Oxford defines fair as ﾓtreating people equally,ﾔ or ﾓjust or appropriate in the circumstances.ﾔ When politicians describe fair trade, the word takes on a particular meaning like ﾓnot taking advantage of the small man.ﾔ
This brief explanation makes it patently clear that ﾓfairﾔ is a very subjective word and therefore, what one person understands is fair trade another does not. However, where most individualists draw the line is when politicians want to choose what is fair or not. In this respect, politicians are most adept at using the word for their purposes, which is to oblige (or force) some people to act contrary to their own purposes to serve the interests of someone else.
America & Japanese Vehicle Imports.
Letﾴs look at the automotive industry in the United States during the 1980ﾴs. American manufacturers were accusing the Japanese of ﾓdumpingﾔ vehicles below their cost into America so the American automakers could not compete on a ﾓfairﾔ or ﾓlevel playing field.ﾔ
Fearing that people would lose their jobs the government intervened and asked the Japanese to institute voluntary export constraints, giving the American manufacturers an opportunity to upgrade their plants so they could produce more competitive products.
Well, the Japanese agreed, but the American manufacturerﾴs did not use this time to improve, they simply took advantage of the governmentﾴs attempt to make things ﾓfairﾔ and did not bother to improve their product to supply what the American consumer wanted to buy.
This attempt to make everything ﾓfairﾔ led to an unprecedented decline in the U.S. automotive industry that was further exacerbated by the Japanese building manufacturing plants in America.
Today, according to recent reports, Toyota Motor Corporation has surpassed Ford as the worldﾴs second-largest automaker behind General Motors Corporation.
The Bahamas and Manufacturing.
Turning homeward, government supposedly ﾓlevels the playing fieldﾔ for local start-up manufacturing enterprises by imposing high tariffs on imports of foreign product. This is said to protect local industry, but in these conditions, the competitive market is not allowed to develop resulting in the consumer paying higher prices. In politics, this is known as ﾓfairﾔ trade.
This begs a couple questions:
1. Where are these start-up companies today? And,
2. Did government reduce the duty rates on the imports when they went out of business?
One can rest assured that the Bahamian consumer pays more for products when the government intervenes to decide what is ﾓfairﾔ in place of the market.
So what?
Should we care? After all, the government tried to save jobs and ﾓcreateﾔ a local industry. Well, what about the jobs that would have been created had government not intervened, thereby allowing the entrepreneurial spirit to develop new industry. Government cannot decide what ﾓfair tradeﾔ is. Individuals trading with each other for goods and services determine for themselves what is fair or not.
Bahamian consumers are smart enough to determine if someone is trying to take advantage of them, so the best protection for them is a wide choice of goods and services, either home made or imported.
Is the search for fairness a mistake?
Dr. Milton Friedman suggested that itﾴs not a mistake to search for ﾓfairness.ﾔ The issue is how we attempt to determine what ﾓfairﾔ is. He noted: ﾓThere is a real role for fairness, but that role is in constructing general rules and adjudicating disputes about the rules, not determining the outcome of our separate activities. That is the sense in which we speak of a ﾓfairﾔ game and ﾓfairﾔ umpire. If we applied the present doctrine of ﾓfairnessﾔ to a football game, the referee would be required after each play to move the ball backward or forward enough to make sure that the game ended in a draw!ﾔ
The only way the government or politicians should be trying to determine what is fair or not is by treating people equally when it comes to following the rules. This can be accomplished by spending their time ensuring the court system is efficient so people can seek redress if they think they have not been treated ﾓfairly.ﾔ
If they do that, the only fair they will need to organise would be for amusement and public entertainment.
The Nassau Institute
