuals only accept sucb wages and conditions because tbeir situation is desperate. Tbeir desperation, moreover, is not natural or inevitable. Instead, it is the product an injustice in the background political and economic institutions against wbich their decisions are made. Unformnately, in spite of interest in the ex post distributive effects of a given policy, and a renewed engagement with contract theory that spurs some economists to take greater inter- est in normative theory, mainstream economic analysis largely eschews competing claims regarding background or historical justice (Hausman and McPherson 2006, Beckerman 2011). Eor many economists, whether the background conditions are just, or whether welfare-improvements (as in potential Pareto improvements) fur- ther or exacerbate injustice, is not the proper scope of economic science. As Nobel Prize-winning economist John Hicks writes, "Whether or not compensation should be given in any particular case is a question of distribution, upon which there can- not be any generally accepted principle. . . . If measures for efficiency are to bave a fair chance, it is extremely desirable tbat they should be freed from distributive complications" (Hicks 1939: 711-12).'^

Tbe economic case, for these reasons, remains willfully obtuse to tbe relevance of conditions of background or stmctural justice to sweatshop exploitation. Such considerations are not, on the above understanding, economic considerations. Indeed, defenders of sweatshops (economic or otherwise) almost completely ignore tbis important set of concems. One notable exception to tbis widespread ignorance is a recent series of articles by Matt Zwolinski and Benjamin Powell, which comprises the only defense of sweatshop labor that takes seriously the relevance of back- ground conditions to worker exploitation. Their analysis, they ultimately conclude, largely redeems the economic case for sweatshop offers and working conditions (Powell 2006, Zwolinski 2007, 2009, 2010, 2012, Powell and Zwolinski 2012).'« Though humans in general have reason to be concemed witb stmctural injustice, such injustices have little bearing on whether sweatshop labor is exploitative. In tbis section I evaluate this defense, concluding that it adds little opposition to tbose whose understanding of exploitation, and the etbics of sweatshops more generally, rejects the welfarist and consequentialist focus of contemporary economic analysis.

Powell and Zwolinski deny that stmctural injustice typically matters for determin- ing whether a sweatshop is acting exploitatively. Zwolinski writes.

Structural injustice matters, of course, but it does not typically matter for determining whether a sweatshop is acting exploitatively, and it does not typically matter in a way that grounds any special moral responsibility or fault on the part of sweatshops or MNEs (multinational enterprises) with which they contract. (Zwolinski 2012: 155)

It is a mistake, furthermore, to posit a corresponding duty to individual participants in the market in response to background injustice. This thesis differs from a number of accounts of tbe relationsbip between background injustice and exploitation. Indeed, Powell and Zwolinski's redemption of the economic case for sweatsbops proceeds by

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way of a rejeetion of other aeeounts of this reladonship. They give speeial attention to the work of Ruth Sample and Jeremy Snyder.'* Like Amold, Bowie, and Hart- man, who I diseuss at some length above. Sample and Snyder argue that sweatshop offers and working eonditions frequently exploit workers in a way that fails to treat them as persons worthy of respeet. They argue that taking advantage of baekground injustiee is a eentral mode of exploitadon.^" When we gain advantage by interaedng with a viedm of sueh injustiee, "and that advantage is due in part to an injustiee he has suffered, we have failed to give him appropriate respeet" (Sample 2003: 74). To sueh a elaim, Zwolinski asks, "Is it fair to hold MNEs and sweatshops responsible for the unjust baekground eondidons in whieh they operate?" His answer to his question is that MNEs ought to take on the "extra responsibility" only in eases where the eompany is direetly responsible for the injusdee, whieh entails the eoUusion between the MNE and the host govemment (Zwolinski 2012:173-74). Ultimately, as Powell and Zwolinski elaim, their disagreement with Snyder and Sample reduces to divergent intuitions regarding what Zwolinski ealls the nonworseness claim (NWC). The remainder of my analysis in this seetion, therefore, will eonsider what NWC adds to the eeonomie ease for sweatshops.

Aeeording to NWC, "in eases where A has a right not to transaet with B, and where transaeting with B is not worse for B than not transaeting with B at all, then it eannot be seriously wrong for A to engage in this transaction, even if its terms are judged to be unfair by some extemal standard" (Zwolinski 2008: 357). Grant- ing that this elaim has eounter-intuifive implieations in some eases, Powell and Zwolinski eounter that theories of the ethies of sweatshops that rejeet NWC entail eounter-intuidve implieadons as well (Zwolinski 2009,2012, Powell and Zwolinski 2012). The "eounter-intuidve implieadons" of rejeedng NWC, however, almost exelusively reduee to elaims regarding states of affairs. They also reduee to elaims about welfare. Zwolinski and Powell elaim to present a pluralist study of sweatshop exploitadon, though one that foeuses on welfarist eoneems for the eonsequenees to potential sweatshop workers. They defend this foeus by referenee to the dire poverty of sueh workers (Powell and Zwolinski 2012: 451 ). If MNEs refuse to take advantage of baekground injusdee, they argue, sueh enterprises won't do business in developing countries at all. Without the abiUty to benefit from injusdee, MNEs would have litde ineentive to export jobs to poorer eountries. The likely result, then, is that eitizens of poorer eountries would be even worse off than they are already. Similarly, Zwolinski denies that sweatshop labor hinders the goal of global distribu- dve jusdee (Zwolinski 2009).

To this point, Zwolinski and Powell have not really redeemed the eeonomie ease for sweatshops in the faee of non-eonsequentialist and non-welfarist eharges of exploitation. They simply provide an additional defense, rooted in the terms presup- posed by the eeonomie ease itself. Zwolinski and Powell also elaim, however, that NWC better respeets the autonomy of sweatshop workers. In response to Snyder, they argue.

