Why is FAIR TRADE better than FREE TRADE?

[Lumpenproletariat]

Total competition and Free Trade produces BETTER RESULTS for all than "trade agreements" which pander to the uncompetitive.

I am in favour of bi-lateral fair trade agreements rather than multi-lateral or global.

We really don't need either, for the good of the whole country. But to pay off certain special interests, like steel or auto producers, or certain farmers, etc., the agreements are beneficial to the politicians who arrange the deals, to favor those special interests at the expense of everyone else. But the whole nation does not benefit from those agreements, whether they are bi-lateral or global. (Though there are some environmental issues common to all nations, and also an agreement among nations to reduce tariff barriers benefits everyone.)

But what is in the whole nation's interest is not the "trade agreements," but unilateral reduction of the trade barriers and opening the market to all nations and all industries and all producers, across-the-board, with no "picking winners and losers" or giving preference to any sector, and with no imposing any ideological bias onto other countries as a condition, such as demanding certain "human rights" policies or other internal policies in those countries. No benefit is gained by the U.S. as a result of imposing these ideological values onto them as a condition to doing the trade. It might be good to pressure them to change some of their practices, but nothing is gained by demanding it from them as a condition they must meet in order to sell their products in our market. It's to our benefit to open our market to all of them, without those conditions.

It's also in our interest to impose a very low tariff tax on all imports -- uniform across-the-board across all boundaries/categories -- simple to compute without any cheating, and low enough to allow near total-free-trade competition of the foreign products with domestic production.

But the "trade agreements" are always rigged to favor certain special interests at the expense of everyone else. At best they are a necessary-evil 2nd-best alternative to free trade, or as a compromise way to move in the direction of more free trade and reduce the harmful trade barriers.

With bi-lateral fair trade you can, as others have noted previously, take into account differences across countries, cultures, strengths and weaknesses etc.

Whatever that means, it makes more Americans worse off. You can't give any example how such "fair trade" and taking "into account differences" improves the general living standard or makes the nation better off. The real impact of such "fair trade" bias against foreign trade is to reduce production and increase the price level, increasing the cost of living by reducing competition. Whereas more competition always benefits the nation's economy -- including competition with foreign producers -- increasing the living standard of all. It's only a few uncompetitive producers who benefit from the "fair trade" restrictions, not consumers generally, who are made worse off.

Fair trade should be a give & take with no parties feeling taken advantage of or . . .

With that rule you might as well make ALL trade illegal, even domestic trade, because there are always some crybabies, not doing so well, who think they're being cheated out of their entitlement, with any kind of trade. There are always some uncompetitive crybabies who feel they were "taken advantage of" and are entitled to more and think they're being cheated by the system or by the dirty capitalist pigs, in any economic system.

. . . with no parties feeling taken advantage of or signing under some form of duress.

No, "some form of duress" is not an appropriate standard, because uncompetitive crybabies call it "duress" whenever they are dealing from a position of less power than the other party. But it's not "duress" just because you're dealing with someone who has more wealth or power than you. You are still free to say yes or no to the deal. It's not true that you're being coerced or forced against your will simply because you're in a weak position. We are all "coerced" by nature into a weak position, so that the other party might drive a harder bargain. That is NOT duress.

Everyone competing in the market is trying to take advantage of everyone else's weakness -- rich and poor, strong and weak. That's not what "duress" or "coercion" or "force" means. The only "duress" to be prevented is the kind where one party threatens to retaliate violently to the other as punishment for noncompliance to its terms. This kind of "duress" makes everyone worse off, not just the one directly threatened.

The only restriction, the only rule, the only qualifier is: Does it make consumers overall better off or worse off. If it makes the consumers better off, then it's "FAIR" in the proper sense. All the rest is Crybaby Economics.

 

[Lumpenproletariat]

Employer-bashing is popular, wins applause from idiot masses, but makes the economy, all of us, worse off.

Paying less than a living wage means you feel your right to conduct business is more important than . . .

The term "living wage" is nothing but an emotional outburst which has no meaning in economics or science or philosophy or anything else which might define what it means. Every crackpot nutcase idiot has his/her own definition of "living wage" depending on their particular wacko propaganda crusade.

. . . you feel your right to conduct business is more important than . . .

What's important for them is to serve the customers, which includes keeping down their costs (and prices to customers). They are doing the right thing to keep their labor cost down to the market wage level, which might be less than this or that "living wage" wacko theory. The right wage to pay is whatever is necessary to get someone to do the needed work, whether it's higher or lower than the "living wage" according to this or that nutcase employer-bashing Marxist crusader.

