Free market impact on third-world countries

[KerriAnn]

Hello all!
I am looking to get some feedback on an issue: How would a free market here in our country impact third world countries?
A specific example would be if we had a truly free market here in the United States, how would this affect the price of cocoa beans in West Africa?
Right now, West African farmers are being paid very low prices for their cocoa beans by the chocolate companies here in the US. One of the results of these low prices is child slavery on the cocoa farms. There are several factors that contribute to this problem. Some think that the demand for low prices by US consumers is a big factor, others think the problem lies mostly with the chocolate corporations greed. I tend to think both are a problem, but the solution is not anywhere in sight due to our current system. Legislation that attempts to promote "slavery free" goods is well intended, but ultimately has no real impact because of lobbying on behalf of chocolate corporations and lack of US consumer education on issues like these.
So, how would a free market in the US ultimately affect trade between the US and thrid world countries?

 

[Zippyjuan]

A truely free market means that corporations are free to exploit people and resources as much as they wish to. Here or abroad.

 

[ClydeCoulter]

A truely free market means that corporations are free to exploit people and resources as much as they wish to. Here or abroad.

This lady, KerriAnn, is looking for a deeper discussion than just some statement of opinion. I know, she's my daughter and we just got off the phone a bit ago about it. I asked her to post it here for a healthy discussion.

She's looking for possible solutions to problems such as she described. She's working on a paper for college. She will have to back up her opinions on solutions with some facts or at least good theories.

 

[Zippyjuan]

My apologies if I appeared to be glib in my responce. A truely free market has no regulations or restrictions. Capital (money and equipment) and labor are free to move to wherever they can get the biggest bang for their buck. If that means that instead of producing cocoa in Hawaii and paying people there eight dollars an hour vs going to Ghana and paying them eight dollars a day- it will move to there. One catch for a free market to operate properly is that consumers and producers need complete information so that they can make the best decisions- but information is a limited resource. There are no rules for the producers to say where they are getting products from or what they are paying the workers so the consumers can't say for certain if they want to buy from Ghana or not. We have to rely on others to get that info for us- whether that is news reporters or with the internet, trying to contact people there and find out- but that burden is on us as consumers.

How can you deal with it if you don't like people in Ghana getting paid $8 a day? Unfortunately, that means changing the market. Setting requirements for either simply reporting information from the company or even restricting what they can do- adding a tarrif to goods they produce or requiring some sort of minimum wage. Unfortunately because now you no longer have a truely free market.

Non- coercive steps you can try to take would be things like a public information program- getting information out to consumers yourself about what is going on and encouraging people to vote against it with their money by buying from someplace else. Now we still have a free market- actually a freeer one since the producers are still free to do what they want and the consumers are now armed with better knowledge of what is really going on to base their own free decisions on what to buy or not to buy. It may or may not also get the company to try to change their behavior as well. Try looking up Fair Trade Cocoa.

I hope that this will maybe give a little bit of a place to start with.

 

[ClydeCoulter]

One of the things we discussed on the phone about this was that sometimes there are larger problems to be solved before more detailed ones can, or sometimes it is a combination of problems.

Having really free news from various sources for public awareness is invaluable. The Kony2012 thing was like a counter-measure to useful sources that may come about in the future about real problems and ways to help.

We also discussed the impact on other countries by being a good example. Get our house in order and a real beacon of light.

 

[KerriAnn]

So basically, a free market would mean that chocolate companies would continue to seek the cheapest beans. That is a fair assumption.
You say that consumer education would be a step to take so that consumers can use their buying power to convince corporations to buy their cocoa from farms that do not use slavery. i.e. consumers are informed which companies buy cocoa from farmers that use slaves, so they choose to buy it from companies that do not use slaves.
Where would the funds come from for this consumer education?
The information given to consumers about these things would likely contradict the information being fed to them by the affected corporations. Current consumer education consists mostly of commercials, unfortunately.
btw, I am not arguing with you, just trying to prompt further replies

 

[Kluge]

So basically, a free market would mean that chocolate companies would continue to seek the cheapest beans. That is a fair assumption.
You say that consumer education would be a step to take so that consumers can use their buying power to convince corporations to buy their cocoa from farms that do not use slavery. i.e. consumers are informed which companies buy cocoa from farmers that use slaves, so they choose to buy it from companies that do not use slaves.
Where would the funds come from for this consumer education?
The information given to consumers about these things would likely contradict the information being fed to them by the affected corporations. Current consumer education consists mostly of commercials, unfortunately.
btw, I am not arguing with you, just trying to prompt further replies

If you're motivated to help people who are essentially forced into slavery, why do you need funds to educate consumers? There are many, many free ways to educate these days.

