Comments on: “Fair Trade” = Socialism

By: Mark

Mark — Fri, 16 Feb 2007 21:42:17 +0000

Brady, I think we’re talking about two different things here: your idea of ‘fair trade’ seems to be agreed-upon private transactions at a somewhat mom and pop level – I can assure you that is not what ‘fair trade’ means to James Webb and Sherrod Brown. They are, in fact, talking about jettisoning free trade agreements and putting up new barriers at the policy level…

By: Brady Swenson

Brady Swenson — Fri, 16 Feb 2007 21:29:58 +0000

See that’s the common misunderstanding right there. Fair trade does not equal protectionism. Fair trade has nothing to do with economic policy. Politicians have latched onto the term and are misrepresenting it. Fair trade is a movement that seeks greater equity in the trading process. This is achieved through businesses making deals with poor producers and artisans that adhere to the fair trade criteria, namely long-term partnerships, safe and healthy working conditions, adaquate pay and, when possible, education and training. This is strictly a business relationship and has nothing to do with policy. My wife and I run a fair trade business and we operate wholly within the capitalist system and are profitable. In exchange we get to advertise the healthy relationships we have with our suppliers and this brings in business, and profits, while helping a poor community develop.

In fact, I am a fan of unrestricted trade. It however, does not exist between any nation now and likely will not for a long long time. The US is very protectionist in some economic sectors and this harms development in the poorer parts of the world. Fair trade is a consumer movement that bypasses policy and makes trade fairer within a profitable capitalist model. How is this protectionist? I still pay protectionist tariffs on the good I import… I’m not helping to create them, certainly.

By: Aaron

Aaron — Fri, 16 Feb 2007 20:32:42 +0000

Fair trade means protectionism (typically via tariffs). Thus, when a government implements protectionist policies, the government forces its populace to subsidize inefficient industries at home; for instance. If a Toyota can be sold for $15,000 before an import tax, but is sold for $25,000 afterwards, when compared with a $20,000 Ford (I am being completely arbitrary in prices here), then the American government might as well be taxing the American auto consumer and giving the proceeds to the American auto industry. This is a redistribution of income. The goal of this redistribution is to, as the mantra goes “keep American jobs in America.” Or in other words, it is the government doing a favor for labor. How is that not socialism?

By: Mark

Mark — Fri, 16 Feb 2007 19:58:42 +0000

Hey, you didn’t have to remove it, but thanks anyway…I’ve been a little touchy lately, as we’ve had some knock-down dragouts in the comments section as of late.

What can I tell you? I’m a unabashed free-trade capitalist. I truly believe that any interference in the free flow of labor and capital is a net detriment to the economy.

By: Brady Swenson

Brady Swenson — Fri, 16 Feb 2007 19:18:33 +0000

Yeah, I felt bad about calling you a gasbag. I have since removed it. My apologies. No one reads the blog yet anyway…

I still, of course, disagree with you about dismissing fair trade as warmed over socialism. Fair trade businesses operate within the same capitalist principles of supply and demand that every other business does. Because the movement also demands rights for workers does not make it socialist in the economic sense. I know that a hallmark of socialism is its focus on labor and can understand confusing the two on these terms… but economically speaking fair trade operates within a capitalist global economy and is operating well within it. Some like to call it social-capitalism, or capitalism that recognizes and respects the human element of trade.

By: Mark

Mark — Fri, 16 Feb 2007 17:36:53 +0000

Brady, thanks for calling me a gasbag on your blog. Your knowledge of basic economic theory is appalling…”fair trade” is nothing more than anti-globalist warmed-over socialism, and its inevitable result is market disruptions, unemployment, lower growth, and protectionism.

Might I suggest a basic course in economics from your local community college?…

By: Fair Trade is not Socialism :: Two Hands Blog

Fair Trade is not Socialism :: Two Hands Blog — Fri, 16 Feb 2007 17:32:30 +0000

[...] Some gasbag on a blog called Decision ‘08 titled a post “Fair Trade = Socialism” that appeared in my RSS reader this morning. In this post he quotes an article by Eric Alterman published in The Nation. In this article Eric Alterman derides American-style free trade agreements as “really just a nice name for a free investment policy that allows global corporations to move production and capital around the world with no thought to the human and environmental consequences and that offers countless exceptions when the powerful are threatened….” [...]

By: Brady Swenson

Brady Swenson — Fri, 16 Feb 2007 16:49:02 +0000

Fair Trade certainly does not equal socialism. It simply seeks to recognize that “free” trade has never, and likely will not in the near term, be truly free. Fair trade advocates recognize the reality that global trade is manipulated all the time by nations attempting to gain an advantage in the global market for their corporations, via subsidies, laws and tariffs. So-called free trade agreements, from an American perspective, have been nothing more than attempts to negotiate terms for corporations to do unrestricted business in another nation. In most cases this means American businesses can operate in another nation without regard to basic labor standards that have become standard in the developed world. Fair trade advocates are simply the labor-rights activists of the era of globalization, fighting to establish an internationally recognized and enforced standard for labor rights. Trade is fundamentally a human interaction. Lives are impacted on either end of any trade deal and laws should reflect that fact by ensuring the rights of people at either end are protected, not simply the rights of the multi-national corporations on one end. For instance, the Peru Free Trade Agreement that narrowly avoided passing at the end of the lame-duck Republican congress is typical in its assurance of rights for American corporations in Peru (i.e. the right to sue, the right to trademark, etc) but utter lack of any basic assurances for Peruvian workers.

Perhaps you equate fair trade with socialism because price floors are sometimes used in fair trade agreements between wholesalers and producers. In volatile markets, such as the coffee market, fair trade certification does require a minimum price, it is currently 1.26 USD per pound. But remember that fair trade coffee businesses are competing, and winning, in the same market as Nestle and Starbucks. Fair traders are not asking any law-making body to legislate a price-floor for goods, we simply recognize that a good portion of consumers appreciate the benefits a stable, reliable price gives to disadvantaged producers and are thus willing to pay a premium in the marketplace for fair trade coffee.

Fair trade is not socialism. Venezuela under Chavez could be considered socialist, but please stop confusing your readers with such inappropriate comparisons and do a bit of due-diligence before posting more nonsense about fair trade.

By: T.W.L.

T.W.L. — Thu, 15 Feb 2007 19:19:25 +0000

I’m still waiting for a “fair trade” advocate to take the logical next step – if international trade is bad for America (as a result of wage/regulation/resource imbalances), then surely interstate trade must be bad for the states. And, as such, it should be curtailed. Right?

By: Dennis

Dennis — Thu, 15 Feb 2007 18:10:48 +0000

I agree with you on the economics, but I think Democrats are tapping into the longtime isolationist streak among many Americans; it’s the same streak that leads many voters to have flipped their opinions on the Iraq War; if the savages want to bomb each other to oblvion, let ‘em do it, seems to be the thinking.

The notion of “protecting American jobs” has a lot of resonance with people, and with corporations that would prefer less competition. The only problem is that protectionist measures just don’t work. You can’t opt out of the realities of the global marketplace.

I wonder how long before we get some congresscritters taking sledgehammers to some foreign-made goods on the steps of the Capitol once again.