Exploring the Ethics and Economics of Global Labor Standards: A Challenge to Integrated Social Contract Theory

TLDR

Global labor conditions pose a challenge for corporate decision‑makers, prompting ethicists to develop Integrated Social Contract Theory (ISCT) as a framework for identifying basic human rights amid cultural conflicts. This study applies ISCT to global labor standards, aiming to identify labor rights that can guide corporations and to assess whether market‑driven decisions can align with these rights. The authors analyze labor standards using ISCT, defining universal agreements, the “sweatshop” problem, and global labor rights hypernorms, and evaluate ISCT’s sufficiency for universal rights. They conclude that ISCT is adequate only for universal rights and suggest future research directions for labor rights determination.

Abstract

Abstract: The challenge that confronts corporate decision-makers in connection with global labor conditions is often in identifying the standards by which they should govern themselves. In an effort to provide greater direction in the face of possible global cultural conflicts, ethicists Thomas Donaldson and Thomas Dunfee draw on social contract theory to develop a method for identifying basic human rights: Integrated Social Contract Theory (ISCT). In this paper, we apply ISCT to the challenge of global labor standards, attempting to identify labor rights that could serve as guides for corporations producing or outsourcing outside of their home country. In addition to identifying areas of universal agreement, we also examine whether ISCT is, in fact, a sufficient basis for determining worker rights; we seek to define the parameters of the “sweatshop” problem; we include the application and results of our ISCT analysis as applied to labor standards: the global labor rights hypernorms; and conclude that ISCT is sufficient only for rights that are universal . We also discuss whether market-driven decisions can identify the boundaries of labor rights, or at least assure that market outcomes are compatible with maintaining labor rights, in order to respond to the shortcomings of ISCT. We conclude with some comments on directions of analysis for labor rights determination.