We do not deny that entering into a relationship can create new obligafions. We simply hold that it is implausible to hold that these new obligations are not waivable, even when

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one party regards the other's waiving of the obligation to be a necessary precondition for entering into the relationship, and the other party strongly prefers the relationship without the obligation to no relationship at all. (Powell and Zwolinski 2012: 469-70)

The question, then, is why would a sweatshop worker waive this obligation not to be exploited? The answer is obvious: because the job offer is their best option in the status quo. Notice that their argument that NWC is more consistent with autonomy essentially reduces to the assertion that, contrary to Sample, Snyder, Steiner, my- self, and others that mutually beneficial exchanges cannot in fact be exploitative. Like Klein's more simplistic assertions regarding exploitation, it seems that, for Powell and Zwolinski, a sweatshop offer is not exploitative (nor is it coercive) if it is rationally chosen. In the status quo, any sweatshop worker who is desperate for an offer from MNEs will waive her "right not to be exploited" or any "additional obligations" that the employer might have in such cases.^' Her desperation, and the fact that she would waive almost any right or obligation to accept an offer given that desperation, does not entail that the offer is not exploitative, or that employers don't acquire additional ethical obligations by entering into an exploitative relation- ship. My point, of course, is not that every workplace that a person might label as a sweatshop fits this characterization. Instead, I claim that in such situations, contrary to Powell and Zwolinski's arguments, the offers remain exploitative.

In response, Zwolinski and Powell might counter that, though exploitative, mak- ing such offers is still the right thing to do, all things considered.-^ Exploitation may be a bad or unfortunate thing, but it is not "seriously wrong." Even if the offers are exploitative, they further the autonomy of those who chose to accept them. To make sense of this response, consider the following situation. As a product of public outcry over charges of exploitation, several managers of MNEs (either because they are morally concerned with exploitative relationships, or simply because it is good public relations) raise wages and improve working conditions. This decision, following the economic case for sweatshops, renders them unwilling or unable to hire as many sweatshop workers. Would such a decision limit the autonomy of those workers who, in an alternative world where managers had no concerns about exploitation, might be employed by the firm? It depends upon what we mean by autonomy. It certainly removes an option that many sweatshop workers, in the status quo, prefer to other available alternatives.

However, the mere fact that an agent prefers something does not mean that, by withholding it, another agent is limiting her autonomy. Zwolinski appears to agree, distinguishing "preference-evincing choice" from "autonomous choice." His positive view of autonomy is less clear.̂ ^ He spends most of his time articulating the moral import of a sweatshop worker's autonomous choice for other agents, rather than what makes that choice autonomous, as opposed to merely preference-evincing, to begin with. At times, he suggests that removing an option is autonomy-limiting if it is really important to the person who might choose it—really important in the sense that it is important for her, or her family's, welfare. Such cases, however, even on Zwolinski's understanding of the terms, seem better described as (really strong) preferences. Instead, Zwolinski's argument gathers its normative freight by refer-

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 65

ence to coercion, understood as making someone live in a way that is contrary to her values. In the brief section "Autonomy-Fxcercising Choice," Zwolinski writes,

I might believe my neighbor's religious practices to be based on an untrue faith, and ultimately detrimental to his financial, emotional, and spiritual well-being. Nonetheless, I am not entitled to compel my neighbor to abandon his religion, and this is not merely because the consequences of my interference would be worse for my neighbor than my doing nothing. Even if I could make him better off by compelling him to abandon his religion, and even if my coercion would have no other ill effects in the world, a respect for my neighbor's autonomy would still require me to abstain from such behavior. (Zwo- linski 2007: 691)

This understanding of autonomy is compelling. An agent does not coerce others, and disrespect their autonomy, simply by removing an option that they might, however strongly, prefer. After all, if such actions are coercive, then almost any decision by market agents—to purchase or not purchase a given product, to change vendors, to use economic or political power to encourage or discourage certain transactions, to employ or not employ a given worker—would be coercive. Since many if not most economic actions remove an option that another individual might prefer, on such account we would need to claim that most market actions themselves threaten or undennine some individual's autonomy. Such an understanding of autonomy would, as Powell and Zwolinski claim regarding Arnold and Bowie's account of coercion,̂ "* be far too expansive. Instead, it is more plausible to interpret Zwolinski as claiming that an agent shows disrespect by compelling others to live according to his values, rather than their own.

This also appears to be tbe notion of autonomy that Powell and Zwolinski utilize in their defense of NWC. They write, "Not only is the rejection of NWC counterin- tuitive, then, it also seems to involve a kind of paternalist substitution of the moral theorist's own values for those of the workers themselves" (Powell and Zwolinski 2012:470). It is not clear, however, why they beUeve this. The fact that a sweatshop offer is the best offer an individual has in the status quo, and therefore she rationally chooses it, tells us next to nothing about her values, beyond the fact that she values the money that the offer provides. In particular, it tells us nothing about whether or not she believes that such an offer is exploitative or coercive. She might believe that it is exploitative, coercive, not a living wage, a rights violation, disrespectful, or whatever, and still accept it, since she is desperate for the offer.̂ ^ Such a rational choice tells us even less about whether or not she would find it exploitative or co- ercive given the opportunity for greater philosophical investigation, by reference to the context of a just world, and so on. She values the option, to be sure, but the availability of that option (or not) may have nothing to do with the moral, political, aesthetic, or religious values that she uses to guide her life. If the economic case is correct, the decision to pay higher wages and provide better working conditions to some employees may lead to negative welfare consequences for some would-be employees. It only threatens their autonomy, patemalistically or otherwise, insofar as we understand that value in terms of the availability of a given option that they might prefer. '̂' Such an account, again, would clearly be too expansive for Powell

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and Zwolinski's purposes. It would denounce many if not most market actions on the grounds tbat tbey undermine tbe autonomy of otber market agents. Eor tbese reasons, neitber tbe economic case for sweatshops, nor Powell and Zwolinski's corresponding ethical case, repudiates the charge tbat managers of MNEs and tbeir partners exploit workers by taking advantage of background injustice.

V. THE ECONOMIC CASE, HUMAN RIGHTS, AND THE RULE OE LAW

Many argue tbat managers of MNEs possess an obligation to respect tbe buman rights of tbeir stakebolders, including tbeir employees. Tbis obligation, most contend, remains even when such rights are not recognized or upheld by the governments in wbicb MNEs, and their partners, do business (Donaldson 1991, Cragg 2000, Wettstein 2009, 2012, Amold 2010a)." Amold and Bowie argue, furtbermore, tbat managers bave a duty to respect tbe mle of law. They write.

