Justice and the Global Economy - Three Competing Schools of Thought

Professor of Sustainable Development and CMER Director, Ethan Kapstein, poses the question of what economic "justice actually means in today's increasingly interconnected world. He compares the views held by the three predominant contemporary schools of thought on globalisation issues - the communitarians, the liberal internationalists and the cosmopolitans - and offers evidence either supporting or undermining their different positions. He also considers whether their views have any real impact on public policy, and offers a qualified "yes".

by Ethan Kapstein
Last Updated: 23 Jul 2013

The intellectual battle concerning the effects of globalisation, particularly as to how the world's poor figure into the broader picture, rages on. Even some of the most powerful global decision-makers are quick to admit that much of the current international economic system is grossly unfair.

Ethan Kapstein, the Paul Dubrule Professor of Sustainable Development at INSEAD, poses the question of what economic "justice" actually means in the current environment, and where attention and resources should best be focussed Is it better, for example, to try to ease the suffering of the world's poorest, or rather to concentrate more on alleviating socio-economic inequality in one's own country?

Kapstein attempts to formalise and clarify many of the various competing conceptualisations of international economic justice (or injustice) currently being proposed by activists, policymakers and academics. In putting forward three general framework models, he attempts to demonstrate that commonly held views about economic justice can and should be supported by sound economic theories and empirical evidence to the fullest extent possible.

· Advocates of the communitarian or national welfare model tend to focus on the effects of economic change on the domestic "social compact". They concern themselves with identifying the "winners" and "losers" caused by globalisation within domestic societies, and ask how best to compensate the latter.

· The liberal internationalists are more focussed on state-level actions that can best strengthen and maintain a peaceful, stable and prosperous world order, such as major international institutions. Governments tend to be viewed as ethical actors while making policies choices by proponents of this model. Their main concern tends to be with the rules and procedures that determine the shape of international trade, investment and finance.

· Cosmopolitan critics of globalisation primarily ask what effects international economic policies have on individual persons, especially the poorest, regardless of where in the world they may live. The cosmopolitan model does not afford the state any privileged position, and indeed is often sceptical that government policies on the whole have the poor's best interests at heart.

Kapstein offers a detailed analysis of the values and main concerns of the proponents of each of the three models, as well as verifiable evidence either supporting or undermining their various positions. The author also asks if such theories actually have any significant impact on public policy, and his affirmative answer may be surprising to many observers. He posits that the World Bank and IMF do actually seem to be adopting what might be termed a "quasi-cosmopolitan" approach to many aspects of international justice, particularly to the eradication of poverty in the world's most desolate countries.

The author also suggests that the cosmopolitan school is presently having greater influence than was true at any time in the post-war period, and offers theories as to why this is the case.

Challenge, September-October 2004

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