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.

[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.

[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.

[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.