Friday, April 29, 2011

Capitalism Brings Us Together - Fair Trade Edition

I gripped on a live stream of a Fair Trade event. The CEO talked with some of the people who are leaders in Fair Trade Co-Ops on the impact Fair Trade has had on their life.

The morality here is two fold.

First, I'll admit I've always been a little close minded about Fair Trade certification. Knowing that one of the requirements is that farmers have to be part of a cooperative always turned me off. A cooperative always seemed a little Marxist to me.

But here I am, at a Fair Trade event, something I would have never considered before. And there is only one reason. I'm getting paid. In other words, capitalism. Capitalism brought me face to face with people who I may have disagreed with in the abstract but who are good people nonetheless. That's the first point.

Also, I actually learned something by listening to these farmers (who incidentally hail from, right to left, Peru, Costa Rica, and Kenya; blue shirt is Mr.CEO). 
  1. A cooperative is more of a democratic community than a communist utopia. Yes, the profits are shared so that even the laziest farmer gets the same as the hardest working but it's voluntary. I think that is the main point. These farmers have decided that the trade-off makes them better off in the end. 
  2. They genuinely care about the quality of the product and the consumer liking it. This is important. They have teamed up with Fair Trade not for handouts but as a marketing tool. 
  3. Because of it's voluntary nature, Fair Trade certified products are a new form of capitalist driven charity. When you buy these products you are subsidizing these farmers lives over and above the market value of their productivity. This may be even better than traditional charity because the money flows through productive means.
  4. They are genuinely happy with this arrangement.
The second point and the most important point is that the Fair Trade certification organization is a byproduct of genuine capitalism, as all charity is. You can't have charity if everybody is poor. 

I am not entirely convinced about Fair Trade though, for a few reasons. 
  1. Fair Trade products have a price floor which means their price stays above a certain level even when market prices drop. The CEO compared it the having a minimum wage. And we know that the minimum wage is good for those who have it but basically prices workers out of the market causing higher unemployment. Which brings me to...
  2. What are the requirements for being in a co-op? It seems that those within the co-op benefit but what about those left out? Also...
  3. What if you don't want to be part of a co-op? What if you don't want to go to the general assembly every year and fight over who gets how much? Why can't you be an independent land owner who treats your workers "fairly" and still get the certification? Is that fair?
Anyway, had a good time and learned something new. All in the race for the almighty dollar! Thank you, capitalism.


Thursday, April 28, 2011

Traffic Lights, Stop Signs, and My Road to Libertarianism

There is almost nothing more infuriating than sitting at a red light when nobody else is around. One minute, two minutes, three minutes... and their light is still green, except their is no "them." You're alone. You're seething. You think, "There's nobody around, why can't I go?"

And why couldn't I go? I should have been able to go. I'm an intelligent human being with 20/20 (ok 20/25 with contacts in) vision and interested enough in self-preservation that I won't go barreling through I red light when a river of cars is passing by. But when nobody else is around, how is it in the interest of public safety to make me idle there?

Because, presumably, laws are written to protect the public. To ensure that the exercise of my rights doesn't interfere with yours. "Public safety" and all that jazz. But I can't figure out how sitting at a red light at an abandoned crossroads is in the public safety interest.

And yet, if I were to make the reasonable calculation that it was safe for me to proceed through and wouldn't cause harm to myself or others and I do so and I was unlucky enough to have a cop see me I will be issued a $230 fine (in Houston). So instead we sit there like mindless lemmings because somewhere there is a piece of paper with some ink on it that says we have to.

freedomWONK's NEW LAW: "The driver of a motor vehicle may move their automobile through a red light when it is safe and reasonable to do so."

This law is modeled on the speed limit law and would not only create immediate gains in economic efficiency but would recognize the fact that us peons down here have brains.

And don't even get me started on stop signs.

Most stop signs are superfluous and I think 99% of people recognize this because the vast majority of people DO NOT come to a complete stop. They slow down as a matter of ritual, but their wheels keep going. Inherently, we know that these stop signs are unneeded and unwanted but we continue the pretense because of the unnecessary punishment associated with non-compliance.

Here are some better suggestion:
1) Four way yield (this would recognize the current reality that nobody stops)
2) Stops signs on only one direction. Pick the busier street and let traffic keep flowing.

I know it's a lot but this is by no means an exhaustive list.

And then it hit me. I can't be the first one to have these thoughts. Surely, there have been others who have tried to tackle the problem of traffic efficiency.

And indeed there have been. But they've been in the government. Therein lies the rub.

The various governments own and operate the public roads. They are the definition of socialism. And not socialism in the abstract, pejorative sense. Actual socialism. The use of the roadways are governed not by the market system but they are centrally planned. We are not customers to be pleased but subjects to be controlled.

Or if you prefer an explanation less derisive see picture to right.

That is basically government in all it's glory. When political calculation takes precedent over economic considerations. In other words, it's easier to maintain and work within the status quo if you want to get reelected. If they were to suggest such changes they would have to defend them in public against angry Highway "Safety" interest groups. The cost (my job) / benefit (your drive) analysis clearly comes down on the side of the status quo.

The same analysis would be different in a market system. If my pay-per-use roads run traffic smoother I'll have more customers. I will make more profit. And I could ignore the Advocates for Highway and Auto Safety. If my roads aren't safe, nobody will drive on them and I'll go out of road business.

Of course, I'm no expert on private roads. You can learn more from Bruce Benson.

Radley Balko, who blogs at The Agitator, says "Libertarianism happens to people." It happened to Brian Aitken.

It happened to me. I didn't understand why I just couldn't go. So I used the power of the Google search engine and studied free markets, public choice theory, economic calculation, and freedom. I read Friedman, Mises, Hayek, and, yes, Rand. And though my awakening was much more innocuous than Mr.Aitken's it was no less profound.

And now that you know where I'm coming from when I blog, I promise later posts will have the virtue of brevity. Maybe.