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Moral Issues in Globalization PDF
Moral Issues in Globalization PDF
George G. Brenkert
Carol C. Gould
DOI: 10.1093/oxfordhb/9780195307955.003.0011
This article considers the key normative issues raised by globalization and
describes the implications of these issues for business ethics and public
policy. It considers various philosophical approaches to global justice and
identifies the consequences of globalization, which include global poverty
and outsourcing. It analyzes three additional values posed by globalization:
the need for improved transparency and accountability of multilateral
institutions, the emphasis on labor standards and the idea of sustainability
and environmental justice.
globalization, business ethics, public policy, global justice, outsourcing, global poverty, labor
standards, environmental justice
This chapter will lay out some of the key normative issues raised by
globalization and will sketch some implications for business ethics and public
policy, especially in regard to corporate social responsibility, the protection of
the human rights of workers and other stakeholders, and the possibilities for
overcoming global inequalities.
I then analyze three additional values posed by globalization: the need for
improved transparency and accountability of multilateral institutions, as
discussed by Joseph Stiglitz, the emphasis on labor standards, and the idea
of sustainability and environmental justice. I conclude with a consideration of
the implications of these values and norms for corporate social responsibility
and stakeholder theory, and I will take note of the UN's Global Compact,
along with some new directions for strengthening the protection of human
rights in the transnational contexts in which business operates.
According to Thomas Friedman in The Lexus and the Olive Tree, globalization
can be characterized as
Defining Globalization
Along somewhat similar lines, social and political theorists have tended to
conceive globalization as a multifaceted phenomenon, marked, in David
Held's terms, by the growing interconnection of states and societies.2 Held
suggests that
globalization can be understood in relation to a set of
processes which shift the spatial form of human organization
and activity to transcontinental or interregional patterns of
activity, interaction and the exercise of power (see Held et
al. 1999). It involves a stretching and deepening of social
relations and institutions across space and time such that, on
the one hand, daytoday activities are increasingly influenced
by events happening on the other side of the globe and,
on the other, the practices and decisions of local groups or
communities can have significant global reverberations (see
Giddens 1990).3
From the accounts of Friedman, Held, Beck, and others, we can identify
several key features of this contemporary phenomenon: (1) Global economic
processes, especially the free movement of capital and trade, and the
development of a global marketplace; these processes may in turn result in
constraints on democratic governments by unelected economic powers
including transnational corporations that are not bound by requirements to
represent the interests either of citizens or people in host countries; (2) The
worldwide spread of information and communications technology and the
global reach of the media, as well as attendant cultural changes, including
the domination of the English language; (3) Global environmental challenges,
particularly climate change and global warming; (4) The strengthening of
international law and the growth of regional human rights regimes in Europe,
Africa, and Latin America, through which individuals and other nonstate
actors can initiate proceedings against their own governments; (5) An
increasing emphasis on transnational security organizations, such as NATO,
and collective defense policies; (6) Increases in transnational migration; (7)
A certain globalization of care, both in problematic economic terms through
the worldwide movement of care workers (e.g., to become nannies in distant
households), and, in a very different sense, through the growing extent
of people's care and concern with the problems of others who reside at a
distance, for example, in regard to global poverty and natural disasters.
Yet, according to Wallerstein, this ideology has met with difficulties both in
former Communist regimes, where the political changes were not followed
by economic success but by growing income inequality, and in the United
States, with the development of a credit bubble and its uncertain future.
Thus he holds that neoliberal policies are increasingly falling out of favor,
with a question remaining as to what will replace them.9
Problems of Globalization
One of the biggest problems posed by globalization for business ethics and
corporate social responsibility is that certain forms of globalization can lead
to a race to the bottom in regard to both labor and the environment. Since
transnational corporations can move and invest elsewhere if their demands
are not met in a particular country, especially in what has been called
the Global South, corporations are relatively free to determine workplace
conditions and to disregard labor and environmental standards if they wish.
