As a general rule, there are two kinds of people in this world — those who understand free trade, and those who don’t like it. Free trade is often portrayed as an evil plot by rich industrialists to exploit Third World countries and at the same time put working-class Americans out of jobs.

But people who believe this have a very distorted view of free trade. Free trade essentially means this: When there is nothing to prevent people from buying products from anywhere in the world, people tend to buy products from whoever can make it cheapest.

As a result, only those who are best at making products remain in business. Naturally, certain countries tend to be better at producing certain things than others. The only way most Third World countries can compete in the global market is by offering cheap labor, and there is simply no way “Fair Trade” policies will ever do anything to bring Third World citizens out of poverty.

To understand why this is the case, it is necessary to understand why wages are much lower in Third World nations. Many people in these countries are not well educated — they have no choice but to be unskilled factory laborers. Also, in poor countries the necessary capital to build factories is hard to come by. As a result, the supply of factory workers is much larger than the demand for them.

Because of this, factory owners pay lower wages. This is not exploitation, this is not abusing the working man, it is simply employers hiring as many employees as they can afford.

If Third World factories are forced to pay “living wages,” the end result is that fewer people will be hired, and fewer goods will be produced. The low wage rates in Third World countries are what encourages companies in First World countries to go through the expensive process of relocating, because they know in the long run it will mean they will be able to produce things more effectively.

There are many politicians and lobbyists who advocate fair trade policies, which means that unless a country has a well developed system of unions bribing government officials to give in to their demands, America will not trade with them, on the basis of “human rights violations.” Fair trade means you as the consumer will pay far more than you would under normal circumstances. Fair trade means people in Third World countries will go from low wage jobs to having no job at all.

For the most part, the surest way to eliminate sweatshop labor in Third World countries is to allow more factories to move there. As more and more factories move in, they will be forced to pay higher and higher wages in order to attract workers from other factories. As with most supposed problems caused by free trade, given enough time the problem solves itself.