If you involve the government in a solution to this problem, it will almost inevitably become corrupt--there is always someone skimming off the top or creating a bureaucracy to enrich themselves or others who they are endebted to--and once you do that, it's almost impossible to end it.

Always, always look at the possible effects of ending this "slavery." Will the people who only make $8/day be forced into prostitution? Have you done the research on the populations who do the work, along with the corporations who buy from them? Would you be happier if the population that works for low pay have no option other than drug dealing or prostitution? Personally, I'd take low pay, because drug dealing and prostitution are almost always an option--so why do these people choose "slavery" over that? It must be a better option, right?

 

[KerriAnn]

If you're motivated to help people who are essentially forced into slavery, why do you need funds to educate consumers? There are many, many free ways to educate these days.

If you involve the government in a solution to this problem, it will almost inevitably become corrupt--there is always someone skimming off the top or creating a bureaucracy to enrich themselves or others who they are endebted to--and once you do that, it's almost impossible to end it.

Always, always look at the possible effects of ending this "slavery." Will the people who only make $8/day be forced into prostitution? Have you done the research on the populations who do the work, along with the corporations who buy from them? Would you be happier if the population that works for low pay have no option other than drug dealing or prostitution? Personally, I'd take low pay, because drug dealing and prostitution are almost always an option--so why do these people choose "slavery" over that? It must be a better option, right?

I agree with you completely. Slavery must be a better option for these people or they would not choose it.
However, it turns out that most of the children who are choosing slavery are under the false impression that they might just get lucky and actually get paid by the farmers to work on the farms. So they take their chances because they are so desperate. They are actually indentured slaves, meaning that the farmers pay a middle-man for the child, then the child must first work off the amount the farmer paid for them before the child is paid. In the end, the child is rarely paid anything because the farmer is being forced to accept such a low price for the beans, so they end up with no money left over to pay the children workers.
Some of these children have heard stories (probably untrue) of other children who left home to work on a cocoa farm and came back home a few years later with a shiny new bicycle. These stories spread throughout the cities surrounding Cote d'Ivoire and fill the children with false hope.
So their choice is ill-informed. They are desperate and starving, and strike out at the age of 10 or 11 to make money for their starving families.

Concerning consumer education, you say their are many free ways to educate consumers, and there are. However, don't you think that the corporations would drown out anyone trying to inform consumers about their options and their buying power? The corporations have lots of money to throw around.

I'm still trying to develop a thesis. I would like to argue that a free market plus effective consumer education would help countries like Africa and other third world countries who have valuable resources.

 

[Simple]

Prices would have been way up if it weren't for the UN backed French helicopter attack that came while we were bombing Libya. The world's chocolate production was in jeopardy to the UN sent in attack helicopters.

If we would not have looked the other way and ignored the use of force, then the free markets would have made the price of cocoa to skyrocket.

 

[majinkoola]

A free market in African countries would help those countries.

When you look on a list of the freest economies in the world, do you see an African country? I generally do not. That, combined with a pretty good certainty of no warring turmoil, would attract investors. Which would increase capital going into the country. Which is the real driver of economic growth, accumulation of capital.

Singapore and Hong Kong are clear examples of this working.

Now, what would likely happen, if this happened in one of the countries producing chocolate, is that other countries would be able to produce the product more cheaply. Which is why we need to show the world that a true free market is easily the most successful system, so that each country would try to emulate it.

 

[Dsylexic]

I agree with you completely. Slavery must be a better option for these people or they would not choose it.
However, it turns out that most of the children who are choosing slavery are under the false impression that they might just get lucky and actually get paid by the farmers to work on the farms. So they take their chances because they are so desperate. They are actually indentured slaves, meaning that the farmers pay a middle-man for the child, then the child must first work off the amount the farmer paid for them before the child is paid. In the end, the child is rarely paid anything because the farmer is being forced to accept such a low price for the beans, so they end up with no money left over to pay the children workers.
Some of these children have heard stories (probably untrue) of other children who left home to work on a cocoa farm and came back home a few years later with a shiny new bicycle. These stories spread throughout the cities surrounding Cote d'Ivoire and fill the children with false hope.
So their choice is ill-informed. They are desperate and starving, and strike out at the age of 10 or 11 to make money for their starving families.

