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tryptych
12-03-2008, 02:25 AM
"Fairtrade is not charity. Just by going shopping, you can make a difference."

http://lifeandhealth.guardian.co.uk/ethicalliving/story/0,,2264187,00.html

While I do buy Fair Trade products, I struggle with the political concept of it.

Partly because of commodification-of-dissent statements like the above, which are nothing if not marvelous advertising copy, and partly because of the suspicion that supermarkets and middlemen are the ones reaping the real rewards, while liberal guilt is soothed by paying 3rd world farmers slightly more than next to nothing.

I was arguing with someone today, who suggested that Fair Trade was useful as wedge to open up discussion into moral issues about global trade, to broaden the possibilities of responses, even if it wasn't often seen as such.

What do you lot think?

bun-u
12-03-2008, 11:07 AM
I disagree with it on so many levels
- it assumes consumers should believe what companies say about their products (why believe in a company’s claim that it was ‘made ethically’ when their claims that their product will make you ‘more sexy’ you will take with a pinch of salt) – the accountability factor is very weak
- it means that the only people who ‘consume to make a difference’ will be higher earners, because they can afford to shell out the extra amounts for products – this adds to the palpable hatred of the poor for not doing their bit
- it’s a pessimistic solution to global issues and re-enforces capitalism – I don’t want of the products I buy to be the result of slave labour – I simply don’t want a choice in the matter – having ‘fair trade’ means you create the room for unfair trade and people can ‘vote with their feet’

vimothy
12-03-2008, 11:27 AM
It doesn't work!

stelfox
12-03-2008, 12:06 PM
^^

well that's a good, reasoned argument.

personally, i'd like not to have the choice and just be able to depend on responsible legislation that would demand that all products be mandatorily fairly traded.

until that's the case, or all forms of capitalism are overthrown (not that i'm convinced this would be a good thing, either, and it's also about as likely as the former scenario), i'd rather fuck other people's lives up as little as my income and time contraints allow.

vimothy
12-03-2008, 12:43 PM
Sorry, but I thought since we've done fair trade to death, there's not much point going into it again. Let me try to elaborate...


personally, i'd like not to have the choice and just be able to depend on responsible legislation that would demand that all products be mandatorily fairly traded.

until that's the case, or all forms of capitalism are overthrown (not that i'm convinced this would be a good thing, either, and it's also about as likely as the former scenario), i'd rather fuck other people's lives up as little as my income and time contraints allow.

Unfortunately, this is not how the world works, and wanting it to be so won't make it. In fact, to the extent it is successful (which isn't clear), Fair Trade does more harm than good.

Fair Trade is literally a price fixing cartel. You might think (or assume) that this is a "good thing", but it also has some unpleasant ramifications that proponents of Fair Trade never seem to consider. (Why is that, by the way)? With Fair Trade we create a system whereby there are two tiers of commodity producers. One tier is the Fair Trade producers and the other is the non-Fair Trade producers. The Fair Trade producers are paid a premium for their product. Therefore, the opportunity cost of buying Fair Trade is that money moves away from the poorer farmers towards the richer farmers. By buying Fair Trade coffee, you make the worse-off, worse-off as demand for their coffee falls and with it the price. A much better (though still bad) idea would be to buy two cups of non-Fair trade coffee and throw one away. That way, demand for coffee would increase, pushing up the price, but the benefits would not be unfairly concentrated within one arbitrarily designated group of growers.

The problem with price floors (like the problem with trying to increase aggregate demand alluded to above), is that prices change for a reason. Farmers complain because the price of coffee can fall according to the market, and they can be left getting an "unfair" price for their product. However, prices change for a reason. Prices are infomation about supply and demand. Economists say that prices "clear" markets, by which they mean, prices regulate supply and demand. Demand for coffee is relatively inelastic, which means basically means that regardless of anything else, total quantity consumed stays roughly constant. So let's imagine that lots of people decide to start growing coffee. Increased supply will not increase the amount of coffee people want to drink, it will push price down. Hence, as more producers are drawn to the coffee market (by, say, well meaning liberal advisers in Western NGOs), the size of the pie will stay the same (aggregate demand), but that pie will have to be shared out among more farmers. Inserting a price floor into this equation (which is whta Fair Trade attempts to do) will have two effects (this is all Econ101):


Increase the amount of coffee supplied leading to a surplus.
Attract more producers to an already oversubscribed market that provides little avenues for productive growth and so will not increase the country's chances of sustaining economy wide growth and increases in living standards.


EDIT: And both of those, btw, will cause downward pressure on price. The Third World needs to get out of these shitty commodity markets, not be encouraged to move more workers into them...

bun-u
12-03-2008, 12:50 PM
^^

well that's a good, reasoned argument.

personally, i'd like not to have the choice and just be able to depend on responsible legislation that would demand that all products be mandatorily fairly traded.

until that's the case, or all forms of capitalism are overthrown (not that i'm convinced this would be a good thing, either, and it's also about as likely as the former scenario), i'd rather fuck other people's lives up as little as my income and time contraints allow.

...but I think doing this lets Governments off the hook - we're not even waiting for capitalism to be overthrown, just expecting our Governments rather than companies to legislate for fair trade

vimothy
12-03-2008, 12:52 PM
...but I think doing this lets Governments off the hook - we're not even waiting for capitalism to be overthrown, just expecting our Governments rather than companies to legislate for fair trade

Can you explain to me why we should expect our governments to do this?