Because of the competition between various countries for capital investment,
governments themselves may not insist on adequate environmental controls
or other regulations for these enterprises. Further, although workers in
the host countries may see their new jobs as preferable to their previous
situation, they are relatively powerless to deal with any exploitation they
may encounter in factories and other workplaces, enabling sweatshop
or other degrading conditions to proliferate. Even workers in developed
countries often feel themselves to be suffering at the hands of globalization.
For them, it may mean the outsourcing or offshoring of good jobs and
a correlative loss of bargaining power at home. From this perspective,
trade agreements like NAFTA and CAFTA are blamed for facilitating the
movement not only of capital but of jobs outside of the United States and
other developed countries in the Global North.
In explicating the first point, which is central to his critique, Daly holds that
economic integration under free market conditions promotes standards
lowering competition (a race to the bottom)14 and that global production
tends to move to countries that do the worst job of integrating environmental
and social costs into prices. He also maintains that this is accompanied by
increasingly unequal income distribution in highwage countries, such as the
United States, with an abrogation of the social contract between labor and
capital there. With capital mobility, Daly
notes that though there may be gains in trade to the world as a whole, there
is no guarantee that each nationstate will share in those gains.15
A lively debate has taken place among philosophers with regard to the
question of what to do about global poverty and global inequalities, including
what the normative grounds are for addressing these difficult contemporary
problems. A brief review of this literature will help in addressing the
responsibilities of corporations in this context, to be discussed in the final
section of this chapter.
The debate began in philosophy with Peter Singer's article Famine, Affluence
and Morality. It used a broadly consequentialist argument, subsequently
developed in his book Practical Ethics, to the effect that we have an
obligation to assist in the alleviation of global poverty.33 Singer argued
that we should give a significant portion of our income to the poor on the
grounds that if we can prevent something bad without sacrificing anything
of comparable significance, we ought to do it.34 For example, if we see a
small child drowning in a pool of water, we ought to rescue it since we easily
can with little cost to ourselves, which is insignificant in comparison with the
avoidable death of the child.35 He argues analogously that we should donate
money to save suffering people far away, either directly or through foreign
aid: It seems safe to advocate that those earning average or above average
incomes in affluent societies, unless they have an unusually large number of
dependents or other special needs, ought to give a tenth of their income to
reducing absolute poverty.36
Other philosophers, including Onora O'Neill, Henry Shue, and James Nickel
presented arguments based on rights for moving toward global justice,
Here we can take note of the increasing recognition that there is a human
right to means of subsistence. The Universal Declaration of Human Rights,
article 25, explicitly recognizes a right to a standard of living adequate
for the health and well being of oneself and one's family, including food,
clothing, shelter and medical care. It would seem, from this perspective,
that a human rights approach requires that we work to alleviate global
poverty. Thomas Pogge adopts precisely this approach in arguing that there
is a negative duty to avoid harming the poor, which we do by imposing on
them global institutional arrangements that prevent them from fulfilling
human rights to an adequate standard of living. He claims that affluent
Western governments, along with powerful actors within them such as
corporations, and indeed most of their citizenry, are in fact to blame for
imposing arrangements that harm poor people by exploiting them and by
reproducing their massive poverty.43
An objection that may be posed to human rights approaches of this sort, and
also to consequentialist or contractarian theories, is that they remain tied to
Western
philosophical perspectives and are thus culturally biased. The claim is
sometimes advanced that in their emphasis on the universality of human
beings such approaches are oblivious to the diversity of human communities.
In the priority they give to the centrality of individuals they reflect narrowly
Western frameworks of thought and exclude more communitarian and local
perspectives. This objection raises the question of cultural relativism, which
is standardly counterposed to universalist or humanistic approaches, an
issue that cannot be adequately dealt with in this chapter (but it is treated in
the chapter by Beauchamp). However, as Amartya Sen has pointed out, an
emphasis on human freedom and the role of the individual is not exclusively
Democratic Accountability
There have been calls for greater transparency within these institutions,
which would allow for press and public scrutiny of their decisions and
activities. With regard to global governance institutions, Joseph Stiglitz
argues that transparency is more essential than it is even for governments,
because the leadership of these institutions is not subject to direct election.
