Natalie Solent

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Tuesday, April 19, 2005
 
Short Primers on Free Trade versus Fair Trade.

Tim Worstall has written an article for the Globalisation Institute called "Trade is what humans do." He also writes that if I can point him in the direction of a specific Christian Aid advert he'll have a go at refuting it, and adds "No charge :-)" That would be cool, if you can find a moment. I'll fish out that copy of the Guardian and post it in the next few days.

He also points out this interesting blog by a development professional who is not a complete free trader, "Owen's Musings." Owen talks about Christian Aid's advert here.

Prompted by the same impulse my regular correspondent A.R.C. has composed some arguments addressed to Christians:

'Make Poverty History' is Christian Aid's stated goal. Christians who want to make poverty history must be prepared to learn from the history of poverty; what causes it and what cures it. Christians know that greed is a sin, and that sacrificing it to the needs of the poor is a duty. However we also know that the ultimate sin is not greed but pride. We must be prepared to sacrifice our pride to the needs of the poor, not just our comfort. Sacrificing pride in this case means sacrificing prejudices.

Addressing that demand to Christian Aid's leaders might surprise them; are they not often denouncing prejudice? Alas, that may be just the trouble; those who make a habit of denouncing others' prejudice may be least able to see their own as the problem. There is a humble way of helping the third world: try out ideas and honestly observe which work and which fail. There is an arrogant way: decide that your idea must be right and don't waste time reviewing it; if the recipients are absurd enought to become still poorer, blame something else and serve up more of the same. And there is a selfish way: discuss the plight of the poor in the third world with one eye on the domestic political debate, half-consciously keeping that eye averted from any symptoms of poverty that do not serve your side of the argument. The leaders of Christian Aid claim the moral high ground but do not appear to be guarding against these moral dangers.

Since the end of colonialism, we have acquired decades of evidence of what works and what fails in the third world. Sometimes the evidence approaches as near to experimental proof as can be hoped for in the complex real world. Consider the famous bet between Nkrumah, ruler of Ghana, and Felix Houphouet-Boigny, ruler of the Ivory Coast as to whose policies would promote growth. Nkrumak was an enemy of globalisation, Houphouet-Boigny its friend. Ghana began well in the lead at independence, and ended well behind two decades later, a natural result of its experiencing steady year-on-year shrinkage of GNP while the Ivory Coast experienced steady growth. What does Christian Aid say to the many examples like this? As in any real world case, of course, one can always find other factors at work, but does it not trouble them that one cannot so easily find counter-examples?

The evidence alone should suffice: the history of the post-colonial third world tells a clear enough story of countries where poverty has lessened and countries where it has grown, and of their governments' policies. It may help some to see that free trade is also not merely theologically defensible, it is more theologically attractive. 'Fair traders' seem to believe that trade and wealth creation is a zero-sum game, where what one gains is taken from another, so that only power can ensure that the poor get their share. But Christians have no business believing that creating prosperity is naturally a zero-sum game, as if God had chosen to create a world where human transactions were naturally a matter of dog-eat-dog. Likewise, while we all often fail to return good for evil in everyday life, we surely believe God did not create a world in which refusing to copy wrongdoing was naturally an unwise choice. Thus we should have no problem with Adam Smith's argument that if others practice unfree trade, it is still not economically advantageous to practice it ourselves.

In short, there is no Christian reason to hesitate over evidence for the benefits of free trade, and nothing suprising in the fact that free trade was the universal creed of British politics when Christian belief was also more universally professed here than today. Thus the obligation is very much on Christian Aid to expose (by explanation, not mere assertion) the injustices that require a countervailing 'fair-trade' power to be exerted by governments. They should also explain why we should not expect this power to become merely another injustice in a world that already has plenty.

Perhaps Christian Aid could do so by pointing to the E.U.'s tariff barriers. Blocking agricultural imports from the third world, and dumping the resultant surpluses on them from time to time at subsidised prices, is certainly a direct exercise of first-world power. An African country, denied agricultural trade, can hardly switch to selling us high-tech goods. Subsidies that our taxpayers only grumble about may be devastating to its much smaller economy. I have often heard the aid parable, "Give a man a fish and you feed him for a day. Teach him to fish and you feed him for life." I would add, "Give him a market for fish and you don't just feed him for life; you give him the chance of a life he chooses." The E.U. denies him that market.

Here above all, Christian Aid's strangely counter-intuitive reasoning defeats its purpose. Every eurocrat can put hand on heart and say, "But I was never guilty of free trade." What chance has a movement against free trade of defeating this powerful vested interest? What chance has it even of avoiding helping it continue?

As for the slogans of Christian Aid's campaign, what strikes me chiefly about them is that they are not very charitable. 'They used to call it slavery, now they call it free trade', says one. Another compares free trade to a tsunami. Such words show little awareness that those who trade freely with the third world might honestly think they do people there good rather than harm by letting them buy and sell without tariffs. A Christian charity should practice the virtue it preaches, in word as well as deed.

Do they believe that free traders cannot honestly think this? I find Christian Aid's stance so strange that I have a hard time accepting that they came by it entirely honestly, entirely uninfluenced by more domestic political prejudices. Just how proper is this suspicion and just how forcefully should I, as a Christian, present it? Should I imitate the style of Christain Aid or should I restrain myself? Of course, as with believing in free trade even in a world of tariffs, I can believe that more courteous argument will also prove more effective argument.

ARC's piece is aimed at a different audience from what I had in mind. That's no criticism and no problem - this isn't a zero sum game, either! The first line is eminently quotable.

posted by Natalie at 4:17 PM

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