Free market impact on third-world countries

[Proph]

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.


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.

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

Make the transportation of the children between cities legal, and you take away the moneymaking incentives of the "middle men" (leaving more spending money in the farmer's pocket that he could potentially use for the children). As people have stated before me, we don't really live in a true free market.

 

[Diurdi]

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.

In general, as one part of the world becomes more wealthy, it becomes easier for the rest of the world to catch up and become wealthy as well. For example the success stories in Southeast Asia would never be as prosperous as they are today if it wasn't for all the technology, capital and innovation that we westerners initially created.

Ofcourse the best thing for their prosperity would be to move towards a free-market solution themselves...

 

[The Gold Standard]

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.

Well, it is hard to say specifically how a free market here would help third world countries. Just thinking out loud:

A free market would imply free trade, which would increase their access to U.S. made products which would be cheaper as a result of our free market reforms, but they would still have to have something to trade for them.

A free market means that the government would not control the money supply, so they couldn't just go to war on a whim, meaning we would stop bombing the third world countries. I suppose that would be helpful to them.

If those countries don't implement free market reforms themselves, it is hard to see specific examples of how we could benefit them. I would have to think more about it.

 

[ClydeCoulter]

BUMP, I love the interaction I see here, I simply love it. BTW, this is part of her "critical thinking class"

 

[KerriAnn]

Make the transportation of the children between cities legal, and you take away the moneymaking incentives of the "middle men" (leaving more spending money in the farmer's pocket that he could potentially use for the children). As people have stated before me, we don't really live in a true free market.

This is an excellent point. Even though it is not really within the intended scope of my paper, I would like to mention this at some point. The same reason applies to legalizing drugs.

 

[KerriAnn]

Well, it is hard to say specifically how a free market here would help third world countries. Just thinking out loud:

A free market would imply free trade, which would increase their access to U.S. made products which would be cheaper as a result of our free market reforms, but they would still have to have something to trade for them.

A free market means that the government would not control the money supply, so they couldn't just go to war on a whim, meaning we would stop bombing the third world countries. I suppose that would be helpful to them.

If those countries don't implement free market reforms themselves, it is hard to see specific examples of how we could benefit them. I would have to think more about it.

This sounds like my thinking thus far... It's been hard for me to make solid connections between our theoretical free market and Africa's economy. Keep thinking Gold, you are onto something!

 

[Barrex]

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?

Yes it does show extreme desperation. It is terrible situation to put parents in: Send child to work for food and a possibility to never see him again or let him stay and probably starve to death. This situation is not solely result of Corporatism vs Free Market argument and it will not be resolved only with Free Market.This is result of centuries of colonialism, wars, corruption etc. and this will not be solved over night but free market is a step in the right direction.Explanation below.

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.

It is interesting how the middle man, the farmer, the local police, and the border patrols are involved in markets that are not free. If you have truly free market, the one that is without state protectionism and interventionism, without few chosen ones there wouldnt be so many people who accept bribe. Side effect of Corporatism (this is what world has now.) is putting corrupt servants of corporation in government and keeping them there (in US and in third world countries). Somewhat related to my first started thread on this forum (link) The part of corrupt politicians refers to your middle man and police officer and border patrols etc.

If you want specific corporation research Bechtel(link). One of prime examples of state protectionism and interventionism and corruption. People in BiH dont have it in good memory. Where there is a war fought by US/NATO forces there is Bechtel following and picking lucrative contracts and things that I can not say here...

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.

