Does Fair Trade interfere with capitalism? February 28 2014, 0 Comments

As a representative of One World Fair Trade I have the unique opportunity to raise awareness of Fair Trade as a trading chain that empowers producers by creating a safe and healthy work environment that is free of forced labor.  I am currently mentoring a very motivated high school student who is working hard to have her school recognized a Fair Trade School. She is raising awareness through presentations to students and faculty. She recently asked me this interesting question, “This might be a stupid question but I want my answers to be truthful and confident when teaching, Does Fair Trade interfere with capitalism?” The following is my answer.

This is a great question and it really made me think about it before I answered. So, I started with Wikipedia and they define Capitalism as an economic system in which trade, industry and the means of production are controlled by private owners with the goal of making profits in a market economy.

I think that most people would love to see a form of globalization and global trading where all parties prosper and develop fairly and equitably. I would say that most economists would agree that capitalism is successful in development, technological innovation and creating wealth for some, but it has also created poverty.

Criticism of Capitalism comes from many areas including Developing Nation Governments, many Non-Governmental Organizations or NGOs and ordinary citizens and consumers claiming economic instability and an inability to provide for the well-being of all people.

Fair trade focuses on the wages and working conditions of labor in developing markets where wages and working conditions are otherwise poor compared to their more developed counterparts. In contrast, it is not uncommon for corporations to outsource their operations to less developed areas where they can get away with paying their workers menial wages instead of having to pay workers more in the U.S. for the same job. These both exploit workers in developing countries while taking away jobs from the U.S.

Political interests, power and greed will always be a factor. I don’t believe Fair Trade will ever interfere with Capitalism. Fair Trade is a choice, a choice that puts the power in the hands of the consumer.