Free Trade? Fair Trade?

[Nihil Obstat]

Vote and discuss. What kind of trade do you support and why? Use sources whenever possible.

[Resurrexi]

I think I have (or rather my family has) bought fair trade before, but I'm not aware that we have bought any of the others.

[Nihil Obstat]

[quote name='Resurrexi' date='21 September 2009 - 09:46 PM' timestamp='1253587570' post='1970786']
I think I have (or rather my family has) bought fair trade before, but I'm not aware that we have bought any of the others.
[/quote]
It's more an ideology, like right wing and left wing, than it is a product. "Fair trade products" are just good that were traded in a certain way, according to a certain ideology.

[CatherineM]

I don't know. I'm tired. Which is the pro-union one?

[Nihil Obstat]

[quote name='CatherineM' date='21 September 2009 - 10:58 PM' timestamp='1253591896' post='1970848']
I don't know. I'm tired. Which is the pro-union one?
[/quote]
Fair trade, I'd assume. They're the ones that are in favour of... activism in third world countries, I think, is a good way of putting it.

[Sternhauser]

I support free trade. No one should use force, fraud, or any other form of coercion against anyone in economic transactions. This precludes all protectionism, interventionism, and unreasonable union actions. (The kind that inflates the wages of workers far above the rate set by the free market.)

Every economic exchange where two people mutually agree on a price is a fair exchange. There are no losers in a free economic exchange. If the transaction were not considered beneficial by each party, then they would not make the transaction.

The "fair trade" movement is an exceptional marketing idea in an age of economic ignorance, and not much else. It will not lift people out of poverty in the long run, which is supposedly the goal of the movement.

~Sternhauser

Edited September 22, 2009 by Sternhauser

[Nihil Obstat]

[quote name='Sternhauser' date='21 September 2009 - 11:07 PM' timestamp='1253592446' post='1970864']
I support free trade. No one should use force, fraud, or any other form of coercion against anyone in economic transactions. This precludes all protectionism, interventionism, and unreasonable union actions. (The kind that inflates the wages of workers far above the rate set by the free market.)

Every economic exchange where two people mutually agree on a price is a fair exchange. There are no losers in a free economic exchange. If the transaction were not considered beneficial by each party, then they would not make the transaction.

The "fair trade" movement is an exceptional marketing idea in this current age of economic ignorance, and not much else. It will not lift people out of poverty in the long run, which is supposedly the goal of the movement.

~Sternhauser
[/quote]
Not to imply that I disagree with you, but do you have any sources or numbers to back up your beliefs?

[Sternhauser]

[quote name='Nihil Obstat' date='22 September 2009 - 12:16 AM' timestamp='1253592984' post='1970873']
Not to imply that I disagree with you, but do you have any sources or numbers to back up your beliefs?
[/quote]

On "fair trade?" I will explain it with reason instead of numbers. Fair trade is ideological protectionism. Meaning, it is protectionism not based on violence, but on an artificially high price propped up by people who want to feel good about what they're doing. That's all well and good, in itself. However, the marketing men make lots of money, and [i]some[/i] of the people in a region who are selling coffee, tea, or whatever other commodity make more money than the market would ordinarily bear. Unfortunately, once everyone is able to jump on the "fair trade" bandwagon, the market will once again achieve equilibrium. They'll be back where they started: a level market playing field.

A "fair trade" is a trade in which both parties agree on the price, without coercion or fraud. Until the market equilibrium is once again achieved, the poor farmers who cannot directly access "fair trade" brand will suffer for dealing in "unfair" goods, when they're just trying to make a buck, or a rupee, a baht, or whatever it is they make. They're usually not getting "oppressed." Poor living conditions are just a fact of life. They're not necessarily getting treated unfairly, they're just going to be poorer than the people who were lucky enough to jump onto the marketing scheme of "fair trade." The people who make more money under the "fair trade" scheme will only do so temporarily. Fair trade is a charity in which people who market the charity make a pretty penny. I'd rather donate my money to a real charity. It saves overhead cost.

~Sternhauser

[Nihil Obstat]

I understand the reasoning. I made this thread because I'm hoping that some people have access to studies and stats that back it up.

[Sternhauser]

[quote name='Nihil Obstat' date='22 September 2009 - 12:32 AM' timestamp='1253593960' post='1970884']
I understand the reasoning. I made this thread because I'm hoping that some people have access to studies and stats that back it up.
[/quote]

Reliable data by objective parties is difficult to find. Logic and reason are always there, like an old friend. Or a flask of brandy.

~Sternhauser

[Nihil Obstat]

[quote name='Sternhauser' date='21 September 2009 - 11:40 PM' timestamp='1253594447' post='1970893']
Reliable data by objective parties is difficult to find. Logic and reason are always there, like an old friend. Or a flask of brandy.

~Sternhauser
[/quote]
That's true. I want to 'think like an economist' now, considering I'm going to be doing a lot of economics in the next few years.
Economics is very much a science, and it does apply the scientific method. Sometimes thought experiments fall short.

