STUDY QUESTIONS
David Ransom, The No-Nonsense Guide to Fair Trade, pp 8-15
Note: “Global South” or “South” is a term for what is more commonly called “the third world” or “the
developing world.” The “North” refers to the industrialized or “developed” world.
General points:
 In reading this article, keep track of what you find surprising—in what way the picture he
presents goes against what you have been led to believe—and in what way the picture he presents
conforms to the views you have developed up to now.
 Also keep track of your political reactions to his views—keeping in mind that in critical thinking a
diversity of views can be valid. Agree? Disagree? Befuddled? Angry? And ask yourself why you
react this way.
o Take both of these reactions as starting points for thinking more deeply about the issues
he raises and the views he presents.
 Also ask how one (you or anyone else) could find support for or criticize his views? What kind of
information, what kind of reasoning, what kind of values?
1. What does Ransom mean when he says “Markets and trade are human constructs” (8)? Why
does he insist on this? By claiming that, what is he arguing against?
 Opposes: “trading comes naturally to people and regulates itself through the self-righting
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mechanism of market forces.” It is not a “natural” system, and it is not a “self-righting
mechanism.”
Opposes: “Morality simply doesn’t come into it.” Morality does, because we make it, and
it can be unfair.
Opposes: “You can’t buck the market.” Yes you can.
Opposes: If “you meddle with trade [it is] at your peril.” Not necessarily, (and free trade is
perilous to some people.)
Basic idea: Trade is a system humans made, not an act of nature or irresistible. Thus it is
susceptible to
2. What are the two simple questions he discusses about Fair Trade (8-9)? How is his second
point related to the idea of democracy? How is Fair Trade a response to this problem?
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Who benefits? The rich and powerful.
Who is accountable? No one.
“Unfair trade is the mortal enemy of democratic accountability, which gets in its way.”
“Fair Trade is primarily about reasserting human control over a system….”
3. According to Ransom, what are the historical origin and the original goal of early “free
trade” (9)?
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A system of trade set up by European empires in the 19th century to enrich and glorify the
rulers of the colonial powers.
4. The notion of “comparative advantage” (10-11) is an important but somewhat difficult idea.
What does it mean? What is the goal of this idea? What does he mean by “added value” and
why is it important to free trade. And according to Ransom, why is it problematic (11-12)?
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“international division of labor.” Some countries are better at some economic activities
than others. Each country should find its comparative advantage and focus on that as
part of the international economic system.
goal: “to justify why [capitalism], rather than assorted royalty and landed gentry, should
be the legitimate heir to the riches that could be harvested from international trade.” (10)
goal: “maximize efficiency of every national economy.” (11)
Added value: processing a raw material adds value—and generates greater profit than
the growing of that raw material.
5. What is “protectionism” (13). Why do free traders criticize it? What happened in the 1950s and
1960s, and why?
 When a country protects its workers and industries by raising tariffs against cheaper
imports.
 Free traders criticize it because it stalls international trade (and comparative advantage).
 1950s & 1960s: International effort to industrialize newly independent colonies to create
more markets for industrial goods. “Import substitution” encouraged infant industries by
protecting them with tariffs. Worked well in Japan & Little Tigers, not in Latin America or
Africa.
6. What is “export-led economic growth” (14)? What is the general role of government in this type of
economy?
 Instead of protecting infant industries, countries should make wealth by exporting goods
(according to comparative value).
 There is deregulation and governments should not intervene.
7. What is “structural adjustment” and why has it become a part of free trade (16-17)? How and why
does Ransom criticize this activity?
 Poor countries become reliant on world commodity markets. This leads to great debit.
 Structural adjustment is a process of requiring poor countries to pay back debt by
focusing more on export commodities.
 When this happens in around the world, the price of the commodities plummets.
 “Losers” are the world environment and the poor.
 Result: “a single empire of footloose corporate capital, dominated by the United States”
(17)
 Result: “power and wealth have slipped away from industrial labor into the hands of the
corporate citadels and finance houses of the North” (17)
8. What does Ransom believe is the “most pressing issue” (19)? And what does he consider to be the
real question concerning intervention (20)? What unstated assumptions or beliefs might lead Ransom
to say this?
 “the absence of any notion that people should, or could, intervene in their shared
destiny.”
9. What are the two priorities – issues – he sees at present? What does he see as the relationship between
these issues and our notion of democracy (20)?
 The first is inequality: the cornucopia of things is available to a small and shrinking
proportion to the world’s people. “the wealth of unrestrained capitalism doesn’t just exist,
but accumulates, left to its own devices it makes the rich relatively richer, the poor
relatively poor and the gap between the two absolutely wider at an accelerating,
compound rate.
 “Democracy cannot conceivably survive, let alone flourish, within or between societies
where blatant injustice intensifies by the day.”
 The second concerns the nature of capitalist wealth.” (He brings up climate change.)
10. The World Trade Organization (15). What is the WTO and what is its primary function? How does
Ransom criticize it?
 “a global agency enforcing free-market values with an armory of sanctions and fines.”
 “’Process’ issues affecting the environment or human rights were excluded.”
 “Although most countries now belong to the WTO, many cannot even afford to be
represented, while a few of the most powerful routinely make decisions on their own in
what’s become known as the ‘Green Room.’”