The intentional violation of the legal rights of workers in the interest of economic efficiency is fundamentally incompatible with the duty of MNEs to respect workers. Indifference to the plight of workers whose legal rights are systematically violated is a denial of respect. At a minimum, MNEs have a duty to ensure that their offshore factories, and those of their suppliers and subcontractors, are in full compliance with local laws. (Amold and Bowie 2003: 228)

Wbile some economists attempt to incorporate rights or processes into their accounts of well-being, standard cost-benefit analysis does not. The incorporation of respect for rights into an assessment of a policy, after all, raises a whole host of value judg- ments (and tecbnical concems) tbat economists wish to avoid (Beckerman 2011, esp. chaps. 7-8).^^ Tbe economic case for sweatshops, as a result, offers tbe following rejoinder: respect for such rights can have negative consequences for tbe welfare of individuals. Zwolinski and Powell echo tbis response. Tbey also, as noted above, assert that sweatsbop workers ought to be free to waive the ethical obligations of tbeir employers, including tbe obligation to uphold their legal and buman rights.

Consider tbe following case: Imagine tbat a manager of a MNE believes tbat success requires employing an armed force to put down or discourage collec- tive bargaining, or protests over employee wages or tbe environmental impact of their business practices. Many who value human rights would argue that the fact tbat their competitors are employing sucb force, and tbat tbe agents of tbe MNE (rigbtly or wrongly) believe that doing so is necessary to remain competitive, does not absolve tbem of tbeir ethical obligation not to terrorize people. Wbat would Powell and Zwolinski argue bere? On tbe one band, in sucb cases MNEs would "deny workers tbe freedom to organize collectively," and tberefore clearly bear at least "partial responsibility for tbe unjust bargaining position against wbich labor agreements are formed" (Powell and Zwolinski 2012: 467). Presumably, tben, tbe managers of MNEs would bave an obligation not to employ sucb a force. On tbe otber band, it is also clear that sweatsbop workers may be so desperate for an of- fer that tbey would accept employment even given such treatment. Tberefore, tbey would "waive" their right not to be terrorized or physically threatened to discourage

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 67

collective bargaining. (Powell and Zwolinski 2012: 463). As such, on Powell and Zwolinski's reasoning, MNEs would no longer have an obligation not to terrorize tbeir employees. Employees would waive this obligation for employment.

Tbis example, combined with the above analysis, sbould lead us to reject Zwolinski and Powell's claim regarding the waivability of an employer's moral obligations, including an obligation to conduct business in way that is consistent with the mle of law and with basic human rights. Eirst, it occludes tbe many non-consequentialist and non-welfarist reasons individuals possess for valuing human rights and the mle of law. All of tbeir counterexamples, following the logic of the economic case for sweatshops, rely upon on claims regarding the welfare of sweatshop workers in a counterfactual world in which they do not receive a given sweatshop offer.̂ '̂ More- over, their thin notion of autonomy is only able to establisb wbat tbe economic case already claims: that many sweatshop workers rationally choose to accept sweatshop wages and working conditions as their best option in the status quo. As a result, the "non-worseness claim" (NWC), and their claim that opposition to sweatshop wages and working conditions fails to respect that the autonomy of would-be sweatshop workers, does not extend tbe reach of the economic case for sweatsbops. Manag- ers of MNEs ought to be concemed with coercive and exploitative relationships, buman rights, and the mle of law. Tbe moral force of these values remains even if, according to the economic case for sweatshops, sweatshop offers are sometimes tbe best option for furthering an individual's welfare in the status quo.

VI. THE ECONOMICS OE SWEATSHOPS AND ETHICAL CONSUMERS AND POLITICAL ACTORS

Many of us are not influential agents of MNEs. All of us, however, need to decide how to act ethically in our roles as political actors and consumers. The business eth- ics literature (almost) completely ignores the ethical obligations of non-managerial stakebolders in tbe practice of sweatsbops. In a way this exclusion is not surprising. The discipline of business ethics, particularly in schools of business, is frequently taugbt and understood as managerial etbics. Such an approach tends not to consider tbe ethics of otber stakeholders in business enterprise, and tbe institutional structure in wbich business managers make those decisions. Eortunately, autbors increasingly point to tbe importance of an ethical analysis of such institutions, the role of busi- ness in our social and political life, and, more generally, the relevance of traditional questions in social and political philosophy to tbe discipline of business ethics (Heath, Moriarty, and Norman 2010). Powell and Zwolinski do so as well, making substantial claims for the ethics of botb consumers and political actors. They write.

We challenge [critics] to demonstrate what economic mechanisms would allow for the universal adoption of higher wages and better working conditions. Until they can persuasively argue for such mechanisms, we call on them to join us in denouncing all legal mandates for higher wages and better working conditions and to advocate only for voluntarily adopted company policies. (Powell and Zwolinski 2012: 471)

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The implieation is that, without meedng this ehallenge, erities of sweatshops have an obligadon not to be erities. In addidon, Zwolinski and Powell are quite eritieal of campaigns by the Intemadonal Labor Rights Eomm, Sweatshop Wateh and others to eneourage eonsumers to favor "sweat-free" produets. Referring to the "Shop with a Conseienee Guide," they write, "These sweat-free sourees are either unionized or mn as worker eooperatives; have healthy and safe working eonditions; offer wages and benefits that will lift families out of poverty; and treat workers with respeet, dignity, and jusdee" (Powell and Zwolinski 2012: 459). Zwolinski and Powell erideize these eampaigns, and the eonsumers who make deeisions based upon these values. They write.

About 29 of these factories are located in the United States and Canada; only 11 are located in Latin and South America, and a single factory is in Asia. Although consumers might feel they are "shopping with a conscience," they are mostly buying products made by wealthy first-world union workers while decreasing the demand for products made in poorer countries and thus harming the employment prospects of the poorer third-world workers." (Powell and Zwolinski 2012: 459)

Sueh eampaigns, and the eonsumer deeisions that follow, as a result, "harm the welfare of poorer sweatshop workers for the benefit of reladvely wealthier workers" (Powell and Zwolinski 2012: 459).

