This morning at Ethika Politika, I argue that “acting primarily for the sake of national interest in international affairs runs contrary to a nation’s highest ideals.” In particular, I draw on the thought of Vladimir Solovyov, who argued that, morally speaking, national interest alone cannot be the supreme standard of international action since the highest aspirations of each nation (e.g. “Life, Liberty and the pursuit of Happiness”) are claimed to be universal goods. I would here like to explore his critique with reference to the subject of international trade. (more…)
Former governor, pastor, and presidential candidate (and current radio host) Mike Huckabee has been a primary driving force in turning today, August 1, into an ad hoc appreciation day for the fast food company Chick-fil-A.
Huckabee’s activism in support of the “Eat Mor Chikin” establishments was occasioned by criticism leveled against the company’s support for traditional “family values,” including promotion of traditional marriage. Chick-fil-A president Dan Cathy said, “We are very much supportive of the family — the biblical definition of the family unit.” That, apparently, was enough to galvanize many opponents of “the biblical definition of the family unit” and the rights of a company to be supportive of such. These opponents include, notably, a Chicago alderman and the mayor of Boston.
In addition to Huckabee’s response, others have argued that there should not be a religious, or even political, test of sorts for determining our partners in free exchange. Jonathan Merritt, a Southern Baptist pastor and author, wrote a piece for The Atlantic, “In Defense of Eating a Chick-fil-A,” in which he writes, “in a society that desperately needs healthy public dialogue, we must resist creating a culture where consumers sort through all their purchases (fast food and otherwise) for an underlying politics not even expressed in the nature of the product itself.” Likewise Branson Parler, a professor at Kuyper College here in Grand Rapids, contends that “Christians need to disconnect the cultural goods and services provided by numerous institutions (including Chick-fil-A) from the gods of politicization and partisanship.”
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.
Since the North American Free Trade Agreement began to be implemented in 1994, the United States has raised farm subsidies by 300 percent and Mexican corn growers complain that they have little hope of competing in this protected market. In this week’s Acton Commentary (published Feb. 29) Anthony Bradley writes that, “U.S. government farm subsidies create the conditions for the oppression and poor health care of Mexican migrant workers in ways that make those subsidies nothing less than immoral.” The full text of his essay follows. Subscribe to the free, weekly Acton News & Commentary and other publications here.
Congress insults our intelligence when it tells us that Chinese currency games are to blame for our trade deficit with that country and unemployment in our own. Legislators might as well propose a fleet of men-o’-war to navigate the globe and collect all its gold: economics is not a zero-sum game.
An exchange on yesterday’s Laura Ingraham Show frames the debate nicely. The host asked Ted Cruz, the conservative Texan running for U.S. Senate, what he thought about the Chinese trade question. Said Cruz, “I think we need to be vigorous in dealing with China, but I think it’s a mistake to try to start a trade war with them.”
“The trade war is on, and we’re losing it,” Ingraham responded. “[China is] subverting the principles of free trade.”
We blockaded the ports of the Barbary pirates when they subverted the principles of free trade — is Ingraham looking for a similar response now? No, she wants weenier measures: just some punitive sanctions here and there to whip China back into shape (because those always work).
Conservatives who are looking through the Mercantilist spyglass have got to put it down, because it distorts economics in the same way Marxism does. Economic growth and expansion of the labor market don’t come by the redistribution of wealth; they come by allowing man to exercise his creative talents, to innovate, to produce.
Protectionists also tend to ignore the inverse relationship between the trade deficit and the inflow of capital to a country. We are a nation of entrepreneurs, and entrepreneurs require investment. All business requires investment. If it’s Chinese investment, then Chinese investors see long term value in the U.S. economy. Sorry I’m not sorry about that.
Our leaders do the country a disservice by proclaiming that unemployment is caused by a trade deficit, and that a build-up of retaliatory tariffs is the way to fix the trade deficit. And they do other countries a disservice also, because U.S. protectionism hurts our trade partners (or potential trade partners). Holding back U.S. economic progress by artificially retaining manufacturing jobs, for example, means that workers in China or Vietnam are denied employment opportunities. It’s mindless selfishness.
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.
In this week’s Acton Commentary, “The Sheep and the Goats: Work and Service to Others,” I visit Lester DeKoster’s interpretation of the parable of the sheep and the goats from Matthew 25. Although not many have discussed this as an “economic” parable, DeKoster’s point is that anyone who truly serves another through legitimate work, whether paid or unpaid, can be understood to be a “sheep.”
Work, for DeKoster, is “the form in which we make ourselves useful to others, and thus to God.”
I don’t discuss another point DeKoster makes in his book, Work: The Meaning of Your Life–A Christian Perspective, that relates to what results from the aggregation of individuals’ work. The answer is civilization: “Work shares in weaving civilization, which is the form in which others make themselves useful to us, by providing us with the tools for doing our work well.”
DeKoster points to the chair in which you sit while you read, or any of the other myriad objects that surround you, that could only have been produced by the contributions of countless workers through the assembly line and supply chain. Joseph Sunde over at Remnant Culture has a post up today that echoes this, focusing on the example of the toaster. His poignantly asks whether this illustrates “that free trade is primarily about collaborating and sharing? Hasn’t free trade shown that it holds great power for expanding, connecting, and shaping a global community?”
Or as Kevin Schmiesing has put it, “No Man is an Economic Island.“