IdleRich
12-03-2008, 01:08 PM
"..unfairly concentrated within one arbitrarily designated group of growers."
But can't anyone take the steps necessary to be Fair Trade? Why do you say it is an arbitrarily designated group?

john eden
12-03-2008, 01:11 PM
Well we've talked before about govts providing health care, health and safety legislation and the minimum wage so it isn't a big stretch from there to fair trade stuff.

I know you don't agree with this approach tho, Vim.

Globalisation does rather screw it all up tho because you are dealing with other govts or overseas companies who have a different agenda.

Is it useful to think of "fair trade" as a top up extra commodity that people can choose to purchase? It certainly has very effective branding and a quite easy to define demographic.

Mr. Tea
12-03-2008, 01:32 PM
- it assumes consumers should believe what companies say about their products (why believe in a company’s claim that it was ‘made ethically’ when their claims that their product will make you ‘more sexy’ you will take with a pinch of salt) – the accountability factor is very weak


Well for one thing, you can't quantify how 'sexy' something makes you, but you can most definitely quantify how much some third world producer is being paid per tonne of bananas, coffee etc. produced, and a producer who can sell goods for a higher price is unequivocally getting a better deal.

droid
12-03-2008, 01:37 PM
Is it useful to think of "fair trade" as a top up extra commodity that people can choose to purchase? It certainly has very effective branding and a quite easy to define demographic.

Or as a kind of agricultural subsidy enjoyed by farmers all over the first world?

Interesting article here taking a pro-fair trade approach but acknowledging the free trade/economic argument:

http://www.cognitivedissidents.org/mitterko-1.html



But what of higher quality Fair Trade goods, such as particular types of chocolate and coffee? This is not a concern for those worried about Fair Trade as a subsidy, but it is for those advocating trade liberalization. These higher quality goods must have a higher value conferred to them from the production of the goods. This is exactly the case in specialty goods like Swiss milk chocolate and artisanal cheeses. The diets of the cows and processing of the milk clearly change the character of such products. The same applies for shade-grown Fair Trade coffee, which establishes an environmental benefit to certain species of birds.

It is shortsighted to forego a discussion of the benefits such goods contribute to disadvantaged workers. Instead of compromising the environmental health of their communities by growing cheap coffee, they can live in a cleaner environment. One shouldn’t be required to pass up living in a healthy community in order for short-term economic gains based on negotiations that ignore the externalities imposed on one’s community. This is where the Fair Trade movement truly benefits those it targets, independent of those concerns Kurjanska and Risse were concerned with. Only focusing on Fair Trade goods as a subsidy is unnecessarily limited in scope, and overlooks the general contributions of the movement. In addition, even if we are distorting the market in this case and possibly hindering the economic development in a particular developing nation, it is clear that overlooking growth may be important in order to secure those benefits for disadvantaged peoples that the Fair Trade movement affords them.

Theres also the point that fair trade goods need not be more expensive than non-fair trade. Take Blue mountain coffee. A 16oz bag costs approx ¢US30 in a supermarket, yet the workers who sort the beans in appalling conditions are paid $JA400 (about $4-5US) per 100 pound bag, and have no job security or any other benefits. The coffee company have also invested nothing in physical or social infrastructure development in the areas that produce the coffee.

Why cant the coffee company treat its workers more fairly, keep the price the same and marginally reduce its profits? I know why they WONT do it, but why CANT they do it?

swears
12-03-2008, 01:46 PM
Fair Trade is literally a price fixing cartel. You might think (or assume) that this is a "good thing", but it also has some unpleasant ramifications that proponents of Fair Trade never seem to consider. (Why is that, by the way)? With Fair Trade we create a system whereby there are two tiers of commodity producers. One tier is the Fair Trade producers and the other is the non-Fair Trade producers. The Fair Trade producers are paid a premium for their product. Therefore, the opportunity cost of buying Fair Trade is that money moves away from the poorer farmers towards the richer farmers. By buying Fair Trade coffee, you make the worse-off, worse-off as demand for their coffee falls and with it the price....

OK, in the short term. But Isn't the main goal of the Fair Trade movement to bring wages up across the board in the long run?


EDIT: And both of those, btw, will cause downward pressure on price. The Third World needs to get out of these shitty commodity markets, not be encouraged to move more workers into them...

What markets do you think would be beneficial to third world nations to get involved with , then?

vimothy
12-03-2008, 01:56 PM
But what is the effect of Fair Trade? I know that we all (myself included) want to change the world for the better and alleviate poverty, but how will Fair Trade achieve this?

From Wikipedia:

http://upload.wikimedia.org/wikipedia/en/thumb/b/b2/Effect_of_a_Price_Floor.gif/270px-Effect_of_a_Price_Floor.gif


But can't anyone take the steps necessary to be Fair Trade? Why do you say it is an arbitrarily designated group?

Arbitrary in the sense that there's one group of Fair Trade farmers and one group of non-Fair Trade farmers, but there's not necessarily any reason to suppose that the Fair Trade farmers are more deserving of a premium.

crackerjack
12-03-2008, 01:59 PM
Arbitrary in the sense that there's one group of Fair Trade farmers and one group of non-Fair Trade farmers, but there's not necessarily any reason to suppose that the Fair Trade farmers are more deserving of a premium.