Does the eeonomie ease for sweatshops, and Zwolinski and Powell's defense of NWC, support sueh assertions? Let's revisit the idea of respeet for persons, but do so from the perspeetive of a eonsumer trying to deeide whether or not to buy goods produeed in sweatshops. Arnold eites the following from Allen Wood:

Marx was right: capital virtually always exploits wage labor. At least this is self-evident if it is granted that those who own the means of production enjoy a decisive bargaining position advantage over those who own little besides their capacity to labor, and that this fundamental vulnerability on the part of labor decisively influences the terms of the wage contracts.... The fundamental bargaining advantage of capital over labor is an ineradi- cable structural feature of the modem capitalist (or so-called "free market") economy. (Amold 2001: 55, quofing Wood 1995: 155)

Amold argues, however, that exploitation is not always wrong (Amold 2003: 254). Whether or not exploitative relationships are right or wrong, for Amold and Bowie, depends upon whether sueh relationships show respeet for persons. When ardeulafing what it means for managers of MNEs to show respeet for persons, Amold and Bowie udlize the idea of eoereion, rather than exploitation. Contrary to Wood's aeeount of exploitation, their aeeount of eoereion is not fundamentally about the inequalities that shape workers' deeisions to work for a firm. Instead, it eoneems the aetions of managers towards workers in the eourse of performing their dudes. They write:

According to the analysis provided here, workers choose to work in sweatshops because the altematives available to them are worse. However, once they are employed, coercion is often used to ensure that they will work long overtime hours and meet production quotas. Respecfing workers requires that they be free to decline overtime work without

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 69

fear of being fired. It also requires that if they are injured or ill—especially as a result of work related activities—they should be allowed to consult healthcare workers and be given work that does not exacerbate their illnesses or injuries. Using coercion as a means of compelling workers to work overtime, to meet production quotas despite injury, or to remain at work while in need of medical attention, is incompatible with respect because the coercers treat their victims as mere tools. (Arnold and Bowie 2003: 231)

They specifically and carefully avoid the claim that sweatshop offers and working conditions are disrespectful because MNEs and their partners, as Wood puts it, "treat [workers'] vulnerabilities as opportunities to advance their own interests" (Wood 1995: 151). This avoidance makes perfect sense. Since such inequalities apply to a wide range of market transactions, to argue that taking advantage of inequality is disrespectful would seemingly reduce their account of respect for persons to a more thoroughgoing criticism of capitalist economic institutions. Perhaps for this reason, Arnold and Bowie deny that coercion, or wrongful exploitation, exists when an indi- vidual chooses a job because her options are insufficient in number and desirability.

Nonetheless, the number and quality of those options still plays a central role in their understanding of on-the-job coercion. They note,

Bangledesh, El Salvador, and other developing economies lack the social welfare pro- grams that workers in North America and Europe take for granted. If workers lose their jobs, they may end up without any source of income. Thus, workers are understandably fearful of being fired for noncompliance with demands to work overtime hours. (Arnold and Bowie 2003: 230)

Interestingly, the economic case appears to further their cause for concern for co- ercion. Far from denying that sweatshop workers frequently posses a narrow and meager range of options (and therefore, on Arnold and Bowie's account, submit to coercion) many economists claim that it is precisely because of this meager range that sweatshop offers are so valuable, and opposition to sweatshops is so wrongheaded (Wheelan 2010, Henderson 2006, Varley 1998, Powell 2008). Powell and Zwolinski, however, challenge the intuitive foundation of Arnold and Bowie's claims regarding coercion. While Arnold and Bowie present a number of "shocking" examples, these examples don't do the work required to defend their account of coercion. Powell and Zwolinski write:

After all, if the demands above indeed qualify as coercive on Arnold and Bowie's ac- count, then so too does almost any instance of an employer demanding her employee to X or else be fired—even the demand that the employee show up regularly to work at the scheduled time. If these are genuine examples of coercion, then coercion is everywhere in the workplace. And an account of coercion that has this implication seems too overin- clusive to be much use in moral theorizing. (Powell and Zwolinski 2012: 465)^°

This implication, for Powell and Zwolinski, functions as something of a reductio ad absurdum of Arnold and Bowie's account of coercion. Their account of coercion is too expansive, labeling a wide range of morally unproblematic economic rela- tionships as coercive. For my part, this implication of Arnold and Bowie's account

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reveals tbe problem witb any account tbat denies tbat tbe number and quality of options available matters for tbe ethics of an offer of employment, but tben builds sucb considerations unto an account of wbat makes certain demands, after an offer bas already been accepted, unethical {or prima facie wrong). After all, employers could simply stipulate, in advance, tbat an offer of employment is contingent upon working overtime, production quotas, and a variety of other provisions Amold and Bowie label as coercive. If workers accepted sucb an offer, wouldn't Amold have to claim tbat sucb an offer is wrongfully exploitative? What's really doing tbe work in tbeir examples, I contend, is tbe poor bargaining position of sweatshop workers. A lack of quality altematives leads many workers to accept exploitative offers tbat subject tbem to on-tbe-job coercion. If workers possess a number of quality, reward- ing altematives, sucb on-tbe-job demands would not appear coercive.

Wood is surely correct that one form of exploitation involves taking advantage of dramatic and decisive bargaining inequality. The fact tbat an offer is exploitative, bowever, as Powell and Zwolinski note, does not entail tbat sucb offers is wrong, all tbings considered. It certainly doesn't entail tbat sucb offers ougbt to be legally prohibited. Nonetbeless, wbat the above debate, and indeed most of tbe business etbics literature on sweatsbops, misses is tbat many individuals wish to avoid par- ticipating in exploitative relafionships, even if exploitation is not always wrong, all tbings considered. Tbey may wish to avoid participating in such relationsbips as consumers, and discourage tbem as political actors, even if individuals as managers don't possess an obligation to improve sweatsbop wages and working conditions. Kantian respect, as Wood, Amold, and Bowie all note, requires respecting indi- viduals as free beings capable of self-governance. Eor Kant, sucb freedom depends upon equality. In ternis of tbe laws, tbis equality is consists of tbe equal coercive right to use the laws to enforce the laws on your bebalf (Kant 1996: 290-91). Freedom, so understood, is compatible witb great material inequality (Kant 1996: 291-92). Free citizensbip, however, and the ability to relate to fellow participants in economic and political institutions as equals, is not compatible witb tbe sort of inequalities of bargaining position tbat leaves some dependent upon otbers. As Kant writes in tbe Metaphysics of Morals, freedom relies upon equality understood as the "independence of being bound by otbers more tban on can in tum bind tbem" (Kant 1996: 393-94).

