signsoflifebooks.com

Coffee producers should be able to make a living wage and conscientious U.S. customers should be willing to pay a few cents more for their daily mocha to assure that. These are the premises behind the concept of fair-trade coffee. Signs of Life has always offered some excellent fair-trade products, and according to a recent Seattle Times article, the trend is rapidly expanding to the mainstream coffee market. That’s a good thing, right?

Well, perhaps not. Cato Institute senior fellow Brink Lindsey says the economics of fair-trade are not that simple. Summarizing his paper Grounds for Complaint: ‘Fair trade’ and the coffee crisis, Lindsey writes: “However well intentioned, interventionist schemes to lift prices above market levels ignore . . . market realities. Accordingly, they are doomed to end in failure—or to offer cures that are worse than the disease. There are constructive measures that can help to ease the plight of struggling coffee farmers, but they consist of efforts to improve the market’s performance—not block it or demonize it.”