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.
Read more on Today’s AU Online Lecture with Victor Claar Postponed…
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.
Read more on This Week on AU Online: Lectures on Development and Trade…
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.
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.
Read more on Fair Trade or Free Trade?…
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.
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 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).
Read more on Acton on Tap: A Christian Economist Clarifies Fair Trade…
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.
In a reflection on fair trade at WORLDmag.com, D. C. Innes commends Victor Claar’s monograph, Fair Trade? Its Prospects as a Poverty Solution.
The NYT Freakonomics blog notes that the Fair Trade movement does not exist independently of the laws of economics:
But the problem with Fair Trade coffee is that as the program scales up, the alternative market ethics it wants to sustain collapse. Inevitably, the Fair Trade market becomes subject to the same laws that drive the conventional commodities market. When the price of coffee drops, the appeal of Fair Trade’s price support lures growers into the cooperatives that sell coffee under the Fair Trade label. As poor growers rush into Fair Trade agreements, the supply of Fair Trade coffee rises. Protected by the price floor, the Fair Trade coffee remains inflated despite flagging demand. What Fair Trade importers thus end up doing with the excess Fair Trade coffee is dumping it—upwards of 75 percent of it!—on the conventional market.
This is a huge problem for Fair Trade. Essentially, to be successful, it must, as I have stated in the past, “argue for a complete standardization of its price-fixing methods.”
This week’s commentary is from Victor V. Claar, an economist at Henderson State University and the author of a new Acton Institute monograph, Fair Trade? Its Prospects as a Poverty Solution. Follow his economics blog here.
By Victor V. Claar
When poor countries grow rich, it rarely has anything at all to do with how many mouths they have to feed or the abundance of natural resources. Instead, across the globe, poor countries of all sizes, climates, and endowments begin to grow rich as two key factors increase.
First, countries grow rich as their human capital improves. Human capital is the term economists use to describe the value that a country’s people possess through their accumulated experience and education. For example, there is little doubt that India’s recent growth explosion is due in large part to the education—including the knowledge of the English language—of its people.
Second, countries grow rich as they invest in and accumulate physical capital: the machines, tools, infrastructure, and other equipment that make the product of each hour of physical labor more valuable. That which both human capital and physical capital share is that they both transform the result of an hour of a person’s hard work into something of even greater value. As the value of an hour of labor rises, employers gladly pay higher hourly rates, knowing that their bottom lines will be the better for it.
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. Read more on Poverty, Capital and Economic Freedom…
