economics in the margins

How fair is fair trade?


The Germans never have spent so much on fair trade products. In 2013 it was 784 million Euro (worldwide, 2011: 4.9 billion Euro). But does fair trade achieve the self-imposed targets? The Economist reviews a book from Ndongo Samba Sylla, a Senegalese development economist working with the left-wing Rosa Luxemburg Foundation of Germany, that takes a negative viewpoint. One critical point:  „There is little evidence that fair trade has lifted many producers out of poverty.“

As far as I am concerned: I am ambivalent. What I don’t like at the fair trade movement is that it conveys the impression that trade (without the attribute „fair“) is unfair in principle (which is definitely not if trade is based on free choice). On the other hand: Consumer sovereignty is a fundamental principle of the Social market economy. You have to know what you buy (even how it is produced) to live an self-determined life, I am convinced. Fair trade organisations help to track and monitor the production chain so that customers are able to know (a little bit) more about what they buy.

In the doubt for the accused: I support the fair trade concept.

Go deeper: Doubts about Fair Trade at tutor2u.net.

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Von Johannes Eber

In Berlin living economist, senior consultant at Initiative Neue Soziale Marktwirtschaft (INSM) and co-founder of the media agency Solokarpfen.

Eine Antwort auf „How fair is fair trade?“

Fair trade encourages local people to remain in relatively low-paid working conditions. This is dangerous when fair trade producers are so prevalent that the whole region keeps growing coffee instead of becoming industrialized.

So … I don’t support the fair trade concept. :-)

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