Is free trade or fair trade more in accordance with Catholic teaching?

[nmgauss]

Any salary can be broken down into an hourly rate.

Salaried positions have complex requirements not amenable to being paid by the hour. Nobody punches a time clock on a salary. When I was teaching, I was salaried. The salary also included summers off when I spent no time working. Sometimes I had to take weekend field trips with large groups. I worked three days straight without overtime. During the holidays, I did no work. I had to attend meetings, where I did no work. Sometimes I spent entire weekends preparing lectures and lesson plans or reading term papers or grading papers. This kind of work schedule is not amenable to an hourly rate.

The minimum wage guarantees no more than being paid a set rate for each hour you work. If your daughter is a private consultant, then she has a degree of bargaining power in terms of what she gets paid.

Yes, it’s called a negotiated contract. It’s the same as a store manager figuring out his prices. If his customers buy, then the deal is sealed. If they don’t buy, there is no contract.
Sometimes customers can haggle with the store as is often done in many places in the world. If a haggler succeeds, then the contract is sealed.

But if you pay lower wages does good old taxpayer not have to foot the bill for the government assistance people on the lower end of the employment spectrum? Is libertarianism not also against giving people government assistance?

Libertarianism is strictly free market. Government is a bad word in that line of thinking.

Paying below the minimum wage and reliance on government assistance also means people have less money to spend. Does this not effect business? It is also near impossible for people on the minimum wage, or less, to get onto the property ladder. Now I can see how this would be good for landlords, but if more people bought and sold houses would the property market not flourish to a greater extent?

Not if the government gives no assistance. What if unemployment insurance comes into play? Employers are required to pay unemployment insurance.

I can’t see McDonald’s, Burger King or Kentucky going under in the near future because they will be forced to employ less people. These companies are flourishing here and they have to pay people the minimum wage.

These companies sell franchises. They do not operate their own restaurants. Each restaurant has a manager who hires people independent of the corporation.

I’ll tell you why I said that. A fellow student in one of my tutorial groups is American. According to her, some people, and I stress some people, who oppose the minimum wage argue those on the lower end of the employment spectrum don’t deserve any more.

How much an employee deserves is determined by the value of his services to his employer. If he cleans toilets, he deserves toilet cleaning wages. If he is a cook, he deserves a cooks wages.

 

[minkymurph]

Regarding the Minimum Wage and its effect on employment: When you increase labor costs but don’t have a parallel increase in revenues, the only way to keep costs under control is to CUT labor. Sure, everyone who is working gets paid a little more per hour. The problem is that fewer people are working, and those who do work find their hours cut.

I was the mother of teenagers the last time the minimum wage was increased. That was not a good year for teens to be looking for summer jobs. Now typical teen positions are retail clerks, fast food, theater ushers… all minimum wage unskilled positions.

Faced with higher costs of employment, but product prices and revenue that stayed the same, the employers had to cut working hours and eliminate positions to keep their labor costs under control. Consequently, the year the minimum wage went up, the only teens who were hired were the ones with prior training and experience. The previous summer the video store managers could hire 10 kids and have them all work 25 hours per week. After the wage increase they could only hire 8 kids to work 25 hours per week.

The other problem they had was that those 8 kids now had to do the same work in fewer hours than the 10 had used the previous summer. The number of tasks didn’t change, but the hours available to perform those tasks went down, so only the most experienced and efficient kids were hired.

This argument has been circulated more than once. I raised other issues on this point. See post 56.

 

[nmgauss]

You went through those statistics very quickly.

These statistics were presented not in support of an argument I was making, but rather for you to deduce which sector employs the highest number of people which relates to your assertion about the number of small businesses in the UK and Ireland.

What about you provide some statistics to support your argument imposition of the minimum wage will result in more unemployment? It’s not exactly fair I should do all the work, is it? It’s also infinitely easier to simply refute what someone says and reject their evidence than to provide evidence? Would you agree? Do this, then I will look for the statistics you request.

You have to do the work. It’s your job to show me the error of my ways.

 

[minkymurph]

Not if the government gives no assistance. What if unemployment insurance comes into play? Employers are required to pay unemployment insurance.

Another poster stated people on low incomes receive assistance. See post 48.

These companies sell franchises. They do not operate their own restaurants. Each restaurant has a manager who hires people independent of the corporation.

So your point is? In relation to whether or not fast food industries generally speaking should pay the minimum wage.

How much an employee deserves is determined by the value of his services to his employer. If he cleans toilets, he deserves toilet cleaning wages. If he is a cook, he deserves a cooks wages.

And what monetary value would you put on a cook or someone who cleans toilets? Based in the first instance on a struggling small business, and in the second one of the giants like McDonald’s?

 

[minkymurph]

You have to do the work. It’s your job to show me the error of my ways.

I’ve done enough. How did you find the links I gave you to the London Times - as requested?