. . . more important than the lives of the workers you employ.

The lives of the workers are not the responsibility of their employer. It's only Crybaby Economics which tries to force employers to babysit their workers. The function of the business is to serve consumers, not provide "jobs! jobs! jobs!" for crybabies, or babysitting slots for excess unemployed riff-raff. The function of the workers also is to serve consumers, and those who are uncompetitive or fail to serve this function cost-effectively should be replaced by other workers who are more efficient, including less costly.

 

[Swammerdami]

I describe my politics as radical centrism. I am very adamant about my opinions, but my opinion is that many issues are not best viewed as black and white. So I didn't vote in the poll. As often, the best path is a Middle Way.

In fact the debate is usually NOT between "Free Trade" and "Fair Trade" — whatever those terms really mean — but between powerful but opposing business lobbies.

Should we reject clothing from East Asia in favor of cheaper clothing from Bangladesh or Africa if we know those manufacturers get their lower prices by enslaving children? That's what Free Trade implies. One big advantage of the Trans-Pacific Partnership Agreement was that the signatories would be forced to move toward better employee rights. (TPP was a good Obama achievement, overturned by a moronic public.)

As another example of "Free Trade" cynicism, consider that in the 1990's countries like Poland were forced to stop subsidizing their film industries. And this was done in the name of diversity — :whack: — as though Polish movie-goers would otherwise be deprived of watching Disney films!

I'm afraid that's the end of my rant on Free vs Fair. There's too much gray to sustain a long one-sided rant. I envy you extremists who can rant forever since everything is black or white.

Why does everyone choose a higher cost of living and thus lower living standard?

The only answer is HATE. It's gut-level, instinctive, hate of employers and desperate job-seekers who are willing to work for less in order to get hired. Or hate directed at those who are more competitive because they would reduce cost, and the FAIR-trade disciple worships only the compensation to workers, with no regard for consumers who have to pay the higher cost....

Oh! Wow!! (My only response to this would be a set of emoticons, but I've not found how to include emoticons easily on this Board.)

 

[DBT]

Cost is relative to income. Those with astronomical wealth and income are not financially disadvantaged by the price of housing, groceries or toilet paper.

 

[Lumpenproletariat]

Which'll it be? low-paying sweatshop job or no job at all?

Why not let the destitute worker decide? rather than the employer-bashing hypocrite?

You assume fair trade eliminates jobs.

Of course it does, when it succeeds at eliminating sweatshops. Doesn't that eliminate those sweatshop jobs? Those jobs are not magically replaced by better jobs -- no, the "deplorable" conditions are eliminated and those workers have no more job.

Or some jobs might still be left after the production cutbacks and factory closures, but not as many. When you close that factory, a new and better factory doesn't just magically pop up in place of the old one you shut down. No, jobs and production are eliminated, or the operation is reduced, so much less is produced, with fewer workers than before. So of course there is elimination of some jobs. That's all "fair trade" can guarantee if it carries out its crusade to eliminate those awful sweatshops.

The operators are pressured into cutting back production, reducing everything because now it all costs more than before, with the higher labor cost and higher safety requirements. Those operators can't just magically pay all those higher wages and magically install all the new safety equipment you're demanding. Even if they do some of it, they also cut back, shut down much of the operation, and manage to carry on at a lower level of production than before. Fewer workers, less production = lower living standard overall than before when they were producing more.

So of course "fair trade" results in job losses. Everyone knows it. No economist denies that it means decrease in production and jobs compared to before when there was less restriction and lower cost. It's much easier to eliminate the "deplorable conditions" you hate than it is to replace those conditions with a whole new factory doing the same production as before but at much higher cost. Who's going to pay all that higher cost imposed by "fair trade"? Where will they get the money to pay for it? You think the cost will all be paid automatically from some new money produced somewhere by waving a magic wand? or like manna falling from heaven?

I think your argument for that is bankrupt, . . .

No, it's your "fair trade" theory that's bankrupt. Answer where the money comes from to rehire all those workers from the sweatshop they had to shut down. Where do those workers go, now that their workplace has been made illegal? How do you think the new higher costs are paid for? Who do you think is going to pay it?

Of course they might salvage some of the operation, and re-open at lower production than before. But how can they possibly do the same amount of production as before with the new higher cost you're imposing onto them? How do you claim they pay for it, now that they have to pay twice as much as before?

