Propiedades en Estado Fresco a) Trabajabilidad

Let‟s begin by considering two alternatives. First, one simply buys a fair trade good (such as a chocolate bar or a cup of coffee) and benefits people in a developing economy by however much the fair trade‟s aid component actually helps them, plus however much benefit they receive from selling their goods for the actual market price of those goods, or secondly by buying an equivalent free trade good and donating the difference to whatever charity one likes. I will argue that it is this second alternative that we should favour. I shall argue for this position in the following sections by presenting practical problems that are specific to fair trade that are not concerns for the alternative approach of buying free trade goods and then donating the difference in price to appropriate charities. First, however, I will make clear the theoretical gains of such an approach that are argued for by Yanchus and Vanssay, assuming that the aid is untargeted as I have defined it.

Recalling figure 6 in the previous section, the loss represented by the move from V to T, which is the cost to consumers in the developed world having the price of the commodities distorted by fair trade, is eliminated, and thus the same amount of good is accomplished for a lower cost. Further, by not distorting the price of coffee, the developed world is benefited by more than fair trade, which is represented by the move from the point on indifference curve Y1, which represents consumption after subsidisation, to the point in the middle of the indifference curve Y2, which represents consumption before the subsidising effect of fair trade.58 For these reasons, assuming that there are no additional costs by running a charity rather than the

additional costs incurred by guaranteeing that the aid component of a fair trade transaction is being properly spent, clearly fair trade is, theoretically at least, unreasonably inefficient. A

straight donation, to a charity that uses the money in an equally targeted fashion as the aid component of fair trade does, of the equivalent of the aid component of a fair trade good would produce better results for both the consumers and the general population of that good‟s

producers. Assuming that there is a form of further targeted aid beyond that of the aid component of a fair trade transaction, strengthens this point even more.

The problem that fair trade has is essentially one of targeting. We have good reason to believe that the aid component of any fair trade transaction is more poorly targeted than it could be. First of all, while there are many disputes about the effectiveness of different sorts of aid, it is quite plausible that some form of planned aid must be better targeted than giving money directly to a small (fairly arbitrary) subset of a population. Thus, while one might think that Oxfam, for example, is a wasteful or otherwise ineffective charity, it is quite likely that some form of aid that directly targets certain social ills, like a lack of clean drinking water, and devotes an equal amount of money to those ills, rather than directly paying a minority of people in the region a premium for their goods, will better aid that region than a straight donation to arbitrary members of the region‟s population.

Further, even if we do away with the assumption that there is theoretically an approach to targeting aid that is more effective than simply directly transferring funds to undeveloped regions of the world, there are good reasons to favour an alternative means of targeting the aid

component of a fair trade transaction beyond the theoretical ones discussed above. These reasons are practical problems that are costs that fair trade goods have that either a direct donation (untargeted aid) or a donation to a charity that focuses on either alleviating certain ills, or building certain public goods does not. They are the topics of the following sections of this chapter.

Finally, before continuing, it is worth admitting that fair trade makes up a very small part of the market. Martin Wolf writes in 2004 that it is less than 1% of the market for cocoa, coffee, and tea, and it is virtually nonexistent in other cases such as palm and coconut oil.59 However fair trade is definitely becoming more prevalent, and assuming that it indeed does becomes common, the problems outlined in the following sections give us clear reason to prefer

alternatives to it. Further, using the fact that fair trade is such a small part of the market to defend it from these criticisms is rather disingenuous on the part of its proponents: it is dubious to suggest that fair trade should be supported, but only to the extent that it really doesn‟t catch on. Clearly, we should assume that indeed proponents of fair trade are recommending its adoption on a large scale, especially since so long as it remains small, it is not truly a solution to world

poverty.