Freedom and Financial Market Reform
The Philosophy of Finance and Money: An Anthology (Oxford University Press)
My argument in this chapter is a relatively simple one, but with major implications for freedom and markets and the ends of financial market reform. It proceeds in two parts. First, drawing upon not only political philosophy but also economic and legal history, I argue that economic freedom depends on the accountability of the institutions that structure individual market choices. It cannot be reduced to either freedom of choice within markets or the range of goods and services available. This fact is frequently ignored in contemporary discourse on freedom in markets, including prominent indexes of economic freedom. It is also ignored in debates over financial market regulation and reform. With respect to the fundamental issue of who controls the laws and institutions that structure our economic lives, including the legal coding of property rights, the relevant distinction is not “markets or the state” but “democracy or authoritarianism.”
Second, I demonstrate the ways in which this ignorance enables trends in finance and regulation that undermine accountability. Failing to recognize that economic freedom depends upon institutional accountability gives license to concentrations of political and economic power and exacerbates principal-agent problems, creating firms that are often too big to fail, and an industry whose regulation is often too complex to enforce. These trends virtually guarantee regulatory capture and the outsourcing of one of the central tasks of government in a free society: the creation and maintenance of institutions that structure markets. Freedom-minded financial market reform should be directed at a simpler and more narrow banking and regulatory system. Unless they are paired with reforms that target the size and complexity of financial markets, calls for greater “disclosure” or “transparency” – a constant refrain in the wake of the Great Financial Crisis - will ultimately fail address this poverty of public accountability. While the devil of reform and regulation is in the details, such reforms offer great potential to counter the ways in which complexity, instability, power and information asymmetries, regulatory capture, and (most basically) a lack of institutional accountability make people less free.
Global Value Chains: A Moral Cost-Benefit Analysis
Cambridge Handbook of the Economics of Global Value Chains (Cambridge University Press)
In the past four decades we have witnessed the dramatic rise in trade as a share of global GDP and global value chains (GVCs) as a share of that trade. GVCs brought with them an emerging global middle class, narrowing inequalities between countries, and helping to life millions out of poverty. At the same time, they play a significant role in rising inequality within countries, undermining the the ability of workers to exchange hard work for a middle-class life (a context-relevant normative standard). Building on recent work in economics and political economy, I argue that the current path of development through GVCs is neither an efficient nor a sustainable means to social or global justice. The emerging global middle class is, in reality, highly concentrated in a handful of Asian countries (China in particular). There is substantial reason to doubt that other countries can, or should, follow the Chinese model. In addition, GVCs undermine worker freedom in two crucial ways. First, they enable (even compel) firms to relocate production to jurisdictions with weaker labor and environmental protections, eroding hard won policies and institutions that help workers secure a larger share of the fruits of economic growth and protect them arbitrary power of employers and managers. At the same time, they undermine the accountability of institutions that structure our political economic relationships, concentrating power in the hands of a cosmopolitan elite. These costs to freedom and social justice threaten to undermine support for trade in general, as citizens in wealthier, democratic countries question whether greater economic integration is worth the diminishing returns to welfare. In order to serve as an effective instrument for worker justice and inclusive prosperity, GVCs need to be structured in ways that mitigate political and economic domination.
Care, Community, and Recognition in a Post-Covid World of Work
Pandemic Relations: [Re] Forging our Moral Bonds in the Time of Covid-19 (Routledge Press)
The pandemic triggered (or accelerated) a number of transformations in the nature of work and the ability of workers and their families to enjoy three important relational goods: community, care, and social recognition. The rapid rise of WFH undermines their enjoyment of community at work and the rewards they get through in person socializing and collaboration. Despite this cost, many workers express a clear preference for remote or hybrid work. Indeed, the ability to WFH is highly segregated by pay and education, with comparatively powerful workers more able to secure the benefits of remote work. Worker preference for WFH, in no small part, reflects the perceived gain in the ability to enjoy another important relational good: care. While WFH provides greater opportunity to provide in person care for family members, it further blurs the lines between work and family life for overloaded professional workers, for whom the expectation is that in some ways they will always be working. In part for this reason, worker burnout across the professions is on the rise. Moreover, since WFH is so segregated by class, its ability to address care deficits may also widen existing gaps in access to care. In the process, it exacerbates ongoing polarization within the economy and within modern firms, a changing workplace community that denies “lower-skilled” workers (who are no longer invited to the holiday party) opportunities for advancement and the social recognition for their contributions to the firm.
