News-Letter

Artificially raising wages means that international companies can afford to employ fewer developing country workers and are more likely to look elsewhere for labor. There will be fewer opportunities for hard-working, impoverished workers just looking to make a decent living.

Not only does fair trade diminish opportunities in developing countries, but it lures workers into pursuing opportunities which are not "the most productive use of their energy," as economist Gene Callahan puts it. How does this happen?

Today, there is an overabundance of coffee growers competing and thus the market price for coffee is extremely low. Jerónimo Bollen, Director of a Fair Trade coffee cooperative in Guatemala, complains of this and said that this is why, "we need fair trade now more than ever."

Actually, this is why we need free trade more than ever. As Callahan says, "By paying more than the market price for coffee - the authentically fair price - fair traders send a signal to people in developing countries to join an already overcrowded field." Fair trade leads to an overabundance of coffee farmers and of coffee which leads to lower prices and wages. Fair trade increases the problem for which it claims to be the solution.

Callahan adds that artificially-set wages, "lure coffee farmers away from pursuing better-paying jobs that would enrich the diversity of a developing country's economy." Fair trade is a policy that "undercuts the very sustainability it wants to promote." Every cup of coffee bought at Pura Vida Café works to prevent developing countries from climbing out of poverty. If you are concerned with the environment, buy shade-grown coffee - a free market variety sold frequently by Starbucks that saves approximately 2.3 square feet of rainforest per cup (according to an article by Arbor Day Foundation in The Daily Green).

In the long-run, protectionism and government involvement in the free market is never in anyone's best interest. Fair trade proponents fail to see this because, as Friedman said, "underlying most arguments against the free market is a lack of belief in freedom itself." People turn to the government out of fear of the "oppression" of corporations and the ups and downs of the markets. In reality, however, people should fear the oppression of the government itself.

The lesson to be drawn is, to quote Friedman one last time, "A society that puts equality before freedom will get neither. A society that puts freedom before equality will get a high degree of both."

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