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Free Doesn’t Mean Unfair

The Guardian (London)

Some dissenters claim that the fair trade movement is about do-gooders up to no good. They are wrong.

We may like to root for the underdog and champion the poor and oppressed, but woe betide the little man who manages to stand tall and not just walk, but run. The latest plucky outsider to get too big for its boots is the Fairtrade Foundation, which certifies fair-trade products. As it celebrates Fairtrade Fortnight, there are numerous reasons for it to be pleased. There are now over 1,500 Fairtrade products on sale in the UK, and sales are rising at about 40% a year.

Yet a growing band of dissenters is claiming that these do-gooders are up to no good. The attacks come on one side from trenchant anti-capitalists who believe the foundation has sold out, and on the other from realist economists who argue that buying fair-trade goods does more harm than good.

The most perverse argument of the free-marketeers, led by the Economist, is that fair trade distorts the market. The reason most coffee farmers can’t make a decent living, for example, is that they are producing too much. Rather than keeping over-production going by encouraging farmers to join fair-trade schemes, we should let the market send out its signals so that they grow something more profitable instead.

The trouble with this argument is that fair trade is a triumph of the free market. It works not because it subsidises goods no one wants, but because relatively rich consumers are willing to support a scheme that guarantees certain benefits to producers. Unlike the huge subsidies paid to farmers by the EU and the US, it is about matching demand for produce that helps the poor with its supply.

The other main argument against is equally flabby. Critics would have you believe that because other forms of trade can also be fair, “fair trade” is some kind of con. You would be mistaken if you thought that anything not carrying the Fairtrade mark was unfairly traded, but any serious advocate of fair trade would accept there are all sorts of trading relationships that benefit producers.

Free trade is neither good nor bad; it all depends on how consumers exercise their freedom. Furthermore, if we’re serious about ethical buying choices, we can’t afford to simply let labels tell us what is good or bad, or be spoon-fed opinions by magazines.

Indeed, it is the most zealous advocates of ethical trade who are doing most to undermine the reputation of the Fairtrade mark, most notably with their attacks on the foundation’s certification of Nestle’s Partners’ Blend coffee. The coffee was awarded the Fairtrade mark because it is for products, not companies; the foundation does not judge the moral merits of the company itself.

This was too much for many to swallow. Red Pepper magazine described the certification as “a betrayal of fairtrade principles”, while the World Development Movement claimed it was “likely to be . . . a cynical marketing exercise” and urged a continuing boycott of Nestle. The boycott, of course, is over Nestle’s sale of formula milk in the developing world, which it is claimed leads to more sickness in infants. But whatever the original rationale for the boycott, it has become an article of faith for many for whom complying with World Health Organisation guidelines, to the WHO’s satisfaction, is not enough to remove Nestle’s guilt.

And here is the nub of the ethical trade debate. The Fairtrade mark has added a great dollop of social concern and action to mainstream business. For many, however, getting into bed with big business is always moral harlotry, as “ethics” is only ever invoked if it helps profits. So do we reward big business when it does change, or do we dismiss all such efforts as window dressing? Unless we want to go the whole way with anti-capitalism, the former is the only honest route.


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