Wednesday, June 09, 2004

Profit is Theft
Yesterday's WSJ had an article about grocery stores selling "fair trade" produce, like bananas and coffee beans, where a certain minimum price is guaranteed to the grower. It seems that the wholesale costs for these globally-minded products are generally only slightly above those of normal produce. Yet many grocery stores will mark them up significantly more than they would mark up the normal produce. (One example: bananas for four times the price of regular bananas, sixteen times the price of what the farmers receive.)

I suppose in the scale of evil, exploiting stupid rich Europeans and Americans is less evil than exploiting poor farmers in Costa Rica. But there's a delicious irony in thinking that these folks who think the trade system is inherently evil are unwittingly giving their money to blatant profiteers.

If these folks would think just a little harder they would realize free trade is fair trade--if no one is coerced into the transaction, it's fair. Yes, farming, like every other pursuit, has irreducible risks--sometimes crops are good and prices low; and other times prices are high and crops are bad. The best way for people to be insulated against these risks so that they don't starve in the off years is through rising affluence, which only comes about through freedom. A tight year from poor crop sales is a good sight better than starving from poor crops.

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