Tim Worstall

The Point of Trade

Phil Bloomer, one of Oxfam’s honchos, indeed, the former head of Oxfam’s "Make Trade Fair" campaign:

He’ll see for himself how cheap products dumped on developing economies
lower the prices of locally produced goods, and on his return could
start pushing for pro-poor trade agreements.

He’s suggesting that this is a bad thing.

Lowering the price of locally produced goods is of course the entire point of trade, thus free trade is indeed a pro-poor trade policy.

Unfortunately, neither Bloomer nor Oxfam get this simple and basic point: they’re still tied up in this dreadful idea that trade rules should be built and managed to benefit producers rather than consumers.

Oxfam: campaigning for the local capitalists rather than the poor consumers. Donate your money elsewhere.

In

4 responses

  1. dearieme Avatar
    dearieme

    I’ll never give to Oxfam because, just a few years ago, we were sitting outside a cafe in Oxford and heard a loud conversation amongst Oxfam head office apparatchiks, laughing derisively about the volunteers who man the shops and do much of the charity’s business.

    Reply
  2. Bruce G Charton Avatar
    Bruce G Charton

    A lady asked: ‘Dr. Johnson, why did you define a hock as a horse’s knee?’
    Samuel Johnson: “Ignorance Madam, sheer ignorance.”
    Sheer ignorance is the problem with the Fair Trade mob – they don’t understand trade. Unlike Sam Johnson they are not prepared to admit the fact.
    They are, however, prepared to debate, agitate and pontificate for years about trade issues – but are *not* prepared to sit down for a couple of hours with an Economics 101 textbook and learn a few basic concepts of trade.
    And until they do – no progress will be made in trying to change their minds. But they won’t learn economics because they think it is evil and mind-contaminating – it would be like reading Mein Kampf.
    I know what I’m talking about here – I was that soldier…

    Reply
  3. dsquared Avatar
    dsquared

    [Lowering the price of locally produced goods is of course the entire point of trade, thus free trade is indeed a pro-poor trade policy.]
    only unambiguously true in the case of agricultural goods (and quite controversial there though I regard that case as basically cut and dried). In manufactures, it’s quite possible to get models in which vulnerability to price shocks makes investment more risky and impedes overall development.

    Reply
  4. johnnybonk Avatar
    johnnybonk

    “Sheer ignorance is the problem with the Fair Trade mob – they don’t understand trade” .. yes indeed, but the point is that they DONT WANT to understand it and have no intention of attempting to understand it, that would make them subservient to the truth, and where is the campaigner’s mileage in that?

    Reply

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