The International Coffee Industry Essay Example | Topics and Well Written Essays - 1750 words

The International Coffee Industry - Essay Example In specific reference to the coffee industry, the profit motive of corporations only worsens the conditions of poor coffee farmers who are not compensated in proportion to their hard labor. According to Thomas Friedman, globalization is the â€Å"inexorable integration of markets, nation-states, and technologies†¦..the spread of free-market capitalism to virtually every country in the world.† (Friedman, 2000: 7-8). In reference to the international trade facilitated by globalization and the diffusion of geographical boundaries, Mittelman refers to globalization as a historical transformation - â€Å"a political response to the expansion of market power† resulting in a transformation â€Å"in the economy, of livelihoods and modes of existence† (Mittelman, 2000: 6). McMichael also corroborates this market-oriented view, seeing the process of global integration taking place on the basis of â€Å"market rule on a global scale†(McMichael, 2000:149). The be lief in the beneficial effects of free trade that exists today is largely a function of the theory of comparative advantage that underlies the Ricardian model of international trade (Henderson, 1993:827). Comparative advantage is the ability possessed by a particular country to produce a particular good at a lower cost relative to other goods and as compared to other countries that produce the same good. Therefore, comparative advantage possessed in one area of production indicates that the country has some favorable factors working on its behalf or has perfected specialized techniques in the production of that good, so that it is able to produce it more efficiently (Mankiw, 2007: 52). According to Porter (1996:64), â€Å"Competitive strategy is about being different.†Ã‚