Fair Trade, Sustainability and Social Change

I. Hudson, M. Fridell

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137269850
• Topic: Politics & International Relations
• Subtopic: Environment & Energy Policy
• Index: Politics & International Relations

The authors critically evaluate the fair trade movement's role in pursuing a more just and environmentally sustainable society. Using fair trade as a case study of the shift toward non-state forms of governance, they focus on its role not only as a regulatory tool, but as a catalyst for broader social and political transformation.

1

Things and What They Hide

On April 1, 2008, as part of their ‘Earth Month’ marketing campaign, Walmart stores rolled out their very own Fair Trade Certified^TM coffee. The press release, sub-titled ‘Retailer Answers Coffee Drinkers’ Demands for Guilt-Free Gourmet Taste,’ read: ‘Bolstering Walmart’s ongoing commitment to environmental issues, these first Sam’s Choice brand coffees … are part of an Earth Month expansion of eco-friendly products that help consumers live better without compromising budget.’ They further reported that the new coffees (including not just a fair trade option but also a brand certified by the Rainforest Alliance, and a United States Department of Agriculture [USDA]-certified organic blend) were all roasted by the world’s first CarbonNeutral® coffee roaster.

The doors of the biggest North American retailer had been breached. Commodities meant to carry a message about globally unequal exchange and the need for solidarity between peasant farmers and Northern shoppers were flowing into and out of the most mainstream of outlets. The company, which had long been an obvious target for those in the labor, environmental, and social justice movements, became one of the top three retailers of fair trade coffee in the United States. The top company on that list is Starbucks, a company not widely loved by those in the alternative globalization circles that have tended to support fair trade. In addition to the glowing publicity generated in the mainstream press, blogs focusing on sustainable food and global justice applauded Walmart’s decision. However, for many who had been active in the fair trade movement, the headlines announcing the Walmart launch must have been remarkably disconcerting. What kind of strange new age had dawned, when the Walmart corporation—infamous for its ruthless exploitation of workers and relentless drive for low prices at any cost—was clearing shelf space to make room for fair trade coffee? What meaning could possibly be taken from a packet of coffee proclaiming itself to be in the service of ‘fairness’ when the woman stocking it on the shelf can’t afford rent and an adequate diet in the same month?

Stock-taking by fair trade movement activists was clearly required. Was this a great victory for the movement? Were we witnessing the fruition of decades of activist sweat, spent to ‘make trade fair,’ as the Oxfam slogan encouraged the world to do? Was the market working to meet the emergent preferences of affluent consumers for justice, poverty alleviation, and environmental sustainability? Press coverage certainly suggested this was the case, as did the major US labeling initiative, then known as Transfair USA. Paul Rice, the CEO of Transfair USA, commented in the New York Times that by putting its Member’s Mark label on a fair trade coffee, Walmart was making a ‘statement of their commitment to fair trade’ (Downie 2007).

Spoiling the happy atmosphere that surrounded this win–win–win scenario for profit, consumer satisfaction, and the world’s poor farmers,¹ an undertow of dissatisfaction could be detected in the activist ranks. At congresses, at meetings, and on online forums, long-serving fair trade workers lamented the wayward drift of a once-radical movement cozying up to the likes of McDonald’s, Starbucks, Dunkin Donuts, and now Walmart. How could activists who had labored together for years, with the common goal of dismantling structures of unequal exchange between the North and the South, have such opposing reactions to what augured yet another healthy spike in the sales of fair trade coffee?

The answer is that fair trade, like most (if not all) social movements, is far from monolithic. We will not be the first to point out that fair traders, including those at all levels of activism and participation in the movement, while sharing a ride, have a variety of destinations in mind (see, e.g., Fridell 2006; Raynolds and Murray 2007, 223–224). For many, Walmart, regardless of (or perhaps precisely because of) its potential to reach an enormous number of new potential fair trade consumers, was not on the itinerary.