While interference poses a potential tbreat to our freedom and autonomy, Kant is fiercely critical of Hobbes's understanding of freedom as non-interference.^' Kant does not understand freedom or autonomy in terms of tbe existence or absence of a given life option, however important or desirable tbat life option may be. Instead, freedom is about social, political, and economic relations. Kant recommends taxing the wealtby and redistributing tbat wealth to the poor, not because he is committed to substantive equality of wealth, but because certain forms of extreme inequalities, and economic dependence, threaten our freedom—our ability to be our own master (Kant 1996: 295). For Kant, tbe laws don't inhibit our freedom, but make tbat free- dom possible. Only citizens, therefore, can be (not merely "passively") free. To be a free citizen, however, one must have a degree of economic self-sufficiency. Extreme inequalities of bargaining power make individuals dependent upon a given offer, and

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 71

compelled to accept coercive working conditions that accompany that offer. Such an individual serves more than himself and the commonwealth, and is reduced to serving another in order to live (Kant 1996: 295). He is not his own master. Insofar as this characterization applies to sweatshop relationships, they fail to respect the humanity of all parties to that relationship. For the Kantian, it is dependence, rather than the existence of absence of a particular offer, that renders an individual, such as a sweatshop worker, unfree or not autonomous.

It is useful to note that Kant is by no means the only philosopher to link freedom (or unfreedom) with dependence or domination. Many repubUcans, for example, understand freedom as the absence of conditions that are thought to diminish our possibilities of action, and put us in a subservient relationship to others (Sellers 1994, Skinner 1997, Pettit 1997). According to this conception, we are free to the extent that we do not find ourselves under the dominion of others,̂ ^ subject to their will, and exposed to changes in their whims and desires. From this understand- ing of freedom as non-domination, republicans historically understood the wage relationship itself as a potential threat to freedom and civic virtue.̂ ^ Few contem- porary republicans, of course, advocate for a society of independent farmers. Even if domination is a structural feature of capitalist economic institutions, however, as Wood (following Marx and Jefferson) asserts, republicans living and working within such institutions retain concern with relative domination. As Pettit reasons, "Freedom as non-domination comes in degrees both of intensity and extent. It can increase in intensity so far as compromising factors—the dominating presences that make people unfree—are reduced; it can increase in extent so far as conditioning influences—the natural, cultural or legal dimensions that make people less free but not wholly unfree—are diminished" (Pettit 1997: 273).

A thorough articulation and defense of the ethical implications of republican freedom for the ethics of sweatshops will need to wait for a following paper.̂ * For our present purposes what matters is that republican values provide insight into much criticism of sweatshops, criticism that survives the economic case for sweatshops. Many people oppose sweatshop wages and working conditions, I contend, because they hold a certain vision of (genuinely) free markets, and free market relationships. This vision is one of free individuals, who are not dominated by, and subservient to, the whims of other participants in the market. According to both Kantian and republican understandings of freedom, this freedom is incompatible with certain inequalities of bargaining power. Indeed, Pettit offers a comprehensive (not merely political but also meta-ethical) theory of freedom that parallels the Kantian view I describe above. For Kant, equality (as non-dependence) is a prerequisite for free and autonomous choice.̂ ^ According to Pettit's account, an individual is free to the extent that she is fit to be held responsible for her actions. Whether or not she is fit to be held responsible, in turn, depends upon the degree in which her choice situa- tion meets a number of conditions. In particular, it depends upon whether or not she is dominated (Pettit 2001). Domination, for both the republican and the Kantian, threatens our humanity, understood as free and self-governing individuals fit to be held responsible for their actions. It leaves us subject to the arbitrary will of another.

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The deeision to employ sweatshop labor threatens this vision of free markets in two ways. Eirst, insofar as sweatshop workers are dominated by their employers, they represent a paradigmatie ease of Kantian and republiean unfreedom. For the Kandan, sweatshop relationships laek the kind of equality that makes freedom pos- sible.̂ *" Instead of being free, self-goveming agents, sweatshop workers beeome tools to others' ambitions. Aeeording to republieans, an individual is free only insofar as she is not dominated, and subjeet to the arbitrary will of others. For the republiean, to elaim, as Powell and Zwolinski do, that we ought to respeet individual's free- dom to be dominated, is not simply wrong, but actually ineoherent. It is to elaim that an important aspeet of freedom is preeisely what a republiean eonsiders the very absenee or negadon of freedom. Seeond, the deeision to partieipate in sueh relationships poses a threat to this vision within more developed nations by eroding the bargaining power of domesde workers (Ebenstein, Harrison, MeMillan, and Phillips 2009). This erosion is not limited to less skilled, labor-intensive produetion (Blinder 2009). The sweatshop debate takes plaee in this eontext, where growing inequalities in wealth and power, particularly when eombined with rapidly diminish- ing job seeurity, pose a tremendous threat to republiean freedom. Wage-eamers are inereasingly dominated by those with greater aeeess to eapital (Mishel, Bemstein, and Sehierholtz 2010, Dew-Beeker and Gordon 2005, Saez 2006, Piketty and Saez 2006).̂ ^ Growing unemployment and job inseeurity plaees workers inereasingly in a subservient relationship to owners, subjeet to their will, and exposed to changes in their whims and desires. As markets expand to other aspeets of eivil soeiety, and wealth is inereasingly important to eleetions and other parts of the politieal process (Bartels 2008), this eeonomie domination leads to politieal and eivie dominadon as well. It is not surprising, therefore, that non-investor stakeholders (in partieu- lar) are more inelined to view the deeision to outsource as unethieal, as eompared to reloeation within a given eountry (Robertson, Lamin, and Livanis 2010). The eeonomie ease fails to reaeh these issues, whieh in no way represent ignoranee of basie eeonomie prineiples.

