The Fairness of Fair Trade

I don’t at all doubt the good intentions of those who promote the use of fair trade products, such as tea, coffee, clothing, etc. But as an ethical question, is fair trade really that fair? According to an article by Leo McKinstry in the British periodical The Spectator, the answer is no. In The Iniquities of Fair Trade (April 2005) McKinstry makes the point that “there is nothing particularly fair about ‘fair trade.'”
An enlightening quote that demonstrates his assertion concerns the actual impact of fair trade market values on the very farmers they are hoping to aid:
Because fair trade subsidies ignore market realities and guarantee prices, they encourage overproduction of certain goods, just as the wretched Common Agricultural Policy has done in the European Union. In the coffee market — where the British fair traders are most active — the central problem at present is oversupply, which has forced down prices. So by propping up unwanted production the fair traders are actually driving down prices even further, which increases the economic damage to farmers and workers. It is especially misguided for fair traders to underwrite inefficiencies and poor quality, when the major, low-cost, highly mechanised plantations of Brazil and Vietnam or the specialised, high-quality farms of Central America can meet the world’s coffee demands so much more effectively. Campaigners would do better to encourage inefficient, small-scale coffee producers, especially in Africa, to diversify into other areas.
People have failed to realise that you cannot legislate morality, and when the European Union has set regulations in place informing buyers who they can and can’t buy from they are in effect harming both the farmers and the consumer.
What is interesting to note is that the fair trade advocates are generally of a more socialist or left-wing perspective. This means that they are against a market driven economy. The irony is that they have to utilise the very market they are against to promote fair trade wares.
Another helpful article, that places the fair trade trend in perspective is Katharine Winans Fair Trades Dirty Secret hosted at Lew Rockwell’s site.
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One response to “The Fairness of Fair Trade

  1. Mark

    Woah, do you realize that you’ve played hackey-sack with a “fair trade” hackey sack? :)

    What I’ve found is that the term they use to describe what they do (namely ‘fair trade’) is loaded and sort of making a moral judgement about some of the dynamics. And yes, that moral judgement is based firmly on socialist economics.

    I’m reading “Capitalism and Freedom” by Milton Friedman. Pretty good stuff so far! I think I’m going to read that and also “Libertarianism” by Hospers and then decide once and for all whether I’m totally comfortable with giving myself the label “libertarian”. I’m probably more comfortable with it than any other political label, though. So in that sense I’m sort of already libertarian. I’m definately not a socialist nor a communist. I’m definately a capitalist and I think some of the common complaints “against” capitalism are actually complaints about pseudo-capitalism. Often, what we see, is not really pure capitalism (because that would be a little too ‘free’ for some peoples likings). Radical capitalism could lead to radical freedom in certain senses, and that scares many people. So, in many senses, pure capitalism has only been around only as much as the powers that be have allowed it, which depending on the place and time may not even be very often.

    I believe the classical use of the terms “liberal” and conservative” are pretty good, but I’ve never associated myself with modern liberalism, and I’m increasingly distancing myself from much of what passes for “conservative” now-a-days. As loudly as the pundits harp on the other side, I think the real difference in political philosophy between a typical conservative and a typical liberal today is quite small. Yes, there may be differences on an isolated moral stand or two, but those are exceptions to a general agreement in philosophy (once some of the differences in partisan lingos are overcome). This sort of thing is to be expected when votes, not principles, are what drive a campaign.

    You said: “..you cannot legislate morality”.

    Sheesh! What were you thinking when you said this..If our government doesn’t ingrain morality into our society, who will??? Let me guess, you’re thinking of something crazy like: The church, or the parents?

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