Even before the pandemic, labor market polarization threatened the social recognition of workers without access to high-end human capital. Covid threatens to make matters worse, amplifying political and economic trends that erode the wages and bargaining power of workers. This erosion leads to what Gheaus, Herzog, and Gilabert all identify as significant bad of work, one that undermines the dignity of workers and their ability to enjoy other goods of work: domination. As work becomes public and pervasive, it is inevitable that worker wages, freedom, and autonomy, including their ability to say no to unreasonable demands by employers and customers, is central to their self-respect. Policy reform, I argue, is urgently needed in order to further the welfare, power, and status of ordinary workers. In this chapter, I highlight policies that target multiple relational goods, including a federal jobs guarantee and public investment in child care and early childhood education. The goal is not only to further the ability of workers and their families to enjoy essential relational goods, but also to create a more free and just post-Covid world of work.
The Oxford Handbook of Philosophy of Work (Oxford University Press)
“The shortfall in good jobs,” Dani Rodrik and Charles Sable argue, “can be viewed as a massive market failure – a kind of economic malfunction, and not just a source of inequality and economic exclusion.” This chapter explores the idea of a good job and its importance to social justice and human flourishing. My focus is on Artificial Intelligence (AI) and the use of technology to automate or augment the tasks worker's perform. Despite the “good jobs crisis” being widely recognized as a defining feature of contemporary political economy, from the Americas to Europe to East Asia, philosophers and political theorists have spent relatively little time discussing work in general and good jobs in particular. After considering recent exceptions to this general tendency, I draw three distinctions that, I argue, are essential to understanding good jobs and their place in a just future of work. First, I distinguish just work from edifying work. Just work, I argue, provides a threshold understanding of a minimally just society, one that enables individuals to relate to each other as free and equal.
While just work explains much of what concerns people about the ongoing transformation comparatively wealthy democratic societies (in particular) it does not capture everything that makes a job “good” or “bad.” In particular, it does not address the proliferation of what David Graeber and others refer to as bullshit jobs, jobs that, though they may afford workers with a good wage, opportunities for creativity, and some control over their working lives, are nonetheless “a form of paid employment that is so completely pointless, unnecessary, or pernicious that even the employee cannot justify its existence even though, as part of the conditions of employment, the employee feels obliged to pretend that this is not the case.” This distinguishes bullshit jobs from what Martin Luther King calls dignified labor, which includes “all work that serves humanity and is for the building of humanity.”
Finally, I distinguish intrinsic from instrumental goods of work. As Lisa Herzog and Anca Gheaus note, most of the goods of work, including compensation, excellence, and community are not intrinsic to work itself. With these three distinctions in mind, I conclude that a moral assessment of reforms to governmental and business policy does not depend on an ontological understanding the value of work in itself. They depend, instead, on contextual analysis of the ways in which reforms shape the path of technological development and the balance of power in contemporary societies. Do these reforms further or threaten the sorts of political and economic relationships that Danielle Allen, Elizabeth Anderson, and I argue are essential to both social justice and human flourishing.
Place Matters: The Ethics of Reindustrialization (Book in Progress)
This book explores the ethics of industrial policy and place-based economic development. Political leaders around the world, including Joe Biden and Emmanuel Macron, are calling for a the “return” of domestic manufacturing, the use of industrial policy to shape the path of technological development, and a focus on greater productive and energy independence. The heart of our analysis is that place matters. It matters where goods are made and services are provided, where workers live, where and how they participate in governance, and where profits are claimed and taxed. Economic policy, we argue, should reflect basic human values of freedom, dignity, and security. In the process, we highlight the ways in which models in economic and political theory disregard these values, even when they claim offer framework for a more just, efficient, and peaceful world. These models drove and justified a transformation in international political economy that diminished state capacity, democratic accountability, and the power, status, and security of workers. The result of this transformation is a crisis of faith in liberal and democratic institutions. Using an alternative model of cost-benefit analysis, grounded in these central values, we identify a set of policy reforms to help ensure a more free, productive, just, and secure future for societies and their workers.