What was for some time an undercurrent of tension within the movement, reflected in the varied responses to the Walmart announcement, has recently become a very visible split, as the US labeling initiative (now called Fair Trade USA (FTUSA)) broke off from the international umbrella organization Fair Trade Labeling International Organization (FLO) on January 1, 2012. While the split was over what seemed to be technicalities in standard-setting and governance, it reflected profound differences in visions for fair trade’s future. There were several contentious aspects of FTUSA’s new standards, causing fair trade pioneers like Equal Exchange’s Rink Dickinson to characterize FTUSA’s actions as a ‘betrayal’ (Neuman 2011). FTUSA initially floated some extremely low draft standards for labeling foods with mixed ingredients which were recently revised upwards in response to a blizzard of protest.² However, the most significant aspect of FTUSA’s new direction was their decision to allow coffee produced using hired and plantation-based labor to be certified—a move long considered but resisted within FLO, which still insists on only certifying democratically controlled cooperatives composed of small farmers. This was a hugely significant shift on the part of FTUSA, and one that, as our argument will reveal, darkens an already menacing shadow that hangs over the potential of fair trade as a transformative movement. A part of our motivation for writing this book is to describe the emergence of this rift in the movement and to chart what we envision to be the implications of pursuing the trajectories suggested by movement activists with different end goals, ideological leanings, and theoretical commitments. Another part of the motivation is to toss in our two cents on the debate about ‘whither, fair trade,’ while simultaneously advancing some arguments about the economics of certification and labeling, the process of social change, and the roles of states, markets, and civil society in the production of justice and its opposite.

Writing a book about fair trade—especially one that is interested in the potential of the movement as ‘transformative’—implies a certain dissatisfaction with the current state of affairs and that dissatisfaction requires a (brief) defense. Our dissatisfaction lies with the specific set of processes that have come to be understood as ‘globalization,’ and with the results of those processes. Do not be alarmed. This is not primarily a book about globalization. Libraries are stuffed with these, and we do not intend to add to the weight. Merely mentioning the word will automatically elicit suspicion from those rightly put off by the ideological uses to which the term has been put and its numerous contradictory definitions. By ‘globalization’ we do not mean some neutral phenomenon of increasing connectedness across space, but the extension of a very specific set of rules that mediate the manner in which the world is increasingly connected. This is more accurately qualified as ‘neoliberal globalization.’ The usual rule book on this insists that governments pursue policies that rely on free markets and minimize direct state intervention. The foundational statement of the ‘Washington Consensus’ that sums up the basics of practical neoliberalism lists a ten-point catechism, including trade liberalization, deregulation of business, market-determined interest and exchange rates, privatization, an unrestrictive stance toward foreign direct investment, tax reform, and fiscal conservatism that aims in particular to eliminate subsidies (the original formulation being ‘indiscriminate subsidies’ which did not include things like expenditures on health and education) (Williamson 1990). The term ‘Washington Consensus’ refers, of course, to the epicenter of this political project, not the extent of its ripples, which reached well beyond the drainage of the Potomac. It became the basic framework for the restructuring of political economic systems in the North and South—a restructuring that came to be synonymous with ‘globalization.’

Critics of fair trade argue that trade that is explicitly fair is unnecessary because neoliberal globalization is in the process of delivering exactly the benefits that fair trade is advocating—better conditions for producers and a production process that is more environmentally benign. Supporters of the status quo argue that allowing free markets to operate and extending the reach of ‘globalization’ are the most promising ways to alleviate suffering and improve the economic security of the billions who teeter on the precipice of the world’s economic system (Callahan 2008; Sidwell 2008; Weber 2007). Poverty, in this view, is understood as ‘residual’ (Kaplinsky 2005, 48). Once globalization gets deep and wide enough, according to this view, the poor (those so far excluded from the boat-lifting tide) will be included in increasing global prosperity.

Despite the vitriol directed at the critics of neoliberal globalization,³ this policy mix has had less-than-spectacular results for the world’s poor, in whose interest all of this globalizing is allegedly occurring. It would be nice, given all of the social-scientific effort put behind measuring poverty and inequality, and all of the political rhetoric from G8 leaders about commitments to eradicating it, if we could say something unequivocal about poverty and inequality having been reduced at the end of the twentieth century. Many have, in fact, done so. Johan Norberg, in his book In Defense of Global Capitalism (2007), claims that the countries of the world are getting more and more equal, and that the claim of growing inequality under global capitalism is ‘just wrong’ (274). Martin Wolf, of the Financial Times, states: ‘Globalization has not increased inequality. It has reduced it, just as it has reduced the incidence of poverty’ (Wolf 2008, 184). Unfortunately, we can’t make such assertions with any certainty. The reality is that contrary to celebratory reports emanating from neoliberalism’s vanguard institutions, we just don’t know much about poverty and inequality.