This vision of free markets eoneems the welfare of sweatshop workers, but in a different way then the eeonomie ease for sweatshops. The eeonomie ease for sweatshops, as I deseribe above, is eonsequentialist. For eonsequentialist theories of ethies, the failure to help is equivalent to harm (Williams and Smart 1973). To assess the ethies of a given aedon (or omission), institution, or poliey, then, is to eompare the results of that aetion to the presumed results in a eounterfaetual world where an agent aeted differently. If the eeonomie ease is eorreet, then in some eases a would-be sweatshop worker would be worse off in a eounterfaetual world where agents as eonsumers or managers ehoose not to partieipate and sweatshop relation- ships, or where agents as eonsumers or eitizens demand higher wages or working eonditions for those they form eeonomie or politieal relationships with. Perhaps on this understanding of morality, Zwolinski and Powell are justified in elaiming that eonsumers, by not doing business with eompanies who employ sweatshop workers, or produeing a "Shop with a Conseienee Guide," are harming those workers. Perhaps also, from this perspeedve, they eould elaim that Snyder and Sample's arguments reveal ineoherenee between our intuitions regarding exploitation and our intuitions

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 73

regarding duties to aid.̂ ^ That said, Zwolinski and Powell do not defend consequen- tialism or welfarism more generally, arguing that agents have an obligation to act in such a way as to further the overall welfare of humanity.^' After all, such a view likely entails a range of ethical implications, including global economic redistribu- tion, that extend far beyond just a willingness to purchase sweatshop goods.

VII. CONCLUSION

My analysis makes clear that the economic case for sweatshops does not resolve the sweatshop quandary. Critics of sweatshops need not, as many suggest, be hostile to free markets or ignorant of basic economic principles. In fact, this paper demonstrates that economic analysis is largely irrelevant to numerous popular and philosophical concerns for the ethics of sweatshop relationships. In section in, I argued that, though economic analysis is clearly relevant to a number of claims the Arnold, Bowie, and Hartman make to articulate and defend their account of respect for persons, their basic notion of respect does not rely upon the truth of any of these claims. Section IV addresses the important claim that sweatshop wages and working conditions, even if mutually beneficial in the status quo, frequently exploit work- ers by taking advantage of injustice. The economic case for sweatshops, I contend, remains willfully obtuse to the relevance of conditions of background or structural justice to sweatshop exploitation.

In addition, I argued that Powell and Zwolinski fail to redeem the econotnic case. Their ethical defense of sweatshops centers on what Zwolinski calls the "non-worseness claim" (NWC). Granting that this claim has counter-intuitive im- plications in some cases, they counter that theories of the ethics of sweatshops that reject NWC entail counter-intuitive implications as well (Zwolinski 2009, 2012, Powell and Zwolinski 2012). The "counter-intuitive implications" of rejecting NWC, however, all rely upon on claims regarding the welfare of sweatshop work- ers in a counterfactual world in which they do not receive a given sweatshop offer. As a result, NWC adds little to the economic case for sweatshops. It is unlikely to be convincing to anyone whose understanding of exploitation, and the ethics of sweatshops more generally, eschews the welfarist and consequentialist focus that dominates contemporary economic analysis. Their thin notion of autonomy, I have argued, is only able to establish what the economic case already claims: that many sweatshop workers rationally choose to accept sweatshop wages and working conditions as their best option in the status quo. This analysis, I argued in section V, should lead us to reject Zwolinski and Powell's claim regarding the waivability of an employer's moral obligations, including an obligation to conduct business in way that is consistent with the rule of law and with basic human rights. Finally, while some economists attempt to incorporate rights or processes into their accounts of well-being, the economic case for sweatshops fails to address claims that the managers of MNEs and their partners possess an obligation to respect the human rights of their stakeholders, including their employees. Economic analysis, for all of these reasons, cannot resolve the sweatshop quandary.

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The economic case fails to address many of our central concerns for sweatshops because, as applied ethics, economics presents an impoverished view of relation- ships. The economic case implies that mutually beneficial exchanges in the status quo are good things. For many, however, the ethics of relationships entails more than this, and includes values that may take precedence over instrumental benefits to welfare. To be clear, many critics of sweatshops, including those who hold the Kantian or republican vision of free markets that I articulate above, are concerned with the welfare of sweatshop workers. They find examples of sweatshop wages and working conditions, such as those cited by Arnold, Bowie, and Vamey, shocking. What is particularly shocking to many, however, is that they themselves participate in exploitative or coercive relationships, profit from the weak bargaining position of sweatshop workers, and so on. It is important not to conclude from this discus- sion that critics of sweatshops are essentially nationalist or protectionist.'*" What individuals who hold this vision desire is that the relationships they enter into (po- litical, economic, and so on) respect freedom and human dignity of all parties to that relationship. For these reasons, many consumers, consumer groups, and other political actors push for structural changes in the background conditions, such as higher wages and better working conditions, that shape the economic relationships that they enter into. They push for better wages and working conditions for any worker, domestic or international (including in some cases themselves), whose poor bargaining position threatens their freedom, making them vulnerable to exploitation and coercion. Such changes better reflect a vision of genuinely free and respectful markets.

NOTES

I would like to thank Lisa Herzog, Denis G. Arnold, and three anonymous reviewers at Business Ethics Quarterly for feedback on earlier versions of this paper.

1. While this paper does not consider internal criticism of the economic case for sweatshops, it is important to note that such criticism exists. Even within the terms of the economic case, several authors question the positive impact of sweatshops in increasing the welfare of the global poor, denying that their welfare would be worse if sweatshops were better regulated (Pollin, Bums, and Heintz 2004, Miller 2003, Arnold and Bowie 2003, Arnold and Hartman 2005, 2006). Several economists challenge the employment of child labor on welfarist grounds. See Basu and Tzannatos 2003.

