Economics of Voting with your Pocketbooks

Recently, the Economist published two articles that argued that recent trends in Fairtrade products, organic food, and locally-grown produce not only are not good for poor farmers, but also are detrimental to the environment ("Voting with your Trolley," and "Good Food" in the December 9th-15th 2006 print edition. Page numbers in the following blog entry refer to this issue unless otherwise noted.) The article was also discussed in Dan Mitchell's "What's Online" column on the New York Times website, December 16th, 2006. As a number of blogs have pointed out, some features of the argument were remarkably lacking in evidence, and there may be some reasons to doubt its truth (For the latter, see usfoodpolicy.blogspot.com).

But even though you can argue that it wasn't a particularly good argument in some respects, it did raise a number of important issues that seem worth addressing, and indeed, it may have been worth publishing for the quality of the discussions in the blogosphere alone.

Some of the arguments the Economist offers certainly seem worth thinking about. In particular, I found the arguments that seemed right out of Adam Smith were quite interesting, and certainly raise a number of important questions. It is not surprising that the Economist would adopt such a perspective, since, after all, the magazine is crucially linked to that eighteenth-century writer. A fundamental idea in Smith's work, and indeed of much of our current economic theory is that when prices go up unnaturally, they have a tendency to go down again. That is, if there is a lot of money to be made in the sale of a certain commodity, then more people will want to move stock into that market. But when more people move stock into a market, they have to be more competitive, which will cause the participants in that market to lower the price to it's "natural price" - to use some of Smith's jargon - or perhaps even below that value. I suppose there are at least two possible consequences to this action. In the first case, the price will fall, and more farmers will be poorer in just the way the Economist suggests. In the second case, even if the price were kept at a constant level, e.g. remain fixed, it seems that negative consequences could follow. Since in this case the price could not be lowered, there is nothing a seller could do to further encourage purchases. And given the limited shelf life of coffee before it's processed, it will have to be sold or the money invested in it will be counted as a loss. But since an investor will want to avoid this situation in the future, the consequence may be that they will produce a smaller crop the following year, hire less labor, or even fire some of those employees that they have. So the workers also would suffer.

It is a fairly solid argument, although it is predicated on the idea that the market has reached a saturation point. In order to determine whether this is true we need to have a clear conception of what the market in fact is. Fairtrade coffee works by adding a small premium to the current price of coffee when it is produced in a certain way. Thus it is certainly linked to the price of non-Fairtrade coffee. But you can argue that it is a mistake to subsume both into the same category. I find it interesting that most of the articles I've read on this subject, including the two in the Economist article seem to presume that Fairtrade coffee is the same product as non-Fairtrade coffee. In one sense, this is obviously true, since the only distinction is through the process by which the coffee is produced, and consequently there often is no discernable difference in the product itself (The Economist article makes a passing aside on page 74 to the decrease in quality of the coffee that is sold as Fairtrade, but offers no evidence for this, and I know from experience that this is not inevitably the case, as my local coffee shop demonstrates every day). As evidence for treating both coffees as the same product, the Economist article makes a passing reference to Tim Harford's book The Undercover Economist, and the Economist observes that the "basic problem" is that "too much coffee is being produced in the first place." (p.74) It strikes me, however, that part of the Fairtrade movement is predicated on convincing customers that there actually is a difference in the product. If people are not interested in 'purchasing coffee,' but 'purchasing Fairtrade coffee,' then there is not only an incentive for more people to put their stock into Fairtrade coffee, but also an incentive for current producers to take their stock out of non-Fairtrade coffee. Thus while the overall market comprised of Fairtrade and non-Fairtrade coffee may be reaching a saturation point, or perhaps even a super-saturation point, the Fairtrade coffee market can still offer tremendous possibilities for growth. Fairtrade is thus a tricky thing to model because it not only encourages an increase in supply of a certain product, but the advertising campaign aims to change the nature of the market in a fundamental way.

But regardless, there are a number of further objections to Fairtrade coffee. For one thing there is the issue of whether the movement should only focus on cooperatives and not the larger plantations that may even have more egregious hiring practices. (p.74) In fact, so far as this prevents the expansion of the market, it could reach the problem of a saturated market mentioned above. Further, there is the question whether the money is actually going to go to the poor farmers who are the intended beneficiaries of the Fairtrade movement. And indeed, it seems imperative that the public know precisely what the premium is that is going to the farmers, and how it is distributed once it reaches them.

