Coffee by Gavin Fridell

Author:Gavin Fridell
Language: eng
Format: epub
Publisher: Wiley

Conclusion

The assessment in this chapter reveals how the state played a key role in driving both the rapid emergence of Vietnamese coffee and the global coffee crisis. Contra the assumption of many free traders, market patterns in the world coffee industry are not primarily determined by the free flow of supply and demand, but are managed and to a large extent driven by economic statecraft. It is not just that states intervene in markets, but rather that they set the context in which markets function. The capitalist economy and international trade require states to enforce private property along with countless other laws and regulations. Once the rules are in place, of course, market forces are extremely powerful, unleashing often-overwhelming market imperatives that can be stronger than many individual states. The Vietnamese state may have played a central role in the expansion of its coffee industry, but once global market forces were unleashed and the crisis took root, it could not simply put the genie back in the bottle. Instead, it had to ride out the crisis like other coffee states.

The case for recognizing the centrality of the state should not be taken to suggest that the state is always “good” – in fact, the majority of states have very poor records in managing coffee statecraft in the interests of the majority of farmers and workers. And yet, this actuality does not remove the fact that the state is always there. Regardless of whether or not trade economists argue that there are efficiency gains to be made from the elimination of the state from the market, such an occurrence is impossible in the context of a capitalist economy, which requires states to ensure its very existence. This means that economic policy designed to combat poverty and injustice in the global coffee industry must take into account the centrality of the state if it is to have the possibility of substantive and long-term impacts.

The collapse of the ICA in 1989 did not mark the end of state involvement in the coffee market, but rather a transformation in relations between coffee states and the degree or intensity of competition between them. From a certain level of collective action during the 1960s–80s, coffee states shifted in the 1990s toward more competitive action, intensifying their efforts to gain comparative advantage over each other. Picking up steam throughout the 1980s, Vietnam proved to be particularly well situated and adept at taking advantage of the new conditions, bursting into coffee markets in the 1990s in a manner that sparked global chaos, only to end up as the world’s indisputable second largest coffee exporter when the dust settled. Whereas the previous ICA quota regime would likely have provided collective checks and slowed the pace of Vietnam’s entry, the post-ICA regime encouraged and intensified competition between individual states.

Reflecting on the political dynamics that have underpinned Vietnam’s economic success, the long-standing advice by free trade think tanks and corporate lobby groups on how to address poverty and insecurity in the

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