2. In the words of Guatemalan economist Lucy Martinez-Mont, who Varley quotes in her extensive study of sweatshops and the sweatshop debate, "It is true that thousands of children work nights, that workers are locked in until production quotas are fulfilled, that wages are obscenely low, and that, in extreme cases, women and children are beaten up by their supervisors. But it is also true that there are no slaves in Central America. People choose to work. . . of their own free will, because those are the best jobs available to them. Given that unemployment compensation is unheard of in Central America, a lousy job is better than no job at all" (Varley 1998: 47). See also Arnold 2003.

3. Their conclusions, with respect to economic enlightenment by self-identified ideology, are that conservatives and libertarians perform the best. Trailing far behind are moderates, followed by liberals, and finally progressives. Recently, Klein has published a retraction of sorts, in The Atlantic. It turns out that, with a similarly worded survey, self-identified "libertarians" and "conservatives" would give equally unenlightened answers (Klein 2011). Nonetheless, Klein's assertions are revealing to our discussion of the economic case for sweatshops.

4. A conception that Pettit specifies in terms of an agent's discursive control, which in turn depends, in no small part, on her dynamical relations to others (Pettit 2001). More on freedom and free choice below.

GLOBAL LABOR JUSTICE AND THE LIMITS OF ECONOMIC ANALYSIS 75

5. See section VI for my Kantian, republican understanding of freedom in markets. 6. This conflation of rational and voluntary choice pervades economic and policy debates over the

phenomenon of "involuntary unemployment" (Hausman and McPherson 2006: 31-38). 7. As an example, in their introductory reader in cost-henetit analysis, Richard Layard and Stephen

Glaister write,"The basic principle is that we should be willing to assign numerical values to costs and ben- efits, and arrive at decisions by adding them up and accepting them up and accepting those projects whose benefits exceed their costs. But how can such values be arrived at? If we assume that only people matter, the analysis naturally involves two steps. First, we must find out how the decision would affect the welfare of those concemed. To judge this effect, we must ultimately rely on the individual's own evaluation of his mental state. So the broad principle is that "we measure a person's change in welfare as he or she would be willing to pay to acquire the benefits or avoid the costs" (Layard and Glaister 1994: I),

8. For the sake of clarity, in this essay I use the term "welfare" to describe a utility-based conception of well-being, as common in contemporary welfare economics. "Well-being," then, I use to describe a broader category that may include considerations beyond individual welfare. My point is not to make a statement on how the terms ought to be understood, but instead to avoid conflating two distinct ideas by using them interchangeably. Alternatively, Dowding distinguishes welfarism, a choice or preference-based account of welfare as understood by mainstream economics, from Aristotelian, Kantian, and Resourcist understandings of welfare (Dowding 2009).

9. As well as "that people assign a non-negligible positive utility to free personal choice" (Harsanyi 1977/1982: 60). For analysis and criticism of Harsanyi's attempt to incorporate such processes into his preferencist utilitarianism, see (Broome 1999, Roemer 2010, Sen 1976, Weymark 1990). See also Harsanyi 1986. For a sympathetic reading, see Binmore 2009.

10. Thisbroadly pluralist understanding ofvalue,ofcourse, is not itself unique (Berlin 1997, Raz 1986, 1994, Walzer 1984). I won't defend it here. One can adopt this broadly pluralist approach, moreover, with- out relying upon a further metaphysical or ontological claim regarding the truth of value pluralism, much less anything like moral relativism (Anderson 1995, Sen 1987, 1993, 1999, 2009, Nussbaum 1999, 2001, 2011). All of these pluralists recognize that individuals and groups need at times to trade off conflicting but nonetheless worthwhile values, including conflicting notions of virtue, freedom, and human rights. For an important recent work in business ethics that adopts this approach, see Brenkert 2008.

11. This work builds from Bowie's Kantian view of ethics for businesses operating in developing coun- tries (Bowie 1999: 41-81), as well as Arnold's earlier work on coercion (Arnold 2001).

12. As Powell argues, "Amold and Hartman have provided an important service to other companies that might want to emulate these examples. However, they are too optimistic about their findings. Strong reasons suggest that the identified economic mechanisms that make voluntary codes of conduct successful in some circumstances will not likely be widespread" (Powell 2006: 1031).

13. See also Santoro 2000 and Bowie 1999: chap. 2. 14. My goal, here, is not to assess the arguments Amold and Bowie make regarding respect and wages

and worker safety, but instead the relevance of the economic case to arguments for respect more generally. I discuss Amold and Bowie on coercion below.

15. Notice also that, according to the terms of the economic case for sweatshops, considerations of working conditions and pay are equivalent. They are reducible to a single currency, whether that currency is wealth or preference-satisfaction. Laws or campaigns directed at improving worker safety or on the job autonomy may produce similarly negative consequences for the welfare of sweatshop workers as laws mandating higher wages. In both cases, they may lead many of the world's most vulnerable individuals to be unemployed, or employed in a job with even less desirable pay or working conditions. Nonetheless, while economics (and firms) may be indifferent to the distinction between unfair wages and unsafe working conditions, further argument is necessary to claim such indifference from a moral perspective.

16. My claims in this section do not rely upon a particular understanding of what background justice entails. Instead, I consider the extent that the economic case for sweatshops, and corresponding ethical arguments offered by Zwolinski and Powell, can address the range of arguments that sweatshop wages and working conditions are exploitative because they take advantage of injustice. As I note below, though an offer may be exploitative, it is a further question, given my pluralist approach, whether or not that offer is wrong, or ought to be legally prohibited, all things considered. In section VI, I articulate a vision of free and respectful markets that addresses further concem that some market agents exploit others by taking advantage of dramatic and decisive inequalities in bargaining position.

