Free, Fair, Faux, Phun
NCP takes on the giant (the global economic system)
We all want to know what to do about a global economic system that seems unfair to millions of people—including us. And given the size and power of those who benefit from and defend this system, it often feels like we’re confronting a giant of Jack and the Beanstalk proportion who would have us too for dinner.
Free Trade is the dominant global economic model, by which governments agree not to hinder the flow of products and profit and not to seek unfair advantage, while giving up the right to restrict trade based on environmental or labor-rights considerations. This system is enforced by groups like the World Trade Organization, which are agencies with the power to bring charges against any member nation that doesn’t abide by established treaties, including overriding national priorities in favor of the economic interests of corporations or trading partners.
People like Fatima from El Salvador toils at the bottom rung of the $81 billion global
coffee industry. In her mountainside Salvadoran village, this single, illiterate, mother
of four earns $3-$5 for picking 100 pounds of coffee—a chore that takes all day. Is it
sufficient? “No,” she said, with a look of grim resignation, “I can barely feed my children
and keep them in school—but what choice do I have?”
Some tout a globalized and Free-Trading world as a flawed-but-basically-useful system, as it has lifted many millions out of poverty in our world. While this is perhaps the case in some situations, consider:
•The real increases from globalization have occurred at the top of the pyramid, with the
CEO’s of clothing corporations, for instance, making $11-18,000 an hour as the women on
the assembly line earn 10-40 cents an hour.
• While they may have a job, working conditions for those in the globalized supply chain
(safety, child care, harassment, forced overtime), and living conditions are often
• Free Trade depends on being subsidized by the environment, as the high cost in
pollution and climate change gases created by global shipping is shifted to the ecosystem
and to the future.
Fair Trade is often held up as the alternative to Free Trade. Here, conscientious consumers
purchase products made by better-paid and treated Poor World workers. Currently, Fair
Trade is a miniscule percentage of the US consumer economy (.05% of coffee sales,
for instance). As pointed out by many analysts, this is noble but insufficient, at least if
our goal is to create a fairer world. Which is not to say it shouldn’t be done, but that by itself it’s not enough.
Other Fair Trade considerations:
Distance: most FT items are produced in far-away places, necessitating long-distance shipment—and a large carbon footprint.
Equity: the wage differential between highest and median income employees in a typical
US corporation is 250:1—does the average difference of 100:1 between the CEO of a FT
company and the workers in other countries (assuming $100,000 annual wage/benefit
package for the US Fair Trade executive, with 240 actual workdays, and $4 per day for
the FT worker in another country) do enough to close this gap?
Fickleness of the global market: Along with ever-changing Rich World consumer
preferences, markets may dry up altogether, leaving Poor World producers at the mercy
of international markets.
Cost and size: achieving certification is a significant cost to poor producers; typically FT
organizations only do business with cooperatives, not individual producers, who are left to
fend for themselves.
Best use of consumer dollars: Fair Trade products are sometimes purchased out of a
desire to “help those people” and may not be money spent on truly useful or needed
items. If not used for essential purchases, would this money be better invested in
programs designed to promote justice and support producers’ self-sufficiency within their
Tolerates affluence: Fair Trade does little to challenge the affluence of purchasers—
indeed the model is based on consumers’ excess disposable income. Does this let us
off-the-hook too easily when dealing with global inequalities? Indeed, some of this
income may have derived from investments in the very corporations that exploit people
and planet for gain.
Individual virtue: FT folks have bought into the individualist mantra of capitalism—kind
of a divide and conquer approach. So long as “changing the world” is left to individual
purchases rather than groups
developing strategies for systemic change, our world will remain un-changed.
Esther met with our delegation in Yangon, Myanmar. She works in a garment factor in Myanmar.
She has a 1st grade education, and her parents are both day laborers, meaning sporadic physical
labor at a very low pay. She left her village in the delta when was 13 to seek work in the city.
She came to Yangon wanting to be a fashion designer or a singer. She started working in a
garment factory in 2018. She makes warm clothes—so these are bound for the EU or US. She
works 10 hours per day at 35 cents an hour.
So both Free Trade and Fair Trade are a bit Faux—short of creating a genuinely equitable economic system. This leaves…
Phundamental changes. Here’s how NCP sees rebuilding the system, starting from the bottom up:
• People in the Rich World step back from the globalized consumer economy by reducing consumption, supporting local producers and refusing to invest in exploitative corporations, meanwhile educating themselves and others about the impacts of globalization on planet and people. This may include boycotts of egregious offenders (think Nestle in the 70’s, Gandhi’s homespun cotton, the Boston Tea Party!).
• Resources freed up by less consumption are re-invested in
life-affirming projects, organizations, movements and retirement funds.
• Pressure is applied to lawmakers to revise or scrap trade deals that
put profit over people and planet.
• A meaningful carbon tax is put on all fossil-fuel-generated energy,
which would be a boon for the planet and for local producers,
as products-from-a-distance would be dis-incentivized.
• Our global neighbors are supported in becoming successful in their
own economies rather than dependent on the global market. Microloan
projects supportined by NCP's Give a Girl a Chance fund in one example
"Our daughters no longer have to migrate to the cities to work in the
sweatshops!" women in this village in the Southwest delta of Myanmar tell our
delegations. The women's microloan projects have given them enough income to
keep their daughters in school and at home, rather than being sent off at an early
age to the big cities.
That’s our modest recipe for creating a more just global community. For the analysis of smarter people than us, see books on the Reading List at the NCP website.