. . . skips a huge number of factors and assumes the conclusion you want.

What factors? Are you not demanding that they pay those workers twice as much? Aren't you demanding that they now pay $2.00 per hour rather than only $1.00? Aren't you demanding new safety procedures which will cost much more than before? How are they going to pay for that? They were already investing all they could in the earlier operations which you're now making illegal. So, how can they now pay more than before, even though now their profit is less, after subtracting all the new costs you're imposing onto them?

Yes I assume the conclusion that it will now cost more than before. How can it not cost more? How can it not cost more if the labor cost is doubled? and if the safety measures are increased? if the working hours are reduced and yet the total wages paid are increased? You're saying that doesn't increase their costs and reduce their profit? You're saying they can magically pay all those higher costs? new costs they didn't have before?

You are the one who has to explain how it's done. You have to explain how you can impose all those extra costs onto someone and yet not cause them to reduce their output. How can they continue producing just as much as before even though now it costs them twice as much per unit output?

I’ve heard people try to argue that lavishly rich Barons trickling pennies to the destitute is a grand idea that benefits everyone, especially those slowly starving.

Whatever scenario you have in mind, you cannot explain how "fair trade" makes any improvement in it. You are forcing the rich Baron to lay off some of those destitute so that now they will get nothing, because their sweatshop is shut down or their job eliminated because it's no longer worth it to the rich Baron to pay the cost of it.

You can't give any explanation how "fair trade" makes those destitute any better off. Just spewing out your hate for the rich Barons doesn't put any food in the mouths of those ones slowly starving. So explain how your hate makes them any better off. Because all you offer them is your hate for their former employer and nothing else. Your hate does not give them any food or put a roof over their head.

Their argument for it is the same as yours; shallow and appears to be merely an apology for greed and manifest destiny.

There you go again --- nothing but hate for the greedy employers. That's all you have to offer the destitute -- those "lavishly rich Barons trickling pennies" to them did more for them than your hate and slogans and moralistic self-righteous preaching. Other than hating their employer who paid them some pennies, you have no answer on how to help those destitute survive any better than before when they had a job. Your hypocrisy doesn't make them any better off than before when they were paid a few pennies, and it's only hypocrisy your "fair trade" offers them.

Instead of preaching "fair trade" = hate of those who pay them pennies, why don't you just get out of their way and let them try to survive. Someone paying them pennies is more than your employer-bashing phoniness does for them. Your only answer is for them to commit suicide, or resign themselves to begging, because that's better than to have only a few pennies, and your "fair trade" imposes this onto them without letting them have a choice.

 

[DBT]

"Which will it be? low-paying sweatshop job or no job at all?"

Considering the US is a wealthy nation, you present a narrow two dimensional picture, two despicable options where any number of possibilities exist.

 

[Rhea]

Lumpy, what you fail to calculate is the other jobs that do and can come up when wages are fair.

I live in a small town with a single large employer. When those wages are fair, they enable myriad small businesses to thrive alongside. The fair wages earned by the “company jobs” enable people to eat out, now “creating jobs” for the pizza shop, the sushi bar, the nail salon, the pharmacy.

If the employer does something not fair trade, like forcing all of their employees to use mail-order pharmacies, they shut down locall independent businesses.

Your claim that if there are fewer jobs but they pay better = fewer overall jobs, ignores the reality of the peripheral jobs created by the good paying core jobs.

Another example of this is when municipalities or counties give unfair advantage to some big box store to come in, and it drives out the independent businesses that used to thrive there. Many dozens of stories of this are clearly extant in the USA. Fair trade thrives until free trade moves in, taking the sweatshop labor of foreign countries and disrupting the previously working local economy.


Free trade creates wider income disparity and it is bad for humanity.

 

[Jarhyn]

What will it be, slavery or starvation? Let the destitute worker decide!

When you leverage an imbalance of power, this is where that calculus inevitably drives you to.

Either you can admit that you have a need for (one human), and you need to pay at the bare minimum the upkeep costs for that, or admit that you think humans are "disposable".

At some point we need to recognize that the only difference between wage slavery and chattel slavery is presence of an abstraction of some fraction of material provisions to money, and the "freedom" to decide which abuser abuses you.

In this thread Lumpy has frequently ignored that the asymmetry here is clearly the same asymmetry that underpins other clear ethical violations. Then they call anyone who doesn't do what is clearly unethical foolish.

The only difference is that Lumpy is not currently in a position to be bent over the barrel. They don't think it can happen to them, so apparently it's not wrong. Might makes right is not an ethical philosophy, and just because you can doesn't mean you should.