 

[nmgauss]

I’ve done enough. How did you find the links I gave you to the London Times - as requested?

Biased. Instead of stating the numbers, the articles have themes to promote. They are essentially out to persuade the reader of the viewpoint of the writer.

 

[minkymurph]

Biased. Instead of stating the numbers, the articles have themes to promote. They are essentially out to persuade the reader of the viewpoint of the writer.

Is the London Times - the source you recommended - generally biased, or just articles in the London Times that don’t support what you think? And of course your completely objective - aren’t you?

That said, I would argue you haven’t read any of the links I gave you. I always put something in the links I send to people as a test to ascertain whether or not they have actually read the information I send them. The reason I do that is because I’ve run across this before.

You failed the test. Your rejecting information you haven’t even read from a source you recommended.

 

[Zoltan_Cobalt]

The Catholic college I attended was designated as a fair trade college. Children in schools are taught about fair trade as part of the curriculum, and in my parish we have fair trade fetes after Mass. So Catholicism, at least in Ireland, very much promotes fair trade.

What is “fair trade” exactly?

 

[minkymurph]

What is “fair trade” exactly?

Zoltan! My friend and nemesis! Just joking.

My understanding of fair trade is not what is being discussed here - which I now realize.

I was referring to fair trade products. Supermarkets now stock them and Catholic schools buy them. If you commit to so many fair trade products you get a certificate (or something like that)

Fair trade products have a fair trade label. Fair trade products were introduced to as assist smaller, poor countries compete with richer countries in terms of selling their produce. They are slightly more expensive but not by much. You can buy fair trade tea, coffee, chocolate and bananas. After Mass in my Parish they sometimes have a fair trade sale where you can buy hand made tea towels, wooden toys, religious icons and jewelry.

 

[Brendan_64]

The Catholic college I attended was designated as a fair trade college. Children in schools are taught about fair trade as part of the curriculum, and in my parish we have fair trade fetes after Mass. So Catholicism, at least in Ireland, very much promotes fair trade.

It is fairly similar in England. Children are taught about fair trade at Catholic schools, and our parish buys fair trade wherever possible. We should support giving a fair price to our less fortunate brothers who are toiling away trying to earn a proper living for themselves and their families, we should not view them simply as part of a corporate machine designed to provide us with products at the lowest possible cost.

 

[minkymurph]

It is fairly similar in England. Children are taught about fair trade at Catholic schools, and our parish buys fair trade wherever possible. We should support giving a fair price to our less fortunate brothers who are toiling away trying to earn a proper living for themselves and their families, we should not view them simply as part of a corporate machine designed to provide us with products at the lowest possible cost.

:clapping:

Good to know we’re all on board.

From a moral perspective is not just about low costs.

 

[nmgauss]

Zoltan! My friend and nemesis! Just joking.

My understanding of fair trade is not what is being discussed here - which I now realize.

I was referring to fair trade products. Supermarkets now stock them and Catholic schools buy them. If you commit to so many fair trade products you get a certificate (or something like that)

Fair trade products have a fair trade label. Fair trade products were introduced to as assist smaller, poor countries compete with richer countries in terms of selling their produce. They are slightly more expensive but not by much. You can buy fair trade tea, coffee, chocolate and bananas. After Mass in my Parish they sometimes have a fair trade sale where you can buy hand made tea towels, wooden toys, religious icons and jewelry.

It’s kind of like Affirmative Action toward small producers who are supposed to be disadvantaged and thus have unfair competition from larger companies. Even though the larger companies can produce better quality products at cheaper prices, the little guy gets the “deserved” boost, and the Catholic Church is urging people to play “fair” and pay more to support these little guys.

 

[nmgauss]

In the early years of the career of Herbert Hoover, he worked for a British gold mining company in Western Australia. His job was to scout for gold deposits, evaluate each one with the idea of profitability, get the new mines running and reduce operating costs as much as possible. When he first started, mining was conducted by having contracts with small local companies in the area. This was fair trade.

However, in Hoover’s opinion, it was more expensive than it needed to be. So he bought out some of the local contractors and started to bypass the remainder until they went bankrupt. He convert a fair trade operation into a free trade one.

By doing this he was able to convert unprofitable mines into profitable ones.

Was he unethical to do this?

 

[minkymurph]

In the early years of the career of Herbert Hoover, he worked for a British gold mining company in Western Australia. His job was to scout for gold deposits, evaluate each one with the idea of profitability, get the new mines running and reduce operating costs as much as possible. When he first started, mining was conducted by having contracts with small local companies in the area. This was fair trade.

However, in Hoover’s opinion, it was more expensive than it needed to be. So he bought out some of the local contractors and started to bypass the remainder until they went bankrupt. He convert a fair trade operation into a free trade one.

By doing this he was able to convert unprofitable mines into profitable ones.

Was he unethical to do this?

That depends on whether you think it’s ethical to use superior bargaining power to bankrupt people or not, and if this was his only option.

