performed as the prosecutor in this pro bono outreach educational project
in the form of a mock trial. Stuart Daw, a local businessman, performed
as the defendant. Mr. Daw has had several articles published that also appear
on the website http://www.heritage-coffee.com Mr. Daw still tries to explain philosophical and legal concepts as applied to business.
COFFEEMAN STUART DAW ON TRIAL
Guilty or not guilty?
Judge: Stuart Daw, you are charged with Moral Turpitude, doing work on behalf
of the US government, knowing the laws under which you performed your work
were immoral. How do you plead to this charge?
Me: Not guilty as charged, your Honor.
A few years ago, as founder and chairman of a philosophic society called
the Tampa Bay Objectivists, I was often in search of a theme for monthly
evening meetings, a theme that would entertain while giving members a chance
to apply important philosophic principles to their everyday lives. An experience
from my own past struck me as being a pretty good subject for review by this
intelligent group of mostly young people, many of whom were in college preparing
for life out there in the real world.
The incident in question had related to something I had done in the coffee
business. Was it morally right, or was it morally wrong? I hadn’t really
given it much thought, though I obviously must have felt it was okay at the
time. It seemed to me that an interesting way to present the case to the
group would be to hold a mock trial, with myself as the accused. As luck
would have it, three of our club members were practicing lawyers. That meant
we had a built-in judge, along with both a prosecution and defense attorney,
with the other people serving as the jury. The “courtroom” was my office,
jammed with around 25 members.
First, an outline of the alleged moral crime. I had acted for some time as
an official coffee taster for the Customs Division of the US Treasury Department,
identifying the country of origin of contraband coffee through blind cup
testing. At the time, the US was a signatory to the International Coffee
Organization quota system, in effect a cartel of governments, designed to
fix coffee prices above their true market level.
Both importing and exporting nations could sign on, and most did. Coffee
growing countries that did not were left with the problem of trying to sell
their coffee to countries not in the Agreement. Or they might move their
surplus to a country that had not been able to fill its quota, to be shipped
under the name of that country (this became known as "tourist coffee"). Or
they would dump it in places such as countries behind the old "Iron Curtain."
One loophole was known as a "Basket Quota," under which an importing member
could grant an amount of its purchases to a non-member that was in its good
graces. An example of a country with a basket quota to export to the US was
Mainland China, a non-signatory to the ICO Agreement, but which was held
in particular favor and being wooed by the US Administration at the time.
Customs had seized two shipments from China on the West Coast, probably resulting
from a tip. After the coffee had been impounded, the two luckless importers
were obliged to sue the government to get the coffee released. Permission
had apparently been granted to import the coffee by the US authorities, but
in this case the problem was that there was more coffee in the seizure than
was grown in China at the time. So if the coffee never came from China, where
did it come from?
I received 42 samples of green coffee from Customs in San Francisco, flown
in and hand delivered late at night by a PhD type who must have had a bit
of jet lag. I met him, samples and all, at the airport, and after dropping
him off at a hotel, headed for home with the samples in the trunk of the
car. No sooner had I pulled into my driveway than a taxi came roaring down
the street. Out jumped the Customs guy, demanding to know if I had opened
the trunk of my car.
Luckily I had not. Apparently he had called local agents in Tampa from his
hotel. They asked him if he had the samples in his possession. He hadn’t
realized or had forgotten that it was crucial to “maintain the chain of custody,”
never letting the samples out of his sight. So when they warned him that
he may have ruined the case against the importers, he quickly came to rescue
The next morning we met at my office. He would not tell me where the samples
had originated. All 42 of them were numbered and otherwise unmarked. I cupped
them “blind” with the Customs man standing close by. Five of the samples
turned out to be of the robusta variety, the rest were arabicas. In a written
report to Customs, I said that while it was impossible to be sure, the coffee
was of a type and kind that I would expect to receive from Indonesia.
As it turned out the coffee had indeed come from Indonesia. It had been shipped
to China and re-bagged with Chinese identification. An interesting part of
the story was that after WWII the Indonesians had deported the Dutch and
Chinese from what had been known as the Netherlands East Indies. The Chinese
element resettled on the island of Hainan off the Southeast coast of China,
taking slips from Indonesian coffee trees with them. Thus had begun an accelerated
coffee culture in China, traditionally a tea-drinking nation.