Presumably the farmers are being paid more for their product by the company buying the, say, coffee. It's not the farmers who are more 'deserving', it's the company paying a fairer (ie higher) price.

john eden
12-03-2008, 02:10 PM
I think what Vim is saying is that in most cases there is no discernable difference in the quality of the product? So on an economic level it doesn't make any sense to pay more for it.

But in my book the product also contains whammo free trade powder, which gives people who purchase it the warm glow of do-gooding. So paradoxically, it justifies a higher price.

IdleRich
12-03-2008, 02:11 PM
"Presumably the farmers are being paid more for their product by the company buying the, say, coffee. It's not the farmers who are more 'deserving', it's the company paying a fairer (ie higher) price."
Yeah, that's what I thought, to be designated Fair Trade means that you are paying a high/fair price doesn't it? I thought it applied to companies such as Starbucks not to a supplier. Are you (Vim) using the phrase Fair Trade supplier to apply to a producer that deals with a company that has been designated Fair Trade?

vimothy
12-03-2008, 02:20 PM
Yeah, that's what I thought, to be designated Fair Trade means that you are paying a high/fair price doesn't it? I thought it applied to companies such as Starbucks not to a supplier. Are you (Vim) using the phrase Fair Trade supplier to apply to a producer that deals with a company that has been designated Fair Trade?

When I said "Fair Trade producer" upthread, I meant the actual farmer being paid buy the coffee producing company like Nestle or whatever. Sorry for the confusion. Price floors are just bad economic policies, for the reasons I've already stated. Subsidies (for example) are much less harmful.


What markets do you think would be beneficial to third world nations to get involved with , then?

Markets with elastic demand, markets where productive increases can be translated into improved living standards -- manufacturing, not agriculture.

IdleRich
12-03-2008, 02:29 PM
"When I said "Fair Trade producer" upthread, I meant the actual farmer being paid buy the coffee producing company like Nestle or whatever."
OK, I see what you're saying - since two given producers cannot compete on price then it is arbitrary which one Nestle deals with. Unless one is better quality I guess.

vimothy
12-03-2008, 02:37 PM
OK, I see what you're saying - since two given producers cannot compete on price then it is arbitrary which one Nestle deals with. Unless one is better quality I guess.

Yep, but then there's no reason for the premium, unless they are paying a premium in excess of the one necessary for higher quality coffee. Otherwise, it's not "Fair Trade", it's just more expensive.


OK, in the short term. But Isn't the main goal of the Fair Trade movement to bring wages up across the board in the long run?

Won't happen -- in the long run, Fair Trade will reduce wages, by increasing supply (both quantity of coffee and -- even worse -- number of cofee producers) in an inelastic market.


Why cant the coffee company treat its workers more fairly, keep the price the same and marginally reduce its profits? I know why they WONT do it, but why CANT they do it?

For the same reason that people who support higher taxes don't just give 20% of their wage every month to charity: self-interest. To make lasting change, you need to institutionalise a system that is incentive compatible for all parties, IMHO.

bun-u
12-03-2008, 03:19 PM
Well for one thing, you can't quantify how 'sexy' something makes you, but you can most definitely quantify how much some third world producer is being paid per tonne of bananas, coffee etc. produced, and a producer who can sell goods for a higher price is unequivocally getting a better deal.

But who is quantifying anything? do you know at the point of purchase how much the farmer is being paid for the product you are buying? No - so your buying into a brand, a notion that something good is being done somewhere, somehow...a similar vague notion to your chances of getting laid will somehow be improved by buying something

bun-u
12-03-2008, 03:26 PM
Yeah, that's what I thought, to be designated Fair Trade means that you are paying a high/fair price doesn't it? I thought it applied to companies such as Starbucks not to a supplier. Are you (Vim) using the phrase Fair Trade supplier to apply to a producer that deals with a company that has been designated Fair Trade?

I notice that companies with very bad image problems are sometimes the ones flaunting fair trade goods. Your tea on a Ryanair flight is fair trade - like the fair trade badge on the cuppa will somehow make you feel better about flying with a company fucking over staff and the environment. There was also the recent story about the exploitative working practices (long hours, no breaks) for staff at a M&S sorting depot with fairtrade goods - it wasn't relevant to the fair trade badge because that only related to the practices at the source country

Mr. Tea
12-03-2008, 03:28 PM
But who is quantifying anything? do you know at the point of purchase how much the farmer is being paid for the product you are buying? No - so your buying into a brand, a notion that something good is being done somewhere, somehow...a similar vague notion to your chances of getting laid will somehow be improved by buying something

I should imagine there's some sort of regulation to the effect that the prices paid to the producers must be higher than the going market rate?

Edit: there actually seems to be a fairly stringent definition of what constitutes 'fair trade' - http://en.wikipedia.org/wiki/FLO-CERT

Mr. Tea
12-03-2008, 03:33 PM
Your tea on a Ryanair flight is fair trade - like the fair trade badge on the cuppa will somehow make you feel better about flying with a company fucking over staff and the environment.

Not to mention customers! Fucking Ryanair, grrr bah mumble grumble...

crackerjack
12-03-2008, 03:46 PM
But who is quantifying anything? do you know at the point of purchase how much the farmer is being paid for the product you are buying? No - so your buying into a brand, a notion that something good is being done somewhere, somehow...a similar vague notion to your chances of getting laid will somehow be improved by buying something

Oh, cobblers. You don't just get to stick the Fair Trade badge on at lesiure - it's earned.

bun-u
12-03-2008, 05:10 PM
Oh, cobblers. You don't just get to stick the Fair Trade badge on at lesiure - it's earned.

