Hostname: page-component-76fb5796d-qxdb6 Total loading time: 0 Render date: 2024-04-25T09:27:46.060Z Has data issue: false hasContentIssue false
  • English
  • Français

The Ethics of Global Capital Mobility

Published online by Cambridge University Press:  20 September 2021

CHIARA CORDELLI Open the ORCID record for CHIARA CORDELLI [Opens in a new window]  and
JONATHAN LEVY
CHIARA CORDELLI*
Affiliation:
University of Chicago, United States
JONATHAN LEVY*
Affiliation:
University of Chicago, United States
*
Chiara Cordelli, Associate Professor, Department of Political Science, University of Chicago, United States, cordelli@uchicago.edu.
Jonathan Levy, Professor, History & Committee on Social Thought, University of Chicago, United States, jlevy@uchicago.edu.
Get access Rights & Permissions [Opens in a new window]

Abstract

Global capital mobility is a crucial determinant of economic, political, and social life. While much has been written about the ethics of human movement, political theory has remained nearly silent on the ethics of capital movement. In this article, we intend to develop a general account of the ethics of global capital mobility—identifying both the forms of mobility that merit protection and those that merit restriction. By integrating normative theorizing with an economic analysis of global investment, we argue that the movement of capital, with important exceptions, should be much more restricted than it is today. We make the case, on both grounds of global justice and international assistance, for imposing coercive limits on cross-border inflows and outflows of capital. To enable them, we also propose a radical reform of the international monetary system—a new global currency—that would simultaneously facilitate beneficial capital movements.