Both concepts turn out to be difficult to measure, particularly when it comes to comparing numbers across time and across borders, so drawing any simple conclusions is a slippery business. Starting with the more straightforward of the two concepts, what do we know about poverty? Putting aside the considerable criticisms of the data on incomes for the moment,⁴ the World Bank announced in early 2008 that between 1990 and 2000 the number of people living below the ‘extreme poverty’ threshold decreased by some 850 million. Some of these graduated to the infinitely more desirable ‘poverty’ bracket, which expanded by about 40 million. As of 2004, the Bank reported, there were just under a billion people living below the threshold (World Bank 2008). However, the Bank’s updated poverty figures, which include improved cost-of-living data, indicate that by 2005 the number of people living in extreme poverty was higher than initially believed—at 1.4 billion, down 500 million from 1981 (Ravallion and Chen 2008). Even in terms of sheer numbers, then, it seems that we have a hard time counting the poor, but the Bank shines a positive light on their new accounting, stressing that while there are more poor people than its economists had believed, poverty was still reduced—halved, in fact, as a percentage of the total developing world population (from 52 % to 25%) (Ravallion and Chen 2008, 23).

It should be noted (and the World Bank does so) that the experience of poverty reduction during the heyday of neoliberal globalization is hugely unequal. Almost all of the measured reduction in absolute poverty was restricted to China and other East Asian nations. If China alone is excluded from the calculations, the rate of decline in poverty is cut in half. Between 1990 and 2000, the number of people living in poverty rose or remained static in Africa, Latin America, Eastern Europe, and Central Asia (Kaplinsky 2005, 30; Ravallion and Chen 2008, 25–27). In sub-Saharan Africa, the incidence of poverty remained identical, but with population increasing, the number of people living in extreme poverty rose from 214 million to 390 million.

Looking instead at inequality, one summary of the data concludes that within countries inequality has unequivocally worsened during the heightening of neoliberal globalization, while between countries it depends on whether you take the size of national population into account. If the numbers are population-weighted, then inequality has marginally decreased. If they are not, then we see an increase (Kaplinsky 2005, 37–38). The decrease in population-weighted numbers is, however, another product of the economic boom in China and, to a lesser-extent, India (Wade 2004). Using the same data improvements for cost-of-living calculations referred to above, the World Bank’s lead economist, Branko Milanovic argues that global income inequality between individuals (as opposed to between countries) is both worse than previously thought and on the upswing (Milanovic 2009, 11–12). A survey of studies on inequality across countries argues, however, that because of severe deficiencies in the collection of data and its comparability, it is difficult to say anything at all about whether inequality is increasing or decreasing. The only point of agreement among studies is that global income distribution is massively unequal (Anand and Segal 2008). Within countries, where methodological problems are drastically diminished, but by no means absent, a broad cross-national survey of income inequality in 73 nations from the 1960s to the 1990s concluded that 48 of them suffered from rising inequality, 16 remained constant, and 9 (France, Norway, Bahamas, Honduras, Jamaica, South Korea, Malaysia, Philippines, and Tunisia) enjoyed increasing equality (Cornia and Court 2001).

While the statistical wrangling over globalization and its purported benefits for the poor rages on, we can say, unequivocally, that a little over five hundred years after Columbus hit ground on Guanahani, somewhere in what is now the Bahamas, we have created a world that is deeply interconnected and profoundly unequal. Despite the fact that globalization has been described as giving humanity a ‘shared sense of the world as a whole’ (Robertson and White 2007, 66), our experiences of that whole are without doubt vastly different. There are, of course, many dimensions to this inequality. This book focuses primarily on the North–South axis, with a particular emphasis on the poverty produced by global commodity exchange at the producer-end of commodity chains. Our case in point is coffee. The producers of coffee, a commodity that many of us take for granted as part of our daily routines, are global subjects, integrated to varying degrees with world markets, but they are not the main architects of the system in which they participate. They are global in the sense that their livelihoods are profoundly impacted by decisions taken far away, in cafes, corporate headquarters, and world financial centers, and also in the sense that their struggle for sustainable livelihood has moved beyond local and national politics. Despite the fact that coffee is widely consumed in the North, and people are willing to pay high prices for coffee at the retail level, the small farmers that make up the bulk of coffee production see very little benefit. They, and other producers of basic commodities, are often included among those struggling below the World Bank’s managerially motivated poverty lines.

