Part One is here.
Michael Krausz, "Relativism and Beyond" in Relativism, Suffering and Beyond, eds. Bilimoria and Mohanty (Oxford, 1997), pp. 97-98:
The classical 'self-refuting' argument against relativism runs roughly along the following lines. If relativism is true then the thesis of relativism itself must be relatively true. It would be contradictory to affirm that relativism is true in an absolute sense. But while one could affirm that relativism is true in a relative sense, the counter-argument goes, to say that relativism is only relatively true has no general force. In order for the thesis to have general force it should include itself and should be presumed to be absolutely true. But that, again, would be contradictory.
In response . . . one might observe that there is no reason to rule out of court any non-general thesis of relativism. That is, the claim that the thesis of relativism is a thesis embraced locally does not itself show that it has no content or is not locally defensible. Local knowledge is knowledge nonetheless. Rather along lines suggested by Nelson Goodman, the aim of justifying local claims, including the thesis of relativism itself, need not be the establishment of of a general or a universal or an absolutist claim but may well be in the name of unpacking local understanding.
Krausz appreciates that a relativism asserted as nonrelatively true refutes itself. A relativized relativism (RR), however, lacks general force. The issue is whether this lack of general force amounts to an objection to RR. Krausz thinks that it does not. RR may reflect a 'local understanding.'
Well, suppose that among Krausz and his group it is held that truth is relative and that this truth is itself relative to Krausz and his group. It is held by me and my group that truth is nonrelative. What I say about Krausz is that his view is nonrelatively false and rests on a confusion of truth with local understanding. Clearly, he cannot reply in kind since he has tied his own hands by retreating to RR, a retreat that he had to make on pain of falling into contradiction. He cannot, that is, say that my view is true only for me and my group. He cannot say that my nonrelativism is only relatively true. If he said that, he would be assuming that relativism is nonrelatively true and would thereby fall into self-contradiction. His retreat to RR was a forced retreat. He therefore has to admit that my view is possibly nonrelatively true, and not just for me. He has to admit this because my position is a possible position he cannot exclude. He must admit that it is possibly nonrelatively true that truth is nonrelative. But if so, then it is possible that there be one nonrelative truth. Now possibly there is one nonrelative truth is nonrelatively true. It follows that there actually is one nonrelative truth, which suffices to show that nonrelativism is true.
Since nonrelativism is true, it follows that RR is false. This in turn implies that Krausz and Co. are confusing truth with "local understanding."
Let me sum this up in a somewhat different way. The retreat to RR is forced. This retreat insulates relativism from the charge of self-referential inconsistency. But it also makes it impossible for the proponent of RR to exclude as false or incoherent the position of the nonrelativist. Not being able to exclude the position of the nonrelativist, Krausz must admit that the nonrelativist position (NR) is possibly true, indeed possibly nonrelatively true. Surely NR is epistemically possible for Krausz and Co., possible given what they can legitimately claim to know. But this epistemic possibility supports the metaphysical possiblity that NR is true. So he must admit that NR is possibly true. But that NR is possibly true is itself nonrelatively true. After all, Possibly p entails it is true that possibly p. So Krausz must admit not only that NR is possibly true, but also that it is actually nonrelatively true that possibly NR.
And that suffices to show that NR is true, RR is false, and that Krausz is confusing truth with "local understanding."