 

[Emily Lake]

Hmm. I kinda feel like Lumpy has missed the core concept that both Free Trade and Fair Trade agreements are agreements relating to international trade. Free Trade produces lower costs to the consumer... but it also results in a lot of business ventures being moved to foreign countries, especially ones that don't pay reasonable wages to their employees and effectively run sweat shops. This in turn also reduces the availability of jobs in the US. Fair Trade results in higher end costs for consumers, but it counters the tendency to off shore production and helps (but doesn't guarantee) that production and manufacturing jobs are available in the US as well.

At least, that's my understanding of it.

 

[Swammerdami]

Much of the discussion here relates to Income Inequality, an important topic on which progressive economists like Piketty and Stiglitz have writtem extensively. Here are three reasons this issue becomes complicated:

• Markets need to be supplemented by explicit government action, e.g. following ideas like Andrew Yang's.
• A policy like moving factories overseas might increase inequality domestically while reducing it internationally. Does compassion stop at our borders?
• The wages of groups with no bargaining power will tend to fall to the minimum wage necessary for survival.

The third point applies most obviously to exploited colonies and some autocracies. But, given the high cost of living in the U.S., I wonder if unskilled wages in the U.S., at least for single mothers, are barely above subsistence level.

 

[Lumpenproletariat]

COMPETITION = replace the inferior performer with the superior performer = always good = everyone benefits.

Or, replace the MORE COSTLY with the LESS COSTLY = increased production and lower prices = good for all consumers = higher living standard for all = a more prosperous nation.

It's not that workers are uncompetitive, but that . . .

Which workers? Some are more competitive, some are less. The less competitive they are, the less valuable they are and more likely to get laid off, or replaced, or paid less. Isn't that what's supposed to happen to the less competitive? The ones who are replaced by cheap labor are the ones who were overpaid. Their jobs are outsourced because they priced themselves out of the market. If you demand more than you're worth, or more than a competitor will do it for, then why should you not be replaced?

Shouldn't a less competitive business make less money? Shouldn't less competitive mean less profitable, paid less, more likely to fail, more likely to be replaced by one that's more competitive, etc.?

. . . not that workers are uncompetitive, but that business looks for cheap labour.

Both are true. Less competitive workers are replaced by more competitive ones, including ones who will do the same job for less, to save on cost. Why shouldn't the more costly be replaced by something less costly? What's wrong with everyone saving on cost? Why should anyone, worker or business, not be replaced by whatever offers the same product/service at lower cost?

Shouldn't workers be REPLACED BY MACHINES which do the same job at lower cost? Are they not replaced by them? You have a problem with that? Then why also should they not be replaced by more competitive workers who will do the same job at lower cost?

What's the difference between replacing a worker with a machine (which does it cheaper) and replacing that worker with another worker who does the same job for less?

Why is it right to replace that worker with a machine in order to save on cost, but not also right to replace that worker with a different worker (who does it for less) in order to save on cost? All your whining for the poor downtrodden underpaid worker is pablum puke for crybabies until you answer this question.

(Or, do you agree with the Luddites that workers should never have been replaced by machines?)

The name of the game is cut costs and increase profits.

Yes, increase profits and benefit to consumers -- that's why it's right to replace higher-paid workers with lower-paid workers, just as it's right to replace higher-paid workers with machines which do the job for less.

Why say the "game" is to increase profits only, and not also to increase benefit to consumers who pay lower prices? What is the reason to ignore the benefit to consumers and obsess only on the higher profit to the company? The answer is hate. Hate for capitalists who make a profit by benefiting consumers, hating them for doing something good for others but doing it not out of pity or generosity, but out of self-interest which then drives them to do something good.

What is the sickness that makes you hate and resent someone for being successful at producing something good, but who commits the sin of also getting a reward out of it instead of doing it out of pure untainted self-sacrificial love?

The whole point of profit, including cost-saving, is that it's also the consumer who benefits from it, and yet the fanatic employer-bashing Marxist refuses to recognize this social benefit, and instead obsesses on the profit to the capitalist as being the only benefit from the cost savings. What explains this obsession, other than hate toward those of a different class?

If there was no benefit to society other than the higher profit to the greedy capitalist, then there'd be no "wealth of nations" or "invisible hand" or "profit motive" or "free market" or "competition" etc. driving market capitalism to produce prosperity.