Yes, it's a badge, an accreditation - won and then circumvented and abused. A bit like a the companies I've worked for with the 'Investors in People' quality mark who curiously treat their staff like shit

IdleRich
12-03-2008, 05:22 PM
"Yep, but then there's no reason for the premium, unless they are paying a premium in excess of the one necessary for higher quality coffee."
Obviously. I was working on the assumption that it was in excess of that.


"Yes, it's a badge, an accreditation - won and then circumvented and abused. A bit like a the companies I've worked for with the 'Investors in People' quality mark who curiously treat their staff like shit"
I'm inclined to agree, those things are just ticking boxes/jumping through hoops whatever. I don't think that you can improve the working life of employees by setting general one-size-fits-all style targets for companies. In fact, in all the shitty jobs I've had with IIP companies the one thing that would have improved everyone's lot is being paid more but somehow that never got mentioned.

crackerjack
12-03-2008, 06:39 PM
Yes, it's a badge, an accreditation - won and then circumvented and abused. A bit like a the companies I've worked for with the 'Investors in People' quality mark who curiously treat their staff like shit

So it's true because you've got anecdotal evidence relating to something else entirely? That's pretty concrete :rolleyes:

bun-u
12-03-2008, 07:10 PM
So it's true because you've got anecdotal evidence relating to something else entirely? That's pretty concrete :rolleyes:

on the contrary, the two things are completely linked - companies will use these symbols to show their practices are non-exploitative when in fact they are anything but

crackerjack
12-03-2008, 07:47 PM
on the contrary, the two things are completely linked - companies will use these symbols to show their practices are non-exploitative when in fact they are anything but

Oh, please, I understand the theory, but where is your evidence? Without it, this is just bog standard comfort-cynicism from Chomsky page 1.

Mr. Tea
12-03-2008, 09:15 PM
Yes, 'comfort-cynicism' is right - if you're going to adopt the stance that so-called Fair Trade produce is somehow just as bad as normal stuff (or worse, in fact, because middle-class people buy it in order to feel superior to scummy povvos) then you're free to sit back and relax with your nice cheap coffee and congratulate yourself for having seen through the scam.

Bun-u, can you provide any evidence to back up your claim?

bun-u
12-03-2008, 10:02 PM
Yes, 'comfort-cynicism' is right - if you're going to adopt the stance that so-called Fair Trade produce is somehow just as bad as normal stuff (or worse, in fact, because middle-class people buy it in order to feel superior to scummy povvos) then you're free to sit back and relax with your nice cheap coffee and congratulate yourself for having seen through the scam.

Bun-u, can you provide any evidence to back up your claim?

Well I already referred to this (http://news.bbc.co.uk/1/hi/uk/6682689.stm) and this (http://www.organicconsumers.org/fair-trade/nestle.cfm)
isn't a bad example of how the accreditation is being used for an image makeover

Mr. Tea
12-03-2008, 10:18 PM
That second one is an example of a company lying about its products - and I wouldn't put anything past Nestlé, I really wouldn't - but it's not a criticism of the Fair Trade policy per se. It's an example of a firm trying to exploit the idea as a marketing tool; something they may (hopefully) no longer be able to do if the ASA decides they've broken marketing laws. Do you know what happened in that case, by the way?

nomadologist
12-03-2008, 11:24 PM
I think what Vim is saying is that in most cases there is no discernable difference in the quality of the product? So on an economic level it doesn't make any sense to pay more for it.

If only the fact that there's no "discernable difference" between two given types of commodity had anything to do with their pricing or public perception of the quality of the products. A majority of generic products in the U.S. are manufactured in the same plants as their brand name equivalents, they just have a different logo on the box.

Branding and lifestyle branding have *everything* to do with what people will overpay for a product.

nomadologist
12-03-2008, 11:37 PM
That second one is an example of a company lying its products - and I wouldn't put anything past Nestlé, I really wouldn't - but it's not a criticism of the Fair Trade policy per se. It's an example of a firm trying to exploit the idea as a marketing tool; something they may (hopefully) no longer be able to do if the ASA decides they've broken marketing laws. Do you know what happened in that case, by the way?


"Fair trade" in the U.K. sounds a lot like the market for "organic" products in the U.S., which are by-and-large lower quality garbage that gets marked up by 300% because the farmers who produce it claim that they don't use pesticides or genetic modification. Of course, the FDA and other regulatory agencies do not actually vouch for the accuracy of these claims, nor do they regulate "organic" products to the same standards as they do regular products, so all sorts of horrible stuff gets passed on at a ridiculous price to people who want to feel like they're being healthy without being sure that all food is produced to high standards of quality at affordable prices.

This has been a big issue in the U.S. for a long time. Is "Fair Trade" new over there?

nomadologist
12-03-2008, 11:48 PM
Asking for "evidence" to back up Bun-U's claims is sort of odd. What is he supposed to do, furnish the message board with YouTube videos documenting boardroom discussions between execs who are discussing just how far they can push the "ethical" envelope while still stamping "free trade" on something?

Where is the big-picture "evidence" that commodifying "free trade" rather than legislating it will work at all? Could we get some evidence to back up that claim?

