The Fairness Of "Fair Trade"
Where's The Social Justice? Where, I Ask You!
By Pejman Yousefzadeh Posted in Economy | Featured Stories — Comments (8) / Email this page » / Leave a comment »
You would think that the producers of "fair trade" coffee would be treating their workers right. After all, they are not the kind of rapacious multinational corporations the fair traders take such delight in inveighing against.
Alas, you would be wrong. On the upside, however, this does mean that you can enjoy your Starbucks with a clean conscience.
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The Fairness Of "Fair Trade" 8 Comments (0 topical, 8 editorial, 0 hidden) Post a comment »
Hmmmm... Your conscience is better off believing in something that isn't true. How convenient. I'd like to think that the tooth fairy is real too...
Pejman is merely pointing out that when you defy the laws of economics, you end up with messed up results. It's like private sector unions. Those few who can get those jobs are better off, but they are few and far between. I suspect that the Fair Trade certified workers are better off than their non-certified bretheren, but that might not be saying much.
Being a rapacious capitalist myself, I'd rather have cheap coffee than expensive coffee that soothes my conscience. But the nice thing about capitalism is that is gives us a choice...
Except Fair Trade coffee doesn't defy the laws of economics. It appeals to a niche market of generally affluent Westerners who would like to purchase coffee produced in a manner that appeals to their conscience.
To suggest that this is defying economics would be akin to suggesting that quality rating systems for products violate the laws of economics. That is absurd.
Does the fact that there are fake Rolex and Breitling watches mean that the market for authentic Rolex and Breitling watches is flawed and defying the laws of economics?
FTR, unions were a major contributor to the OVERALL benefits of ALL workers rising.
Whether the fair trade certification process does or does not achieve it's objectives is a complex question that requires more than some anecdotal evidence of people skirting the system.
"There are those who look at things the way they are, and ask why... I dream of things that never were and ask why not." George Bernard Shaw
And I'd like to think it goes a little deeper than "soothing anyone's concsious". I consider buying fair trade an investment in business, health, society, and stable democracy.
If you cluelessly buy cheap coffee because, gosh durn it, ya want cheap coffee and don't care where it comes from, then you're, well, clueless! Unless you're broke, then fair enough.
I've been following Fair Trade Coffee for awhile now; I posted on this when the FT report came out a few days ago:
http://www.cincomsmalltalk.com/blog/blogView?showComments=true&entry=333...
The bottom line here is this: coffee is a commodity, and the Fair Trade system sets up an obvious incentive to game that system - get your commodity marked "Fair Trade", and you get to mark the price up.
Free Trade Coffee tastes better and costs less. Plus I can ease my conscience by providing more resources to support my family rather than feeling good about supporting a BS trademark that allows producers to charge more for the same thing.
The Fair Trade movement is not fair to anyone except Starbucks (who can charge more for the same product by labling it "fair").
It's still coffee and I'll never understand how people can drink that stuff... :P
"Always be honest with yourself even if you are honest with no one else...
...It helps you keep track of your lies..."
--Myself
...is that four farms out of a sample of five underpay their workers by 10.7%?
"No!" you say. "Even though that example has so little statistical weight as to be pointless even to include, the Peruvian exporter businessman says it's true!"
(begin sarcasm)
Oh, of course! And the exporter has no incentive to cajole companies sympathetic to the poor "underpaid" workers to pay him more for their coffee, how did I miss it! (end sarcasm) Do you think he might not be telling the truth in order to further his own agenda and bank account balance? Come on, you guys are all about economics; if your company could increase revenue without increasing expenditures (say, because they're already doing what they're supposed to be), would you do it? (begin sarcasm again) I know lying to further agendas is a foreign concept to us Americans, but it just might happen elsewhere. (end sarcasm)
I don't deny that underpaying happens; it may even be rampant. The point is that the evidence the article cites comes nowhere CLOSE to supporting its claim and that of the post, let alone proving them.
I don't have time to look at the Weizman story right now; I will later and follow this post up if it has anything convincing in it.
I'm curious as to the reasoning behing this post meant to throw dirt on what is basically a good idea - a certification process for coffee that improves my confidence that my money is finding its way to people doing hard work for my benefit - remember, despite what you may feel about government and hard work and all that, people really do get screwed in much of the developing world.
Capitalism is wonderful, and a well audited certification by a private agency like Fair Trade does what socialist governments can't do - gives producers a choice as to what their production methods will be like rather than forcing it upon them.
Obviously the auditing system needs work, and discrepancies are slipping through, but my understanding is that the Fair-Trade organization is working very hard to make sure problems like this are rare.
And either way, no one's forcing anyone to buy fair trade! Despite it's faults, my concious is better off for believing in it.