The Acton Institute will be hosting another thought provoking and discussion orientated Acton on Tap on Tuesday, May 17. The event will begin at 6:30pm at the Derby Station (2237 Wealthy St. SE, East Grand Rapids 49506).

Leading the discussion will be Victor Claar, who is a professor of Economics at Henderson State University. The Acton on Tap with Professor Claar is titled “Clarifying the Question of Fair Trade: A Christian Economist’s Perspective.” Claar will bring a unique perspective of the discussion of fair trade by fusing Christian and economic principles:

Fair trade is an enormously popular idea in Christian and secular circles alike. Who, after all, could be against fairness? There are now fair trade certified products as varied as coffee, chocolate, fruit, and, most appropriate for an Acton on Tap audience, beer. Victor V. Claar, associate professor of economics at Henderson State University and co-author of Economics in Christian Perspective, however, raises significant economic and moral questions about both the logic and economic reasoning underlying the fair trade movement. Claar suggests that, for all its good intentions, fair trade may not be of particular service to the poor, especially in the developing world.

Claar has written extensively on fair trade including his monograph, “Fair Trade? Its Prospects as a Poverty Solution.” He wrote a commentary in 2010 discussing the economic obstacles for the world’s poor, and how to bring them out of poverty:

If we want to be effective agents in aiding the poor, we should focus our efforts in directions leading to the enhanced value of an hour of labor. That is, we should help poor countries wisely grow their stocks of human and physical capital, all the while bearing in mind that markets and their prices send the best available signals regarding where our efforts can have the greatest impact. The newfound success of innovative micro lending efforts such as Kiva can help show us ways to effectively invest in the accumulation of physical capital by the global poor. Compassion International is a marvelous organization that works to further the education—the human capital—of poor children worldwide, with a financial accountability record above reproach.

Further, markets work best when economic systems maintain the dignity of human beings. First, human beings grow and flourish—and accumulate human and physical capital—in systems that afford them considerable economic freedom. Economic freedom means that people are able to make personal choices, that their property is protected, and that they may voluntarily buy and sell in markets. Yet, economic freedom requires the protection of private property. When property rights are clearly defined and protected, people will work harder to create and to save. When they are confident that the fruits of their labors cannot be taken away arbitrarily or by force, people everywhere have greater assurance that their labors will lead to better lives for themselves and their families. Today’s rich collection of NGOs that work toward basic human rights play a critical role in this regard.

[…]

If we really care about the global poor, we should work to make trade freer for everyone in our global community: a level playing field for all. That means tearing down all of the barriers we use to keep the global poor from working in the very jobs in which they are perfectly positioned to make the greatest lasting gains.

To read the full commentary click here.

Click here for more information on next week’s Acton on Tap.


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  • Michael

    Curiously, Claar appears to be calling for precisely what happens when Fair Trade is functioning at its best.

    Before going into that, it’s worth noting that purchasing Fair Trade products and supporting efforts to increase the value of labour are not mutually exclusive activities. However, the vast majority of people have more opportunities to purchase Fair Trade products than they do to affect the value of labour in another country.

    Back to Fair Trade and supporting the accumulation of capital, let’s look at coffee:

    1. Small-scale coffee farmers form co-operatives, which allows them to reduce competitive pressures, decrease costs through collective purchasing/reduced transaction costs, and increase the power of their position within trading relationships

    2. Their co-operatives seek Fairtrade certification as part of an overall strategy that includes accessing higher value markets.

    3. The co-operatives use the increased revenues to (a) increase farm gate prices for their members, (b) develop agricultural extension services to improve quality, production, and produce diversification, (c) vertically integrate their supply chain (if appropriate) to further enhance market position, employment opportunities, and diversity of income streams, (d) invest in community development and education

    Fair Trade effectively provides a bridge whereby consumers (and businesses) can support the accumulation of physical, human, social, and sometimes natural capital by co-operatives of farmers who are independently verified to meet a series of social and environmental standards.

    And, if it’s not working for any particular actors, be they farmers, businesses, consumers, whatever, they’re always free to pursue any alternatives they find more appealing.