The Only Fair Choice: Support FREE Trade
Some of the conclusions from the article UNFAIR TRADE, by the Adam Smith Institute:
1. The Fairtrade certification system and the Fair Trade movement from which it springs are fundamentally unfair. They offer a small improvement in prices to very few primary producers, while leaving most out in the cold and possibly even worse off than before. Of the farmers Fairtrade helps, many live in Mexico, a relatively wealthy and well-developed country. Fairtrade does little for the poorest of the poor in the agricultural sector, the landless laborers who are refused permanent employment under Fairtrade rules.
2. Fairtrade is not an answer to poverty. For those who promote it, Fairtrade is not even necessarily intended to aid economic development. Instead, Fairtrade operates to keep the poor in their place, sustaining uncompetitive farmers on their land and holding back the changes that could give their children a richer future by encouraging mechanization and diversification. Proponents of Fairtrade seek to present a consumer-friendly face, and have persuaded some commentators that it is an example of the free market in action. Yet the ultimate goals of the fair trade movement include the management of production and the rejection of free trade.
3. Economic growth in India and China is lifting more people out of poverty than ever before in human history. The insignificant scale of Fairtrade has no prospect of improving so many lives. Indeed, its economic vision, if implemented, would undoubtedly prevent such improvements from continuing.
4. Fair Trade is unfair: it seeks to reduce voluntary exchange to a government controlled privilege and to refuse agrarian societies the opportunity to become rich. By selling itself as the only option for the ethical consumer, Fairtrade directs the public away from new and exciting alternatives that may do much more good. Ultimately, for those who want to see the poor lift themselves out of their poverty, the only fair choice is to support free trade.
Comment: In a related previous CD post I wrote: Whenever you hear politicians or Lou Dobbs talk about "fair trade" instead of "free trade," you'll pretty much be guaranteed that the discussion has left the realm of economic theory and the overwhelming empirical evidence of the benefits of free trade, and ventured off into a philosophical/political discussion justifying using the political process to bestow protectionist trade policy favoring a well-organized domestic, special-interest industry at the expense of consumers, in the philosophical interest of "fairness."
Likewise, any attempt by a private nonprofit organization to substitute controlled and managed "fair trade" for voluntary exchange and free trade, motivated by the goal to "seek greater equity in international trade," will necessarily result in inferior outcomes which are fundamentally unfair.