On Thursday at 9PM EST, Victor Claar will be a guest on “Stossel” on Fox Business. Claar and John Stossel will discuss fair trade coffee. Claar frequently lectures on the fair trade movement at Acton University and wrote, Fair Trade? It’s Prospects as a Poverty Solution. If you can’t catch the premier of the show, it will air again multiple times, including on Fox News at 10PM EST on Sunday, December 15. The full episode will also be available online several days after the original airing.
“Who could be against fairness?” Victor Claar asked this question at Acton University last month. He and Travis Hester gave a talk titled, “Fair Trade Versus Free Trade” with their focus on the coffee industry. They explained what the fair trade movement is, evaluated its effectiveness, and explored ways for caring people to help coffee growers overcome poverty.
Before looking at the fair trade movement, it is important to note that coffee is what economists call an inelastic good. That means that if the price of coffee increases, the quantity demanded will not decrease by a lot. Claar puts it simply: “If coffee prices rise, coffee drinkers will probably buy less coffee, but probably not much less.” Spikes occur frequently in coffee prices due to bad weather and the delicacy of Arabica coffee plants. The price of coffee is volatile and is, according to fair trade advocates, too low. (more…)
If you haven’t joined us for this lecture series yet, there’s still time! The final live session for the Globalization, Poverty, and Development AU Online series, Fair Trade vs. Free Trade, has been postponed. This means that you now have a few extra days to catch up on the lectures that we’ve already held before joining us next week for Victor Claar’s lecture on Tuesday, December 18, 2012.
Also, if you’re interested in learning more about topics related to development, trade, globalization, or human flourishing, be sure to check out the recently released DVD Series from our friends at PovertyCure.
Poverty, development, and stewardship tend to be topics both of discussion and personal reflection as we are reminded to count our blessings around this time of year. If similar ideas have been on your mind, you may be interested in Globalization, Poverty, and Development, an AU Online lecture series that explores the theme of human flourishing and its relation to poverty, globalization, and the Church in the developed world. Join Mr. Brett Elder, a director at Acton Institute and creator of the NIV Stewardship Study Bible and Dr. Victor Claar, a professor of economics at Henderson State University, for online sessions scheduled for Tuesday, December 11 and Thursday, December 13 at 6:30 pm EST.
Everyone who registers for the Globalization, Poverty, and Development series (or subscribes for an All Access Membership) has access to the recordings and resources shared on the course page. This means you can still register for the course even if you won’t be able to join us for the live sessions. Visit auonline.acton.org for more information and to register.
Is ‘fair’ trade really more fair or more just than free trade? Does fair trade create an unfair advantage that hurts the poor more than it helps? There are two different opportunities over the next few days where you can have the chance to explore this topic further.
Acton will be hosting Professor Claar for an online discussion tomorrow, May 9, at 6:00pm ET. In the AU Online session of his popular lecture Fair Trade vs. Free Trade, he will lead us through an analysis and comparison of arguments for and against both fair trade and free trade. Visit the AU Online website for more information and to register.
Is ‘fair trade’ more fair or more just than free trade? While free trade has been increasingly maligned, The Fair Trade movement has become increasingly popular over the last several years. Many see this movement as a way to help people in the developing world and as a more just alternative to free trade. On the other hand, others argue that fair trade creates an unfair advantage that tends to harm the poor.
Which does a better job helping the impoverished people around the globe—free trade or fair trade? The American Enterprise Institute recently held a debate on that topic at John Brown University entitled “Free Trade vs. Fair Trade: What Helps the Poor?” Click here to watch the debate between scholars Claude Barfield, Paul Myers, and Victor Claar.
In the debate Dr. Claar raises concerns about both the logic and economic reasoning underlying the fair trade movement. He also expands on that theme in his recent monograph, “Fair Trade? Its Prospects as a Poverty Solution”, the latest volume in the Acton Institute’s Christian Social Thought Series.
Related: On April 11, Dr. Claar will be visiting Acton on Tap to deliver a talk on “Envy: Socialism’s Deadly Sin.” To learn more about Acton on Tap and other Acton sponsored lectures, visit our events page.
Tomorrow evening economist Victor Claar will be leading an Acton on Tap where he will talk about fair trade. As a Christian and an economist, Claar brings a unique perspective to the discussion. He will be asking a number of key questions including: Is fair trade truly the best way to help the poor, and, if not, then what can we do instead?
The blog, Common Sense Concept, recently reviewed Claar’s new book, Fair Trade? Its Prospects as a Poverty Solution. This rerview provides a sneak peak of the discussion ahead at this week’s Acton on Tap:
But good intentions aren’t enough, and as economist Victor Claar in his new book, neither are manipulative trade initiatives. For Claar, author of Fair Trade: Its Prospects as a Poverty Solution, the fair trade movement simply “cannot deliver on what it promises,” and Christians would do well to pay heed.
Thus, Claar focuses the bulk of his critique on whether such initiatives truly achieve long-term and sustainable success and prosperity. Does fair trade actually lead to the enrichment of the lives it touches, or does it simply give them a temporary boost? Does it — or can it — lead to “transformational, lasting change,” or is it simply our way of giving them a few extra nickels for that week’s bread and milk (not wholly insignificant, mind you)?
Given that coffee is perhaps the most popular of fair-trade commodities, Claar focuses his attention there, providing an initial overview of the coffee market itself, followed by a discussion of fair trade strategies as commonly applied. Here, we learn a few important things: (1) coffee is easy to grow, (2) its price is inelastic, and (3) the “market appeal” of one’s beans is essential for success. Additionally, and most importantly, (!!!) demand is dropping while supply is rising.
“Simply put,” Claar explains, “coffee growers are poor because there is too much coffee.”
The book offers plenty of arguments against such schemes, but this often unspoken reality illuminates the most central: Artificial, top-down fair trade programs toy with price signals and manipulate individuals to do the wrong thing in the wrong place at the wrong time. “Incentives matter,” says Claar. “Once the stakes of any economic game have changed, people alter their behavior accordingly.”
Join us on Tuesday, May 17, from 6:30-8:00 PM at the Derby Station (2237 Wealthy St. SE, East Grand Rapids 49506) as what is sure to be a very enlightening and lively discussion.
For more information on tomorrow’s Acton on Tap click here.
Click here to read the entire blog post on Common Sense Concept.
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.
A constant theme here at the Acton Institute is the idea that good intentions are not enough…they need to be connected to sound practice.
It’s admirable that people wish to better the lives of coffee growing peasants. I also applaud their use of private initiatives and organizations. But before scorning their neighbors for not sharing their means, and before trying to turn the world inside out and upside down on the basis of an adolescent “why not?” they should make sure that the vehicle they have chosen for their dreams actually does what it’s supposed to do, and doesn’t do more harm than good.
Check out Claar’s book for more on the intentions, challenges, and realities facing the fair trade movement.