He points out that at the WTO, negotiations tend to be carried out behind
closed doors, allowing for the influence of corporate interests, while at the
IMF, the financial community carries out its usual secretive methods, despite
the fact that collective, public goods are involved. Transparency within these
institutions, he argues, would permit criticism and more responsiveness
to public needs for openness to the interests of all, as well as attention to
crucial values such as environmental sustainability.58
A further norm, though one not usually counted among the conditions for
decent work, is the achievement of some significant measure of worker
It has been observed that to sustain the world's population at the current
consumption levels of the affluent would actually require the resources of
three additional planet Earths. Even the current aggregate consumption
level, which includes that of some billion people who exist in absolute
poverty, is not sustainable.68 Given that life depends on the planetary
support systems and its biodiversity, it is necessary to meet people's needs
in a way that preserves the ability of future generations to meet their needs,
and that retains natural diversity. Accordingly, it has been proposed that a
principle of sustainability requires that societies assure that
(a) rates of resource exploitation do not exceed rates of
regeneration;(b) rates of resource consumption do not exceed
the rates at which renewable replacements can be phased
into use; and (c) rates of pollution emissions and waste
disposal do not exceed the rates of their harmless absorption.
Compromising any of these three conditions puts the well
being of future generations and planetary life at grave risk.69
We can now consider the import of the previous analysis of globalization and
global justice issues for altering notions of corporate social responsibility. In
addition, the implications for enlarging the existing account of stakeholder
theory will be addressed in view of the broader scope of those having a
stake in corporate activity in a more globalized world. And in conclusion,
two practical directionsa proposal for the wide use of human rights
assessments and the UN's Global Compact initiative will be discussed.
From the argument presented in this chapter that gives moral priority
to norms of global justice, it follows that if human rights include rights
against being harmed and also economic and social rights then multinational
enterprises and their members have obligations to respect these rights at
least by not violating them. As noted, human rights have increasingly been
held to apply not only to the activities of state actors in the public sphere but
also to nonstate actors as well. In addition, to the degree that human rights
require individuals and other agents to participate in creating institutions
that would fulfill them, there is an obligation to contribute to the degree
possible to helping to fulfill people's human rights. It is difficult, of course, to
determine the scope of such obligations. Controversies abound concerning
how to balance obligations to those close to us as opposed to general duties
on grounds of humanity to those more distant from us. Further, while some
think that the latter call only for charitable acts, a stronger notion of our
interdependence in meeting each other's human rights and basic human
needs would support moral requirements of positively cooperating to fulfill
them, especially by way of supporting institutions that would do so.
Another argument for corporate obligations to protect and help fulfill human
rights derives from Pogge's account. He argues that Western nations and
multilateral institutions acting on behalf of powerful interestsincluding
corporate oneshave in fact imposed systems on people in developing
countries that are harmful, at least partly unjust, and even exploitative.
In view of this, he holds that these various agents in turn have positive
obligations to aid these people in fulfilling their human rights, where these
obligations derive from the basic negative duty to avoid harm. It remains a
difficult question to determine more precisely how these obligations devolve
on the various actorsstates, multilateral institutions, corporations, and
individuals in Western countrieswho are to different degrees complicit in
imposing such harm.
Yet, even if it were claimed that corporations do not directly cause harm in
this way, it can be further argued that they have legal claim to their profits
We can conclude this discussion of the import of the above analysis for
corporate social responsibility by taking note of an important practical
Conclusion
Suggested Reading
Donaldson, Thomas, and Thomas W. Dunfee. Ties That Bind. Boston: Harvard
Business School Press, 1999.
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Friedman, Thomas L. The Lexus and the Olive Tree. New York: Farrar, Straus,
and Giroux, 1999.
Find This Resource
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Pogge, Thomas W. World Poverty and Human Rights. Cambridge: Polity Press,
2002.
Find This Resource
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Shue, Henry. Basic Rights: Subsistence, Affluence, and U.S. Foreign Policy.
Princeton, N.J.: Princeton University Press, 1980; 2nd ed., 1996.
Find This Resource
Worldcat
Google Preview
Singer, Peter. One World: The Ethics of Globalization. New Haven, Conn.: Yale
University Press, 2002.
