Just because I don't support fair trade doesn't mean I hate poor farmers. In fact, by my calculations, it means just the opposite. For me, it is simple economics. I believe that fair trade, while well-intentioned, is eventually counterproductive.
Despite my misgivings, fair trade is an unprecedented phenomenon. With a simple label and the guarantee of fair prices for hardworking farmers, activists have managed to create a multibillion dollar business that helps more than 6 million people. Most astonishingly, these liberal activists - promoters of government regulation and decriers of capitalism - have achieved this completely through free-market economics. As a result, millions of farmers can buy more mules, meals or medicine with their artificially high profits. And now, with fair-trade purchases rising 42 percent over the last year - a number bound to increase with the introduction of Starbucks' "farmer friendly" coffee - fair trade is a real market force to be reckoned with.
Nevertheless, the sky is not the limit. It seems fair trade creates a dangerous tipping point. Many top economists believe that as coffee growing becomes profitable, more of it will be produced, per classic economic law, flooding an already saturated market. In fact, coffee only sells for 50 cents per pound in the normal market. Supply and demand, that evil governess of all economics, can never be chained for long.
Short of a global mandate, fair-trade coffee will never account for 100 percent of the market, and, millions of coffee growers will be left selling an overproduced crop without the safety net of wealthy Western activists. In simpler words: The inability to pay $1.24 (the going fair trade rate) for every pound of coffee sold will doom millions of farmers to sell their coffee for less than the going rate of 50 cents per pound. As a result, the cycle of poverty will worsen. This argument demands attention. Economists - real, live, nonpartisan economists - think fair-trade coffee will have a negative effect on the very people it helps.
There are, of course, different views. Some believe that supply won't increase as dramatically as predicted or that fair-trade coffee will become another layer of differentiation for coffee consumers, as is taste or aroma, never reaching a high enough percentage in the market to make a real impact. These arguments are all logical. The correct answer, like the war in Iraq or the choice between Coke and Pepsi, comes down to personal choice. Help the Colombian farmer now and send his Peruvian counterpart down the coffee grinder of poverty? Will it even happen that way? Unfortunately, like the cola drinker who knows he prefers Pepsi over Coke but picks the generic brand in the blind-taste test, no one really knows what will actually happen.
You see, maybe I am for the little guy, as I said. Sadly, I don't think that fair-trade coffee and bananas are going to lift Third World farmers out of poverty and into the light of day. In fact, it's possible that this amazing free market adventure could do just the opposite. Perhaps conservatives and Republicans aren't as heartless as everyone thought. Maybe we just think that the easy answers are not always the right ones. After all, different opinions don't necessarily mean different results. So, Monday morning, when I stumble down to Starbucks for a cup of fair-trade coffee, I'll be drinking it for the caffeine and not for the Colombian farmers.
Charlie Szold is a freshman in the School of Public Affairs and a conservative columnist for The Eagle.