Mr. Tea
13-03-2008, 12:32 AM
Asking for "evidence" to back up Bun-U's claims is sort of odd. What is he supposed to do, furnish the message board with YouTube videos documenting boardroom discussions between execs who are discussing just how far they can push the "ethical" envelope while still stamping "free trade" on something?

Easy: some kind of report, summarising the findings of an investigation, that concludes "Fair Trade companies pay their producers no more, or almost no more, than the regular, exploitative companies". (which is what Mr. U seems to be claiming)



Where is the big-picture "evidence" that commodifying "free trade" rather than legislating it will work at all? Could we get some evidence to back up that claim?

I assume you mean "fair trade"? Well if you ask the companies involved, I'm sure they'll furnish you with plenty of evidence. Seems to me that the onus of proof is on someone claiming that they don't, in fact, do what they claim to do. (And if that is the case, as it seems to be with Nestlé, it is illegal and there are government bodies set up to stop them from doing so.)

Slothrop
13-03-2008, 12:49 AM
Where is the big-picture "evidence" that commodifying "free trade" rather than legislating it will work at all? Could we get some evidence to back up that claim?
It's kind of tangential to the immediate point, but part of the value of 'ethical consumerism' is that it brings the treatment of the producers to the western consumer's notice at all. Although fair trade may not be the solution, buying into fair trade at least means accepting that there is a problem.

I've never really bought the argument that lots of people buy fair trade bananas and think they're 'doing their bit' and that all is well and right with the world - or rather, it's probably true, but not many upper middle class mums would have been revolutionary marxists if they hadn't been seduced by fair trade bananas. Whereas some people who are into ethical consumerism may listen if you tell them that ethical consumerism isn't enough and another solution is needed.

Mr. Tea
13-03-2008, 01:19 AM
I've never really bought the argument that lots of people buy fair trade bananas and think they're 'doing their bit' and that all is well and right with the world


Yeah, you'd have to be pretty stupid to think it was going to solve everyone's woes (or even just the third world's woes) overnight, but it's still better to do *something* than to do absolutely nothing. And as you say, buying Fair Trade stuff could help bring to people's attention the wider issues and problems.



or rather, it's probably true, but not many upper middle class mums would have been revolutionary marxists if they hadn't been seduced by fair trade bananas.

You certainly don't have to be "upper middle class" to afford this stuff - I mean, it's not like they cost ten times as much as any other bananas, is it? Not to mention the fact that there are all sorts of expensive luxury goods (Nike shoes, anyone?) that are produced in conditions just as exploitative as the cheap stuff.

Gavin
13-03-2008, 01:50 AM
As far as putting "ethical labels" on exploitatively produced commodities, see "conflict-free" diamonds. It's a way to make sure that all diamonds flow through client government channels (and particularly Israel), not to groups opposed to Western interests. It's the same cartels holding a tighter reign on their product. Even the poor regulatory agencies have found millions of dollars of "blood diamonds" in the "legitimate" market.

I think it is interesting the anxiety that centuries of alienation from labor has produced... not just ethical labels, but TV shows about production, making-of docs, etc... the mode of production getting spectacle-ized, ... you see why people with leftist sympathies are wary of this.

noel emits
13-03-2008, 10:58 AM
It's kind of tangential to the immediate point, but part of the value of 'ethical consumerism' is that it brings the treatment of the producers to the western consumer's notice at all. Although fair trade may not be the solution, buying into fair trade at least means accepting that there is a problem.
Also if you are going to buy stuff anyway then you can at least 'send the market a message' about how you would prefer the food to be sourced. It doesn't mean that you think it solves all problems or that you are even necessarily really getting what it says on the label but I think it's better than doing nothing.

vimothy
13-03-2008, 02:02 PM
I think that the debate on this thread has moved away from being useful to people making semi-metaphysical statements about the ability to act under conditions of capitlism. Fuck waiting for the revolution. It will never come.

The point is not whether it's possible for Fair Trade to be positive and a good for the developing world, but whether it actually is. And I do not think that the onus is on me to prove that it is not (though I think it's pretty clear that it's not), but on the Fair Trade companies and their supporters to prove that it is. Can anyone explain theoretically and demonstrate empirically how Fair Trade produce helps, not just Fair Trade producers (which is a circular argument a la polz), but developing nations generally?

And it's not good enough to say, "well, I hope it has a positive effect, and that's worth something". It isn't. There is a massive distance between good intentions and good outcomes, and the history of development is testimony to that fact. Why use price floors? There are much more sensible ways (like subsidies) to achieve similar aims to those stated. As long as the effect of Fair Trade is minimised, then these price floors will have surely have little effect on the whole market -- but that's a bit of strange position for Fair Trade to be in, the idea that it is justified to the extent that it has no significant effect.

