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Free & Fair – Part I

"Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’, because law is often but the tyrant’s will, and always so when it violates the rights of the individual." – Thomas Jefferson

"The bosses’ right to live is mine to die." – Rage Against the Machine

"The purpose of freedom is to free others." – Toni Morrison

Here’s a fun experiment anyone can do. Find someone who espouses neoliberalism (they’ll call it "free-market economics"). Ask them why coffee farmers are poor. See if their answer doesn’t contain the phrase "in a free market…" If it does, it raises two issues.

First, neoliberals are much more willing to discuss theory than practice. The theory is so elegant that it simply must work in practice. Honest proponents of the practice, however, eventually turn their backs on it and speak out against it. Examples include David Korten, Joseph Stiglitz, and John Perkins, and I recommend any and all of their books.

Second, the phrase "in a free market" slips the assumption that the market is free into the conversation without discussion. Once they’ve established that logical toehold, all other reasoning follows from it. If the market is free, then all participants engage on terms they have chosen for themselves — so, by definition, all trade is fair, because no one would participate in an unfair exchange.

The theory works — but then, what theory doesn’t? The practice is another story: neoliberalism never reduces poverty, and often increases it. So, where is the disconnect? What, specifically, about neoliberalism is incorrect?

The problem is one of definitions. Neoliberals assert that to be free is to be unhindered by outside forces — primarily the government. Government involvement in a voluntary transaction inevitably disadvantages one side — or both. The less government interferes, the more trade is voluntary, and hence, fair.

Sounds sensible, doesn’t it? The problem is, the question of government interference is largely a red herring. I don’t mean that trade needs more laws. History shows that the fairest forms of trade have emerged from the work of ordinary people, achieving things independent of, and even in spite of, government.

Rather, what I mean is that neoliberals assume that the only power dynamic to be addressed is that between the market and the government. To them, it would be nonsense to speak of a balance of power within the market. If a transaction is voluntary, that means it was the best option for both sides — otherwise, one or both would have made a different choice.

Coffee Grower in Uganda

But, let’s compare. Say a worker living in a nation with 50% unemployment gets a job at a factory belonging to a multinational corporation. The worker earns 100% of her income (which, in many places, is her family’s income) from the company. The percentage of its income the multinational makes from the surplus value of her work is so small it’s hardly measurable.

Or, consider the small coffee grower, living deep in the hills of Nicaragua (or Colombia, or Jamaica, Kenya, Ethiopia, etc.). He and his family are so remote that only one buyer is willing to make the trip out to purchase his harvest for the year. That buyer has dozens of growers, but the grower has only one buyer.

In both cases, for whom is the market free?

The worker and grower are not directly (i.e., at gunpoint) forced to accept the transactions on whatever meager terms they are offered, but the other choice is suffering and possible starvation. This is the freedom neoliberalism offers them, which is, of course, no freedom at all, because they have no power. Power is the ability to exercise freedom, and freedom is the ability to exercise power.

If we value freedom, we must address the power dynamic within the market. We must identify who really holds the power.

You might expect me to say that corporations hold the power. They do not. If they did, fair trade would be one more fad on the conveyor belt of fashion, and corporations would not have to colonize nearly every flat surface for advertising. Clever as some ads are, they only serve to obscure who really holds the power.

You hold the power.

That’s why they work so hard to get your attention. That’s why they use words and pictures that bypass your judgment and appeal to your emotions. That’s why they work so hard at cultivating their brand image.

They can’t take your power from you, because a seller needs buyers. They can, however, make you forget you have it, and make you feel fortunate to be buying from them. This is backwards, of course, because your freedom is not a matter of fortune, it’s an inalienable right.

What’s so liberal
about neoliberalism?

When you look at commerce this way, the picture shifts. You can exercise your power deliberately. You can use your freedom to celebrate and uphold the freedom of others, by buying fair trade.

This is the highest understanding of fair trade. It is not about pity or other charitable sentiments. In fact, it’s not about helping other people at all, because in the final analysis, help is not helpful. The only thing that is helpful is power. Only when the poor have the power to exercise their own freedom will the market be truly free. You can work towards this by seeking out opportunities to join your power with that of the poor as you make your purchases.

Neoliberals assume there is a level playing field for all, dismissing all evidence to the contrary. Fair trade, in contrast, actively works to level the playing field so that freedom for one does not come at the expense of freedom for another. In this way, it beats neoliberalism at its own game.

The only real free trade is fair trade.

Continue on to read Part II.

Further Reading:


  1. Whenever I hear the words “free market”, what I really hear is “deconstructed-and-rerigged market”.

    As well, one may ask oneself whether the current sociopolitical practice of centralizing power is motivated more by fear & distrust than by courage & sobriety.

  2. Steve, you’ve made some good points about free market economy, however, when I read that people hold the power, because they can choose what they buy, I get a bit angry. People are more than just consumers, we are also citizens, which means that we can fully participate in writing law. Choosing fair trade products in a supermarket is OK, but if you wish to reduce poverty in the world then why not change the economic system all together, by changing the law? I hope that’s what you will write about in part 2 ;)

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  4. You do not talk of the government’s role in regulating and authorising product (coffee) distributors and the potential that exists for corruption of “Officials” by powerful interests. Who’s to say that the Ugandan coffee grower isn’t constrained to selling their Coffee through “officially authorised” buyers, with government controlling the level of competition to favour their own interests?

    In which case, the only power people with limited choices imposed by corrupt governments have is the power to rebel. And that is not so much a power as an act of utter desperation. Consider how long the Zimbabwe regime has persisted.

    And theories that do not work are discarded by ones that do – that is the scientific method. History is littered with discarded theories that do not fit the facts and will continue to be so in a free society.

    I am lost as to the point of this wandering article, if there is a point. Neoliberals are nothing but liberals trying to work in a centralised power structure, ie. there is nothing liberal or liberating about them. Socialism, Communism, Fascism all function through a centralised command and control structure, as does modern day Globalism. In the end they all revert to the same basic operational principles that they have in common. That is, centralised control by an elite class, which is invariably a merging of political, industrial & mercantile interests. That is why China (notionally Communist) and the USA (notionally Democratic & Capitalist) can get on so well and dominate the globe in so many industrial sectors. (Although USA capital has now migrated to China leaving the USA broke, but that is another topic).

    “Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men.” – Lord Acton

  5. Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’, because law is often but the tyrant’s will, and always so when it violates the rights of the individual.” – Thomas Jefferson

    Your Thomas Jefferson quotation needs to be emphasised, for it derides the ligitimacy of governments and legislators of all flavours and stripes. There is nothing more tyrannical than zealot that cries “The ends justify the means” as they ride rough-shod over the rights of their fellow human beings, not realising that their unrestrained use of coercive power and complete lack of respect for the individuals that make up society, is their moral undoing.

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