Thursday, March 11, 2010

Fair Trade Coffee? No, Thanks!

Chicago just passed a stupid law.

Article on why it was stupid, according to me.

The City of Chicago passed a resolution this month supporting fair trade efforts in the city, but critics say there’s more to the fair trade story than most consumers realize.

Mike Munger, chair of the political science department at Duke University, said the concept of fair trade – which certifies businesses for paying workers a living wage and observing social and environmental criteria -- isn’t always successful. “It probably succeeds close to half the time,” he said.

People don’t want to hear that because they want to feel better about themselves, Munger said. “It’s just not true, the premise is not true.”

One problem is an imbalance when too many companies go for certification in one product – say, coffee – and that drops the price and also keeps farmers from growing other crops.

Another problem is where the money goes.

Several studies demonstrate that a middle man may be the real winner, Munger said. Consumers are paying middle men more, not the worker. The money can be dissipated somewhere before it gets to the worker, he said, possibly in paying bribes for certification.

Obtaining fair trade certification is expensive, and there’s no way to prove that the workers are the ones reaping the benefits of the premium prices the consumers are paying, Munger said.

Check this. Unbelievable.

A podcast on Fair Trade

An article in England, with a remarkably self-hating man commenting.

A guest blog post, and also my best shot at explaining why Fair Trade is idiotic.

"Fair trade" raises costs to consumers. Worse, it enslaves the people it claims to help, with the invisible chains of artificial subsidy, and arrested economic development. If it pleases you to think of happy natives, living primitive lives, just go rent a BBC documentary, and let the market work.


Tom said...

Professor Munger has the temerity to introduce facts and logic into an enterprise dominated by self-satisfied smugness. It has to be EASY to be the caring person; thinking is hard.

Mike Wazowski said...

Although I respect where you are coming from and understand that while fair trade policy is not perfect in its practice just yet, I do believe that we are making steps in the right direction for better trade practices across many industries. If fair trade coffee has to be the industry that marks the map for those who come after, maybe that's okay.