Fair Trade as a theory of justice

Comercio Justo and Justice: An examination of Fair Trade.

Presented at The Sixth Forum of the World Association for Political Economy (WAPE): 

Responses to Capitalist Crisis: Neoliberalism and Beyond

May 27 to May 29, 2011, University of Massachusetts, Amherst, MA, USA

This paper examines the theoretical basis of Fair Trade as justice.  Grounded largely in the works of Amartya Sen and supported by other philosophers and economists, it looks at the origins, motivations, and elements of Fair Trade.  I explore Fair Trade as a form of justice and seek to understand it as a transformational model of trade.  The intellectual merit of this paper is to examine how Fair Trade outcomes advance our theoretical understanding of justice.  The broader impact is to create a dialogue around understanding Fair Trade which can lead to further development of just and equitable trade systems worldwide.

Keywords: Fair trade, justice, globalization, humanistic economics

Amartya Sen in his Idea of Justice, proposed that justice needed to be understood in a broad sense and though institutions could play a part in it, it was greater than just the institution itself.  "Justice," Sen wrote, "is ultimately connected with the way people's lives go, and not merely with the nature of institutions surrounding them."  However, I argued that an institution could provide a model for justice and be a catalyst for the development of a more just and fair society.  One such example was the institution of Fair Trade. 

Fair Trade operated as an oasis of justice in the tumultuous seas of free market, global capitalism.  At a time of growing inequality and unfairness, an institutional model of justice seemed unlikely, yet one existed and was growing strong.  Sen agreed that though “often overlooked or marginalized in the dominant traditions of contemporary Western discourse…ideas of justice, fairness, responsibility, duty, goodness and rightness have been pursued in many parts of the world” (2009, p. xiv).  Fair Trade was an example of an institutional model which pursued economic and social justice and environmental sustainability in many unseen and marginalized parts of the world.  

To date, there has not been much Western literature written about Fair Trade as justice.  This paper applies Sen’s concepts of justice to the rationale for the practice of Fair Trade.  The intellectual merit of this paper is to deepen the understanding of justice as defined by Sen and to debate the emergence of Fair Trade as a model of justice.  The broader impact is to create a dialog around Fair Trade which leads to the development of even more just and equitable trade systems worldwide.

DEFINING FAIR TRADE

Sen proposed a theory of justice which advanced and promoted global justice through the recognition of our shared humanity and interconnectedness.  It echoed many of the objectives and beliefs shared by institutions and individuals, such as myself, working in Fair Trade.  Fair Trade was a form of commerce developed in 1946 and refined in the 1960s and again in the 1980s by American and European institutions as a way to promote cultural and environmental sustainability and bring greater economic return to marginalized producers.  It was supported by producers who voluntarily embraced the guidelines of Fair Trade by working together cooperatively, sharing resources, improving product quality, and providing transparency.  Fair Trade was also supported by consumers who embraced its socially responsible values and/or product qualities by choosing to purchase Fair Trade goods. 

Rawls saw institutions as being supported by people within the context of their societies, if people believed that the institutions were just and fair and others were supporting them, then they would too (1993).  It was this long term development of trust and confidence through a cooperative arrangement which gave an institution its strength.  Sen agreed with Rawl’s interpretation of institutions but cautioned against too much focus being put on people’s good behavior.   He felt that truly just institutions would encompass all, not just the well behaved.

Several Fair Trade institutions provided the infrastructure for the Fair Trade industry.  These included the USA based Fair Trade Federation (FTF) which served artisan producers with locations in the US and Canada, and the European based, World Fair Trade Federation (WFTO) which represented producer groups from all around the world and had foreign field offices set up in different countries.  Fair Trade institutions also provided support and materials to educate consumers about Fair Trade.  FairTradeUSA and FairTradeUK promoted Fair Trade in European and USA communities through their successful fair Trade Towns and Schools programs.  The Fair Labeling Organizations, FLO (also known as FairTrade International), created standards for 17 Fair Trade Certified product categories: bananas, cocoa, coffee, cotton, flowers, fresh fruit, honey, juices, nuts and oilseeds, rice, spices and herbs, sports balls, sugar, tea, wine, manufactured clothing, and composite food products.  FLO worked with 20 national initiatives and two producer networks to spread Fair Trade Principles and distribute Fair Trade Certified products.  FairTrade USA, formerly worked with FLO but now licenses Fair Trade Certified products for the US market under its own name (Fair Trade Federation, 2009).  Fair Trade producer groups and distributors applied and paid membership fees to join these institutions.  The institutions then used these fees to promote Fair Trade to consumers and internally support members though the development of sales opportunities, business and technical assistance, trade show attendance, networking, and Fair Trade advocacy.

The primary focus of Fair Trade was to improve the lives of the most disadvantaged people in developing countries through market access (Nicholls & Opal, 2006).  It was a broad, expansive, long term vision which incorporated not just producers but communities and consumers as well.  In Fair Trade, trade was the means by which the end, the improvement of lives, was achieved.  The various institutions working in regulating Fair Trade had specific guidelines that participants followed to ensure full fairness or justice.  These varied from one institution to the next but all include aspects of transparency, fair wages, technical assistance, access to credit, long-term trade relationships, and environmental sustainability.

“Institutional change and policy reform,” wrote Sen on the forward to a 2002 Oxfam trade report, “can radically alter the prevailing levels of inequality and poverty, without wrecking the global economy.”  Oxfam was an international confederation of 15 organizations working together to find solutions to poverty and injustice.  They were very active in the development of producer projects for Fair Trade sales (Oxfam, 2012).

EXPERIENCING JUSTICE....

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