Moreover, it's bemusing to see so many people (not necessarily on Dissensus) who wouldn't believe that any company is even capable of delivering social goods, uncritically accept the claims of the Fair Trade companies. I'm much more suspious of companies who tell me that their product represents the best interests of humanity, and much more comfortable with companies that I know are out to make a buck. With the latter, at least you know where you stand.

vimothy
13-03-2008, 02:04 PM
This is very good:

Paths to Prosperity: Approaches to Institutional Change and International Development (http://www.iea.org.uk/files/upld-book426pdf?.pdf) - Karol Boudreaux & Paul Dragos Aligicia

noel emits
13-03-2008, 02:54 PM
I think that the debate on this thread has moved away from being useful to people making semi-metaphysical statements about the ability to act under conditions of capitlism. Fuck waiting for the revolution. It will never come.
You do? That seems a strange blanket dismissal of all the various voices on this thread. But then I'm not sure what you mean by 'semi-metaphysical', as if that means that the 'metaphysical' (do you mean 'moral' or 'ethical' questions?) has no value in this debate. Perhaps what you really mean is it's not an aspect you are interested in, while others might consider it of basic importantance. And considerations of how we can act under real conditions, if that's what people were discussing, are also far from irrelevant.

Fair Trade as it is may not work and may be counter-productive but the point about registering a consumer vote for an idea of 'just trade' is a perfectly practical one and something we can do 'under conditions of capitalism'. If you think that 'Fair Trade' is not helpful then your vote can go elsewhere but the point still stands.

vimothy
13-03-2008, 04:06 PM
You do? That seems a strange blanket dismissal of all the various voices on this thread. But then I'm not sure what you mean by 'semi-metaphysical', as if that means that the 'metaphysical' (do you mean 'moral' or 'ethical' questions?) has no value in this debate. Perhaps what you really mean is it's not an aspect you are interested in, while others might consider it of basic importantance. And considerations of how we can act under real conditions, if that's what people were discussing, are also far from irrelevant.

What I mean is that bun-u and nomadologist are barking up the right tree for the wrong reasons. Yous seem to have come away with the opposite impression to the one that I'm trying to give. Saying "it's impossible to act in a positive way under capitalism, because it all reproduces capitalism power relations" is a deeply impractical philosphy of despair, IMO. It's not that I'm uninterested in that debate. I find it interesting enough to comment on it here. I just don't find it productive.


Fair Trade as it is may not work and may be counter-productive but the point about registering a consumer vote for an idea of 'just trade' is a perfectly practical one and something we can do 'under conditions of capitalism'. If you think that 'Fair Trade' is not helpful then your vote can go elsewhere but the point still stands.

Ok, so --

I've already agreed that pretty much everyone wants to make the world better, and obviously many are even prepared to pay a premium on products in the hope that this premium will do something good, even if they're not quite sure what that is.

What you're saying (it seems) is that even if it's not directly helpful to the producers, and not indirectly helpful to developing economies, it still has value because it sends a message to the market. What message does it send? It sends a message that says "more please -- there are large margins on "ethical" products". What we're left with is, even if Fair Trade doesn't actually work, it still sends a message to the big companies that there is a big growing market for Fair Trade. I'm sure they're thinking, "great!"

Here's how I see the best-case realist senario: Large companies up their prices because consumers think they are contributing to developing world externality costs, when in reality only a very small percentage of the premium goes to poor producers. Fair Trade price floors don't distort markets to the extent that most producers do not selll commodities through the Fair Trade system (i.e. to the extent that Fair Trade has little impact), but as the market for ethical goods grows, and given the ability of (and incentives for!) companies to increase their margins at the expense of the consumer (because the consumer thinks they're benefiting the third world) Fair Trade price floors will distort commodity markets, create dead-weight loss and keep developing economies locked into agricultural industries, which is to say, it will keep third world economies in the third world.

Mr. Tea
13-03-2008, 04:20 PM
Vimothy, can I ask you: why is it necessarily the case that poor countries will remain poor for as long as their chief form of economic activity remains agriculture? There are still people who make a living from agriculture in the developed world, even in a very urbanised, service-oriented economy like the UK (BSE, foot and mouth, rapacious supermarket monopolies etc. notwithstanding). Of course, developed-world farmers have access to all sorts of technology that third-world producers don't. So couldn't third-world farmers reap the benefits of the technology we've been using for decades, perhaps with the benefits of hindsight to avoid some of the environmental problems we've caused for ourselves along the way? Or are they better off giving up farming altogether and adopting industry of some sort (which surely requires much more in the way of technological advancement, and poses even greater threat to the environment, than farming)? Or could they actually make a decent living for themselves if they didn't have to compete with the unfair subsidies paid to developed-world farmers by those countries' governments?

vimothy
13-03-2008, 04:34 PM
Good question. Farmers in the developed world make money for a few different reasons:

1. Modern agricultural industries are heavily capital intensive (to a large degree, meaning that per capita, they are very productive, which is where the profits come from chiefly).
2. Most (significant) labour demanded is high skilled, and wages have to be competitive with other industries.
3. Markets are frequently protected and farmers are subsidised by Western governments, so that developed world agriculture doesn't have to compete fairly with undeveloped world agriculture.

The way that industry contributes to growth is by making productivity increases, which then feed profits back into capital acquirement and abour markets. A very generic model of development is to move into manufacturing, where there are opportunities to 1, achieve productivity increases (as there aren't really in coffee farming or cotton picking) and where you are 2, selling to markets where demand is elastic*, i.e. markets where your productivity increases will not necessarily result in job losses across the board. Increased movement of labour from agriculture to manufacturing will put upward pressue on wages for farm labour and so benefit farmers workers as well.

I think this process could describe US manufacturing as easily as US agriculture, BTW.