Concerning consumer education, you say their are many free ways to educate consumers, and there are. However, don't you think that the corporations would drown out anyone trying to inform consumers about their options and their buying power? The corporations have lots of money to throw around.

I'm still trying to develop a thesis. I would like to argue that a free market plus effective consumer education would help countries like Africa and other third world countries who have valuable resources.

who do you propose to be charge of this consumer education ? the govt? dont make me laugh.

 

[Dsylexic]

I agree with you completely. Slavery must be a better option for these people or they would not choose it.
However, it turns out that most of the children who are choosing slavery are under the false impression that they might just get lucky and actually get paid by the farmers to work on the farms. So they take their chances because they are so desperate. They are actually indentured slaves, meaning that the farmers pay a middle-man for the child, then the child must first work off the amount the farmer paid for them before the child is paid. In the end, the child is rarely paid anything because the farmer is being forced to accept such a low price for the beans, so they end up with no money left over to pay the children workers.
Some of these children have heard stories (probably untrue) of other children who left home to work on a cocoa farm and came back home a few years later with a shiny new bicycle. These stories spread throughout the cities surrounding Cote d'Ivoire and fill the children with false hope.
So their choice is ill-informed. They are desperate and starving, and strike out at the age of 10 or 11 to make money for their starving families.

Concerning consumer education, you say their are many free ways to educate consumers, and there are. However, don't you think that the corporations would drown out anyone trying to inform consumers about their options and their buying power? The corporations have lots of money to throw around.

I'm still trying to develop a thesis. I would like to argue that a free market plus effective consumer education would help countries like Africa and other third world countries who have valuable resources.

choices are based on ill/poor information? ah.theall too common asymmetric information argument.the poor sods are so ignorant that they cant even realize that their neighbors and parents are getting a raw deal .eh?.
without addressing inflationism which robs the poor of their meagre savings with which some of them could actually escape their indentured lives,you arent even beginning to address the problems.
anyway,what superior lifestyle choice have you in mind for these hapless people?if the govt and local states stopped looting their savings and civil liberties,they could have a fighting chance at escaping poverty

 

[Dsylexic]

My apologies if I appeared to be glib in my responce. A truely free market has no regulations or restrictions. Capital (money and equipment) and labor are free to move to wherever they can get the biggest bang for their buck. If that means that instead of producing cocoa in Hawaii and paying people there eight dollars an hour vs going to Ghana and paying them eight dollars a day- it will move to there. One catch for a free market to operate properly is that consumers and producers need complete information so that they can make the best decisions- but information is a limited resource. There are no rules for the producers to say where they are getting products from or what they are paying the workers so the consumers can't say for certain if they want to buy from Ghana or not. We have to rely on others to get that info for us- whether that is news reporters or with the internet, trying to contact people there and find out- but that burden is on us as consumers.

How can you deal with it if you don't like people in Ghana getting paid $8 a day? Unfortunately, that means changing the market. Setting requirements for either simply reporting information from the company or even restricting what they can do- adding a tarrif to goods they produce or requiring some sort of minimum wage. Unfortunately because now you no longer have a truely free market.

Non- coercive steps you can try to take would be things like a public information program- getting information out to consumers yourself about what is going on and encouraging people to vote against it with their money by buying from someplace else. Now we still have a free market- actually a freeer one since the producers are still free to do what they want and the consumers are now armed with better knowledge of what is really going on to base their own free decisions on what to buy or not to buy. It may or may not also get the company to try to change their behavior as well. Try looking up Fair Trade Cocoa.

I hope that this will maybe give a little bit of a place to start with.

wtf is wrong with 8 dollars a day? i started my work life in india at 4 dollars a day.you save and scrounge and work your butt off.plus 4 dollars a day can stretch a long way when haircuts cost 20 pennies and a poorman's meal costs 50 cents a day.in poorer countries,as in all countries,wages are relative.

 

[Barrex]

What is a name of your thesis?
KerriAnn first you must get some facts.
People in US living less than US$1 per day:????
People in Africa living less than US$1 per day: 36.2%
and things like that.
8 dollars per day is far from "slavery". You can not use US standards of income for Africa and then say "slavery". In US it would maybe be so but not in Africa. You say:
"farmers pay a middle-man for the child"? A father.
"went to work to help their starving families". My uncle was a missionary.In Africa people are starving. Children are much better of working on farm and eating than starving with their families and not working because of some theories of market.

