Tuesday, November 28, 2006

The Archer's Christmas Gift ideas

For those needing ideas for Christmas gifts but don't want to sell out to rampant commercialism, you might consider some of the fair trade ideas and businesses listed on The Ashram blog (Thanks to Kyle for digging this up). You will find an extensive list there. I am not giving warrant to the legitimacy of many of the links there, not because I have any particular reason to think any of those businesses are bad per se. I just am not familiar with a lot of them.

That having been said, I will say that I do have some issue with how certain fair trade businesses are run. From an economic standpoint, I find their logic well intensioned but often flawed. Please don't misunderstand me on this point. I am not advocating that poor people should be ripped off or left to the mercy of economic powers beyond their control. But the problem I see (and I have had some first hand experience on this) that some fair trade organizations turn into liberal paternalism very quickly because they are based on an economic assumption that market based economies are inherently flawed outright.

This may or may not be true, but the point I am trying to make is that this surfaces due to the weird-affluent-Western-liberal-guilt-thing that haunts certain quarters (which I have never really understood myself). These same rich folks approach 3rd world depressed economies with the modern penchant for "all problems have a solution." Thus, if Farmer Juan is not getting enough for his coffee beans, we will create a Utopian "fair trade zone." This means in actual practice that a lot of these cooperatives come in to circumnavigate the market based economy only to create an artificial market where instead of having the market dictate how much a crop is worth, and artificial price is created.

This often times leads to the logic of "We think that Farmer Juan is getting ripped off if he gets (for example) 5 cents per bushel of coffee beans." While Farmer Juan may in fact be getting ripped off by the market/trans-national corporations/Satan/whomever your villain of choice is, the fact that Fair trade folks want to help remedy this is a good thing. However, the next logical step that many a fair trade business fall into is a trap. They will then turn around and say, "Well, if 5000 dollars is the yearly poverty line (and poverty lines and other such economic ruminations are inherently suspect statistically), we think in our righteous might that Farmer Juan should be getting (for example) 20 cents per bushel of coffee beans so that he can make or excede 5000 dollars per annum." Or worse yet, that Farmer Juan should be getting 50 cents per bushel, with 50 cents being completely a pie in the sky number pulled out of our...(well, never mind where.)

This is problematic, because it creates an artificial market, devoid of economic reality. While its great Fair Traders care enough about Farmer Juan to want to help, this can ultimately be devastating to 3rd world markets. Remember always the old adage, "never do more harm than good." I say this because the well meaning attempt to restructure the market to free the dependent farmer to become more independent and self supporting through fair trade cooperative in this manner actually can have the opposite effect. What is more likely to happen is that you now have one well meaning affluent white group dictating prices instead of another. By offering an artificial price for coffee beans (or whatever the crop is), this actually increases 3rd world economies' dependence on the affluent West, not lessening it.

What plays out is that we end up with the logic and operating policy of classic liberal paternalism in that we (the Fair Traders) in our righteous benevolence are going to give you people more for your crop then it is actually worth on the open market. (Gee, Wally, aren't we swell for doing this?) This has the economic effect of making the farmer more dependent on the fair trade organization because this artificial price has been created, and thus the farmer becomes more dependent on the affluent white West.

Artificial markets are very dangerous things. (For an example, I point you to the artificial economy the US created in South Vietnam during the late '60s.) Heaven help those farmers when the White western investors lose interest because the fad has worn off or the capital for the fair trade enterprise dries up because the US economy itself has gone sour. Artificial market bubbles will inevitably pop and farmers will be in a worse spot than they were to begin with because then they will be even more desperate and the market can dictate an even lower price because of supply side economics.

Again, let me repeat, I am not against fair trade. But when dealing with Fair Trade organizations, the questions need to be asked as to whether the dealer's modus operandi of fair trade is "we give the farmers more than their crop is worth (thereby making them dependent)" or is the operating policy "we are helping local economies to become economically viable by their own merit." In other words, are we propping them up solely on our own in a sort of weird neo-economic imperialism, or are we helping them to help themselves so that they can remain standing in the event we can no longer help them. Fair Trade should be about helping not dictating and creating more dependence.

This can be done in many ways, of course. In the aforementioned Ashram list, I would recommend such businesses as http://www.oxfamamericaunwrapped.com/ or other entrepeneurial investments such as Ten Thousand Villages. The USPG also has a good network for this. I would also recommend businesses and cooperatives that urge crop and trade diversification. You shouldn't be growing all one crop, in case of crop failures or market oversaturation. This all seems like common sense, but I am constantly amazed at how many people involved in Fair Trade organizations (and other church social agencies) that have absolutely no grasp of economics or farming.


Kyle said...

Holy cow, you're a mason? would you like to talk about this?

Oh, and as far as the economic stuff goes... um, okay. :0)

The Archer of the Forest said...

I've been a mason for years, dude, and it has nothing to do with my wanting to take over the world ;) Just kidding.

Actually it came in handy, as I got into the National Masonic Library in London the other day. I got to hold a copy of the document signed by Queen Victoria giving the American South belligerent status during the Civil War. For us Civil War buffs, that was big.