In addition to the persistence and in some cases intensification of poverty—and in gauging this we need to look beyond the economists’ privileged indicator of income, and look as well at access to key resources like land, water, shelter, food, and labor—globalizing capitalism faces another thorny inconvenience. It has now become acceptable in polite company to talk in apocalyptic terms about the ecological consequences of production and consumption. While climate change is likely the most pressing ecological problem we face, it is just one symptom among many of a system that is steadily undermining both its own foundation (what James O’Connor (1998, 144–157) calls the ‘conditions of production’—nature, labor, and space) and the conditions of life for humans and other species. A book by the Dean of Forestry at Yale University, James Gustave Speth—no stranger to elite policy circles—summarizes the spate of problems. In addition to spelling out the now-familiar grim assessments about climate change, Speth (2008) lets loose a torrent of statistics on deforestation (‘between 2000 and 2005, the world lost forest acreage the size of Germany’), desertification (‘an area larger than Canada … suffers from some degree of desertification … (and) each year fifty million acres become too degraded for crop production or are lost to urban sprawl’), loss of freshwater (‘40 per cent of the world’s people already live in countries that are classified as “water stressed”’), loss of marine fisheries (75% of marine fisheries fished to capacity, with only 10% of large predator fish stocks remaining from their original levels), toxic pollutants (every person on earth can be shown to harbor detectible levels of dozens of persistent organic pollutants and other toxic substances. When tested for the presence of 88 harmful chemicals, Canadians show an average of 44 per person), loss of biodiversity (‘over the next 100 years or so as many as half of the earth’s species, representing a quarter of the planet’s genetic stock, will functionally if not completely disappear’), and nitrogen over-fertilization (which creates oceanic ‘dead zones’ like the one at the mouth of the Mississippi River). Speth concludes that the problem underlying all of these symptoms is globalizing capitalism—a shockingly frank evaluation coming from someone whose lofty position should not create a material bias against the current system.

It runs against the grain of a prominent discourse in policy circles that claims there is no contradiction between neoliberal globalization and sustainability. On the contrary, this discourse, which initially came to dominate the understanding of what was meant by ‘sustainable development’ and which now travels under the label of ‘ecological modernization,’ posits that further industrialization, reliance on market forces, and deeper global integration are the best possible paths to saving the environment (conceived primarily as a provider of goods and services to humans) (see, e.g., Mol 1995; 1997; 2002; Mol and Spaargaren 2000). The idea that the answer to the environmental problems of neoliberal capitalism is more neoliberal capitalism is, however, losing strength. Ecological Marxists, anarchists, ecofeminists, and other members of the academic and political fringe have been warning their very small audiences that our current social relations of production—left on their own—are incapable of averting environmental disaster (e.g., Bookchin 2005; Foster 2002; Gould et al. 1996; Harvey 1996; Mies and Shiva 1993; O’Connor 1998; Plumwood 1993). There’s little by way of evidence to prove them wrong so far, and the scientific community informs us that time is running out rapidly (and in some instances has already run out) on our ability to wait for the market magic to kick in (Rockström et al. 2009).

In short, while debate continues on neoliberal globalization’s effects on global poverty, there can be little question that profound inequalities and remarkable poverty persist. Further, there is no question that it is producing massive ecological devastation. The destruction that Speth lists reiterates the conclusion of the Millennium Ecosystem Assessment (2005) that things are getting steadily worse. While we have been instructed for decades that the market is our best hope for human progress, the global evidence does not clearly suggest that exchange under conditions of high social, political, and economic inequality unfolds into durable, broad human and environmental development. As a low-wage worker I may exchange my work for a few affordable commodities—chips, soda, a TV, a machete, and an old mattress to sleep on, and that can be viewed as development, but where such exchange replaces non-commodified exchange relations, the emergent effects of such trade can result in my (and my family’s and my community’s) physical, mental, and social diminishment. As well, we argue later in the book that it will result in profound difficulties in recognizing human connections, and an...