*EDIT -- sorry...

vimothy
13-03-2008, 04:40 PM
So to answer your question, agriculture will not solve the problem of developing world industries as long as agriculture is relatively unproductive (basically, as in labour heavy and capital light -- farming needs to grow in order to affect development) and agricultural markets are inelastic (as in, demand won't change very much even with price). They can't just grow more coffee, even using modern farming techniques, because the price of coffee will fall as supply increases and demand remains relatively still, and less poor people will be employed doing it.

vimothy
13-03-2008, 04:51 PM
Half a Cheer for Fair Trade (http://www.iea.org.uk/files/upld-book408pdf?.pdf) - Philip Booth and Linda Whetstone


Abstract

The fair trade movement claims that the products it provides are sourced “justly” and that purchasing fair trade products brings economic benefits for the poor. Whilst it is clear that fair trade might bring some benefits to particular groups, whether it brings significant net benefits to the poor in general is questionable. Moreover, the claim that fair trade transactions are more “just” cannot be substantiated. Customers also might be surprised to learn that the majority of the Fairtrade Foundation’s income is spent on promoting its own brand.

Ethical food revolution picks up pace with 62% rise (http://business.scotsman.com/fairtrade/Ethical-food-revolution-picks-up.2818135.jp) - Alastair Dalton


98% of Fairtrade chocolate is manufactured and packaged in Europe. Only 8.5p of a £1.70 bar of Fairtrade chocolate remains in the country of origin.

12p per pack of coffee is the additional income a farmer gets through the Fairtrade brand. But the typical UK supermarket shopper pays 75p extra compared to other brands.

4p of the extra £1 cost of a bag of Fairtrade bananas compared to other bananas gets back to the farmer.

1/3 more land is required to farm free-range produce than conventional techniques.

3p extra is all the farmer gets per 227g pack of coffee beans when purchased at the Fairtrade guaranteed price of 72p per lb.

Critics say fair trade is bad for economic development in the long run. Fairtrade subsidies keep peasant producers, especially in Africa, tied to small-scale, inefficient farming methods when these countries need large-scale, mechanised agriculture.

Fairtrade agreements often favour one group of farmers over another. For instance, it discriminates against the major, low-cost, highly mechanised plantations of Brazil and Vietnam.

The bitter cost of ‘fair trade’ coffee (http://www.ft.com/cms/s/2/d191adbc-3f4d-11db-a37c-0000779e2340.html) - Hal Weitzman

noel emits
13-03-2008, 05:38 PM
Saying "it's impossible to act in a positive way under capitalism, because it all reproduces capitalism power relations" is a deeply impractical philosphy of despair, IMO.
Indeed. I'll happily argue for that on a metaphysical level as well. ;)


What you're saying (it seems) is that even if it's not directly helpful to the producers, and not indirectly helpful to developing economies, it still has value because it sends a message to the market.
Well no, I was saying that if you (one) finds that it doesn't work then obviously it is sending the wrong message and something else should be done. I was just saying that that is part of the rationale behind buying Fair Trade products. Obviously if used effectively a vote with the wallet is a language that all producers will understand.

I do buy Fair Trade 'organic' tea from the supermarket so I am probably a mug but it doesn't cost any more than regular organic tea and it's only about 20p more than the other stuff so for the amount of tea I drink that's really not a big deal.

Mr. Tea
13-03-2008, 05:47 PM
Arguments about distortion of the market aside, it seems that most of the criticism of the Fair Trade concept is a criticism of the way it is actually implemented - only a small amount of the extra cost goes to the producers, some firms lie to make it sound like they participate in the scheme much more than they really do - rather than the concept itself. In other words, it would be worth doing if it went further, and was more rigorously applied, than it is in reality at the moment.

nomadologist
14-03-2008, 06:50 PM
Easy: some kind of report, summarising the findings of an investigation, that concludes "Fair Trade companies pay their producers no more, or almost no more, than the regular, exploitative companies". (which is what Mr. U seems to be claiming)



I assume you mean "fair trade"? Well if you ask the companies involved, I'm sure they'll furnish you with plenty of evidence. Seems to me that the onus of proof is on someone claiming that they don't, in fact, do what they claim to do. (And if that is the case, as it seems to be with Nestlé, it is illegal and there are government bodies set up to stop them from doing so.)

What kind of report? We all know that companies fairly and accurately report those sorts of metrics. :rolleyes:

So show me some of the metrics that prove that "fair trade" products are having a positive net effect against the economic exploitation of the developing world. There must be some "reports" out there somewhere...

nomadologist
14-03-2008, 06:57 PM
As far as putting "ethical labels" on exploitatively produced commodities, see "conflict-free" diamonds. It's a way to make sure that all diamonds flow through client government channels (and particularly Israel), not to groups opposed to Western interests. It's the same cartels holding a tighter reign on their product. Even the poor regulatory agencies have found millions of dollars of "blood diamonds" in the "legitimate" market.

I think it is interesting the anxiety that centuries of alienation from labor has produced... not just ethical labels, but TV shows about production, making-of docs, etc... the mode of production getting spectacle-ized, ... you see why people with leftist sympathies are wary of this.

Or watch American TV for a half hour and catch all of the Chevron and GE and myriad companies touting their "earth friendliness" and the different "options" you have now --namely whether you want to overpay for a barely functional partially ethanol-powered vehicle because it makes you feel better (regardless of whether this is really the best option in any sense) and you can afford to do so.