This is largely what progress and higher living standard is all about. The production becomes cheaper, and so the lower-cost production replaces the higher-cost production, whether it's machines or workers operating the machines. Replacing the more costly with something less costly is the reason why today we can buy a printer for less than $100 which cost $2,000 30 years ago. Yes, that's the "name of the game," and it's good for companies to play this "game" and make higher profit by bringing us those cost savings and making our lives better.

 

[DrZoidberg]

Fair trade is complete bullshit. It's not fair. It's always unfair. Free trade is always the fair price. The market is clever that way.

If a market is saturated so that workers are making less than a living wage, a lot of them need to work with something else. That's where government intervention can go in and do something useful. But to fuck around with the prices is always a dead end. Paying people for products that is more than the product is worth (set by the free market) means more workers working with something than they should, or are unproductive.

 

[DBT]

Or, replace the MORE COSTLY with the LESS COSTLY = increased production and lower prices = good for all consumers = higher living standard for all = a more prosperous nation.




Which workers? Some are more competitive, some are less. The less competitive they are, the less valuable they are and more likely to get laid off, or replaced, or paid less. Isn't that what's supposed to happen to the less competitive? The ones who are replaced by cheap labor are the ones who were overpaid. Their jobs are outsourced because they priced themselves out of the market. If you demand more than you're worth, or more than a competitor will do it for, then why should you not be replaced?

Shouldn't a less competitive business make less money? Shouldn't less competitive mean less profitable, paid less, more likely to fail, more likely to be replaced by one that's more competitive, etc.?



Both are true. Less competitive workers are replaced by more competitive ones, including ones who will do the same job for less, to save on cost. Why shouldn't the more costly be replaced by something less costly? What's wrong with everyone saving on cost? Why should anyone, worker or business, not be replaced by whatever offers the same product/service at lower cost?

Shouldn't workers be REPLACED BY MACHINES which do the same job at lower cost? Are they not replaced by them? You have a problem with that? Then why also should they not be replaced by more competitive workers who will do the same job at lower cost?

What's the difference between replacing a worker with a machine (which does it cheaper) and replacing that worker with another worker who does the same job for less?

Why is it right to replace that worker with a machine in order to save on cost, but not also right to replace that worker with a different worker (who does it for less) in order to save on cost? All your whining for the poor downtrodden underpaid worker is pablum puke for crybabies until you answer this question.

(Or, do you agree with the Luddites that workers should never have been replaced by machines?)

The name of the game is cut costs and increase profits.

Yes, increase profits and benefit to consumers -- that's why it's right to replace higher-paid workers with lower-paid workers, just as it's right to replace higher-paid workers with machines which do the job for less.

Why say the "game" is to increase profits only, and not also to increase benefit to consumers who pay lower prices? What is the reason to ignore the benefit to consumers and obsess only on the higher profit to the company? The answer is hate. Hate for capitalists who make a profit by benefiting consumers, hating them for doing something good for others but doing it not out of pity or generosity, but out of self-interest which then drives them to do something good.

What is the sickness that makes you hate and resent someone for being successful at producing something good, but who commits the sin of also getting a reward out of it instead of doing it out of pure untainted self-sacrificial love?

The whole point of profit, including cost-saving, is that it's also the consumer who benefits from it, and yet the fanatic employer-bashing Marxist refuses to recognize this social benefit, and instead obsesses on the profit to the capitalist as being the only benefit from the cost savings. What explains this obsession, other than hate toward those of a different class?

If there was no benefit to society other than the higher profit to the greedy capitalist, then there'd be no "wealth of nations" or "invisible hand" or "profit motive" or "free market" or "competition" etc. driving market capitalism to produce prosperity.

This is largely what progress and higher living standard is all about. The production becomes cheaper, and so the lower-cost production replaces the higher-cost production, whether it's machines or workers operating the machines. Replacing the more costly with something less costly is the reason why today we can buy a printer for less than $100 which cost $2,000 30 years ago. Yes, that's the "name of the game," and it's good for companies to play this "game" and make higher profit by bringing us those cost savings and making our lives better.

Having a significant percentage of poorly paid workers does not benefit society or the economy.

Well paid workers have spending power, they buy the goods goods and pay for services with money they would not otherwise have.

What you overlook is a balance between production cost and price.

It's not always about maximizing profit for those at the top of the heap.

You overlook the gross imbalance in wealth between those at the top and everyone else.

 

[Swammerdami]

Fair trade is complete bullshit. It's not fair. It's always unfair. Free trade is always the fair price. The market is clever that way.