These are all things that should be taken into account in evaluating the success of the Fairtrade movement. At present, it is worth noting that there is a lot of controversy over whether the Fairtrade organizations are succeeding in their mission, and the Economist article is only one of the more recent critical voices. One problem is that the actual financial data that would affirm or fail to validate the organization's claims does not seem to be freely available. As I say, we not only want to know what percentage of the premium is actually going to the producers, but also how this money is distributed once it gets there. The Internet seems an ideal place for this information to be distributed, although it is true that it might be a rather large undertaking. Yet, it seems that having this information available online might not only assuage doubts in an organization's effectiveness, but also open up the possibility for a whole new level of transparency within the markets it aims to improve. For ultimately this is the strongest weapon that we have against unethical companies, and nothing protects an unethical business more - be it farm or factory - than a lack of transparency.

In the meantime, I’m going to be spending a bit more time with Adam Smith this week.    

Montaigne and Lake Michigan

The holiday season is here, and I've decided to do something curious, to turn my blog into a book. No, I didn't land a contract from a big publisher, or come to think of my work so highly that I think everyone should read it. But then these have never been my aims in writing this blog. I admit that I've never been entirely clear about what my aim actually is. It's true that when I first started this blog I had all the usual reasons: I wanted to share my adventures with my extended friends and family, I wanted to explore my own thoughts, I wanted others to see the pictures I had taken. But at a certain point in this process you realize that there's a bit more to blogging than that. And no, I'm not necessarily referring to a latent prima donna complex, or some innate desire for quiet people to become extroverts. For me, the fact of the matter is that a blog is a form of media like no other. There's no other form of communication that so readily incorporates text, pictures, and sound, that is so conducive to interpersonal communication, and yet preserves the deeply personal nature of journal writing. It has very little precedent. Like the advent of printing, we're embarking on a brand new type of literary work.

Well, it occurs to me that although the format may be new, it's not entirely without precedent. For instance, the personal journal or diary definitely figures in its development. And yet, the transition from self-communication to communicating to the world is not insignificant. In fact, if I had to find a precedent for blogging, I'd probably instead point to a single work first published in 1580: Michel de Montaigne's Essais. Now Montaigne scholars may role in their graves at the suggestion, but there are many reasons to think of Montaigne as the first blogger.

Superficially, this can be defended from the standpoint of content. Probably no person had ever written for the public with the personal style and breadth of Montaigne until the advent of blogging. Not only did Montaigne write about philosophical topics, and interesting facts about education and social mores, but he also wrote about such uncouth subjects as indigestion and the best time to use the toilet. And one characteristic of bloggers - although perhaps not of this blogger - is the openness to such unusual themes. Further, the style of writing that Montaigne developed, mixing serious philosophical subjects with witty asides also finds many parallels among the more successful bloggers. Finally, the manner in which Montaigne approached his writing also draws many modern parallels. He claimed to have written down everything as it occurred to him, and he claimed never to have struck out a passage that had been sincerely written, even if that would reveal contradictions and errors in his own views. What Montaigne has thus given is a true picture of himself, and many of today's bloggers have similar aspirations.

But from a more philosophical standpoint, too, it seems that Montaigne dealt with many of the same philosophical puzzles that loom in the background of blogging life. For, most bloggers are caught in the same position that Montaigne was: writing deeply personal things, but recognizing that a larger impersonal audience would be reading those thoughts. Much of Montaigne's unique style seems to have developed from a mixture of these two conflicting forces: the force to be true to oneself, and the force to present this self to the world.

But perhaps this is not the best way to describe what's going on either in Montaigne or in a blog. For this way of speaking seems to suggest that we have a self that is independent of the world around us. But who we are is defined by that world. It's thus not the case that our personalities are so fixed. In fact, perhaps a better way of describing what's going on when we embark on a project like a blog is that we are fostering new aspects of our personalities, aspects that we may not have been aware of beforehand. Although I've gestured towards this fact in an early blog, perhaps it's worth going into this in a bit more detail again. I think it should be fairly obvious that we act differently around different people. Even if we're not aware of it, the ways that we respond to our father or mother are very different from the ways that we might respond to our auto-mechanic or boss. Each of these people stands in different relations to us, and who we are is in part how we respond to those different relationships. In each case there's some give-and-take, so to speak: the way we respond to those people determines the way that they respond to us, which in turn helps redefine the way we respond to them. And this obviously happens at the most individual level too. And there are many complexities. For instance, some people may always have bad interactions with their auto-mechanic, and the mood that this experience puts them in might cause these same people to act differently later to their husband or wife. Or we might meet someone who gives us a new way of looking at the world, and it might permeate all our relationships, such as when someone has the calling to become a priest or a monk. I mention this since I know a few people who have done this, and had to break up with their girlfriends as a consequence. There's a tough alteration.