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

Simplistic:
Corporatism=state protectionism and interventionism=corruption=putting corrupt politicians, corrupt policeofficers, corrupt border patrols and corrupt people in positions of power=more corruption=more crime=oppression=low human rights=unethical redistribution of wealth=slavery=starvation=crime=unethical=makes Mungo mad.....
and for positives
Free Market=significantly less coruption in third world countries (somewhat in US)
Free Market=less wars/military involvement/kinetic crap crap whatever they call sending troops overthere
Free Market=look up my previous post (the part what got a lot of "=")

If there is truly free market in US then politicians will not be able to favor 1 corporation over other or one corporation over other nation. With free market corrupt people wouldnt be put in positions of power and wouldnt be able to stay there. No matter how strong corporations are they can not overthrow governments (yet) on their own. They need states (politicians to do it)(link). The reason why corrupt people (in third world countries) stay in power is because they are backed up by governments (of western countries) and not because of direct imvolvement of corporations. If it wasnt this way they would be dealt with (again: research pleanty of history examples).

 

[BamaAla]

So this is class is in the philosophy department rather than the economics department?

If that's the case, maybe you should stick to the self interest aspect of a free market here rather than any benevolent aspect and its effects on a very specific situation in the developing world.

 

[The Gold Standard]

Ok, now that I'm not at work I can think about this a little more in depth.

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.

In your example you are looking in the wrong places to place blame. First of all, everyone wants to buy the best product for the cheapest price, and there is no reason to ever stop a company or person from doing so. Cheap cocoa beans do not cause slavery. If the price of cocoa beans tripled tomorrow, those people will still be slaves, because they do not understand their rights or do not protect them. Slavery is a violation of property rights. If property rights are not protected, then you can never have a free market and never have real prosperity. It is a sad situation, but they have to make the necessary changes to protect their rights. Preventing companies from buying their cocoa beans will not solve any part of the problem.

As far as the main question, how would a free market in the U.S. affect trade with these countries? To take your prior example further, what would happen in the chocolate industry? There would be no tariffs on imported cocoa, the cost of shipping will stabilize once oil is purchased in gold or silver instead of Federal Reserve notes, there would be no minimum wage laws to price workers out of the labor market, there would be no endless government unemployment benefits to discourage workers from taking jobs, etc. All of these things will lower the input costs for chocolate makers. There also would not be FDA regulations among others pricing competitors out of starting their own chocolate companies. You would have numerous new chocolate companies pop up driving down the price and mazimizing the quality of finished chocolate products. So setting aside the rights violations by the cocoa farmers, the cocoa beans they export will now result in an abundance of chocolate products to choose from at a lower cost available for the African people to import.

Here is are a couple of good links about free trade:

http://mises.org/daily/1429

http://mises.org/media/1874/Five-Most-Common-Myths-about-International-Trade

Now a free market here would have these benefits in every industry. Even if nominal wages fall, prices would fall faster, making everyone wealthier. You wouldn't have our current monetary policy discouraging savings and therefore relying on inflation to drive misdirected capital investment. You would have real savings and business cycles would be minimal or nonexistent (assuming bankers that can't redeem customer deposits are prosecuted for fraud instead of bailed out). We would be producing like it was 1922 again, flooding the world with high quality low cost products like we did back when we had some semblance of sound money. This would definitely raise the standard of living of every country. How much it raises that standard of living depends on the policies and systems of government in each of those countries though.

 

[KerriAnn]

So this is class is in the philosophy department rather than the economics department?

If that's the case, maybe you should stick to the self interest aspect of a free market here rather than any benevolent aspect and its effects on a very specific situation in the developing world.

I wish I could, but the book I am assigned to "critically" respond to is all about the child slavery issues connected to cocoa production. The author provides no explicit solutions to the problem, so I am attempting to provide a step towards a solution.
The book is called Bitter Chocolate by Carol Off.

 

[KerriAnn]

Ok, now that I'm not at work I can think about this a little more in depth.



In your example you are looking in the wrong places to place blame. First of all, everyone wants to buy the best product for the cheapest price, and there is no reason to ever stop a company or person from doing so. Cheap cocoa beans do not cause slavery. If the price of cocoa beans tripled tomorrow, those people will still be slaves, because they do not understand their rights or do not protect them. Slavery is a violation of property rights. If property rights are not protected, then you can never have a free market and never have real prosperity. It is a sad situation, but they have to make the necessary changes to protect their rights. Preventing companies from buying their cocoa beans will not solve any part of the problem.