The higher price may depend on the exporting country's policies. It might include costs to avoid pollution, while the cheaper manufacturer poisons nearby ground-water. The higher price might include a carbon tax to mitigate global warming. The higher price might support an employee wage large enough that the worker needn't hire out his children as slave laborers.

"Free trade is always the fair price." Can you cite any economist who believes this trite mantra? "Markets usually help set appropriate prices." Sure. But please let us not fall into the black-and-white thinking that has reduced American discourse to a laughing-stock.

If a market is saturated so that workers are making less than a living wage, a lot of them need to work with something else.

And if there's a shortage of bread, let them eat cake.

 

[ZiprHead]

You want guillotines cuz that's how you get guillotines.

 

[Lumpenproletariat]

"Free trade" = the market price is best. / "Fair trade" = the market price is too low.

The free market (supply-and-demand) is innocent until proven guilty.

The burden of proof is on those who demand a higher price than the market price (for labor or anything else).

The claim that free trade makes everyone better off in the long run is purely an article of faith and nothing else. There are no theoretical reasons to believe that every single person is better off . . .

Does freedom and justice and happiness make everyone better off? "There are no theoretical reasons to believe it."

"Free trade" means you have the right to choose what color of shirt to wear, or whether to buy that shirt, where to buy it, what it's worth, etc. No one has proved that everyone is better off having that free choice. It's easy to spew out mindless platitudes that something can't be proved.

Those who want to curtail your freedom have the burden of proof on them to show that your freedom needs to be curtailed. Until someone explains why buyers and sellers have to be restrained and denied freedom to make choices, the default position has to be that freedom is better, whatever kind of freedom it is.

. . . reasons to believe that every single person is better off nor is there empirical research to support the claim.

There's no "empirical research" proving that good health makes every single person better off. There might be someone somewhere who needs to be unhealthy in order to be better off.

"Free trade" just means free choice, or "live and let live" rather than having the choices dictated to you. If you don't understand the value of "live and let live," then probably no "empirical research" could ever convince you.

BTW, there is nothing inconsistent with fair trade also being free trade.

They are inconsistent in the example of China shipping cheap steel to the U.S.

FAIR trade = extra tax has to be added to make the Chinese steel just as expensive as the U.S. steel.

FREE trade = let the cheap steel be sold at the lower price with no penalty.

These are inconsistent, and of the two, free trade is better for the country. Making the steel artificially more expensive does no benefit to the country, but only benefits a tiny minority of steel producers/workers, while forcing 300 million Americans to pay the higher price for steel.

Fair trade can exist as free trade with standards.

"standards"? This is a very subjective term which every special interest uses in its own way to impose its conditions onto buyers and sellers to increase its profit and punish their competitors, or even promote their ideological crusade. It's easy to use pseudo-patriotism and xenophobia to rail against foreign competition and foreign-made products obviously tainted or substandard or inferior because they're not "made in America" by red-blooded Americans.

That word "standards" is used by every special interest to promote its own crusade against some kind of enemy -- economic, political, ideological -- there are many kinds of crusaders, demanding "standards" in order to manipulate consumers and businesses in one way or another (dictating to them what they can buy or what price they must pay), to promote their own personal profit, or their prejudice or their dogmatic vision of what's good for people.

Some of the "fair trade" preaching is just hate for capitalism, and trade-bashing is just one more way to strike at the greedy bourgeoisie, especially employers who don't pay high-enough wages. Most "fair trade" is employer-bashing in one form or another, and "standards" is part of the rhetoric of moralistic preaching against this hated class, and this hate rhetoric is popular because wage-earners are a large majority of the population while the small employer-class is easy to scapegoat.

All trade has standards. For example, when there is free trade in lumber, buyers can insist that the lumber is not warped or comes from dead trees. The idea that fair trade is opposed to free trade is simply nonsense.

This seems to reflect an ignorance of what "fair trade" means. If you google "fair trade" it's always about requiring buyers to pay higher prices, mainly for labor, rather than paying the market price based only on supply-and-demand. The two are clearly contradictory:


FAIR TRADE vs. FREE TRADE:

FREE TRADE: Buyers and sellers individually make their own choice what price to pay or to charge for something, and the prices and wages are all determined by market supply-and-demand. And competition, sometimes driving down price, is good for consumers and so is best for all society, regardless of the hardship to those who are less competitive.

