i.want.world

Here’s a letter to the New York Times:

Todd Tucker wants Uncle Sam to reject free trade in favor of “fair trade” (Letters, Nov. 22).

While every decent person applauds fairness and condemns unfairness, “fairness” is far too fuzzy a concept to guide public policy. To see why, imagine what the state of First Amendment law would be like were only a few words of that amendment changed to make its guiding principle fairness rather than freedom:

“Congress shall make no unfair law respecting an establishment of religion, or prohibiting the fair exercise thereof; or abridging the fairness of speech, or of the press; or the right of the people fairly to assemble, and to petition the Government fairly for a redress of grievances.”

Is there any doubt that replacing “free” with “fair” in this context would remove all teeth from the First Amendment? In the same way, a policy of fair trade rather than free trade would, in practice, be a policy of unfree – and, by the way, unfair – monopoly privileges for politically influential domestic producers.

Sincerely,
Donald J. Boudreaux

Nestlé has just announced that KitKat – Britain's biggest-selling chocolate bar – will carry the Fairtrade logo from next month. But how much do consumers really know about the Fairtrade movement? Is it, as some say, an essential safety net that helps poor farmers earn a better living or, as others say, an example of western feel-good tokenism that holds back modernisation and entrenches agrarian poverty?

We might think of sub-Saharan subsistence economies when we think of Fairtrade, but the biggest recipient of Fairtrade subsidy is actually Mexico. Mexico is the biggest producer of Fairtrade coffee with about 23% market share. Indeed, as of 2002, 181 of the 300 Fairtrade coffee producers were located in South America and the Caribbean. As Marc Sidwell points out, while Mexico has 51 Fairtrade producers, Burundi has none, Ethiopia four and Rwanda just 10 – meaning that "Fairtrade pays to support relatively wealthy Mexican coffee farmers at the expense of poorer nations".

The article additionally points out:

Another criticism is over institutional inefficiencies. The vast majority of the money from Fairtrade sales remains in the west – with only about 5% of the Fairtrade sale price actually making it back to the farmers. As Philip Oppenheim says, "any intelligent person will ask why I should pay 80p more for my bananas when only 5p will end up with the producer". Fundamental to the failure of wealth transfer are issues such as the fact that while 90% of the world's cocoa is produced in the developing world, only 4% of the chocolate is produced there. Developing countries remain locked in the primary sector commodities market, while the west cashes in on their value-added conversion.

Fair Trade Is Less Fair (and Less Free) than Free Trade

Fair Trade - Just Another Scam

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