I was born in BiH (devastated by war,destroyed under communist dictatorship etc...country between a"third world country" and western country.). If there is a free market "third world countries"(TWC) would kick "modern countries"(MC) respected asses. Living standard in TVC is "unbelievably" (in your work dont use unbelievably research and use percentage or other form of stats ) cheaper than in MC. That results in cheaper work force (people can work for less and still have enough to survive). BiH doesnt have food stamps program and people are not starving on the streets (and BiH is not MC).

Get rid of subsidies and state protectionism of privileged (big corporations) and all production and work would be transferred to TWC.
For example: Metal related processing on Germanys new Nuclear power plants is done in eastern European countries (in BiH I know a company that produces metal construction and sends workers to work on construction sites in Germany. That company at beginnings worked in conditions what you are referring as a "slave"... after a decade now it is taking jobs from those big corporations that were her "slave owners".)

This is a case in Africa and in BiH:low living costs=low salary=cheap production costs =more production=more people works=less starvation=higher living standard=more children with better education= better jobs= starting new jobs=creating value).

Term "child labor" is new and used in MC (western countries) that achieved high level of living standard stealing from TWC and are now able to sent every child to school and "protect him". In rest of the world reality kicks in: Through out history children were working and it was and still is normal thing to do. Work was and still is their school. They were "apprentices" who worked for their "masters" (not slave owner). If they didnt went to work=school them selfs they would starve till death.

"consumer education" is good but where does money for consumer education comes from? Redistribution of wealth. From whom are you going to take money from to pay for "consumer education" of others? "Free market+ forced freemarket"" concept.

P.s.
My English is not perfect and this topic is having so many aspects that I dont know where to start so I threw little bet of everything....mumbo jumbo...

P.p.s.
This movie comes to mind:
http://www.imdb.com/title/tt0080801/

P.p.p.s.
Is this a aprils fools joke? It is a well known facts that there are no women on this forum. They are a myth. Just like a Bigfoot,not gay fans of Lady Gaga and Eskimos .

 

[Dsylexic]

Hello all!
I am looking to get some feedback on an issue: How would a free market here in our country impact third world countries?
A specific example would be if we had a truly free market here in the United States, how would this affect the price of cocoa beans in West Africa?
Right now, West African farmers are being paid very low prices for their cocoa beans by the chocolate companies here in the US. One of the results of these low prices is child slavery on the cocoa farms. There are several factors that contribute to this problem. Some think that the demand for low prices by US consumers is a big factor, others think the problem lies mostly with the chocolate corporations greed. I tend to think both are a problem, but the solution is not anywhere in sight due to our current system. Legislation that attempts to promote "slavery free" goods is well intended, but ultimately has no real impact because of lobbying on behalf of chocolate corporations and lack of US consumer education on issues like these.
So, how would a free market in the US ultimately affect trade between the US and thrid world countries?

how do you know that prices are 'low'? is there a perfect price ?why shouldnt the price be 1 dollar per bean.?what if the children were replaced by robots/machines .will that solve the problem?

 

[ClydeCoulter]

Which tells me that we in the U.S. must get our house in order. We must get politics out of the hands of corporations and into the hands of the people under the Constitution proper. There should be no laws preventing proper competition in the free market, otherwise it is not free. And wars must ONLY be fought to protect the people and their rights, not to steal resources.

Only then, can we set a good example of liberty as well as prosperity for the world to see and to strive for. And when I say world, I mean each individual out there in each country/continent.

 

[KerriAnn]

What is a name of your thesis?
KerriAnn first you must get some facts.
People in US living less than US$1 per day:????
People in Africa living less than US$1 per day: 36.2%
and things like that.
8 dollars per day is far from "slavery". You can not use US standards of income for Africa and then say "slavery". In US it would maybe be so but not in Africa. You say:
"farmers pay a middle-man for the child"? A father.
"went to work to help their starving families". My uncle was a missionary.In Africa people are starving. Children are much better of working on farm and eating than starving with their families and not working because of some theories of market. .

