Is Fair Trade Fair?

Since we are in the middle of this year's Fairtrade fortnight, it might be worth asking the question: Is Fairtrade fair? There is a lot of criticism out there, almost invariably from economists, which are dutifully picked up by newspapers and magazines during events like Fairtrade Fortnight. One prominent essay on the subject is by Peter Griffiths, which gets straight to the point by arguing that not only is Fairtrade not fair, it is unethical (Ethical Objections to Fairtrade, 2011). This essay has just been signposted here in Sheffield through Now Then magazine, in an article by Cassie Kill to mark the fortnight.

Now Peter Griffiths, like most good economists, posits a Utilitarian ethic, and basically concludes, after highlighting several problems with Fairtrade, some of which are picked up in the Now Then article, that the best way to support Third World producers is to pay the minimum price possible and give the money you save to charity. If you are a Utilitarian this is the end of the argument and you may as well stop reading this now.

There are many critiques of the Griffiths essay, and others like it, but at the end of the day is is probably fair to say that nothing is perfect in this complex world, and Faitrade has problems like anything else. A better way to look at this is to get beyond the problems or otherwise of Fairtrade marketing and look at fairness itself. And rather than struggling to understand the economics of remote countries, to look at fairness right here where we live and work and do our shopping. The minimum wage is regularly posited by economists as creating a 'market distortion' that leads to unforeseen unfairness, often around increased unemployment. We should instead, economists argue, allow wages to find their own level and so keep prices low so we can all afford goods and services and all (supposedly) find work.

The problem with this sort of utilitarian argument is that it assumes that the market works for all of us, and we are all on a 'level playing field' and all 'in it together'. In fact, what happens is that most companies are only interested in supplying goods and services and providing employment in order to make a profit for their shareholders, who are often not the same people who are buying these goods and services. This is called 'maximising shareholder value' and companies will do everything they can within the law (and sometimes a little bit outside it) to achieve this, including lobbying to get laws changed in their favour, avoiding paying taxes, and not checking supply lines. For them, the minimum wage and fairtrade agreements undermine opportunities to maximise shareholder value.

One of the key ways to maximise shareholder value is to 'externalise costs' , that is, to avoid paying the real price for anything if you can get away with it. Two key areas for externalising costs is firstly to pay the lowest wages possible and hope someone else will feed, clothe and house people who get paid so little that they cannot afford such basics, and secondly to trash the environment and hope that someone else will clean it up.

So if you seek the cheapest price for goods and services, in half decent countries like the UK you will find yourself paying increased taxes to support benefit payments and cleaning up the environment. When you see destitute people from the Third World on the telly you can always give some of the money you have saved to Oxfam.

But whether people are in East Sheffield or East Africa, they don't want charity, they want fairness and justice. The minimum wage is not enough, we should pay a living wage. People don't want aid, they want to sell their produce at a price they can live on and be able to send their children to school and afford health care.

If you pay the lowest price that you can find, someone somewhere, along with their environment, will almost certainly be being trashed whilst already wealthy shareholders pocket even more. These shareholders and their agents, the bonus seeking chief executives on obscenely high salaries, backed by their lawyers, will stop at nothing: they tried to convince us that it was safer not to wear seatbelts, that asbestos and tobacco do not kill you, and finally that climate change is not caused by their rampant overexploitation of the planet.

In Now Then Cassie Kill rather weakly say that she does not have all the answers and suggest that we should do a little bit of research, though she does say that she buys faitrtrade when she can afford it, how ever often that turns out to be.

So here are some pointers:

Firstly, get it straight in your head that the vast majority of big companies are in it for profit for shareholder value and nothing else despite all the nice things they say in their adverts and promotional literature. And secondly, see through the shortcomings of Utilitarianism. You can use utilitarian ethics to justify slavery – do you really want to go there?

So you want to buy something and you don't want to make people dependent on benefits or aid, and you don't want their environment to be trashed.

The most important criteria is provenance.

Do you know where it came form? Who grew it or made it? What their lives are like? What labour laws and other rights they have? If you don't, then either don't buy it or find out. If you cannot find out, either the supplier does not care, seeking only the lowest price, or knows something they don't want you to find out. If you had done this with your frozen beefburgers, you would not now be feeling sick at the thought of what you were eating last month.

The next step is to buy from a co-operative or small trader wherever you can. Shop at the Co-op and join and, if you want, influence policy. Buy from John Lewis and Waitrose. Buy from the very person who owns the business and get to know them and ask about their suppliers. Don't buy Cadbury's Fairtrade dairy milk, buy the Co-op's. Half the world's population benefits from cooperatives, including over a billion members, 100 million workers and over a trillion dollars of trade. You can help freeze out the already stupidly rich shareholders and build up the cooperative movement. Find out about Sheffield Co-ops here: http://sheffield.coop/list. Find out about co-operatives worldwide here: http://ica.coop.

You can help pay the £6.9 million salary of Tesco's CEO or you can help people like yourself. You choose.

The next step is to buy from countries that have established labour rights and decent welfare systems. Despite the efforts of our own country to the contrary, the EU has established and maintained comprehensive labour and welfare legislation. If you shop for food in season there is virtually no reason to buy food from outside the EU. And stuff like coffee, tea, chocolate and bananas can easily be bought fairtrade through cooperative suppliers or directly from known cooperatives.

And finally, yes it often costs more. After all you are making sure that growers and workers are getting a decent living, but the pursuit of shareholder value is so endemic that even cutting out the middle people and dealing with cooperatives still makes it more expensive. So what are you going to do, give in and go to Tesco's? Remember, one day they will come for you, and there will be no one left to help you.

Instead, why not spend twice as much on half as much? You are no worse off, you can learn to make do and mend and even end up recycling less. OK, you still need to eat, but do you really need to eat that expensive protein every single day? Fill up on fruit and vegetables and really enjoy that treat knowing that you are taking one small step to making the world a better place - and you will be healthier as well.