Yes, it’s more than just a fair-y story

News
Is it all it claims to be?
Is it all it claims to be?

Older people will often remind us that “Back in the day, stuff was made at home”, but now globalisation has changed everything. Today we’re constantly in touch with our global neighbours; they pick our bananas and sew our shoes together. Their fingerprints are on our clothes. We’ll probably never meet them, but they are the men, women and children who built our material worlds, their live short lives consumed by our consumerism. This phenomenon of global trade is caused by cheap labour and has brought development to countries like South Korea, Singapore and now China. Free marketeers are right that trade, rather than aid, has created wealth.

So where does Fairtrade fit into all this, is it an unhelpful hindrance to development, or will it speed up the process? And does it actually help people, or is it another capitalist ploy to get middle class shoppers to spend more? I think there are two misconceptions that make people unsure about Fairtrade, a movement which really has the potential to change the lives of millions.

Firstly, the idea that Fairtrade distorts markets. Though it may be the key to development, low wages trap people in poverty. In Bangladesh 3 million people, 90% of them women, are employed in the garment industry, paid an average of £4.40 a week. This is below the official poverty line, but it’s not unusual; the World Bank estimate that almost a quarter of the world’s population live underneath it. Bangladesh’s government won’t raise their minimum wage because brands like Primark would simply move production to India or Indonesia instead. Multinationals are so powerful – Nestle’s market value is four times Costa Rica’s GDP – that producer cartels like OPEC are an impossibility. Companies argue that they cannot raise wages because of competition for low High Street prices. So is the solution to wait it out, waste a few million more lives, and hope that in a few decades countries like Bangladesh will build up the infrastructure to development?

No. The solution – and responsibility – lies with consumers. If consumers choose goods which pay workers fairly then markets aren’t distorted. A firm can’t lose out by providing what consumers want. Fairtrade makes fair wages part of the marketed product, in the same way that people pay more for free range eggs. It is wholly different from trade unionism or state intervention because wages are determined naturally by supply and demand. Fairtrade is entirely consistent with market freedom; the consumer remains king, but is willing to pay a fair wage to those for whom the market has dealt an unfair invisible hand.

Fairtrade doesn’t hinder development, but is it enough? Some fear that Fairtrade diverts attention from, or even replaces, charity, a more direct way of transferring money to the world’s poorest. Part of the Fairtrade certification requires companies to pay a ‘premium’ towards social projects, like schools and hospitals, so that communities benefit too, but primarily money goes to workers. Fairtrade should be seen as distinct from charity, spending £20 on Maltesers does not send money to Africa as efficiently as donating £20 to Oxfam does. But John Sentamu, Archbishop of York, said, “If you choose to buy the non-Fairtrade product, you are actively choosing to contribute to the poverty of others.”

Unless we believe that our cheap chocolate is worth the cost of thousands living in poverty, 150 million of them child-labourers, Fairtrade is the minimum standard to be pursued in conjunction with charitable giving. Not donating to charity because you buy Fairtrade is like not getting your Mum a birthday present because she’s paid a decent salary, and imagine everyone’s reaction if your Mum’s boss refused to pay her her salary because it was her 50th birthday and she happened to receive a lot of gifts. Trade and aid. One cannot replace another – both are essential. If Fairtrade alters our lifestyle, it should be replacing unethical purchases, not charity.

Fairtrade wields political power. When we choose a Fairtrade product over an unfairly traded one, we aren’t just giving a bit more to a poor worker, we’re giving every competitor in the industry another reason to pay their workers fairly. We have power; consumers, not companies, rule the free market. The abolitionists told people to stop buying slave sugar, not so that ethical plantations could make big profits, but so that owning slaves became bad business. The consumer said no to slavery and the market noticed. Eventually it became law. That changed the world.

Fairtrade is the minimum, and even if it’s imperfect, it’s a step towards justice. It’s the road to development and the route out of poverty for millions of workers – your global neighbours who stitched together our material world.