Fair Trade: Towards a New Economics of Virtue? (Alex Nicholls)

Alex Nicholls taking questions at #ftf09

Alex Nicholls taking questions at #ftf09

Never underestimate the power of a good story.

Alex starts by showing this video from Canal+. Fair Trade is a good story. 

The numbers: £2.6 billion global certified Fair Trade sales in 2008 (up 22%), £713 million in the UK (up 47%).

The story: Slum situations in Bangladesh. Most workers are in garment factories, foreign investors, no real health and safety regulations. Long hours, 6/7 days a week, £12/month. Often their rent is the same as their wage, so they are stuck in a cycle of poverty.

The People Tree project aims to allow rural economies to be sustainable so that people don’t have to migrate to the cities. Long term employment for 250 women. Creche, school, skills training, legal support. People Tree pay 70% of their income. There are more details and photos on Safi’s blog.

People often hear the story and suspect that it’s just marketing, that it’s all commercial. But Fair Trade really works. We’ll be talking today about how to make the story .

Everyone wants a part of a good story. Is Fair Trade just supplying the story for others to take advantage of?

Bigger questions

Can Fair Trade work for wider societal change? Can it be a political force?

The economy has been depressing. Retail sales and reduction in global trade flows directly affect Fair Trade.

But it’s not all bad: Research saw Sainsbury’s customers buying Fair Trade products and economising on other products.

Economics of virtue

Marx talked about “commodity fetishism”: he reckoned that people didn’t care where their products came from, they just fetishised the object itself. That’s where modern capitalism has gone now. But Adam Smith wrote Theory of Modern Sentiments way back in 1759. The idea of embedding capitalism back into society, of basing our economic models around doing good, community and virtue is not new.

The three Ls of Fair Trade: loyalty, lifestyle, legitimacy

What’s going to happen to Fair Trade?

1. Business as usual: Fair Trade becomes mainstream and people who just supply Fair Trade become irrelevant.

2. Fair Trade remains a niche. Large retailers buy into it when it suits them.

3. Economy of virtue: Fair Trade enters the mainstream and transforms it. Ethical consumption becomes the norm. Producers own their own development. This is “the prize”.

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