Global Fair Trade: Humanizing Globalization and
Reintroducing the Normative to International Political Economy
by
Candace C. Archer
Bowling Green State University
Stefan Fritsch
Bowling Green State University
Abstract
Since the mid-1990s fair trade has gained consumers and public attention, but IPE
scholars have had little to say about this new phenomenon. Since the fair trade concept is
based on consumer behavior that incorporates moral and ethical choices, it can not easily
be explained by mainstream IPE theories which are predominantly based on the rational
actor model. This paper examines the fair trade movement, discusses its history, its
impressive growth and the ethical and social agenda it promotes. Fair trade is an anomaly
that cannot be explained by mainstream rationalist ontologies. Instead, we argue, IPE
theories need to consider classical political economy works which reveal many valuable
insights regarding moral and/or ethical concerns. By reintroducing normative
considerations fair trade can reconnect consumer and producer, move our theories beyond
merely rationalist ontologies and humanize globalization.
Keywords:
Fair Trade; Normative IPE; Globalization; Ethical Trade; IPE theory; underdevelopment
1
Global Fair Trade: Humanizing Globalization and
Reintroducing the Normative to International Political Economy
Introduction
Over the last decade the issue of “fair trade” has gained considerable attention among
consumers and in the popular press (Featherstone 2007; Downie 2007). Today fair trade
products are both more visible and more widely available. The general message of fair
trade advocates is that international trade should be more sensitive to positive social
values including fair labor practices, fair product prices, non-exploitative production
methods and environmental sustainability.1 Fair trade attempts to guarantee more
equitable prices for certain products, predominantly originating in developing countries,
so that producers get more direct benefits from trade and communities can improve
production standards and overall living conditions. Although gaining public prominence,
fair trade is largely absent from theoretical discussions in International Political Economy
(IPE).2 Two reasons might explain IPE’s neglect of this phenomenon. First, fair trade
products mostly consist of commodities like coffee, bananas, cacao, sugar, honey, tea, or
flowers. These agricultural products represent a small percentage of total global trade and
fair trade labeled products occupy a small percentage of global agricultural markets. Fair
trade’s volume, therefore, generates limited or even insignificant impact on global trade
relations. However, as we will show, fair trade products represent a dramatically growing
sector which indicates their increased relevance.
Second, fair trade does not fit neatly into the mainstream rational actor model on
which most of contemporary IPE theory builds. The growth of fair trade markets around
2
the world indicates that consumers are willing to spend more money and personal
resources to assure that the products they consume are non-exploitative of humans and
environmental resources. Thus, the logic of fair trade runs contrary to mainstream
rationalist frameworks for understanding human behavior and global economic
interactions. Most theories of IPE still depict market actors as rational actors concerned
with the most efficient allocation of limited resources. The existence of fair trade presents
an interesting anomaly that suggests a fundamental ontological weakness of IR / IPE
which Frost has criticized as paying “overall insufficient attention […] to normative
issues.”(Frost 2008:259). Mainstream IR / IPE theory is presented as objective social
science focused on describing and understanding economic phenomena, “uninterested in
and often hostile to moral concerns” (Wapner 2000:2). The existence of fair trade and the
moral agenda of those who practice fair trade questions this underlying ontology.
Although theories based on rational ontologies have trouble explaining fair trade,
normative concerns as such are not new to political economic writings. In fact, many of
the formative voices of political economy can provide insight into this movement because
historically, political economy scholars considered more than rationality in their
discussions of market relationships and the institutions in which they are embedded.
While this normative strain of IPE theory exists, it has been ignored in the contemporary
discourse.
The goal of this paper is to examine the fair trade movement and by doing so,
make a case for the re-incorporation of normative discussions in IPE to account for this
anomaly. The underlying thesis is: The fair trade phenomenon represents alternative
socioeconomic behavior which conflicts with concepts of rational action and most
3
efficient resource allocation. Contemporary IPE theory has not adequately explained
norm-based socioeconomic processes like fair trade. Instead, we argue that the re-reading
and the reintegration of norm-aware classical political economy works could capture the
normative nature of fair trade and extend explanatory frameworks for socioeconomic
interaction beyond orthodox market mechanisms, based on supply and demand, and
beyond the rational actor model, which assumes that human action is solely based on
constant cost-benefit calculations and a drive for profit maximization. We will begin by
discussing the development of the fair trade movement, its motives, its growth as well as
applied instruments and possible consequences. After establishing the normative
foundations of this type of trade, we will consider the theoretical implications of fair
trade and demonstrate the utility of re-reading classical political economy literature for
understanding this movement. Finally, we argue that fair trade represents an alternative
way to understand globalization and re-connect the consumer and producer in a more
humanizing way.