FAIR TRADE: Buyers are required to pay higher-than-market prices, especially for labor, because the market price is not "fair" or is too low to provide a decent lifestyle for the sellers (especially wage-earners). And competition tends to be unfair to sellers/wage-earners, because it drives down their price so their income is not enough to support a decent lifestyle.

Virtually all definitions of "fair trade" fit this dichotomy of "free trade" vs. "fair trade" -- it's always about forcing buyers to pay higher price in one way or another. Some of this takes the form of protectionism or state mandated higher wages -- such as Donald Trump or Bernie Sanders protectionism -- but it's also done by preaching guilt to buyers and guilt-tripping them into paying higher prices or buying only from sellers who pledge to pay higher wages.

"Fair trade" has nothing to do with ensuring the quality of a lumber product -- get serious! It might apply to a case of guilt-ridden consumers requiring certification that the lumber was produced by "fair" labor standards (higher wages, working conditions, more costly worksite). But "fair trade" is never only about the consumers demanding a higher-quality product. Consumer satisfaction is just a fact of the marketplace in all transactions, where buyers make their choice whether to pay a higher price for higher quality. It's always "fair" for both the buyer and seller to make their individual free choice.

But "fair trade" is an ideology which condemns some of the choices by buyers who are guilty for paying prices which are too low. In some cases it's not about unfair labor practices, but about environmental standards, to change production to make it more environmentally sustainable. This is obviously not what Trump's "fair trade" is about. So the current "fair trade" rhetoric is about pandering to wage-earners, not about protecting the environment from being destroyed.

Protection of consumers against fraud is not what "fair trade" means. It's always about forcing consumers to pay higher price in some form, usually relating to the unfair treatment of wage-earners used in the production. It's never about the self-interest of individual consumers, protecting their interest as buyers, but only about forcing them to pay higher prices.


"fair trade" = Consumers must pay higher prices

You can't find an example of a "fair trade" issue which is not about forcing buyers to pay higher prices, usually about forcing employers to pay higher wages, out of sympathy for the wage-earner class who are seen as being exploited and abused by the employer class. But it's also about poor farmers or other private operators seen as exploited or abused by powerful interests who should pay higher prices. So the basic economic principle of "fair trade" in one form or another is to condemn buyers who should be paying higher prices, because the free market alone, supply-and-demand, is not fair to some of the sellers.

In some cases it's also about environmental issues, which might be more legitimate as a case for higher prices.

Look up examples of "fair trade" and you'll see that they all fit into this description -- buyers not paying high-enough (fair) prices.

Two examples of Donald Trump's "fair trade" are his higher tariffs on Chinese steel (to punish China for its substandard wage level to workers, or for unfair low price they charge for the product), and his new North American trade deal which requires higher wages to be paid to Mexican autoworkers. It's almost always about wage-earners being underpaid, which is usually the meaning of "unfair" as opposed to "fair" trade. Or it's also about "unfair" competition in the form of a low price, below the cost of production, but that low price is usually due to low labor cost which allows a lower price to buyers.

But it's not about protecting consumers against anything unfair, except possibly the unfairness of not educating them about the poor downtrodden workers who produced the product they buy at a low price. On this point, "free trade" is the belief that buyers are not obligated to feel guilty about some downtrodden workers in Bangladesh -- but rather, other countries must take responsibility for their economic practices, and it's not the consumer's obligation to pass judgment on other countries and make sacrifices based on some ideology or dogma about what the law should be in those countries. Most of those dogmas don't really make anyone better off in those countries, but only make them worse off.

 

[ZiprHead]

The term "living wage" is nothing but an emotional outburst which has no meaning in economics or science or philosophy or anything else which might define what it means. Every crackpot nutcase idiot has his/her own definition of "living wage" depending on their particular wacko propaganda crusade.



What's important for them is to serve the customers, which includes keeping down their costs (and prices to customers). They are doing the right thing to keep their labor cost down to the market wage level, which might be less than this or that "living wage" wacko theory. The right wage to pay is whatever is necessary to get someone to do the needed work, whether it's higher or lower than the "living wage" according to this or that nutcase employer-bashing Marxist crusader.

. . . more important than the lives of the workers you employ.

The lives of the workers are not the responsibility of their employer. It's only Crybaby Economics which tries to force employers to babysit their workers. The function of the business is to serve consumers, not provide "jobs! jobs! jobs!" for crybabies, or babysitting slots for excess unemployed riff-raff. The function of the workers also is to serve consumers, and those who are uncompetitive or fail to serve this function cost-effectively should be replaced by other workers who are more efficient, including less costly.