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Web Sites
Notes:
(1.) Thomas L. Friedman, The Lexus and the Olive Tree (New York: Farrar,
Straus, and Giroux, 1999), 78.
(5.) Ibid.
(7.) Ibid.
(9.) Ibid.
(14.) Ibid.
(15.) Ibid.
(18.) A report by Sarah Anderson and John Cavanaugh poses the problem
starkly, observing that 1. Of the 100 largest economies in the world,
51 are now global corporations; only 49 are countries. 2. The combined
sales of the world's Top 200 corporations are far greater than a quarter
of the world's economic activity. 3. The Top 200 corporations' combined
sales are bigger than the combined economies of all countries minus the
biggest 9; that is they surpass the combined economies of 182 countries.
4. The Top 200 have almost twice the economic clout of the poorest four
fifths of humanity (Sarah Anderson and John Cavanaugh, Top 200:
The Rise of Global Corporate Power, Corporate Watch, 2000), http://
www.globalpolicy.org/socecon/tncs/top200.htm.
(20.) See Patrick Karl O'Brien and Armand Clesse, eds., Two Hegemonies:
Britain 18461914 and the United States 19412001 (Aldershot, U.K.
Asghate, 2002), and the discussion in Niall Ferguson, Hegemony or
Empire? Foreign Affairs 82 (Sept/Oct 2003): 154161.
(23.) Robert Hunter Wade, The Disturbing Rise in Poverty and Inequality:
Is It All a Big Lie? in Taming Globalization, ed. David Held and Mathias
KoenigArchibugi (Cambridge: Polity, 2003), 1846. For an opposing view, see
Jagdish Bhagwati, In Defense of Globalization (New York: Oxford University
Press, 2004). See also Sanjay G. Reddy and Camelia Minoiu, Has World
Poverty Really Fallen? Review of Income and Wealth 53 (3) (2007): 484502.
(25.) Held, Global Covenant, 35, citing David Held and Anthony McGrew, The
Global Transformations Reader, 2nd ed. (Cambridge: Polity, 2003), pt. 5.
(27.) Thomas Pogge, Real World Justice, Journal of Ethics 9 (2005): 31.
(28.) David Held, Global Covenant, 35, citing Wade (see note 21 above).
(30.) Held, Global Covenant, 37. See also Gender Equality: Striving for
Justice in an Unequal World, Policy Report of the United Nations Research
Institute for Social Development, http://www.unrisd.org/unrisd/website/
document.nsf/0/1FF4AC64C1894EAAC1256FA3005E7201?OpenDocument.
(31.) Fiona Robinson, Care, Gender and Global Social Justice: Rethinking
Ethical Globalization, Journal of Global Ethics 2 (June 2006): 1618, citing
reports from the World Health Organization (Ethical Choices in LongTerm
Care: What Does Justice Require? 2002, Geneva, and Gender and Women's
Health: Gender and Disaster, Regional Office for SouthEast Asia, 2005),
and UNIFEM (Biennial Report, Progress of the World's Women 2000, United
Nations Development Fund for Women, New York).
(33.) Peter Singer, Famine, Affluence and Morality, Philosophy and Public
Affairs 1 (3) (1972): 229243; and Practical Ethics (Cambridge: Cambridge
University Press, 1993).
(38.) Garrett Hardin, Lifeboat Ethics: the Case Against Helping the Poor,
Psychology Today, September 1974.
(39.) Onora O'Neill, Lifeboat Earth, Philosophy and Public Affairs 4 (1975):
273292; Henry Shue, Basic Rights: Subsistence, Affluence, and U.S. Foreign
Policy (Princeton, N.J.: Princeton University Press, 1980); and James W. Nickel,
Making Sense of Human Rights (Berkeley: University of California Press,
1987).
(43.) Thomas Pogge, World Poverty and Human Rights (Cambridge: Polity
Press, 2002).
(44.) Ibid. See also the summary and defense of the argument in Pogge,
Symposium: World Poverty and Human Rights, Ethics & International
Affairs, 17.
