Trade, Exploitation, and the Problem of Unequal Opportunity Costs

Abstract This paper assesses the ‘power-induced failure of reciprocity’ account of exploitation in the domain of trade. I argue that its proponents face a dilemma. Either the cost variable of reciprocity is understood to include opportunity costs. Then, the account implausibly implies that those with more valuable outside options should get a larger part of the overall benefits of cooperation. Or the cost variable is understood to exclude opportunity costs. Then, the account has awkward implications in cases where direct costs and opportunity costs are substitutable. To evade this dilemma, the account could be amended to include a hypothetical baseline that equalizes opportunity costs. But then, the account ceases to be isolationist. Whether a cooperative interaction counts as exploitative is no longer independent of moral considerations about distributions outside the domain of trade.