John R. Commons and the Problem of International Labor Rights

Those familiar with the work of Karl Polanyi will not find it surprising that increased international economic integration since the 1970s has brought forth protest about its destabilizing effects. Among the most pressing issues debated by scholars seeking to ameliorate those effects is the matter of creating and enforcing an appropriate system of international core labor rights. Not surprisingly, there has been considerable disagreement among economists regarding both the wisdom of pursuing international labor rights and the appropriate means of instituting them. Whether it has been made explicit or not, those who have been most vocal in carrying the international labor rights debate forward have generally employed modes of reasoning grounded in neo-Marxist or neo-classical economic theory. In our judgment, neither of these theories provides a viable standpoint for demonstrating the appositeness of international labor rights or for examining how an appropriate set of such rights might best be worked out. There is a theoretical standpoint, however, that provides the economist with a conceptual entry point (Resnick and Wolff 1987, 25) into market processes from which labor standards are seen to be intrinsic to labor markets. We have in mind, of course, the institutional labor economics of John R. Commons with its capstone, the volitional (as opposed to mechanism) theory Commons came to call the theory of Reasonable Value. For reasons we spell out later, one should be cautious about presuming Commons's ideas are directly applicable to this question. As Commons conceived it, Reason-