No honestly.....
This came back to mind while catching up with Maggi Dawn's blog, which I always find refreshing.
At best fair trade is putting a sticking plaster on a big gory wound (no more please - I hide behind the sofa when Holby City is on)
It can no doubt be good for some people - particularly the people we buy from - and their supply chain. I happen to really like Divine Chocolate - and it is cool that Divine is 47% owned by the growers in Ghana.
But let's face it - Fair trade goods are a luxury. And luxuries are for rich people. Are we just inoculating rich people with a little bit of feel-good?
As for boycotting a brand because it uses sweatshops - that is downright stupid. We rich folks get to feel complacent because we are not buying this big nasty brand, and said brand sacks a few hundred child workers. Congratulations - we've just made poverty more unbearable for people who lived off our leavings.
So let's not be satisfied with boycotting - it kills the people we say we care about!
Let's not just use a sticking plaster - fair trade is good - as far as it goes (not very far) - and it does demonstrate we care (not much).
Now trade justice - that is a good cause! Lets get Chirac to be a bit bold, lets start dismantling trade barriers like the EC subsidy.
It's still not enough of course - when many developing countries see most of their GDP magically dissapear into Swiss bank accounts.
Fair trade does suck - because it breeds a self satisfaction which is downright shameful.
2 comments:
Chatting last night with a mate about this post, he suggested that fair trade in, say, coffee, might be not only neutral but actually detrimental. The reason was to do with some messy economics that I struggled to grasp, but will try to explain. I didn't believe him for a long time, but now I think I get it.
The reason why we need Fair Trade coffee is because growers are not getting a fair price. But price is set by the interface of supply and demand; this is essentially the fundamental theorem of economics. The price is too low because there is oversupply. The correct solution would be to reduce the supply, but no individual grower wants to do that because they lose money. So we get Fair Trade.
Fair Trade effectively removes a certain amount of the supply (by signing up certain growers to be Fair Trade growers) and a certain amount of the demand (by creating a luxury Fair Trade brand) from the normal coffee market.
Because the demand and supply ring-fenced by Fair Trade is in equilibrium, and the non-Fair Trade market is oversupplied, taking equal chunks out of supply and demand actually makes the oversupply ratio greater. (see some math below to check this) The fundamental theorem of economics tells us that more oversupply with further drive down prices in the non-Fair market. So growers actually get even less for their coffee.
Sure, the (minority) Fair Trade growers get a fair price; but everyone else gets an even worse price.
Math bit: Let's say that, before the entry of Fair Trade to the market, supply is 200 units and demand is 100 units. Prices are lowered due to an oversupply of 2 to 1. But if Fair Trade comes along and takes 50 units of the supply and 50 units of the demand for its own little market, the rest of the coffee market is left with 150 units of supply to meet 50 units of demand. The oversupply ratio is now 3 to 1, prices are lowered further still, and mainstream coffee growers suffer.
Is that what we wanted when we bought Fair Trade?
Kez also responded to this in her article: Fair Trade
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