You raise two interesting points. The circumstances you describe is similar to what was termed the ‘tragedy of the commons.’ Tragedy of the commons is a situation where there are too many ‘owners’ and the result is either over or under production of resources. I would concur it is futile to persist with a system that is unprofitable. Privatization is one solution, but it is not the only solution and not necessarily the best solution.

The second interesting point you raise is justice as fairness. Fairness and justice are not necessarily the same thing, in fact I would argue they are not, although an intrinsic link exists, as in my view the justice as fairness theory has limitations. Business dealings do require a degree of ruthlessness. We have saying here, ‘you can’t make an omelet without breaking eggs.’ What I would argue is we should attempt to deal with others justly. If someone refuses a fair, or just bargain that is their choice, but they have to accept the consequences. In the situation you describe above I would say I would not have enough information to make a call on whether or not it was ethical. If Hoover attempted to negotiate with weaker parties, seeking to persuade, and they refused a reasonable offer without good cause, I wouldn’t necessarily describe what he did as fair but it could be categorized as just. Riding rough-shot over someone else’s wishes to your advantage and their detriment just because you can is another matter. I would not describe that as just.

 

[minkymurph]

It’s kind of like Affirmative Action toward small producers who are supposed to be disadvantaged and thus have unfair competition from larger companies. Even though the larger companies can produce better quality products at cheaper prices, the little guy gets the “deserved” boost, and the Catholic Church is urging people to play “fair” and pay more to support these little guys.

That’s pretty much it. I would add that countries with struggling economies will inevitably need to be propped up by those with stronger economies. Countries with weak economies are also prone to political and social unrest and in the worst possible scenario, they collapse and constitute a failed state. It’s therefore in everyone’s interests to promote economic stability in poorer countries.

 

[Ridgerunner]

I realize this is somewhat theoretical, but there is, conceptually, no difference between free trade and fair trade.

Aquinas and Augustine defined “fair trade” as one person giving something he values less to another, for something he values more. In most transactions, that’s what happens. Maybe I value some object less than some other person, but because of my particular needs, I value his money more. He, on the other hand, values the object more than the money he gives for it, otherwise he wouldn’t do it.

There are, of course, all kinds of potential impediments to that kind of trading. But to the extent it’s interfered with by government, monopoly, coercion, deception, or even psychological “over-hyping”, the “freedom” is reduced, as is the “fairness”.

I don’t think government has any business determining “fairness” in trade. As soon as it puts its thumb on one side of the scale, it changes the balance on the other side. Its role should be only in limiting monopoly, coercion, and deception; things that impinge on freedom and therefore on fairness.

 

[minkymurph]

I realize this is somewhat theoretical, but there is, conceptually, no difference between free trade and fair trade.

Aquinas and Augustine defined “fair trade” as one person giving something he values less to another, for something he values more. In most transactions, that’s what happens. Maybe I value some object less than some other person, but because of my particular needs, I value his money more. He, on the other hand, values the object more than the money he gives for it, otherwise he wouldn’t do it.

There are, of course, all kinds of potential impediments to that kind of trading. But to the extent it’s interfered with by government, monopoly, coercion, deception, or even psychological “over-hyping”, the “freedom” is reduced, as is the “fairness”.

I don’t think government has any business determining “fairness” in trade. As soon as it puts its thumb on one side of the scale, it changes the balance on the other side. Its role should be only in limiting monopoly, coercion, and deception; things that impinge on freedom and therefore on fairness.

I couldn’t disagree with this. ‘Fairness’ is a very broad term and difficult quantify. Something that could be construed as unfair may also be morally justified, and something that is unfair may well be lawful. This is why I prefer the term, ‘just dealings’ rather than fair trade. What you are talking about is dealt with by doctrines of law such as; unconscionable dealing, unjust enrichment, misrepresentation and duress.

 

[nmgauss]

I realize this is somewhat theoretical, but there is, conceptually, no difference between free trade and fair trade.

Aquinas and Augustine defined “fair trade” as one person giving something he values less to another, for something he values more. In most transactions, that’s what happens. Maybe I value some object less than some other person, but because of my particular needs, I value his money more. He, on the other hand, values the object more than the money he gives for it, otherwise he wouldn’t do it.

There are, of course, all kinds of potential impediments to that kind of trading. But to the extent it’s interfered with by government, monopoly, coercion, deception, or even psychological “over-hyping”, the “freedom” is reduced, as is the “fairness”.

I don’t think government has any business determining “fairness” in trade. As soon as it puts its thumb on one side of the scale, it changes the balance on the other side. Its role should be only in limiting monopoly, coercion, and deception; things that impinge on freedom and therefore on fairness.

Deciding what is fair as in “fair trade” is a slippery slope because it is not quantifiable.
The Church is urging people to think in terms of “fair trade”, but there is no way to verify that it is happening.