Ranting to /dev/null

Against fair trade

Evan asked for me to articulate my criticism of "fair trade" practices.

Here goes.

My biggest objection to the "fair trade" has nothing to do with the ideas behind it. I'm not opposed to paying a fair price for quality goods, and I am opposed to theft. My objection is that all of the fair trade and other progressive-type "innovations" is simply that they do not scale, and are thus not viable options for everyone. They remain a trendy way for those rich enough to afford them to assuage their consciences, but cannot and will not amount to anything more than that.

Take the example of shade grown coffee. Sure, sounds nice and all. But if I remember correctly, shade-groves produce significantly less coffee per acre than conventional methods. This means that if we want to produce enough coffee to meet demand, we need to bring significantly larger tracts of jungle into production (which in turn says bad things about conservation, but that's another discussion). Barring that, the price of coffee goes up, and it becomes a luxury good for those that can afford it. In essence, those who say all coffee should be shade-grown are saying that only the people that have enough disposable income to pay double-digit figures per pound of beans should be allowed to drink it. That's not particularly populist, now is it?

The same kind of thing goes for other progressive "fair trade" type arrangements: they work well on a small scale, and can produce enough inventory to fill a niche market, but we simply can't produce enough of whatever-it-is-we're-talking-about that way.

Additionally, "fair trade" agreements frequently boil down to rank protectionism. There's a reason Costa Rica is violently opposed to free trade agreements with the US. The reason is that they've got a massively overpriced labor market with stiff government protections on said labor practices, and if those protections are removed, they can't afford to continue to overpay their workers. Other countries have similar problems with agricultural subsidies and corporate protectionism.

If there is a proposal floating around that is economically efficient while simultaneously furthering progressive goals, I'd be all for it. But the "fair trade" proposals I'm familiar with all seem to be economic disasters waiting to happen.

Posted by ryan at March 18, 2006 9:54 AM | TrackBack