Opportunity Issues: Which American Dream?
The Routledge Handbook on the American Dream. Volume 3 (Routledge Press)
Economist Raj Chetty and his team at Opportunity Insights are responsible for some the most sophisticated statistical analysis of opportunity and mobility ever produced. This landmark achievement is motivated by what they refer to as the “Fading American Dream.” They write, “our research shows that children’s chances of earning more than their parents havebeen declining. 90% of children born in 1940 grew up to earn more than their parents. Today, only half of all children earn more than their parents did. Opportunity Insights seeks to reverse this trend and revive the American Dream.” The motivational focus on absolute mobility closely resembles what in my recent book Just Work for All: The American Dream inthe 21st Century I call just work. Just work concerns the dignity of work and those who perform it, including the widely held conviction that individuals should be able to exchange hard work for a better life for themselves and their families.
Most of their analysis and policy prescriptions, however, reflect a different set of normative concerns: those closely associated with what I call fair race. That is, they reflect the relative opportunity and mobility of different groups within the United States. Moral clarity is crucial here for at least three (related) reasons. First, just work and fair race rely upon different normative groundings. This divergence impacts the justification for giving these principles priority when they trade of with other values. Second, the politics just work is quite different than fair race, particularly in domains where the latter invites “zero-sum” thinking about justice. Finally, though there will at times be important practical overlap, reviving the American Dream in terms of just work entails different policy priorities than those that further fair race. The former, I argue, are particularly crucial to combating winner-takes-all trends in American political economy and restoring American faith in liberal and democratic institutions.
Did We Trade Freedom for Credit?
Finance, Domination, and the Political Economy of Freedom
European Journal of Political Theory
This article concerns freedom and financial markets. First, I consider the republican case for liberalization, extending Robert Taylor’s economic model of republicanism to financial markets. This case adopts what I call a “philosopher-king” approach to political theory, arguing by reference an ideal or first-best set of policies or reforms. Then, I investigate the negative externalities of several decades of financial market liberalization, including the erosion of political accountability and the growing concentration of political and economic power in the hands of those best suited to profit from the rise of finance. From this “political economy” perspective, the impact of liberalization is clear: we paid for greater access to credit with political and economic domination. In republican terms, we traded freedom for credit. My analysis, moreover, has implications for republican debates on freedom and the market. In second-best worlds, where reforms will almost certainly be incremental, shaping the balance of power in ways that impact future policy, judging reforms by reference to a vision of domination-free markets will often suggest policies that make individuals less free. The political economy approach is far more relevant to debates about which economic institutions further or hinder freedom as non-domination.
On the Ethics, Practice, and American Politics of Personal Responsibility
Philosophy and Social Criticism
While libertarians (by most accounts) affirm personal responsibility as a central moral and political value, libertarian theorists write relatively little about the theory and practice of this value. Focusing on the work of F. A. Hayek and David Schmidtz, this article identifies the core of a libertarian approach to personal responsibility and demonstrates the ways in which this approach entails a radical revision of the ethics and American politics of personal responsibility. Then, I highlight several central implications of this analysis in the American political and economic status quo. First, this analysis makes a mockery of so-called libertarian/conservative ‘fusionism’, such that libertarian personal responsibility cannot partner with meritocratic conservative thought to provide a plural grounding for rejecting progressive or redistributive economic policy. Next, preferred libertarian policies threaten the status, esteem and social bases of self-respect of citizens who are worse-off through little or no fault of their own. Finally, these policies undermine the ethics of personal responsibility that Americans from across the ideological spectrum value and many conservatives and libertarians celebrate. In the American status quo, those who value personal responsibility must reserve a central place for policies that mitigate opportunity and distributive inequalities.
Global Labor Justice and the Limits of Economic Analysis
Business Ethics Quarterly
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-be 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 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.
