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The Fair Trade Movement in Historical Perspective

Explaining the “In and Against the Market” Predicament


In 2001, under the auspices of their joint working group, FINE[1], four leading fair trade associations agreed on a statement defining fair trade and its underlying mission:

Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers—especially in the South. Fair Trade organisations, backed by consumers, are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.

Fair Trade’s strategic intent is:

  • Deliberately to work with marginalized producers and workers in order to help them move from a position of vulnerability to security and economic self-sufficiency.
  • To empower producers and workers as stakeholders in their own organizations.
  • Actively to play a wider role in the global arena to achieve greater equity in international trade.

From this definition, it is clear that as a process and a movement, fair trade posits and seeks to uphold several core values. These tenets are based on a holistic vision of trade that incorporates social and environmental production factors into pricing decisions as well as a philosophical commitment to social justice and development. At its most fundamental level, fair trade seeks to foster cooperative and equitable market exchange between marginalized producers, collaborative traders, and conscientious consumers. Littrell and Dickson have emphasized fair trade’s aim of “empowerment and improved quality of life for artisan producers…”[2]  Maseland and De Vaal assert that fair trade rejects “efficiency as the main criterion” for international trade and proposes in its place a criterion of “fairness.”[3] Jaffee et al have argued that, based on traders’ core commitments to “fairness” and “equity” for producers, fair trade products carry a “moral charge” straight through to prospective purchasers.[4] At the consumption end, fair trade is alternately viewed as valuing notions of “consumer sovereignty” and “agency”[5], as “an initial attempt to counter the pervasiveness of commodity fetishism, working to make visible and relevant the social relations that underlie production and exchange”[6], as combining functional and ethical values in “social goods”[7], and as providing consumers a “benefit from the ‘warm glow’ of subsidizing a subsistence laborer” in a poor country, with the consequence that “the marginal benefit of these products is greater than their simple utility value.”[8] Renard has summarized the movement’s underlying values as “solidarity and fairness.”[9] For Ransom, “[t]he greatest single virtue of fair trade is that it encourages us to take a closer look, to engage more critically with the intriguing, sometimes shameful, details of everyday human life.”[10]

FINE’s definition was arrived at, however, more than four decades after the fair trade movement made its first tentative forays into what its proponents then called alternative trade. The purpose of this thesis is to examine the complex history of the alternative/fair trade movement as a basis for understanding one of its core tensions: the disjuncture within the movement about its proper position vis-à-vis the global capitalist market.

In Part 1, I undertake a detailed analysis of the alternative/fair trade movement’s gradual progression from small-scale direct-purchase schemes to increasingly mainstream prominence. I employ a basic framework first suggested by Anne Tallontire, which delineates four key stages in the development of fair trade: goodwill selling, solidarity trade, mutually beneficial trade, and the simultaneous development of trading partnerships and marketing of the fair trade brand.[11] These stages are dealt with individually in sections 1.1 to 1.4, while section 1.5 provides a snapshot of fair trade’s current scale and some of its impacts. Throughout the analysis, I provide succinct profiles of and quotations from prominent alternative/fair trade players to illustrate the motives and experiences of people and organizations in the movement.

Part 2 begins by briefly highlighting some of the potential misunderstandings that may result from the historical overview outlined in the preceding sections, and then proceeds to an argument by Gavin Fridell, who has offered an important alternative analytical frame for the history and philosophical underpinnings of the fair trade movement. Part 3 pulls together critical aspects of the previous sections in an effort to engage one of the movement’s core tensions: the dualism that fair trade posits itself as both an alternative to conventional trade and a part of that system. This tension has been described by observers in a variety of dichotomies: Moore has called it “the two visions of Fair Trade (a working model and the challenge to orthodoxy)”[12], Barratt Brown and Raynolds have each placed the movement “in and against the market”[13], Fridell has called fair trade “within and against the market”[14], and Renard has employed the phrase “inside and outside” to refer to the same tension.[15] Although academic observers note this polarity frequently in their analyses of fair trade—and fair trade practitioners experience it firsthand in their trading activities and strategic discussions—the tension is rarely dissected in the fair trade literature, and few commentators have proposed potential explanations for this seeming paradox. This work seeks to fill that void.

In this thesis, I argue that the sense of dislocation implied by these analytical dichotomies reflects the disjuncture within the fair trade movement about whether it is constructing an alternative trade system that is parallel to (and “against” and “outside”) the conventional trade system, or whether the movement belongs within the conventional system, injecting notions of “fairness” and reforming from the “inside.” Pursuant to this discussion, I propose an analytical model that delineates what I call the idealist and realist tendencies of the fair trade movement. By contextualizing the roots of the “in and against the market” tension through a careful examination of the alternative/fair trade movement’s history, I seek to unpack this paradoxical polarity. Rather than positing that fair traders must hasten to resolve this dichotomized dilemma, I demonstrate the commonalities and interdependence of the two positions. Ultimately, based on a historical and values-based reading of the movement, I argue that there is no inherent contradiction in the movement’s sense that it is both in and against the market, and that this disjuncture arises from the differing strategic priorities of fair trade actors rather than signaling deep divergence about the principles of fair trade. By demonstrating that the idealist and realist perspectives are not mutually exclusive, it is hoped that a more holistic understanding of the fair trade movement and its intentions can emerge.

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Masters Thesis for:
New School, Graduate Program in International Affairs
May 2007
Advisor: Professor Stephen Collier
Reader: Professor David Gold

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