Wasn't there a thread about that a while ago?

nomadologist
14-03-2008, 07:01 PM
Arguments about distortion of the market aside, it seems that most of the criticism of the Fair Trade concept is a criticism of the way it is actually implemented - only a small amount of the extra cost goes to the producers, some firms lie to make it sound like they participate in the scheme much more than they really do - rather than the concept itself. In other words, it would be worth doing if it went further, and was more rigorously applied, than it is in reality at the moment.

Right. It's just so typical of a consumerist society that people are happy to jump on a "fair trade" bandwagon only insofar as it becomes just another easy set of consumer choices and does not demand any real political engagement or attention to policy-making.

Mr. Tea
14-03-2008, 07:29 PM
What kind of report? We all know that companies fairly and accurately report those sorts of metrics. :rolleyes:


Well obviously I meant a report carried out by an independent non-commercial body of some kind.



So show me some of the metrics that prove that "fair trade" products are having a positive net effect against the economic exploitation of the developing world. There must be some "reports" out there somewhere...

I dunno, maybe they're not having any effect - but maybe they are. It just seems churlish to dismiss the whole thing out of hand because it's a voluntary scheme companies can take part in and all companies are, like, totally evil.

nomadologist
15-03-2008, 02:47 AM
Who said all companies are "like, totally evil"? All companies have to operate according to a bottom line, and as I'm sure even Vimothy will admit, this entails pushing the ethical envelope, especially with regard to things like sales metrics and charitable deeds.

My point is there are no agencies that measure things like the net effect of one company's products on the global economy at large. This sort of thing would be expensive beyond belief if it were even mathematically possible. Until these sorts of numbers become feasible, "fair trade" is simply another clever form of lifestyle branding, and companies know this and use it to their advantage. Why shouldn't they?

vimothy
17-03-2008, 12:14 PM
My point is there are no agencies that measure things like the net effect of one company's products on the global economy at large. This sort of thing would be expensive beyond belief if it were even mathematically possible. Until these sorts of numbers become feasible, "fair trade" is simply another clever form of lifestyle branding, and companies know this and use it to their advantage. Why shouldn't they?

Agreed. I think that I have been too hard on Fair Trade, however. I'm all for an empirical approach to development, and perhaps, given the relatively small amounts of coffee producers selling through Fair Trade price floors (1% of coffee sales -- coffee is the second most traded commodity in the world), the distortionary effects will be negligible. I doubt that very much of the extra cost makes it to the coffee growers, because the incentives for the companies are to sell at a premium and shave only a little bit extra off for the poor farmers. Otherwise, they'd already be "fair trade". I don't think it's the end of the world, but I don't think that it will do much good, especially if more coffee sales become Fair Trade. I'm prepared to be proven wrong, though...

vimothy
17-03-2008, 12:32 PM
EDIT: tripple post

vimothy
17-03-2008, 12:35 PM
fucking hell...

comelately
17-03-2008, 02:04 PM
This Fairtrade debate has been interesting for sure, but there is another dimension to the debate surely? After all, more or less the only way to buy chocolate that has not been tainted by slavery is to buy fair-trade.

nomadologist
18-03-2008, 01:39 AM
Agreed. I think that I have been too hard on Fair Trade, however. I'm all for an empirical approach to development, and perhaps, given the relatively small amounts of coffee producers selling through Fair Trade price floors (1% of coffee sales -- coffee is the second most traded commodity in the world), the distortionary effects will be negligible. I doubt that very much of the extra cost makes it to the coffee growers, because the incentives for the companies are to sell at a premium and shave only a little bit extra off for the poor farmers. Otherwise, they'd already be "fair trade". I don't think it's the end of the world, but I don't think that it will do much good, especially if more coffee sales become Fair Trade. I'm prepared to be proven wrong, though...

Totally agree, and this is actually one issue (one that ends up being part of a whole range of issues) that I think the right approaches with the proper trepidation and a realistic sense of the enormity of the task, where the left doesn't seem to want to really face this and instead turns to--what else?--a pat set of aesthetic band-aids on our boo-boos.

It's one area of many (including eco-friendliness) where neo-liberals and the new "left" is its own worst enemy and even a self-parody of its own values. Whole Foods and these new lifestyle brands are, sadly, bastions of the current "left" and a testament to its failure to recognize that old boogeyman class and the related economic challenges. At best. At worst they are actually contributing to the problem in the fashion that you suggested above.

Sometimes it makes sense to me why the neo-con movement sprang up--there had to be a knee-jerk reaction to the sort of "fair trade" SUV-driving Soccer mom patrons of Trader Joe's that became the voice of the former party of strong centralized government and even stronger social programs for the underclass. Where are the policies that limit the power of multi-nation megacorporations? Where are the subsidies for farmers? Where are the limitations on corporations' and the governments abuse of energy and fuels?? Where are the funds for initiatives to find creative solutions to projected future energy crises?

Nope just buy "organic" peanut butter and drive a hybrid.

nomadologist
18-03-2008, 01:49 AM
The fair trade article is pretty great:


An emerging criticism of Fairtrade within the industry is that the organisation misleads consumers about its ability to monitor production practices. FLO Cert, a body officially independent of FLO, monitors the certification process. Critics say there is a need for an outside auditor. “The way Fairtrade promotes itself is a little irresponsible,” says Mr Watts. “The certifiers need an external watchdog.”

That's exactly what my argument was supposed to be--shoud've read this first.