WIDER Annual Lecture 7
Global Labour Standards and Local Freedoms
Kaushik Basu is known for the expert way in which he brings the tools of economic and philosophical analysis to bear on current development issues. In recent years his interests have included questions concerned with international labour standards and worker rights, particularly those related to the use of child labour in developing countries. As he points out at the start of the lecture, one of the less recognised consequences of globalization is an erosion of democracy, with the lives of individuals in developing nations becoming increasingly dependent on decisions taken in other countries over which they have no influence. The imposition of global labour standards—however well-meaning the motivation of the proponents—risks adding to this disenfranchisement as well as hurting the intended beneficiaries. Hence the need for a thorough assessment of the rationale for international intervention. Respect for personal liberty leads Basu to argue that individuals should be allowed to enter into a labour contract that would be outlawed in the developed world, provided that the contract does not involve coercion and provided that the parties concerned fully comprehend the implications of their agreement. Those who favour imposing external constraints on such free market activities must offer convincing counter arguments. Individual ignorance or irrationality is one possible route, along with explicit or implicit coercion. Another possible justification rests on the existence of multiple equilibria, when an external ‘benign intervention’ might result in a switch to a stable and mutually preferred equilibrium. A third, more subtle, line of reasoning points out that while individual free-market transactions may be justifiable, blanket permission for classes of contracts can have negative repercussions which undermine the case for respecting individual freedom. This lecture expands on these ideas and examines their implications for global labour standards in the context of such issues as child labour, hazardous working conditions, and workplace harassment. The careful attention to the details of the argument is a welcome contrast to what Basu refers to as the ‘muscular desire’ of international bureaucrats to get on with the business of crafting legislation. It is hoped that this lecture may persuade some of these impatient but well-intentioned policymakers to consider more carefully the consequences of their initiatives.The 7th WIDER Annual Lecture was given by Professor Kaushik Basu in Helsinki on 10th November 2003, under the title ‘Global Labour Standards and Local Freedoms’.