Space here precludes going through the actual subsequent pre-trial procedures
and the final disposition of the case, which was strictly decided on the
legal issues involved. But Let’s get back to the story of our philosophical
society and the mock “trial.” Our group was closely knit intellectually and
philosophically, for each member was a student of Objectivism, the philosophy
of Ayn Rand. While their knowledge of Objectivism varied from one to the
other, they all had at least a basic grasp of it and the meaning of the four
main branches of philosophy -- Metaphysics (what is?), Epistemology (how
do I know what is -- the theory of knowledge), Ethics (how should I behave?),
and Politics (what is the proper form of social organization?).
We grasped the idea that all government laws should rest on some idea of
proper ethics and morality in any society. A cartel such as the ICO coffee
agreement would mean imprisonment if ordinary citizens attempted it. A good
question to ask then would be: why should governments somehow exempt themselves
from their own law and be able to get away with it?
The evening “trial” went well beyond our expectations. I thought it would
be an easy win for me in working to enforce the law, but it turned out quite
differently. While the proceedings were not recorded, here is a very brief
summary of it after following the usual courtroom preliminaries:
Prosecutor: Do you believe cartels should be legalized?
Me: Yes. But more accurately, simply being ignored as not harmful except to those indulging in them.
Prosecutor: Don’t you believe that if companies were allowed to fix prices
they would run wild and rip off the public with impunity?
Me: No, for competition would not allow it. The profit returns from inordinately
high prices would also be high, and there are always competitors looking
for places to invest capital in profitable enterprises. The result would
be new entries into such a business, normalizing prices again. There’s no
need for government involvement.
Prosecutor: Having admitted antitrust laws are wrong, why then did you agree
to work for the government in prosecuting private citizens for breaking an
Me: Because while I believed the law was wrong, I knew that coffee brought
into the country well below market prices meant competitors of our company
would have an unfair price advantage. Further, if a law is immoral but legal,
one must realize that in breaking the law, one runs the risk of detection
Prosecutor: In other words, you are a philosophic pragmatist. You were only
concerned for your own company, and not that some of your fellow citizens
could benefit from lower prices. That was selfish of you, Mr. Daw.
Defense Attorney: Objection Your Honor. He’s badgering the witness.
Me: A few people might benefit from lower prices with respect to that relatively
small amount of coffee being smuggled into the country, but the rest of the
populace would have to bear prices much higher than the market because of
their own government meddling in the process.
Prosecutor: I don’t think we need further testimony from this man. He’s clearly
guilty of breaking the moral law. He knows that the proper role of government
in a free society excludes being involved in the field of economics, interfering
with the individual rights, including property rights, of private citizens.
By testifying for the State he knew he was going against his own conscience
and sense of right or wrong.
My lawyer called a couple of “character witnesses” on my behalf, then took
over the questioning: Mr. Daw, do we have a responsibility to help the poor
farmers of the Third World get more for their products?
Me: This is a zero sum game, whereby some countries may get a short-term
benefit from a government coffee cartel while others, not part of the cartel,
are losing. Besides, raising prices above market levels of any agricultural
product only encourages farmers to over-produce, creating a glut. Eventually
the dam bursts, prices crash, impoverishing all the producers. That’s the
natural law of the open marketplace.
Defense Attorney: You knew cartels were bad. Please tell the jury why, then,
you witnessed for the government in the case of this seizure?
Me: The ruling principle here was justice. The law is wrong, and I admit
it. But in the case of a bad law in a free society, the only moral course
to follow for an individual citizen is to uphold the law, while working to
have the bad law changed.
Those were the essence of the arguments before and against the defendant.
The judge, attorneys and I left the room to allow the jury to come to a decision.
To our surprise, it did not come quickly. It was perhaps a half-hour before
we were called back to hear the verdict. The jury had taken this case very
The judge asked for the verdict, and the jury “foreman” stood and pronounced
“not guilty.” The judge then polled the jury, and to my surprise I had won
by only a couple of votes. But that was proof that we had found a really
good issue to chew on. And we all had a lot of fun in the play.
It is appropriate to be serious and consider the principles involved in the
above mock trial, in case either Canada or the US should ever think of re-entering
the price fixing game of an international cartel. It would not be the moral
thing for them to do. And remember, the moral is the practical. For whatever
we may think of private efforts to raise prices through such things as Fair
Trade, we must remember that these groups are strictly voluntary. Consumers
are not obliged to pay more than the real market price for coffee if they
choose not to. Coffee consumption is the ideal democratic process - people
voting with their palates and their dollars for the best value we in the
business can offer.