Question

Is fair trade worth it? Consider the benefits to fair trade and weigh them against the costs. Cite evidence to support your opinion and discuss how to address the counterargument.

Answer 1

Introduction:-

The recent developments in labor laws, and the governments of most countries being extremely sensitive to economic fairness of the weaker sections has led to rapid development of companies and market types which want to organize their business in such a manner that it is fair, both to the employees and the customers, while making sure that the organization does not harm the society in whatsoever manner possible.

Moving over the concepts of capitalism, it believes in social accountability of a business, in which it refuses to indulge in practices, which might save costs, but is not fair to the ideologies expected and created by business owners.

Fair trade producers, have historically been smaller companies or corporations, since business owners at a large scale, have tried and operate in conditions which maximize self interest than social conditions which even when important have not seen them doing much.

Case Specifics:-

This brings us to the argument, that is free trade worth it and what are the pros and cons of such a business model. Free trade in my opinion, and of many other economists is the correct way of overall development when looked at macro or overall variables in a country.

It ensures, that the economy does not be profitable only for a handful of people but rather, believes in giving justice to the society and indulging in practices that are profitable for everyone and just not the owners respectively.

Fair trade begins with paying attention to the production process right from the start by making sure, that the business procures its products from the best sources, by paying a price which is justified than settling for a substandard quality product, and then paying employees with justified salaries and making sure that the marketing efforts are ethical to earn sufficient profits.

The pros of having such a strategy is that these products easily catch the eyes of the consumers, and have a higher brand value than other brands. Fair trade is rapidly deployed in production of coffee and flowers for an example in the United Kingdom.

The problem which faces this discussion is that it is argued, that the prices of these goods tends to be higher and thus people have to pay higher to purchase these products.

A counter argument however, is that it is the fair value of the product or service which the end user ends up paying, and also because of the fact, that the quality of this product tends to be higher than others, since the company pays deep attention to every small step of the production process, it is therefore justified and at the same time makes everyone in the production process earn a fair price for the effort which they put in the manufacturing process respectively.

Please feel free to ask your doubts in the comments section if any.