76 BUSINESS ETHICS QUARTERLY

17. It is through the Pareto principle that welfarist economic theories explicitly incorporate individual preferences (Dowding 2009). If the ethical limitations of the Pareto Principle are not clear to both economists and the policy makers who implement them, such approaches threaten to exacerbate background injustice (Hausman and McPherson 2006). The point, of course, is not that most economists think that background justice is irrelevant, or that economic tools can't be utilized to quantify the extent of past injustice, give weight to the preferences of disadvantaged groups (Layard and Galaister 1994, Dreze and Stem 1987) and so on. Instead, it is important to recognize that practitioners of cost-benefit analysis typically do not do so, a norm adopted by the economic case for sweatshops, and international economics more generally, where Kaldor-Hicks criteria are still the norm. See also Kaldor 1939: 550.

18. Zwolinski claims that outside of the Marxist tradition, which tends to see relationships between capital and labor as inherently exploitative, philosophers to this point have almost completely ignored the relevance of background conditions to claims that sweatshop labor is exploitative (Zwolinski 2012).

19. Zwolinski also spends substantial time questioning the usefulness of Iris Young's work to the case of sweatshop exploitation (Young 2006, 2011). I will not challenge this analysis here.

20. Despite their libertarian orientation, Powell and Zwolinski completely ignore libertarian Hillel Steiner's notable work on exploitation. According to Steiner, a person who takes advantage of injustice (such as a rights violation) is an exploiter, even if that person is herself not the perpetrator of the injustice. Steiner considers a number of schematized forms of exploitation, to illustrate two points. "The first is that, although the mode of deprivation involved in exploitation is not the same is that involved in a violation of rights, it results from such violations and, moreover, the two deprivations may be of the same value. Sec- ond, whereas rights violation—paradigmatically, theft—is a bilateral relation, an exploitation is essentially a trilateral one" (Steiner 1984: 233). The implication of Steiner's account for our discussion of sweatshop labor is clear. A person who takes advantage of an injustice or a rights violation, such as the violation of property rights, the right to free association, the right to freedom of movement, and so on, is an exploiter. He is no less an exploiter even if it was another agent (the government, another domestic or multinational organization, an ordinary thief) that perpetrated the rights violation. Indeed, this trilateral form of exploita- tion, as Steiner notes, is the most standard case.

21. See Varley 1998 for numerous case studies. 22. Though such a claim would contradict, at least, Zwolinski 2007. 23. Perhaps this lack of specificity is purposeful, since he wants the main argument to "hold regardless of

whether one holds a coherentist, originalist, procedural, or substantive conception of autonomy" (Zwolinski 2007: note 7).

24. I discuss this claim in section VI. 25. She might accept such an offer even as she campaigns for laws or company policies mandating

higher wages and better working conditions for herself and her fellow workers. More below. 26. Powell and Zwolinski might distinguish legally-mandated limitations of choice versus market-

mandated limitations of choice. Without denying that there may be a moral difference between economic coercion and legal coercion, such a distinction only rescues their defense of autonomy if they rather im- plausibly stipulate that government agents limiting an option as a result of citizen outcry limits autonomy whereas corporate agents limiting an option as a result of outcry from consumers and other stakeholders does not.

27. Human rights, of course, may themselves be justified or understood in terms of respect for persons. 28. As then-chief economist at the World Bank Larry Summers notes, in his controversial and now

widely-circulated memo, "The problem with the arguments against all of these proposals for more pollution in LDCs (intrinsic rights to certain goods, moral reasons, social concerns, lack of adequate markets, etc.) could be turned around and used more or less effectively against every Bank proposal for liberalization" (Hausman and McPherson 2006: 13).

29. Even in terms of the economic case for sweatshops, it is not clear that such waivability serves the welfare of humanity as a whole. Understood holistically, rather than on a case-by-case basis, such waivabihty may undermine respect for human rights norms in general, producing negative consequences for human welfare.

30. They continue, "Nor does Arnold and Bowie's reassurance that coercion is ovXy prima facie wrong do much to help. For starters, this places all the weight of determining which instances of coercion are really wrong, and which are acceptable, on further moral theorizing which they have not so far explained in any detail, let alone defended" (Powell and Zwolinski 2012: 465).

GLOBAL LABOR JUSTICE AND THE LIMITS OE ECONOMIC ANALYSIS 77

31. Eor Hobbes, a "free man, is he, that in those things, which by his strength and wit he is able to do, is not hindered to do what he has a will to do" (Hobbes 1991: 146).

32. Pettit writes, "Domination, as I understand it here, is exemplified by the relationship of master to slave or master to servant. Such a relationship means, at the limit, that the dominating party can interfere on an arbitrary basis with the choices of the dominated: can interfere, in particular, on the basis of an interest or an opinion that need not be shared with the person affected" (Pettit 1997: 22).

33. Thomas Jefferson writes of the wage relationship, in a quote frequently taken out of context, that "dependence" on such a wage, and the will of another, "begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition While we have land to labour then, let us never wish to see our citizens occupied at a work-bench" (Jefferson 1785: 290-91). Republicans like Jef- ferson and Madison, as a result, spent much of their lives arguing that America remain primarily an agrarian economy comprised of self-sufficient fanners. A manufacturing or service-based economy would inevitably corrode the virtues necessary for citizens of a democratic republic, and lead to material inequality that is incompatible with democratic self-government and the dependence of even the most industrious workers on owners that made them easily manipulated (Sandel 1998, Skinner 1997).

34. Eor a few provisional ideas, see Hsieh 2008 and Ricoy 2011. 35. Here Kant follows Rousseau, who also valued equality as a necessary means for freedom (Rousseau

1772/1997:78). 36. Particularly when the rule of law is not upheld, and sweatshop workers are unable to appeal to the

law to protect their freedom (Kant 1996: 290-91). 37. Increasingly, this domination works through inheritance (Fried 1999, Piketty 2011). 38. Zwolinski writes, "If the empirical data we have surveyed about sweatshop wages are correct, sweat-

shops are providing significant benefits to their workers, while firms that do not outsource are (as far as we know) doing nothing to benefit them. How, then, can it be permissible to neglect workers in the developing world, but impermissible to exploit them, when exploitation is better for both parties?" (Zwolinski 2012: 167; emphasis in original).

39. Nor do they defend a kind of global moral prioritarianism, where everyone has the obligation to act in such a way as to further the welfare of those worst of, which probably includes potential sweatshop workers.

40. Though some critics may be.

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