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Alan Duncan flunks economics – or does he?

Despite all the empirical evidence on the failure of Fairtrade, along with widespread criticism from august organs like The Economist, Alan Duncan appears to support the scheme in today’s Independent. Responding to a question, he says:

The Fairtrade set-up is a really good system. It stops exploitation, gives producers a start, and makes a serious contribution to the development of poorer countries.

But maybe he is not so supportive. For the question had two parts. He was asked whether it was a good idea and: “Do you buy any?”

He did not respond to the second part of the question.

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10 comments to Alan Duncan flunks economics – or does he?

  • Johnathan Pearce

    Duncan is a smart guy: he used to be an oil trade, so unlike some of the current crop of MPs, has actually worked in the City. My worry about him, though, is that he feels he needs to pander to the fashionable notion that “fair” trade means not allowing countries to export goods at below some “fair” price, produced by “fair” means, whatever that is. In practice, of course, it means that protectionists, who use the “fairness” doctrine, want the likes of Africa etc to impose the same high regulatory controls over their economies as we do, to ensure a “fair and level” playing field. Utter bollocks, obviously.

    If A. Duncan meant something more specific, such as not buying imports from countries operating slave labour or the like, then he should do so.

    About 10 years ago, he co-authored a book with quite strong libertarian themes to it, with a weird name like Saturn’s Monsters. What happened?

  • Lee Kelly

    What happened?

    The same thing that always happens. The politician wins political power, and then decides that he or she wants to increase, or at least retain, that power: it is a career, a living, a path to a comfortable retirement, and perhaps riches along the way. The politician is faced with a dilemma: either to pursue good and unpopular policy and risk losing power and all its personal benefits, or to concede to bad and popular policy, satisfying their political benefactors and increasing or retaining power.

    This is why politicians almost invariably act the same as each other, despite professing radically different ideologies. The wriggle room to implement policies at their own discretion i.e. without impacting their career, is practically nil, especially in a democracy.

    That said, I am sure that many politicians have deluded themselves, thinking that each concession is a necessary stepping stone to that mythic office where they are no longer constrained by petty politics, and the real work can begin… and we all know what these politicians are called, right?

  • guy herbert

    All trade is fair, because all trade is voluntary. Anything else is not trade. It is fraud, tax, or slavery.

  • James

    Jonathan, it was Saturn’s Children.

    What happened was, Alan Duncan was elected as a Conservative MP and took the whip. It can’t be entirely expected of him to say what he pleases every time his personal position might be at odds with his party- that’s just the reality of being elected on a particular platform.

    For a Conservative politician however, I think he pushes the boundaries whenever he can. For example, there’s the unpublished chapter in support of legalisation of drugs that was removed from his book, as it was (at least at the time) thought that it might compromise the Conservatives- it now sits on his parliamentary website. It might seem fairly mundane content for what we are used to, but for the parliamentary website of a Conservative MP (or any MP) to carry an article in support of legalisation is still a step outside of the safety zone.

    For what it’s worth, from what I know of Duncan he seems relatively likeable- more measured in his thoughts and ideas than a lot of the other vacuous bods who sit in Parliament. I think it was Duncan who coined the term ‘Tory Taliban’ several years ago when criticising the authoritarian wing of the party, namely the Cornerstone Group.

  • moonbat nibbler

    I’m happy with my one Fairtrade purchase.

    A long-sleeved, 2-layered, T-Shirt from M&S made with “very limited” 100% Fairtrade cotton. The number of platitudes on the label would make the most ardent self-hating grauniad reader feel good about themselves.

    T-Shirt cost £2 in the sales, reduced from £7. Fair trade indeed.

  • RRS

    Strangely enough, this topic ties in to the recent “Creative Capitalism” muggle.

    Bastiat’s insightful remark about “service for service” as a way to understand the processes of trade and economics is the clue here.

    What services can those in “less developed” places provide to those elsewhere to obtain the benefits in goods and services derived from the services of those located elsewhere?

    Would those in the LD places benefit if the ranges of services they could offer could be expanded or improved?

    Well, or course they are usually found to serve in labour intensive services, picking coffee beans, tea, cotton, and the like – all deemed of value (at least some relative value) to those located elsewhere.
    But, the effect of so-called FairTrade Programs is to “lock-in” the efforts to those existing limiting services by marginally raising the apparent returns, which are soon levelled down again to the original relative valuations.

    My coffee cost more, I want more wages, my boss wants a higher price for what is sold to the picker (plus transfer costs, as well).

    What is really needed is effort to expand or change the services that those in the LD places can offer. It will have to occur incrementally and it will be subject to the usual view of being “exploitative” in its intiative stages. But, exploit has more than one meaning (Nabokov).

  • CountingCats

    Duncan is a smart guy: he used to be an oil trade, so unlike some of the current crop of MPs, has actually worked in the City.

    I have known many people who work in the City, and they have been, in their own area of expertise, some of the most ignorant people I have known.

    It stops exploitation, gives producers a start, and makes a serious contribution to the development of poorer countries.

    To be eligible for Fair Trade a farm must be family run and not employ a single labourer and it must be a member of a cooperative which then deals with the Fair Trade representative.

    Any farmer who seeks to improve the quality of his/her product sees the result simply mixed in with that of all the other members of the co-op. Any farmer who actively seeks to improve or grow the business is actually punished for doing so by losing Fair Trade status.

    Fair Trade acts to ensure people are never more than subsistence farmers. It is dishonest, immoral, and its effects are the opposite of what Alan Duncan is claiming.

  • AD comment man

    (sorry for making this post anonymous to readers, but I don’t want to put my name to what follows).

    Johnathan — Alan Duncan is a smart(ish) fellow, with views I usually sympathize with. However, he has a reputation for being lazy, egotistical and usually spectacularly uninterested in his whatever brief he happens to hold. I doubt he has thought about Fair Trade for longer than was absolutely necessary.

    James — Unfortunately Duncan only seems “relatively likeable” from a distance. He blows hot and cold, veering between charming and petulant, the driving force at all times his immense respect and admiration for Alan Duncan.

  • Eric

    “Fair trade”. Hah!. That and it’s more prominent (in the US, at least) cousin “sweatshop free” are the two biggest yuppie swindles since Starbucks was founded.

    Sure, let’s force buyers to pay people living in mud huts as much as someone doing the same job in Los Angeles. They’ll surely appreciate us trading their crappy job in for… no job at all.

  • Jacob

    To be eligible for Fair Trade a farm must be family run and not employ a single labourer

    Marxist ideology. Hiring a worker means exploiting his labor.
    Even Tory MPs are full of it.