What Is Fair Trade? Some Comments on Terminology
Fair trade has been used in political discourse with several different meanings:
The first and still more prominent understanding defines fair trade as establishing a “level
playing field” between trade partners, mostly states (Balaam and Veseth 2008:109). In
other words, trade is “fair” if all trade partners adhere to the same principles, norms and
rules. Under this definition “unfair trade” practices would include the broad field of nontariff barriers like subsidies or social, labor, health and environmental standards which
lead to distortions in global trade relations and cause “unfair” advantages (Cohn 2008:
4
206; Goldstein and Pevehouse 2007: 321). However, as Cronin points out, “it [is] often
hard to know where legitimate nontrade concerns end and trade protection [begins]”
(Cronin 2002:373). Developed countries regularly invoke this definition for fair trade
because they wish to protect their domestic markets from cheaper foreign imports. For
example, lower labor costs or weaker environmental regulations in developing countries
reduce product prices and thereby increase their competitiveness in global markets. These
practices are often cited as undercutting the competitiveness of developed country
producers and are used as an example for why developing countries’ producers are not
trading “fairly.” However, from this point of view, the use of fair trade rhetoric seems
rather synonymous with protectionism.3
Stiglitz offers a second and slightly different usage that has also gained some
prominence. He argues that liberal trade, if truly absent of barriers, would lead to greater
global welfare and development. The problem he cites is that trade is not “fair” because
the system is inherently discriminatory. Not only do many developed countries break the
rules of the liberal trading system, but the structural power relationships and political
agreements do not lead to the full incorporation of the underdeveloped world into the
global trading system. His solution to making trade “fair” is a combination of state
policy, better adherence to liberal rules and a more participatory, redistributive global
trading system (Stiglitz 2006:82; Stiglitz et al. 2005). Stiglitz’s reformist agenda is an
attempt to make trade more “fair” for the global South, but this is a less common usage of
fair trade.4
5
Neither of the definitions above accurately depicts our usage of the term. We wish
to be clear; our interest in fair trade is confined to the global social movement committed
to the values articulated in the following definition. Fair trade is
“a trading partnership, based on dialogue, transparency and respect, that
seeks greater equity in international trade. It contributes to sustainable
development by offering better trading conditions to, and securing the
rights of, marginalized producers and workers – especially in the South.
Fair Trade organisations (backed by consumers) are engaged actively in
supporting producers, awareness raising and in campaigning for changes
in the rules and practice of conventional international trade” (FLO
International 2008).
The fair trade movement argues for ethical trade and advocates improving the lives of
producers in poor countries. Organizations that label or certify fair trade products have
requirements that would help the producers benefit from trade directly and assure that
products are produced in a non-exploitative and developmentally positive manner. The
goal is to empower producers and their communities and help them become economically
self-sufficient, thereby adding to the sustainability of economic growth within an
underdeveloped state and reducing some of the negative consequences of globalization.
Buyers or consumers of fair trade labeled products are motivated by their desire to
support fair labor practices and development in poorer states. Buyers make informed
purchases based on a global justice and social development agenda. As Maseland and De
Vaal explain, consumers consider it a “moral obligation” to purchase products that
promote justice and redress the negative consequences of international trade (Maseland
and de Vaal 2002: 251-53). Because fair trade products often cost more in the market
place, it is difficult to argue that the most efficient allocation of resources is driving the
consumer’s purchase and because they are often quite similar to non-fair trade products,
consumers are not using superior quality standards to drive their purchasing. Fair trade
6
purchases are instead morally based. In a fundamental way the movement re-connects
producers and consumers. It overcomes the facelessness of global trade and production
by creating a process that gives consumers more information on the products and those
who produce them. Fair trade consumers may never meet the people who produced their
purchases, see the working conditions or assure the profits end up in the worker’s hands,
but they are more connected to the production process because they are guaranteed that
their purchases are regulated to promote positive social values. This is a central issue in
fair trade to which we will return in more detail below.
