Wednesday, March 30, 2005

The False Economics of Fair Trade: I blogged a bit about this some time ago, when one of the leading coffee distributors announced that it was entering the fair-trade racket. I knew enough at the time to doubt the efficacy of fair trade:
Of course, if you believe the market can work more generally, more globally, then you won't be inclined to think so-called fair trade prices are helpful anyway.
But I never really looked into the details until today, when I got curious and googled. At the Mises Institute's helpful site, I found a more in-depth look at not only the false economics, but the actual scam underneath.

If you buy fair-trade coffee, ask yourself these questions: How much of the additional money you spend goes to the grower? How much is pure profit for retailers like Starbucks, or packagers and distributors like Procter and Gamble, or your supermarket for that matter? How do fair-trade buyers decide who gets to be paid extra for their beans? Goodwill? More fairness? Kickbacks? And do fair-trade incentives actually make things worse for growers in general?

Find out here.

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