Global Value Chains: A Moral Cost-Benefit Analysis

Thursday, March 23, 2023
4:00 PM - 5:15 PM
AH 102

Joshua Preiss (Minnesota State University, Mankato) 

Joshua Preiss is a Professor of Philosophy and Director of the Program in Philosophy, Politics, and Economics at Minnesota State University, Mankato. His recent book, Just Work for All: The American Dream in the 21st Century, was published in 2021 by Routledge. His forthcoming work includes “Freedom and Financial Market Reform” in the Anthology of the Philosophy of Money and Finance (Oxford) “Community, Care, and Recognition in a Post-Covid World of Work” in Pandemic Relations: Re-Forging Our Moral Bonds in the Time of Covid-19 (Routledge) and “Global Value Chains: A Moral Cost-Benefit Analysis” in the Cambridge Handbook for the Economics of Global Value Chains (Cambridge).

Abstract: For much of the past four decades, policymakers across national and party lines trumpeted economic arguments for the gains from trade. They backed them up with significant reforms that, in combination with technological advances, led to a dramatic rise in trade as a share of GDP and global value chains (GVCs) as a share of trade. My goal in this presentation is to highlight important moral features that are routinely absent in the economic models used to both defend the reforms that made this transformation possible and assess their impact on individual welfare. By reference to recent work on the economics of trade and inequality, I argue that individual welfare is in essential ways relational. A moral cost-benefit analysis needs to recognize the importance of status, including the ability to be recognized for the contributions of your labor, to individual welfare.

In addition, the rise of GVCs placed significant downward pressure on the bargaining power of “ordinary” workers, eroding hard-fought gains from labor activism, and making the institutions that structure economic relationships far less accountable to their values and interests. This loss of freedom, I argue, explains why inequalities that result from trade, in the words of economist Dani Rodrik, “have a different feel.” The point is not to deny the immense potential benefits from trade. Instead, I conclude the status and power of workers and the political accountability of economic institutions are essential to assessing those costs and benefits. To put global markets on a sustainable path toward free and inclusive prosperity, these factors must be central to the development and implementation of trade policy.