PeakTrader.com

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PeakTrader said...

When you pay $1 more to help the poor fair traders, you'll pay $1 less for something else to hurt the poor free traders.

If they were all fair traders, we would pay more dollars and consume less. They would produce less, but consume more, e.g. what we produce.

So, fair trade is much like a welfare program.

Fair trade is when someone pays more to consume less, while another produces less to consume more.

The net result is less.

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Sean said...

If every country agrees to a minimum labor standard.

Actually, I think that's the idea: the belief that bargaining power and not oversupply is causing low wages. IF that's true (a big if, I admit), then it's a significantly better attempt to address the problem than welfare checks.

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PeakTrader said...

Sean, a universal minimum labor standard in poor countries would raise prices, reduce employment and output, and rich countries would lose more than poor countries, unless productivity or profit offsets those losses.

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PeakTrader said...

"Output and Profits Per Worker Are at Record Highs; Bad News: That Means a Jobless Recovery Ahead"

If productivity is near the maximum and demand picks-up, firms will have to hire, or new firms will take up the slack.

We may be finally there, although it may be a slow recovery.