You have yet to show any acknowledgement that workers and consumers are the same people.

What Is a Living Wage?
A living wage refers to a theoretical income level that allows an individual or family to afford adequate shelter, food, and the other basic necessities. The goal of a living wage is to allow employees to earn enough income for a satisfactory standard of living and to prevent them from falling into poverty. Economists suggest that a living wage should be substantial enough to ensure that no more than 30% of it gets spent on housing.

https://www.investopedia.com/terms/l/living_wage.asp

 

[Lumpenproletariat]

As it stands, most of the worlds wealth is flowing into the hands of a small percentage of the world's population.

Two corrections to this would be:

Impose a tax on Wall St., i.e., tax on stock transactions.

Increase property taxes on the largest holdings. Or make property taxes progressive, so that most residential homes would not be taxed more, but those in the very high brackets would be taxed at higher rates.

That's the reality. It is an unsustainable reality.

Just whining about the wealth gap does no good unless you offer a real solution to it. The solution is not to prop up the wage levels of uncompetitive workers to have them be paid more than they are worth.

Paying anyone more than their real value doesn't solve anything or make it better. We're better off to let the free market set all the prices and wages, without artificially paying someone higher than their worth out of pity for them. Pitying the less competitive and pandering to them makes nothing better. All it does is increase the prices all consumers have to pay, including the poor.

Increasing the income tax rate on the highest brackets would be OK. But income tax is hugely expensive to enforce, as opposed to property tax.

 

[DBT]

As it stands, most of the worlds wealth is flowing into the hands of a small percentage of the world's population.

Two corrections to this would be:

Impose a tax on Wall St., i.e., tax on stock transactions.

Increase property taxes on the largest holdings. Or make property taxes progressive, so that most residential homes would not be taxed more, but those in the very high brackets would be taxed at higher rates.

That's the reality. It is an unsustainable reality.

Just whining about the wealth gap does no good unless you offer a real solution to it. The solution is not to prop up the wage levels of uncompetitive workers to have them be paid more than they are worth.

Paying anyone more than their real value doesn't solve anything or make it better. We're better off to let the free market set all the prices and wages, without artificially paying someone higher than their worth out of pity for them. Pitying the less competitive and pandering to them makes nothing better. All it does is increase the prices all consumers have to pay, including the poor.

Increasing the income tax rate on the highest brackets would be OK. But income tax is hugely expensive to enforce, as opposed to property tax.

Why do you say it's 'whining' whenever problems are being identified and described? Is it because you don't happen agree, and this is your way of dismissing whatever you disagree with?

 

[DrZoidberg]

Fair trade is complete bullshit. It's not fair. It's always unfair. Free trade is always the fair price. The market is clever that way.

The higher price may depend on the exporting country's policies. It might include costs to avoid pollution, while the cheaper manufacturer poisons nearby ground-water. The higher price might include a carbon tax to mitigate global warming. The higher price might support an employee wage large enough that the worker needn't hire out his children as slave laborers.

Sure. But how is "fair trade" doing anything to help that? I'm not using fair as the colloquial word. I'm using it in this context. Which is what the thread is about.

https://www.fairtrade.net/

If anything fairtrade makes environmental destruction worse by giving unfair advantage to some players, while the non-subsidised (by Fair Trade) have to exploit the environment more to make up for the loss.

Fair Trade is an idiotic slogan. It's the western middle class buying a good conscience with zero thought behind it. Only making more damage. NGO's are also prime targets for local maffia. Who can wrap these guys around their finger. Often in collusion with local governments. The only NGO's that seems to know what they are doing is the Red Cross and the ones about female reproductive health. The rest (I may have missed some) are a disaster. Fair Trade included.

"Free trade is always the fair price." Can you cite any economist who believes this trite mantra? "Markets usually help set appropriate prices." Sure. But please let us not fall into the black-and-white thinking that has reduced American discourse to a laughing-stock.

A fair price is a price for a product that reflects it's market value. The market sets that yes. Sometimes the market form cartells. In that case that is the problem. But then we should bust the cartells. Not manipulate the price.

If a market is saturated so that workers are making less than a living wage, a lot of them need to work with something else.

And if there's a shortage of bread, let them eat cake.

I'm aware it's not as easy as that. But the solution isn't to keep a dysfunctional industry going. As long as there are subsidies for a bad industry it'll keep going in perpetuity, until those subsidies are removed. Fair Trade only acts to prolong pain and suffering. Letting the market handle it at least makes the pain shorter, albeit traumatic while it lasts.