As far as the main question, how would a free market in the U.S. affect trade with these countries? To take your prior example further, what would happen in the chocolate industry? There would be no tariffs on imported cocoa, the cost of shipping will stabilize once oil is purchased in gold or silver instead of Federal Reserve notes, there would be no minimum wage laws to price workers out of the labor market, there would be no endless government unemployment benefits to discourage workers from taking jobs, etc. All of these things will lower the input costs for chocolate makers. There also would not be FDA regulations among others pricing competitors out of starting their own chocolate companies. You would have numerous new chocolate companies pop up driving down the price and mazimizing the quality of finished chocolate products. So setting aside the rights violations by the cocoa farmers, the cocoa beans they export will now result in an abundance of chocolate products to choose from at a lower cost available for the African people to import.

Here is are a couple of good links about free trade:

http://mises.org/daily/1429

http://mises.org/media/1874/Five-Most-Common-Myths-about-International-Trade

Now a free market here would have these benefits in every industry. Even if nominal wages fall, prices would fall faster, making everyone wealthier. You wouldn't have our current monetary policy discouraging savings and therefore relying on inflation to drive misdirected capital investment. You would have real savings and business cycles would be minimal or nonexistent (assuming bankers that can't redeem customer deposits are prosecuted for fraud instead of bailed out). We would be producing like it was 1922 again, flooding the world with high quality low cost products like we did back when we had some semblance of sound money. This would definitely raise the standard of living of every country. How much it raises that standard of living depends on the policies and systems of government in each of those countries though.

Excellent! This is the type of stuff I'm looking for! I almost feel bad, like you did my homework for me.
I really appreciate your input, I can do some research now to build on some of your ideas and I think I will have a solid paper.

I will also be including some analyzing of the role of these middle-men, and how they are a product of the laws that restrict transporting children over state lines. Seeing as how the law enforcement agencies do not have the resources to uphold these laws, and many of them are corrupt anyway, the laws do nothing but create a racket for the law enforcement and the middle-men so they can exploit the farmers. (Thank you Proph).

 

[Simple]

Mises Institute is a good source. Here is a jazzed up version of Tom Wood's argument on the subject of child labor.

 

[The Gold Standard]

I wish I could, but the book I am assigned to "critically" respond to is all about the child slavery issues connected to cocoa production. The author provides no explicit solutions to the problem, so I am attempting to provide a step towards a solution.
The book is called Bitter Chocolate by Carol Off.

I don't know how well this argument will work. Free market reforms here and free trade can potentially increase the standard of living in those countries, but only if their masters allow them enjoy those benefits. I don't know of any "solution" to the problem short of volunteering to go over there with a rifle and free the slaves and teach them how to protect their rights, unless you want us to invade and occupy them which just creates a whole new set of problems.

 

[KerriAnn]

Mises Institute is a good source. Here is a jazzed up version of Tom Wood's argument on the subject of child labor.

Thanks. This video provides a good basis for my argument.
I could have done without the effects though, I thought I was having an acid flashback for a second, very distracting!

 

[Barrex]

bump for very interesting "stuff"

 

[enoch150]

Thanks. This video provides a good basis for my argument.
I could have done without the effects though, I thought I was having an acid flashback for a second, very distracting!

This comes from his speech "Applying Economics to American History" http://mises.org/media/4260/Applying-Economics-to-American-History

The whole thing is very good. The part about child labor is in the first 15 minutes, if you want to hear it in context.

You also might want to think about the flip side of the argument: How do unfree markets in the US harm third world countries? High import tariffs or quotas would prevent Americans from buying products exported from those countries. That prevents the third world country from having income with which to trade for other goods.

 

[ClydeCoulter]

Bump, KerriAnn will be posting her paper after she has completed it for feedback......
More input, need input, bleep, bleep

 

[enoch150]

Careful. Some teachers take a sentence or phrase from papers, put it in quotes, and search google to look for plagiarism.