I personally like this dynamic way of looking at ourselves. Maybe an analogy might be useful. It's as if each of us are cities being built in a particular place. Now there are limitations that nature imposes upon us, our underlying psychology, if you will. In the analogy we might think of this as the topography of the landscape. If there's a mountain in the middle of the city, we may build around it, we may try to tunnel through it, but we have to deal with it somehow. Similarly lakes will require bridges, and so on. We probably cannot alter some features of our psychology, but we can find ways of working through them, or overcoming them. And we each have individual limitations imposed upon us by the talents we have, or the peculiar set of natural abilities that we develop. In the analogy we might think of this as the limitations of our township, perhaps a lake or an impossible to pass mountain pass. If we now take this analogy as our basis, one way of looking at doing something new like writing a blog is that it is like building a new neighborhood in our city. Yes, it will be confined by our underlying psychology, it will have the same limitations that we have, and so on, but it is something new, and it has new challenges: new contracts have to be negotiated, new decisions and allocations need to be made. And although it may seem like a isolated appendage, the whole structure of the city may change in response to the addition: the traffic patterns may alter, some parts of the city may become neglected, other parts may suddenly seem very important.

So when Montaigne wrote his Essais, it wasn't just that he was merely presenting his preexisting self to the world. Rather he was developing a new self, a new facet of his personality, and it's this newly constructed self that he was showing to the world. In a similar manner, I think I am - and indeed all bloggers are - building a new self through this exercise. Of course, this isn't limited to blogging, almost any activity does this, but there are different decisions that have to be made when one blogs. For instance, there are parts of myself that I've chosen not to share with the world in this blog: for the most part I don't name people or discuss the many small problems and pleasures that I might experience from day to day. Perhaps someday I will be more open to this sort of thing, but at the moment it doesn't seem a natural part of this facet of my personality. If one is a psychological reductionist, you might explain the fact that I don't discuss things like when I use the toilet, or the moments when I might manifest a latent Oedipus complex, as so many attempts to misrepresent my true nature. That is, often in the psychological literature there is the thought that our underlying desires and emotions are our "true self" and so far as we try to appear different from this universalized set of features and relationships we are somehow not being true to ourselves. But this is to mistake the landscape for the city. It's true that the landscape will always be there, but it's only one part of who we are, and we don't even need to understand it as the most important part. To be "true to yourself" is to build a representation of who you are that you can accept and embrace.

And in the end, perhaps the most remarkable thing about Montaigne's writing is how rich and interesting a representation he made. He managed to leave behind something that tells a lot about who he was. A desire to leave been part of him behind was probably part of his motivation, as he alludes to explicitly in his "To the Reader." I suppose that ultimately I too share his desire to leave something of myself behind. And what could be more natural? This thought is at least as old as Aristotle, who claims that human beings have an innate desire to strive toward the immortality they cannot have as mortal beings. We either do this through sexual reproduction, a way of leaving an image of ourselves behind, or as I might add, by putting our words down on paper or some other medium. Actually, if you think of it, these two ways of striving towards immorality are not independent, but each relies on the other in a significant way: in order for our words to be read in the future we need future generations, and in order for these future generations to understand who we were we have to tell them. It occurs to me that one of the reasons why I know so little about the daily lives of my ancestors is that they lacked the second of these two components. They obtained one half of what it means to have human immortality, but unlike Montaigne's family, there was no means for them to tell me about themselves. How fortunate to have an ancestor like Montaigne!

Now that I think about it, perhaps it's possible that future generations will have to deal with the opposite difficulty from this dearth of information I'm describing. Perhaps with all the blogs, recordings, pictures, videos, and so on that we have today, future generations will have information overload, and the quest for them will be to find a way of piecing the pieces together, or they'll just throw their hands up in the air and choose to ignore us completely. But since so little remains from my ancestors, and I experience that as an unfortunate loss, I can certainly be excused for leaving a little bit more of myself behind. So, with this caveat, I don't feel guilty for any self-indulgence I have granted myself in writing this blog, or in turning it into a book through blurg.com for my family and friends, even if it's not as significant as the tome a lone Frenchman from the seventeenth century has left us. This blog is still a piece of who I am, and for this reason it seems important for me to leave it behind. And I still have one advantage over that Frenchman: I have photographs.

Well, after this set of thoughts, I should say that my intention is to end my book of recollections of 2006 with photographs, so my blogyear will end in this way as well. Living in my new apartment, with a fantastic view of the lake, I've been privy to some remarkable sights over the past few months. It's true that some friends have been able to share in some of these moments, but no one has been able to appreciate all the changes that I've seen, or the different images that have been conveyed by means of water, light, and sky. I think the most remarkable thing about my view is the fact that it changes so often. It's not just that no two sunrises are identical, or that the 2 PM today looks slightly different from the 2 PM yesterday. But these small differences are also parts of a much larger progressions that is always on parade before my windows. I hope that the accompanying photographs can convey some important parts of this parade.

