Michael Munger on Fair Trade and Free Trade

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4.7 • 4.3K Ratings

🗓️ 3 December 2007

⏱️ 59 minutes

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Summary

Mike Munger, frequent guest and longtime Econlib contributor, speaks with EconTalk host Russ Roberts about fair trade coffee and free trade agreements. Does the premium for fair trade coffee end up in the hands of the grower? What economic forces might stop that from happening? They discuss the business strategy of using higher wages as a marketing strategy to attract concerned consumers. They turn to the issue of free trade agreements. If the ideal situation is open borders to foreign products, is it still worthwhile to negotiate bilateral and multilateral agreements that requires delays, exemptions and a bureaucracy to enforce? What is the cost of including environmental and various labor market regulations in these agreements?

Transcript

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0:00.0	Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts
0:13.9	of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org
0:21.2	where you can subscribe, find other episodes, comment on this podcast, and find links to
0:26.5	another information related to today's conversation. Our email address is mailadicontalk.org. We'd
0:33.6	love to hear from you. My guest today is Mike Munger, chair of the Political Science Department
0:40.1	at Duke University, frequent columnist at the Library of Economics and Liberty, and frequent
0:45.5	guest here at econtalk. Our plan today is to do a bit of grab bag. We're going to talk
0:50.6	about at least two topics that listeners have suggested, fair trade, and trade agreements.
0:56.9	And if we have time, we'll talk about other matters as well. Mike, welcome back to econ talk.
1:01.0	Great to be here. Let's start with fair trade coffee. First, what is it, and is it a good
1:10.4	idea or a bad idea? Well, you're probably, most of the listeners have probably seen it if
1:15.6	you go into a coffee shop, sometimes it'll be an option, sometimes with the only thing
1:18.7	that they sell. The idea is that farmers of coffee are exploited. They don't get very
1:25.7	much of the fairly high final price. And so let's charge a little bit more and make sure
1:32.4	that more of it goes to the farmers, and hopefully all of the premium goes back to the farmers.
1:38.1	And I feel better about having my $3 cup of coffee. Are you a coffee drinker, Mike?
1:43.2	I'm a big coffee drinker. Sometimes I apply it topically.
1:48.2	How's that working for you? That topical thing. It is amazing how many people have a kind
1:55.6	of coffee dependency. It has become in the last 10 years just something that we do. It's
2:01.3	a big part of American culture now. Yeah, it has grown a lot. And for those
2:05.2	you who are not coffee fans, I recommend the novel Memoir from Ant Proof Case by Mark
2:10.9	Halperin, which most of the book is a satirical take on coffee drinking. The main character
	...

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