(45.) Pogge, World Poverty and Human Rights, chap. 6; and Thomas Pogge
Eradicating Systematic Poverty: Brief for a Global Resources Dividend
Journal of Human Development 2 (2001): 5977. See also the more
comprehensive proposal for global taxation in Gillian Brock, Taxation and
Global Justice: Closing the Gap between Theory and Practice, Journal of
Social Philosophy 39 (Summer 2008): 161184.
(47.) Thomas Pogge Human Rights and Global Health: A Research Program,
Metaphilosophy 36 (January 2005): 182209.
(52.) Amartya Sen, Human Rights and Asian Values, The New Republic, July
1421, 1997.
(54.) See, for example, Abdullahi Ahmed AnNa'im ed. Human Rights in
CrossCultural Perspectives: A Quest for Consensus (Philadelphia: University
of Pennsylvania Press, 1995).
(56.) Fiona Robinson Care, Gender and Global Social Justice: Rethinking
Ethical Globalization, Journal of Global Ethics 2 (June 2006): 525;
Virginia Held Ethics of Care: Personal, Political, and Global (New York:
Oxford University Press, 2005), especially chap. 10. See also Carol C. Gould
Transnational Solidarities, Journal of Social Philosophy 38 (Spring 2007):
146162.
(59.) S. Prakash Sethi Globalization and the Good Corporation: A Need for
Proactive Coexistence, Journal of Business Ethics 43 (2003): 21.
(64.) A Fair Globalization: The Role of the ILO, Report of the Director
General on the Social Dimension of Globalization, 2004, http://www.ilo.org/
wcmsp5/groups/public/ dgreports/dcomm/documents/publication/
kd00070.pdf.
(65.) See, for example, Denis Collins The Ethical Superiority and Inevitability
of Participatory Management as an Organizational System, Organization
Science 8 (Sep.Oct. 1997): 489507. See also David Ellerman The
Democratic WorkerOwned Firm (London: Unwin Hyman, 1990).
(67.) Cf. Ten Principles for Sustainable Societies, in Cavanagh and Mander,
Alternatives to Economic Globalization, 6162.
(68.) Tim Hayward Human Rights Versus Emissions Rights: Climate Justice
and the Equitable Distribution of Ecological Space, Ethics & International
Affairs 21 (4) (2007): 431450.
(75.) Ibid.
(83.) See Ronald K. Mitchell Bradley R. Agle and Donna J. Wood Toward a
Theory of Stakeholder Identification and Salience: Defining the Principle
of Who and What Really Counts, Academy of Management Review 22
(1997): 853886; Robert A. Phillips Stakeholder Legitimacy, Business Ethics
Quarterly 13 (1) (2003): 2541; and the discussion of these views in Bert van
de Ven Human Rights as a Normative Basis for Stakeholder Legitimacy,
Corporate Governance 5 (2) (2005): 4859.
(85.) See Gould, Globalizing Democracy and Human Rights, 234, and
Carol C. Gould Structuring Global Democracy: Political Communities,
Universal Human Rights, and Transnational Representation, Democracy
in a Globalized World, ed. Joakim Nergelius (Oxford: Hart, 2008), based
on Transnational Representation: Extending Participation in Cross border
Decision Making, Midwest Political Science Association Meeting, Chicago,
Ill., April 8, 2005. A similar proposal is in Tarek Maasarani Margo Drakos and
Joanna Pajkowska Extracting Corporate Responsibility: Towards a Human
Rights Impact Assessment, Cornell International Law Journal 40 (2007): 135
169.
(86.) Oliver Williams The UN Global Compact: The Challenge and the
Promise, Business Ethics Quarterly 14 (4) (2004): 755774.
(87.) For a discussion of the Compact and its context, see John Gerard
Ruggie, Taking Embedded Liberalism Global: the Corporate Connection, in
Taming Globalization, 93129. See also Andrew Kuper Harnessing Corporate
Power: Lessons from the UN Global Compact, Development 47 (3) (2004): 9
19.
(88.) Peter Utting The Global Compact and Civil Society: Averting a Collision
Course, Development in Practice 12 (November 2002): 644.