Debating Fair Trade

I have become deeply concerned with the economic orthodoxy developing in the Christian sub-culture in North America regarding so-called fair-trade. My own denomination - the Christian Reformed Church of North America - has recently published an issue of Justice Seekers on the importance of buying fair trade.

But this is pop culture international political economy, and nothing I've read and understand of economics seems to confirm this enthusiasm. What it confirms is an uncritical embrace of Wendell Berry's idyllic mode of production. Fair trade fits with the popular imagination of Africa needing essentially small-scale "mom and pop" stores, which fetch fair prices rather than being driven out of business by the conglomerate chains, like we all witness far too often here in North America.

The problem with this nostalgia is that it does not actually generate wealth. If it did, "mom and pop" stores wouldn't have gone out of business. Artificially floating unprofitable systems of production is as good a way as any to ensure that Africa (and other regions) stay poor; it ensures that single-industry economies continue to linger on, artificially stimulated by the latent guilt of the global north, when such economies could be differentiating, producing and even competing with the global North. What keeps this dream from happening is not paying higher prices for your coffee, but a profoundly broken system of international trade and global financial institutions.

I embrace Fair Trade as essentially a glorified public-relations campaign. It alerts us depth of our economic and political problems, but solve global economic disparity? Nonsense. The reverse is more true. We do need fairer trade - something tied, I believe, to freer trade. And, as both Joseph Stiglitz and Paul Collier agree, the problem with free trade is that it's never been tried.

* Further reading: I recommend here Collier's much lauded book The Bottom Billion, or his TED talk.