But even though a picture is worth a thousand words, it's worth taking a few words to describe the variety that I take to be apparent in these photographs. For starters, since my apartment faces due east over the lake, the sunrises are absolutely spectacular, and I've even moved my bed near the windows so I never have to miss one. And I value the moonrises - perhaps because of their less common nature - even higher. And then there are odd moments in the day, such as the time when a low western sun happens to reflect off the adjacent building and casts my entire hallway in a deep yellow glow. And there are the changes of the season, from the summer when the lake is nearly covered with sailboats as far as you can see, to the autumn, when only a few boats venture out in the stiff breezes, to the winter when the lake is completely empty save for the occasional white crest of a wave. There was even a remarkable few days when the water must have been close to the air temperature, and swirls of mist raced across the surface of the water towards the rising sun. And then there are the changes that are the result of Chicago's variable weather patterns. For instance, on clear sunny days you can see as far as Michigan City. On other days low and repressive clouds remove the light of day, such as the afternoon when all the tornado sirens in downtown Chicago went off. Sometimes there has been a soft, light gossamer mist that covered all the tops of the nearby buildings, and which draped across the pier like a piece of fabric.Sometimes, when a storm is passing far out on the lake, you have an unobstructed view of the lightning and passing rains. And the moon at night is truly spectacular, especially when there are enough clouds to cast moving shadows down on the water. Although perhaps the most amazing view that I've seen is one morning when I didn't see anything.The fog was so thick everything was hidden: the lights on the pier, the building across the way, the boats, the lighthouse, everything. The only thing I could see that morning was a plain untextured whiteness. Anyway, you can look at the accompanying photographs if you would like to experience a little more of my view. They may not have been parts of who you are, but they can be now.

Hmm, that leads me to ponder another great advantage of sharing our lives with others: the ability to enrich their lives. This need not be seen as an altruistic process, since we gain advantages from it as well, but there are certainly altruistic components. Whether these altruistic components are accepted for what they are or whether they are seen is a sort of intellectual colonization project perhaps ultimately depends on the whims of chance.

And it is a whim of chance that led me to combine Montaigne and pictures of Lake Michigan in this final post of my 2005-2006 series. But after thinking through the line of reasoning above, perhaps it's a fortuitous combination, and perhaps it reveals something about the facet of my personality that I am building through this blog. Although the reasons why I say this may have to be deferred to another post, I'll leave that last observation for my reader to judge.

Happy holidays!

Common English Words

Movies have become such an important part of our culture that many common English words actually derive from the names of important directors. The following list defines some of the more important of these words.


bergmanian — (adj) Characterized by a state of depression and despair, often accompanied by a bleak and uncompromising outlook. "After our fight, she decided to go all bergmanian on me."

chaplin — (n) To do something so well you become a cultural icon. "He was the chaplin of his time."

(1) coppolate — (vb) To make something unusually grand and showy. "He could have made it a small, private affair, but he decided to coppolate the event instead."
(2) coppolate — (vb) To make something unusually small and introspective. "He could have coppolated [see previous definition] the event, but decided to coppolate it instead."

felliny — (n) A state of absurdity or surreal bewilderment. "When the priest told us to be sure to fill the evening with lots of sex and alcohol, we were overcome by the felliny of it all."

jacksonize — (vb) (1) To remove all nuance and subtlety from a script. "This script has been thoroughly jacksonized." (2) To go for the most obvious cinematic tricks whenever possible. "He could have done something original, but he decided to jacksonize the scene instead."

jarmusch — (n) A moment that captures the randomness of everyday life, as in "It's impossible for me to explain what happened, since it was a complete jarmusch."

kieslowskate — (vb) To render deep and depressing by means of unusually fantastic cinematography. "Love seemed such a happy and uplifting emotion until the film thoroughly kieslowskated it."

kurasawa — (n) A classic, model, best of it's kind. "It was the kurasawa of sports cars."

lucalate— (vb) To add an unusual number of special effects. "The film would not have been so good if the director didn't lucalate it."

mehtazian — (adj) Characterized by excessive controversy or an extreme polarization of opinions. "After the activist's lecture there was a mehtazian reaction from the crowd."

miyazakia — (n) A profound or sublime state of being, often used with the explicit phrase, "a state of." "Upon seeing the Sistine Chapel, we found ourselves in a state of miyazakia."

spielbergify — (vb) To do something in an especially obvious or predictable way so everyone gets it. "The teacher decided the point was so important that even though most students understood it immediately, she spent twenty more minutes spielbergifying it."

tarantinish — (adj) (1) Made unusually trendy or compelling by an effective use of music. "The commercial was so tarantinish, I couldn't help but buy the product." (2) Made especially dramatic or discomforting by the use of violence or disturbing imagery. "The commercial was so tarantinish, I could hardly watch it."

tarkovskia — (n) A state in which just about anything can seem beautiful and sublime because of a preceding period of impossibly long and depressing ennui, often used with the explicit phrase, "a state of." "We were in such a state of tarkovskia that we thought that bell-making was the most incredible thing ever done."