Type
Research Article
Information
American Political Science Review , Volume 116 , Issue 2 , May 2022 , pp. 439 - 452
Copyright
© The Author(s), 2021. Published by Cambridge University Press on behalf of the American Political Science Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Adler, Gustavo, Camila Casas, Luis M. Cubeddu, Gita Gopinath, Nan Li, Sergii Meleshchuk, Carolina Osorio Buitron, Damien Puy, and Yannick Timmer. 2020. “Dominant Currencies and External Adjustment.” IMF Staff Discussion Note No. 20/05.CrossRefGoogle Scholar
Alvaredo, Facundo, Chancel, Lucas, Piketty, Thomas, Saez, Emmanuel, and Zucman, Gabriel. 2018. “The Elephant Curve of Global Inequality and Growth.” American Economic Association Papers and Proceedings 108: 103–08.Google Scholar
Barry, Brian. 1992. “The Quest for Consistency: A Skeptical View.” In Free Movement: Ethical Issues in the Transnational Migration of People and of Money, eds. Barry, Brian and Goodin, Robert E., 279–87. University Park: Pennsylvania State University Press.Google Scholar
Nicoletta, Batini, and Luigi, Durand. 2020 “Analysis and Advice on Capital Account Developments: Flows, Restrictions, and Policy Toolkits.” IEO Background Paper BP/20-20/03.Google Scholar
Beitz, Charles. 1999. Political Theory and International Relations. Princeton, NJ: Princeton University Press.Google Scholar
Beitz, Charles. 2018. “Property and Time.” The Journal of Political Philosophy 26 (4): 419–40.CrossRefGoogle Scholar
Borio, Claudio. 2016. “On the Centrality of the Current Account in International Economics.” Journal of International Money and Finance 68 (C): 266–74.CrossRefGoogle Scholar
Calvo, Guillermo A. 1998. “Capital Flows and Capital Market Crises: The Simple Economics of Sudden Stops.” Journal of Applied Economics 1 (1): 35–54.CrossRefGoogle Scholar
Caney, Simon. 2001. “Cosmopolitan Justice and Equalizing Opportunities.” Metaphilosophy 32: 113–34.CrossRefGoogle Scholar
Carens, Joseph. 2013. The Ethics of Immigration. New York: Oxford University Press.Google Scholar
Carney, Mark. 2019. “The Growing Challenges for Monetary Policy in the Current International Monetary and Financial System.” Speech given by Mark Carney Governor of the Bank of England Jackson Hole Symposium.Google Scholar
Cocco, Federica, Wheatley, Jonathan, Pong, Jane, Blood, David, and Rininsland, Ændrew. 2019. “Remittances: The Hidden Engine of Globalisation.” Financial Times, August 27. https://ig.ft.com/remittances-capital-flow-emerging-markets/.Google Scholar
Coppola, Antonio, Maggiori, Matteo, Neiman, Brent, and Schreger, Jesse. 2021. “Redrawing the Map of Global Capital Flows: The Role of Cross-Border Financing and Tax Havens.” The Quarterly Journal of Economics 136 (3): 1499–1556.CrossRefGoogle Scholar
Dagan, Hanoch. 2019. “Autonomy and Pluralism in Private Law.” Chap. 11 in Oxford Handbook of the New Private Law, eds. Gold, Andrew S., Goldberg, John C. P., Kelly, Daniel B., Sherwin, Emily, and Smith, Henry E.. Oxford: Oxford University Press.Google Scholar
Dietsch, Peter. 2015. Catching Capital. New York: Oxford University Press.CrossRefGoogle Scholar
Dietsch, Peter. 2017. “Normative Dimensions of Central Banking: How the Guardians of Financial Markets Affect Justice.” In Just Financial Markets? Finance in a Just Society, ed. Herzog, Lisa, 231–49. Oxford: Oxford University Press.Google Scholar
Dominguez, Kathryn M. E, Yuko, Hashimoto, and Ito, Takatoshi. 2012. “International Reserves and Global Financial Crisis.” Journal of International Economics 88: 388–406.CrossRefGoogle Scholar
Eichengreen, Barry. 2008. Globalizing Capital: A History of the International Monetary System. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Eichengreen, Barry. 2019. “Two Views of the International Monetary System.” Intereconomics 54: 233–36.CrossRefGoogle Scholar
Fine, Sarah, and Ypi, Lea, eds. 2016. Migration in Political Theory: The Ethics of Movement and Membership. Oxford: Oxford University Press.CrossRefGoogle Scholar
Fischer, Stanley. 1997 “Capital Account Liberalization and the Role of the IMF.” IMF Seminar. https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp091997.Google Scholar
Freeman, Samuel. 2006.“Distributive Justice and the Law of Peoples.” In Rawls’s Law of Peoples, eds. Martin, Rex and Reidy, David A., 243–60. Hoboken, NJ: Wiley.CrossRefGoogle Scholar
Furceri, Davide, Loungaini, Prakash, and Ostry, Jonathan D.. 2019. “The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data.” Journal of Money, Credit, and Banking 5 (1): 163–98.CrossRefGoogle Scholar
Ghosh, Atish R., Ostry, Jonathan D., and Qureshi, Mahvash S.. 2016. “When Do Capital Inflow Surges End in Tears?” American Economic Review 106 (5): 581–85.CrossRefGoogle Scholar
Goodin, Robert E. 1992. “If People Were Money.” In Free Movement: Ethical Issues in the Transnational Migration of People and of Money, eds. Barry, Brian and Goodin, Robert, 6–22. University Park: Pennsylvania State University Press.Google Scholar
Herzog, Lisa. 2019. “Global Reserve Currencies from the Perspective of Structural Global Justice: Distribution and Domination.” Critical Review of International Social and Political Philosophy. https://doi.org/10.1080/13698230.2019.1616441.CrossRefGoogle Scholar
