June 25, 2006 Leave a comment
Before going further, I’d like to make it perfectly clear that it is entirely within coffee-bean buyers’ rights to pay any price, including an inflated price, they can get growers to agree to. And I consider it entirely within the rights of coffee consumers to buy coffee represented to have been so purchased at any price the retailer is willing to part with it for. This is all voluntary. There are no governments involved and so, as far as I can see, no coercion.
So, why does it rankle me so? Am I so intensely uncharitable that the charity of others bothers me, even when it costs me nothing? How very refreshing it is, after all, not having the taxman threatening me with the armed might of the state if I should shirk in paying his levy!
So my objection to Fair Trade isn’t a libertarian objection. There’s nothing about smug ignorance that violates the non-aggression principle. I do have a strong semantic objection (As Potts says, “But worse, this is yet another Newspeak-style hijacking of the word, ‘fair,’ coupled here with ‘trade’ that bothers me.”) But I’ll leave the semantics alone for now, assuming that they’ll be obvious from the rest of my objections, which are primarily intellectual and utilitarian.
Bad thinking is producing bad results. And the whole Fair Trade campaign is bad economic thinking at an almost cartoonish level. Potts again: “� la Bastiat, it’s what is not seen that troubles me worst.”
The issue of Fair Trade helps make clear that not all leftist dupes are philosophical collectivists. Some are merely methodological collectivists.
They want to help “the poor” — but “the poor” is a false aggregate. The actions they take — whether coercive, like minimum wage legislation, or voluntary and market-based, such as the whole “fair trade” swindle — end up transferring wealth from the poorest of the poor to the richest of the poor (and to the wealthier people running the scam).
The whole concept of Fair Trade in the 21st-century West is socialist at its heart, even if not necessarily statist. It is based on the belief that the market price is unfair, that it necessarily involves exploitation, or is at least somehow arbitrary. So, the thinking goes, just pay more than the market price. But here’s the kicker: this higher, “fairer” price is still a market price — for a different product.
If I find out that gardeners in my area make only $10/hour and I think that’s absurdly low, offering $20/hour may mollify my sense of social injustice, and ends up getting me a superior gardener, but in no way does it help the gardeners whose marginal productivity earns them $10/hour.
When fair traders realize this, they can either abandon the erroneous concept of a “fair price” other than the free-market price, or they can turn to more coercive actions such as minimum wage: outlaw the hiring of gardeners at only $10/hour. Again, the higher-skilled gardeners will immediately benefit from this action, but the guys whose gardening labor can only draw $10/hour on the free market will in no way benefit from now being coercively disemployed.
Fair Trade is the same story on a smaller (and yes, voluntary) scale. When you choose to spend your dollars on Fair Trade products, not only are you not helping out the poorest coffee growers or farm workers; you’re actually steering wealth away from them. I don’t know too many leftists who feel sanguine about further impoverishing the poorest of the working poor, and yet that’s what all leftist economic policy amounts to — even, it turns out, when that policy is pursued peacefully.