Let me clarify, I am not the one who said something about 8 dollars a day, these 11 year old indentured slaves I am referring to are paid nothing besides enough food in their bellies to keep theme working. And yes, sometimes the middle-man in these deals are indeed the parents of the children! That shows extreme desperation in itself, does it not? What type of situation what you have to be in in order to sell your children?
I do not disagree with the idea of children working. Just because our children in the US are able to wait until they are 16 or 17 to start working is not comparable to situations in other countries, and I realize that.
The children I am referring to as slaves are actually indentured slaves, really. I am referring to a very specific population in the cities surrounding Cote d'Ivoire, where children are picked up by the dozen by men looking to transport them into Cote d'Ivoire and sell them to local farmers who are paying a premium to the middle-man for the cost of transportation (it is, of course, illegal to transport the children between the cities and so they must pay large bribes along the way).
So you see, the farmers are making enough money to pay for these children, but the money is going to the wrong people. Instead of the children being paid for their hard work, the middle man, the local police, and the border patrols are being paid for the trafficking costs of these children.

I was born in BiH (devastated by war,destroyed under communist dictatorship etc...country between a"third world country" and western country.). If there is a free market "third world countries"(TWC) would kick "modern countries"(MC) respected asses. Living standard in TVC is "unbelievably" (in your work dont use unbelievably research and use percentage or other form of stats ) cheaper than in MC. That results in cheaper work force (people can work for less and still have enough to survive). BiH doesnt have food stamps program and people are not starving on the streets (and BiH is not MC).

Get rid of subsidies and state protectionism of privileged (big corporations) and all production and work would be transferred to TWC.
For example: Metal related processing on Germanys new Nuclear power plants is done in eastern European countries (in BiH I know a company that produces metal construction and sends workers to work on construction sites in Germany. That company at beginnings worked in conditions what you are referring as a "slave"... after a decade now it is taking jobs from those big corporations that were her "slave owners".)

This is a case in Africa and in BiH:low living costs=low salary=cheap production costs =more production=more people works=less starvation=higher living standard=more children with better education= better jobs= starting new jobs=creating value).

Term "child labor" is new and used in MC (western countries) that achieved high level of living standard stealing from TWC and are now able to sent every child to school and "protect him". In rest of the world reality kicks in: Through out history children were working and it was and still is normal thing to do. Work was and still is their school. They were "apprentices" who worked for their "masters" (not slave owner). If they didnt went to work=school them selfs they would starve till death.

"consumer education" is good but where does money for consumer education comes from? Redistribution of wealth. From whom are you going to take money from to pay for "consumer education" of others? "Free market+ forced freemarket"" concept.

Yes! This is a good point. Some might say that education is free, but there is cost, it takes time and money to educate the public, especially one as naive as ours. I don't want to write about an idea where the government steps in and creates some sort of consumer education board or something, that is not what I want. I want the idea of a free market to be applied here, and I want the idea to flow naturally into the conclusion that if we created a free market here, that it would result in a good example for other countries and our free market benefits would "spill over" onto other countries such as Africa and help situations such as the one I have presented.

P.s.
My English is not perfect and this topic is having so many aspects that I dont know where to start so I threw little bet of everything....mumbo jumbo...

P.p.s.
This movie comes to mind:
http://www.imdb.com/title/tt0080801/

P.p.p.s.
Is this a aprils fools joke? It is a well known facts that there are no women on this forum. They are a myth. Just like a Bigfoot,not gay fans of Lady Gaga and Eskimos .

No, no joke.
I have seen other women on here, maybe you aren't looking hard enough!

 

[WilliamC]

We won't have free markets until we eliminate the international bankers who control the worlds money supply for their own profit.

How much wealth is suppressed is unknown, but just imagine where our species could be today if the trillions upon trillions of dollars spent on useless wars since the end of WWII had not occurred and that wealth instead was left with the people instead of being confiscated through taxation and inflation.

As long as the money is controlled then so are the people who are forced to use it.

 

[The Gold Standard]

In a free market companies would be free to pay people as little as they want. Of course they would have pay people something or they wouldn't work. No free people would volunteer to be slaves. If they feel slavery is the best option then it is because a government makes it the best option, ie. either work or die.

In a free market there would be no government imposed barriers to competition like we have today, so the companies that abuse workers would have to compete for the best workers with companies that don't abuse them, ultimately making the companies that treat workers poorly less productive and competitive. The competition would also lower prices across the board meaning that even if nominal wages didn't increase, those wages would buy more goods and services, making everyone wealthier.

In a free market the ease of entry and reduced costs of production make goods and services abundant and cheap, giving even the poorest people access to them.

 

[KerriAnn]

Just to clarify,
For this particular paper, my thesis will try to prove that the benefits of a free market in the US will "spill over" onto third world countries.

My long term thesis for my class paper will be a larger scoped thesis that will cover Ron Paul's policies.