Adam Smith and Coffee Farmers in Ethiopia

By Daniel E. Lee and Elizabeth J. Lee.

Published by The Global Studies Journal

Format Price
Article: Print $US10.00
Article: Electronic $US5.00

Adam Smith envisioned a world of small shopkeepers and farmers, all of them individual entrepreneurs. Though Smith never visited Ethiopia, the coffee trade in Ethiopia approximates the world that Smith envisioned, with 95% of Ethiopian coffee produced by small farmers. It is good coffee, some of the best in the world. That, however, did not spare farmers in Ethiopia from economic disaster when a glut of coffee on the world market put coffee prices in a freefall with prices hitting a one-hundred year low when adjusted for inflation. With their incomes plunging, many farmers switched to other crops, chief among them khat, a leafy narcotic that sells for as much as $200 a pound in the United Kingdom and the United States, where it is illegal. Smith believed that market-driven shifts in production would contribute to the wealth of nations, resulting in everyone being better off. The experience in Ethiopia suggests otherwise.

This paper examines ways of dealing with the human dimensions of this economic catastrophe. Among them are new marketing initiatives such as the Oromia Coffee Farmers Cooperative Union headed up by Tadesse Meskela and efforts of Oxfam and other organizations to appeal to the moral sentiments of consumers and executives of companies such as Starbucks and Sara Lee to encourage them to purchase coffee produced in Ethiopia and elsewhere that provides a fair return to the farmers who produce it. The latter offers some interesting parallels with Smith’s theory of fellow-feeling, which he developed in The Theory of Moral Sentiments, published in 1759 — seventeen years before the much better known An Inquiry into the Nature and Causes of the Wealth of Nations. The paper concludes by examining possibilities for and limitations of cooperative marketing initiatives and moral suasion as means of ameliorating the human costs of market economies.

Keywords: Global Economy, Adam Smith, Coffee Farmers in Ethiopia, Human Cost of Global Market Factors, Coffee Farmer Cooperatives, Trademarking Coffee, Fair Trade Movement, Appeals to Moral Sentiments

Global Studies Journal, Volume 1, Issue 4, pp.51-60. Article: Print (Spiral Bound). Article: Electronic (PDF File; 503.231KB).

Prof. Daniel E. Lee

Professor of Ethics, Augustana Center for the Study of Ethics, Augustana College, Rock Island, Illinois, USA

Daniel E. Lee is professor of ethics and director of the Center for the Study of Ethics at Augustana College, Rock Island, Illinois, where his teaching responsibilities include a course in business ethics. In June of 2007, he was a member of the People to People Ambassador Program Philosophy Delegation to China. He has traveled and taught in South America and Europe, in addition to visiting China and other countries. The author of several books, among them Hope Is Where We Least Expect to Find It (1993), Navigating Right and Wrong (2002) and Freedom vs. Intervention (2005), he holds the M.A., M. Phil. and Ph.D. degrees from Yale University.

Elizabeth J. Lee

Northwestern University, School of Law, Chicago, Illinois, United States, Northwestern University, Chicago, Illinois, USA

Elizabeth J. Lee, while a student in the J.D. program at Northwestern University School of Law, Chicago, Illinois, was part of a research group that traveled to Ethiopia in 2008. During the summer of 2006, she served as a clerk at the Center for International Human Rights in the Bluhm Legal Clinic at Northwestern University School of Law, where she worked on asylum cases. During the summer of 2007 she served as a clerk for Gammage & Burnham, a law firm based in Phoenix, Arizona. She received the J.D. degree from Northwestern University School of Law in May 2008 and is currently serving as a clerk for a justice of the Arizona Supreme Court. Fluent in Spanish, she has studied and taught in Ecuador and has traveled extensively throughout South America and Europe, as well as Mexico, New Zealand and Australia.

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