the law of chocolate, slavery and free trade

ITs not just about law this week.

This week I want to do something quite different and write about a very old law case which now has a new significance.

Sir Edward Carson was an Irish barrister who became an English politician (being the Cabinet Minister responsible for the British Navy during part of World War 1) and finally a "law lord" (a judge who is a member of the House of Lords).

In 1908 he appeared for the London Evening Standard in a libel action brought by George Cadbury, the head of the family that then owned the famous chocolate company. The Standard was controlled by Liberal Unionists members of a political party which supported tariffs and industrial protection (which was then called Imperial Preference). For years before that time England had been a free trade nation with negligible tariffs. Those supporting Imperial Preference pointed to the relative decline of British industry which was trying to compete against Germany and USA which both had very high tariffs. (An interesting aside here is that Abraham Lincoln supported tariffs- in fact both Karl Marx and Charles Dickens wrote that the US Civil War was about the largely manufactoring Northern states trying to impose high tariffs while the southern states opposed this. Both Marx and Dickens said the war had little to do with slavery.) The Tariff reformers also claimed that free trade was basically amoral- that to buy the cheapest product all the time led to exploitation of workers and a lowering of standards.
The Cadbury family were Liberal supporters of free trade and had in 1901 purchased the Daily News (another London paper and something of a competitor for the Standard). The Standard articles alleged that Cadbury Bros Ltd ,which claimed to be model employers having created the village of Bournville outside Birmingham, which was trumpeted as being a wonderful place to work and live knew of the slave labour conditions on São Tomé, the Portuguese island colony from which Cadbury purchased most of their cocoa for the production of their chocolate. At that time on Sao Tome the workers were indentured, rather like the Kanakas in the sugar fields in Queensland in the 1800s but in even worse conditions. They could not leave their employer, they were kept impoverished and-the Standard alleged – half starved and driven to work at gunpoint. The articles alleged that George's son William had gone to Sao Thome in 1901 and seen for himself the slave conditions. The articles went on to say that the Cadbury family had decided to continue purchasing the cocoa grown there because it was cheaper then that grown in the British colony of the Gold Coast, (which is what Ghana was then called) where labour conditions were much better, being regulated by the British Colonial Office. The Standard alleged that the Cadbury family knew that the reason cocoa from Sao Thome was cheaper was because it was grown by slave labour. The articles left the reader to draw the conclusion that free trade directly led to exploitation.

George Cadbury sued the Standard. Carson defended the paper. In the course of the trial all the truly dreadful conditions that workers on Sao Tome suffered came to light. The jury found that George Cadbury had been technically defamed but that in substance the allegations were true and awarded him one farthing in damages. Older readers may remember the farthing was the smallest denomination in pre decimal currency- one quarter of a penny- in today’s money less then a quarter of a cent.

This case was regarded at the time as an important political case as Carson and the Unionists maintained that it showed the fundamental immorality of free trade. Protection and tariffs was not simply-they said- about protecting British industry and workers but about helping what we would today call developing countries maintain and improve their standard of living.

So why have I written about this long ago case? Because law and politics and economics are connected and because the same sort of thing is happening today. Today we have ‘outsourcing’, we have what economists call ‘the race to the bottom’ with countries reducing wages or industrial or environmental standards to compete with other countries. And most of all we have China. A recent ANU study "A "Race To the Bottom Globalisation and China’s labour standards" shows how Chinese policies fixing wages at $1 or less per day is stopping economic growth and better wages in countries like Thailand, Indonesia and the Phillipines All of those countries- like Australia- are signatories to International Labour Organisation (the ILO is an arm of the United Nations) and ensure better wage and industrial practises then does China. Other studies have shown that in America that from 1973 to 1993 (the period in which tariffs started to be reduced ) 1.3 jobs per 100 were lost on balance each year But 10.2 jobs per 100 were destroyed, while 8.8 were created. There was also a net reduction in wages- that is the new jobs paid less then the old ones.

I might be venturing away from law and into politics but is it time to rethink our trade policies?

Further reading
* "Race To the Bottom Globalisation and China’s labour standards" http://rspas.anu.edu.au/~anita/pdf/AChancp461.pdf
* Michael W. Klein, Scott Schuh and Robert K. Triest, "Job Creation, Job Destruction and International Competition" (Upjohn Institute) http://www.upjohninst.org/publications/jcjd.pdf
Chocolate on Trial: Slavery, Politics, and the Ethics of Business, by Lowell J. Satre