Dr. Stephen Phillips, Associate Professor of History and Political Science at Belhaven College in Jackson, recently presented a paper on "The Morality of Free Trade" at the Free Market Forum at Hillsdale College in Michigan.

The paper contrasts the morality and the effects of "free trade" and "fair trade."

Belhaven comes from a social engagement, evangelical Christian tradition while Hillsdale tends toward conservative libertarianism. Phillips makes a distinction in his paper, "While the libertarian position has some appeal, largely holding to maximized individual freedom restrained only by the Stoic 'do no harm' principle...Biblical principles include the negative duty to avoid harm to others as well as oneself, and add positives duties to self, others, and God."

Phillips said he is unsure how the libertarian leaning faculty viewed his paper, but the Christian engagement faculty at Hillsdale gave the paper a warm response.

Phillips' paper stresses the necessity of fairness for free capitalism, and that "fair trade" actually contradicts that imperative.

The government's central duty, Phillips writes, "must be protection of life and property." So the government "plays a critical role in enforcing moral strictures against fraud and dishonest dealings." This follows the Biblical mandate for honesty in commerce and trade, "God forbids engaging in unequal dealings, even to the advantage of the poor: 'You shall do no injustice in judging a case; you shall not be partial to the poor or show a preference for the mighty, but in righteousness judge your neighbor' (Lev. 19:15)."

Fair trade advocates contradict fairness by giving advantage to one party or another. Phillips maintains that fair trade "requires government control of trade, wages, and working conditions" that "opens the door to corruption." Those possessing "political influence use government controls [to] enhance their own status and advantage."

He argues protectionism and trade barriers increase corruption and decrease economic development. "There is a close correlation between tyrannies around the world and the degree of protectionism that they have erected. Generally speaking, nations that are distinguished by protectionism rank high in corruption; they are also in abysmal economic straits...corruption restrains foreign investment, a critical factor of economic growth. Corruption undermines the rule of law and property rights, so essential to economic development."

He says many embrace "fair trade" under the false (and Marxist) assumption "that while business is corrupt, labor (or government) is not." Phillips suggests "vice and depravity corrupt and undermine a free market" but those "abuses are not a failure of the market; they are a failure of man." This universal condition of man affects all institutions and interfering on one side to give advantage because of political power is the type of corruption encouraged in "fair trade" practices.

Phillips illustrates, "if a state prohibits formations of unions, strikes, etc., this fosters a corrupt collusion between industry and government to oppress workers. On the contrary, if government requires industry to hire only union workers, not fire union workers, etc., this encourages a corrupt collusion between union and government to oppress industry. Neither status serves the common good. Government should be limited so that it cannot be included in corrupt collusions."

He continues, "Fair trade, so called, is not fair. It promotes discrimination and inequality. It places too much trust in government, opening the door for government abuse. It runs in bad company with tyrants and oppressors."

Free markets check the corruption that undermines economic development. It brings accountability to economies like we are facing today. Phillips says that free trade and free markets "punish laziness and dishonesty." Globally, free trade allows foreign investment to "displace the local corrupt oppressors (e.g., Zimbabwe)" and increases production and technology that lifts "a backward labor-intensive economy out of the dark ages into the modern global marketplace of efficient labor (e.g., China)."

Phillips maintains that free trade decreases poverty, increases access to goods, improves health and education, and encourages the free exchange of ideas and a free market in religion.

He also speaks to the charitable Fair Trade movement appealing to many Christians. This movement voluntarily "seeks to pay higher than market prices for goods, such as coffee, and use any profits for social welfare projects, such as improved health cared and education." While calling the goals commendable, Phillips notes most producers see little increased income by participating while facing unnecessary restrictions in market growth. Because of the lack of consistency among the standards for these groups, and their tendency toward higher administrative costs than other charities, he suggests "it might be more efficient just to give donations to non-Fair Trade charitable organizations for the aid of the poor in developing economies."

Phillips argues that "free trade" is actually more fair because it complies with universal (and Biblical) values of equality of opportunity and justice. But "fair trade" imposes artificial disadvantages on competition to the eventual detriment of individuals, countries, and the global market.

Perry, a former congressional aide, is a partner in a public affairs firm. Reach him at reasonablyright@brianperry.ms.