[Sternhauser]

[quote name='Nihil Obstat' date='22 September 2009 - 12:49 AM' timestamp='1253594970' post='1970895']
That's true. I want to 'think like an economist' now, considering I'm going to be doing a lot of economics in the next few years.
Economics is very much a science, and it does apply the scientific method. Sometimes thought experiments fall short.
[/quote]

Nihil Obstat, the current economic mess was created by economic "geniuses" who experience a giddy thrill from poring over charts and graphs of data, and who tried to come up with economic formulas to explain something that can never be explained solely by formulas: free human action. Human nature was created by God, and human nature legislates economic law. Save yourself the nonsense of studying modern economic theory (particularly Keynesianism and all the nonsense monetarist ideas) and get yourself an inexpensive education in economics. Three authors: Ludwig Von Mises, Friedrich Hayek, and Hans-Herman Hoppe. Their rock-solid works should be your curriculum. I suggest starting out with a one of the shorter works. [i]Interventionism: An Economic Analysis[/i], by Von Mises. After a few chapters, you'll really begin to understand why Peter Schiff was able to predict the current mess long before it happened, in spite of the laughter and scorn coming from the the financial big shots.

~Sternhauser

Edited September 22, 2009 by Sternhauser

[Nihil Obstat]

[quote name='Sternhauser' date='21 September 2009 - 11:57 PM' timestamp='1253595474' post='1970902']
Nihil Obstat, the current economic mess was created by economic "geniuses" who received a giddy thrill from poring over charts and graphs of data, and tried to come up with economic formulas to explain something that can never be explained solely by formulas: free human action. Human nature was created by God, and human nature legislates economic law. Save yourself the nonsense of studying modern economic theory (particularly Keynesianism and all the nonsense monetarist ideas) and get yourself an inexpensive education in economics. Three authors: Ludwig Von Mises, Friedrich Hayek, and Hans-Herman Hoppe. Their rock-solid works should be your curriculum. I suggest starting out with a one of the shorter works. "Interventionism: An Economic Analysis," by Von Mises.

~Sternhauser
[/quote]
I disagree. I think the current economic crisis was caused by two things. Number one is pure unadulterated greed. Number two is people who, misguided, want to fix the world according to their political beliefs.
There is indeed a place in society for formal economics.

[Nihil Obstat]

Also I'm surprised you leave out The Wealth Of Nations from your exhaustive and oh so effective curriculum.

[Sternhauser]

[quote name='Nihil Obstat' date='22 September 2009 - 01:00 AM' timestamp='1253595643' post='1970905']
Also I'm surprised you leave out The Wealth Of Nations from your exhaustive and oh so effective curriculum.
[/quote]

Please don't introduce snarkiness into the conversation. It's completely uncalled for. I have treated you respectfully, and I simply ask that you do the same.

There is absolutely a place for formal economics. But the fact must be recognized that interventionism, or remaking the world in their own political image, as you rightly point out, must be thrown in the dustbin of bad ideas. When someone starts seeing market laws as something that can be manipulated, he needs to realize that the economic laws are just like the physical laws. You can suspend the natural forces of gravity for a time, but it will get you in the end. The best thing to do is work with nature, not against it. Many of the Wall Street gurus are, plain and simply, roulette players. The stock market is often nothing more than a "dice" shoot. A real economist needs, as Gerald Celente says, to use current trends to forecast future events. And those current trends are based on human demand. Economics can be a great tool to measure human action, but it should never be used as a means of controlling human action.

Don't get me wrong, Adam Smith was amazing. He must have caught a lot of flak for his work that flew in the face of the politically lucrative protectionism that was so prevalent during that era. That's all right. If you're catching flak, it just means that you're over the target.

The fact is, however, there aren't too many economists who have it even mostly right. Milton Friedman was right on some things. Even Alan Greenspan was correct about a great many things, before he got sucked into the system and found that he could make money if he betrayed his earlier, correct viewpoints. But you don't want to start your studies on the Catholic faith or apologetics by reading Richard Dawkins, Christopher Hitchens, or Martin Luther. You want to start your Catholic studies on solid rocks, such as St. Ignatius of Antioch, St. Thomas Aquinas, G.K. Chesterton, Dietrich Von Hildebrand, and St. Ignatius of Loyola.

Of course greed was among the root causes of the current economic unpleasantness. But desire for material things does not in itself make it possible to acquiring them. That takes systemic, institutionalized corruption. The Federal Reserve's inflation, for example, which has graciously robbed the dollar of 93% of its value since 1913, helped make it possible, as did the many scams run by the banks. The banks, no longer required by a free market to actually maintain anything near enough in reserves to cover its loans thanks to the FDIC and easy-money policies on the part of the Fed, were able to make loans to anyone that was above room temperature and had somewhat of a pulse. Why be fiscally responsible when "the State" foots the bill if you bust? And those economists, studying their graphs, and their charts, and basking in the teaching of Keynes, made the real estate bubble possible, and the coming inflation inevitable.

The market understands what people think they want, and it will supply it. Unfortunately, the people do not often realize the old adage: "ideas have consequences." If the majority of people live frugally, well, and morally, the economy will reflect that, and abundance will be forthcoming. Unfortunately,

~Sternhauser

Edited September 22, 2009 by Sternhauser