27 May 2007

Free Associations: Beverage Mal-Distribution

Water Movement, 2001 © David Goldes

"Bean counting

50 Number of countries where coffee is grown.

2bn Number of cups of coffee consumed each day.

42 Number of beans needed to make one espresso.

80-140 Milligrams of caffeine per cup.

£40bn Amount generated by annual sales.

3 cents Amount received by an average coffee farmer for a $3 cup of coffee."

Globalization seems like a terrific thing until you look at the details. And often globalization is a good thing, just not an unadulterated one. One can, for instance, ask about the "footprint" left by various market interactions. And people are made of carbon too. In The Guardian today is a story prompted by the independent documentary film "Black Gold" (I filched the numbers above from that report). And, of course, it won't do to switch to bottled water either, as The New York Times makes clear today.

A few years back Houston Fotofest (2004) focused on Water ... which, of course, is under pressure from privatizers.

For a relatively sane view of globalization from an economist, try Dani Rodrik's blog where he today (correctly) points out that:
"[I]n fact there is nothing in the economic case for free trade to suggest that all or most of the individuals in the economy will be better off with free trade. ... And even with respect to the aggregate gains from trade, the economist's case hinges on a large number of auxiliary assumptions. These may well be violated in the real world. I would bet my dollar on the common person having an instinctive understanding of these imperfections before I would trust a Chicago or GMU economist's priors on it."
The point, I guess, is that you should not rush to try justifying your beverage choices by invoking free trade arguments about how globalization inevitably helps poor farmers in developing countries. The devil is in the details.

P.S: Via Greg Sherwin here is a related story on coffee from the BBC.

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Blogger swag said...

There are few things more dangerous than looking at the face value of statistics without probing any deeper for real meaning. Compare the pay scale for a truck driver shipping the beans in Guatemala with that in the U.S., you're going to get an astronomically different number.

Not that the equitable distribution of wealth on a global level isn't wholly skewed. But if anyone is to make headway on changing that, we have to operate from facts in context -- not on convenient Harper's Weekly factoids.

27 May, 2007 12:43  
Blogger Jim Johnson said...

Greg, You obviously find the "factoids" discomfitting from your vantage point in a San Fran coffee shop. How about next time you complain about the price of gas and blame the exhorbitant profits made by "big oil" you remember that the coffee industry is a close second in the race to extract profits. Or, since you undoubtedly think that that is just a barely relevant factoid and would NEVER criticize Exxon-Mobil, just jump up and down when others do so, and remind them about all the terrific things big oil does for the poor in, say, Nigeria.

So what is the"real meaning" of the stats I quote? Since the Guatemalan truck driver lives in a shit poor country ruled by an authoritarian regime, we would just shrug and order another latte? Somehow, your concern for the skewed distribution of wealth in the global economy (what about just in the US?) rings hollow. Sorry. Jim

27 May, 2007 16:59  
Anonymous Anonymous said...

It might be noted that the Wall Street Journal (yes, the liberal “drive-by media) published a story, "Globalization's Gains Come With a Price" (May 24th). In the article, the trio of authors outline the downside of globalization. Most notably, the "haves" get more of the pie (shocking, I know). This is not only true for the US, but for Mexico, Central American and Asian countries.

Additionally, those with education get more. If the US wants to continue being a player. It might be a good idea to fix our schools. Idk, just a suggestion.

Last, it still makes me sad to hear about your son.


28 May, 2007 12:00  
Blogger Jim Johnson said...


Thanks for the kind word about Jeff. Some days are unbearably difficult (yesterday I was doing spring cleaning and found traces of Jeff at every turn). Other days are OK. I miss him.

Ass for the WSJ piece, there was a brief notice of it on Dani Rodrik's blog. He found it odd that teh folks at Dow Jones thought this was news. Even those economists - like, say, Jagdish Bhagwati - who are very pro-globalization acknowledge that it is not costless and that the costs (and benefits) are often quite unevenly distributed. So they ackonowledge the need for different sorts of restrictions on different sorts of markets. It would be nice if a subtler view of "free trade" might emerge in the press.

28 May, 2007 13:09  

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