Economically, it was naïve. Trying to solve pricing problems on the other side of the world through our shopping choices may make us feel better, but it is unlikely to have much effect, except possibly to make the situation worse. Basic economics tells us that the usual reason prices for a particular commodity are low is that too much of it is being produced: supply and demand. This normally motivates some farmers to move into other crops that are in shorter supply, and thus have a higher price, giving greater return to the farmer. It’s why those nasty free markets tend to promote efficiency and prosperity.

However, artificially propping up the price of a commodity distorts this process and removes the incentive for farmers to diversify. In fact, it does the opposite: it creates an incentive for others to start producing that crop (since it has a guaranteed higher price), thus increasing output and putting an even further downward pressure on price. So there is a reasonable chance that the well-meaning ‘Fairtrade’ movement may actually make things worse in the long run for the majority of third world farmers. The world is very complex place, and solving problems in the world (economic and otherwise) is very difficult. The intuitively obvious action (let’s give some farmers more money for their coffee by buying Fairtrade) may, in fact, end up having larger negative consequences we haven’t stopped to consider.

The same is true for nearly all the practical, secular problems we face. And the larger, more complex and more distant the problem, the more resistant it is to simple, feel-good solutions. It’s why being a politician is such an unenviable task. Even if you’re smart enough to foresee some of the byproducts and consequences of your policies, there will be unforeseen negative results and implications that will only become apparent over time. (We could have the same conversation about global warming, and whether we really have any idea how bad it will be, and whether our proposed solutions will, in fact, make things on the whole better or worse—but let’s leave that for another time!)

This is not just an economic judgement born of observation (although the older you get, the more you observe this phenomenon in action); it is a theological observation as well. It’s the world that Ecclesiastes 3 describes for us so beautifully—a world in which we can see glimpses of order and goodness, and in which we can affirm that everything has its right time, and yet a world which eludes us. We cannot see the whole—neither in all its parts and variety, nor in its future. This is the burden God has laid upon humanity, Ecclesiastes tells us. It is the frustration he has afflicted us with so that we might seek him, who alone sees all and knows the meaning of all.

via The Sola Panel | Smell the coffee.