Ilzetzki, Ethan, Reinhart, Carmen M., and Rogoff, Kenneth S.. 2019. “Exchange Arrangements Entering the 21st Century: Which Anchor Will Hold?” Quarterly Journal of Economics 134 (2): 599–646.CrossRefGoogle Scholar
Independent Evaluation Office of the International Monetary Fund. 2020. IMF Advice on Capital Flows: Evaluation Report, 2020. Washington, DC: International Monetary Fund.Google Scholar
International Monetary Fund. 2012. The Liberalization and Management of Capital Flows: An Institutional View. Washington, DC: International Monetary Fund.Google Scholar
International Monetary Fund. 2019. Taxonomy of Capital Flow Management Measures. Washington, DC: International Monetary Fund.Google Scholar
James, Aaron. 2012. Fairness in Practice: A Social Contract for a Global Economy. New York: Oxford University Press.CrossRefGoogle Scholar
Kose, M. Ayhan, Prasad, Eswar, and Rogoff, Kenneth. 2009. “Financial Globalization: A Reappraisal.” IMF Staff Papers 56 (1): 8–62.CrossRefGoogle Scholar
Kurtz, Jürgen. 2016. The WTO and International Investment Law. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Laborde, Cécile. 2010. “Republicanism and Global Justice: A Sketch.” European Journal of Political Theory 9 (1): 48–69.CrossRefGoogle Scholar
Levy, Jonathan. 2021. Ages of American Capitalism. New York: Random House.Google Scholar
Lin, Justin Yifu. 2015. “Why I Do Not Support Full Capital Account Liberalization.” China Economic Journal 8 (1): 86–93.CrossRefGoogle Scholar
Nicolás, Magud, Reinhart, Carmen M., and Rogoff, Kenneth S.. 2018. “Capital Controls: Myth and Reality.” Annals of Economics and Finance 19 (1): 1–47.Google Scholar
Meade, James. 1975. “The Keynesian Revolution.” In Essays on John Maynard Keynes, ed. Keynes, Milo, 82–8. Cambridge: Cambridge University Press.Google Scholar
Miller, David. 2016. “Is There a Human Right to Immigrate?” In Migration in Political Theory: The Ethics of Movement and Membership, eds. Sarah Fine and Lea Ypi, 11–31. Oxford: Oxford University Press.Google Scholar
Oberman, Kieran. 2013. “Can Brain Drain Justify Immigration Restrictions?” Ethics 123: 427–55.CrossRefGoogle Scholar
Oberman, Kieran. 2016. “Immigration as a Human Right.” In Migration in Political Theory: The Ethics of Movement and Membership, eds. Fine, Sarah and Ypi, Lea, 32–56. Oxford: Oxford University Press.Google Scholar
Obstfeld, Maurice. 2009. “International Finance and Growth in Developing Countries: What Have We Learned?.” IMF Staff Papers 56 (1): 63–111.Google Scholar
Obstfeld, Maurice, Shambaugh, Jay C., and Taylor, Alan M.. 2010. “Financial Stability, the Trilemma, and International Reserves.” American Economic Journal: Macroeconomics 2 (2): 57–94.Google Scholar
Organization of Economic Co-operation and Development (OECD). 2019. OECD Code of Liberalisation of Capital Movements. Paris: OECD.Google Scholar
Patten, Alan. 2014. “Are the Economic Liberties Basic?” Critical Review 26 (3–4): 362–74.CrossRefGoogle Scholar
Rajan, Raghuram G. 2006. “Investment Restraint, the Liquidity Glut, and Global Imbalances.” IMF.org. November 16. https://www.imf.org/en/News/Articles/2015/09/28/04/53/sp111506.Google Scholar
Rawls, John. 1971. A Theory of Justice. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Rawls, John. 1996. Political Liberalism. New York: Columbia University Press.Google Scholar
Rawls, John. 1999. The Law of Peoples. Cambridge, MA: Harvard University Press.Google Scholar
Reddy, Sanjay. 2003. “Developing Just Monetary Arrangements.” Ethics and International Affairs 17 (1): 81–93.CrossRefGoogle Scholar
Rey, Hélène. 2015. “Dilemma Not Trilemma: The Global Financial Cycle and Monetary Policy Independence.” NBER Working Paper 21162.CrossRefGoogle Scholar
Risse, Mathias, and Meyer, Marco. 2019. “Tax Competition and Global Interdependence.” Journal of Political Philosophy 27 (4): 480–98.CrossRefGoogle Scholar
Rodrik, Dani, and Subramanian, Arvind. 2009. “Why Did Financial Globalization Disappoint?” IMF Staff Papers 56 (1): 112–38.CrossRefGoogle Scholar
Stiglitz, Joseph. 2010. The Stiglitz Report: Reforming the International Monetary and Financial Systems in the Wake of the Global Crisis. New York: The New Press.Google Scholar
Stilz, Anna. 2017. “The Duty to Allow Harmless Migration.” Unpublished Manuscript.Google Scholar
Terzi, Andrea. 2004. “Is a Transactions Tax an Effective Means to Stabilize the Foreign Exchange Market?” Quarterly Review 56 (227): 367–85.Google Scholar
Tomasi, John. 2012. Free Market Fairness. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Wiedenbrüg, Anahí. 2021. “Responsibility for Financial Crises.” American Journal of Political Science 65 (2): 460–72.CrossRefGoogle Scholar
Wollner, Gabriel. 2014. “Justice in Finance: The Normative Case for an International Financial Transaction Tax.” Journal of Political Philosophy 22 (4): 458–85.CrossRefGoogle Scholar
Valentini, Laura. 2011. Justice in a Globalized World: A Normative Framework. Oxford: Oxford University Press.CrossRefGoogle Scholar
Zucman, Gabriel. 2016. The Hidden Wealth of Nations: The Scourge of Tax Havens. Chicago: University of Chicago Press.Google Scholar