EVALUATING THE CRITICISMS OF FAIR TRADE¹

Abstract

This article critically examines some of the most common arguments used to support the view that Fair Trade should be rejected by consumers and businesses seeking to socialise their economic decisions. Overall the paper finds that the majority of such criticisms lack evidential rigour and sophisticated theory but instead rely on a high degree of rhetorical aptitude. While this does not naturally lead to the position that Fair Trade is necessarily beneficial, the conclusion reflects on a substantial amount of positive evidence to suggest that Fair Trade should not be abandoned by consumers or businesses.

Fair Trade and Free Entry: Can a Disequilibrium Market Serve as a Development Tool?

“…While demand for ''fair-traded'' products is clearly substantial (Elfenbein & McManus, 2010;Hainmuller, Hiscox, & Sequeira, 2011), there has long been a debate as to the extent of a rent transfer under this system (Smith, 2009, Berndt, 2007Henderson, 2008;Sidwell, 2008). 5 This study joins a recent empirical literature using data from producer countries to estimate benefits directly (Becchetti & Con-stantino, 2008;Utting-Chamorro, 2005;Arnould, Plastina, & Ball, 2009;Dragusanu & Nunn, 2013).…”

Agricultural Cooperation

“…What economists refer to as a "warm glow" is achieved in a particularly sound manner if I can do something for the health and education of the farmer who grows the cocoa for my chocolate. Smith (2009) collects and evaluates the criticisms directed towards fair trade, including the argument that support would be more effective if it was given directly to poor communities rather than taking a detour via traders and labelling organisations (as voiced by Henderson 2008). This argument neglects the fact that, should fair trade not exist, the buyers of fair trade products are unlikely to substitute their purchase premium for a donation.…”

Fair Trade Is Counterproductive and Unfair: Rejoinder

“…In his response to Henderson (2008), Alastair Smith (2009) makes a number of theoretical and factual claims about both Fair Trade 1 and Henderson (2008). We agree with a few of these claims and disagree with many.…”