Freedom, Autonomy, and Harm in Global Supply Chains
Journal of Business Ethics
Responding to criticism by Gordon Sollars and Frank Englander, this paper highlights a significant tension in recent debates over the ethics of global supply chains. This tension concerns the appropriate focus and normative frame(s) for these debates. My first goal is to make sense of what at first reading seems to be a very odd set of claims: that valuing free, autonomous, and respectful markets entails a “fetish for philosophical purity” that is inconsistent with a moral theory that finds no wrong in harming workers, including the least advantaged among them. Sollars and Englander reach these conclusions, I believe, because their criticism assumes and relies upon the presumption of a global prioritarian frame, one which focuses individual welfare, and which they then apply at the level of individual political and economic actors. Much of Benjamin Powell and Matt Zwolinski’s work, I continue, including their criticism of political and economic activism and Powell’s indictment of organized labor, relies on a similar frame—while expanding the harms to include the freedom and autonomy of would-be sweatshop workers. This prioritarian frame, I argue, is particularly poorly suited to discussion of the ethical responsibilities of individual economic and political actors. We ought to reject it. To make progress on debates over global sweatshops, and the ethics of global supply chains in general, we need a better frame, and better standards of freedom and autonomy, than those invoked by many prominent defenders of sweatshops.
Command and Control
The Routledge Companion to Environmental Ethics (Routledge)
This chapter considers the ethics and economics of command and control environmental policy. Command and control refers to environmental policy that relies on direct regulation (permission, prohibition, standard setting) as opposed to policy that relies on economic or market-based incentives. Such policies are so named because they “command” a particular environmental outcome, and control how firms or individuals must meet that outcome. This approach dominated American environmental policy for many decades, and remains a central tool which legislatures utilize to attempt to reach desired environmental outcomes. Nonetheless, the past three decades of legal and economic discussion of command and control policy centers on the intrinsic limitations and inefficiencies of this approach, with some even going so far as to equate it to “Soviet-style” regulation and “socialist central planning.” The purpose of this chapter is not to defend command and control regulation from such criticisms. Instead, this chapter highlights several normative and practical concerns with market-based alternatives. These concerns, in many cases, provide reason for policy makers to continue to favor command-and-control regulation. In addition, this analysis calls for greater scrutiny and public discussion of the notions of efficiency theorists and policy makers utilize to determine whether command-and-control or market-based environmental policy is more efficient.
Milton Friedman on Freedom and the Negative Income Tax
Basic Income Studies
In addition to his Noble Prize-winning work in economics, Milton Friedman produced some of the most influential philosophical work on the role of government in a free society. Despite his great influence, there remains a dearth of scholarship on Friedman’s social and political philosophy. This paper helps to fill this large void by providing a conceptual analysis of Friedman’s theory of freedom. In addition, I argue that a careful reading of his arguments for freedom ought to lead Friedman, and like-minded liberals and libertarians, to give absolute priority to his negative income tax proposal. A substantial basic income furthers effective economic freedom (on Friedman’s own understanding), redeems his central claim that markets enable cooperation without coercion, and enables him to address his lifelong interlocutors by mitigating concerns for the ways in which economic dependence and inequality undermine both freedom and democratic legitimacy.
Multiculturalism and Equal Human Dignity
Bhikhu Parekh is an internationally renowned political theorist. His work on identity and multiculturalism is unquestionably thoughtful and nuanced, benefiting from a tremendous depth of knowledge of particular cases. Despite his work’s many virtues, however, the normative justification for Parekh’s recommendations is at times vague or ambiguous. In this essay, I argue that a close reading of his work, in particular his magnum opus Rethinking Multiculturalism and the selfproclaimed “sequel” A New Politics of Identity, reveals that his claims frequently rely upon a Kantian account of moral dialogue and indeed moral personhood that he remains unwilling to claim. Recognizing this latent Kantianism is essential to a thorough assessment of Parekh’s work on identity, and his criticisms of other theorists. It is only because of his ambiguity that his multiculturalism is able to avoid the sort of charges that he levels against other responses to diversity, including those of such authors as Rawls, Habermas, Kymlicka, and Raz.