The Development and Growth of Fair Trade
The modern fair trade movement is often traced back to 1940s America when the
Mennonite Church purchased needlework from Puerto Rican artisans and sold it through
“Ten Thousand Villages” (Ten Thousand Villages 2008) and the Church of the Brethren
imported wooden cuckoo clocks from Germany to assist post-war European refugees
(SERRV International 2008). By the early 1950s more shops selling fair trade products
opened in the US. In Europe, the earliest fair trade activities can be traced back to the UK
during the late 1950s. Oxfam UK sold crafts produced by Chinese refugees in Oxfam
shops (International Federation for Alternative Trade (IFAT) 2008). During the 1960s
and 1970s, these relationships became consolidated and Southern NGOs established
permanent links with their Northern counterparts. They formed relationships “based on
partnership, dialogue, transparency and respect” with the goal of “greater equity in
international trade”(International Federation for Alternative Trade (IFAT) 2008).
7
The most significant development in fair trade was the creation of labeling
processes that would identify products as “fair trade certified” (FTC). This process
emerged in the Netherlands in 1988 as a reaction to plummeting coffee prices. From
there, many more local organizations created independent certification processes which
are now being consolidated under the Fairtrade Labeling Organizations International or
FLO. FLO is an umbrella organization that consists of independent state-based fair trade
organizations attempts to provide one standard for fair trade certification through FLOCERT. The consolidation and history of the fair trade movement provides an interesting
example for networking activities of non-governmental organizations in global politics.
From the 1970s on, domestically based fair trade organizations began to meet in informal
conferences and workshops around the world, a process which became more formalized
in the mid 1980s through the establishment of various associations in different regions of
the world. In 2001, FLO, IFAT, NEWS! and EFTA established FINE, a collaborative
effort to coordinate their fair trade activities such as advocacy, standards and monitoring.5
Currently there are hundreds of fair trade organizations in Northern and Southern
countries.6 The remarkable growth of fair trade concerned NGOs, especially during the
late 1980s and 1990s appears to go hand in hand with the general growth and momentum
of an emerging global civil society which is critical of the negative effects of economic
globalization, concerned about human, civil and labor rights and environmental
protection. Famous public expressions of this emerging global and transnational civil
society and its manifold socioeconomic concerns have been the street protests at the
WTO Ministerial meeting in Seattle in 1999 or the establishment of the yearly World
Social Forum as a counter initiative to the World Economic Forum (WEF).7
8
Growing Trade in Fair Trade Products
The development of the fair trade movement is directly responsible for the increase in
FTC products and their growth in market share. By the 1990s more consumers were
educated about the existence of fair trade products. Due to data quality, it is difficult to
present a coherent picture of how this sector has grown since its earliest beginnings in the
1940s, however, the picture has become clearer since the late 1990s. All indications are
that the market share of fair trade products is expanding dramatically. Since 1999 FTC
product sales have increased by 319% in Europe and 440% in North America (see table
1).
Table 1: Development of Total Fair Trade Sales 2001-2006 (in million US-$)
Year
2001
2002
2003
2004
2005
2006
Europea
326,9
n.d.
n.d.
597.00
747,63
1044,9
North Americab
125,2
180.00
276,1
358,9
378,9
552,8
a
Growth 2001-2006 in %
319,6
441,5
Source: (Krier 2001; Krier 2005)
Source: (Fair Trade Labeling Organization 2006; The Fair Trade Federation 2005)
b
Coffee and Bananas are two of the oldest FTC products and provide an excellent example
of fair trade increases in Europe. Since 1999, the market share growth of FTC bananas
and coffee has been impressive. Table 2 shows the current market shares for both product
categories. Although it is difficult to draw general conclusions about only two
commodities, they nevertheless provide an example of the overall trends. They also raise
questions about differences among similar countries in terms of their purchases of fair
trade products, a question that is beyond the scope of this paper, but one that should
9
be investigated. What the tables do show however, is the significant growth in market
share that fair trade products have experienced across Europe and the US over the last six
years.
Table 2: Market Shares for Fair Trade Products in Europe 1999 & 2004
Bananas (in % of total)
Coffee (in % of total)
1999
2004
1999
United Kingdom
15
47 United Kingdom
1,5
Switzerland
1
5,5 Switzerland
3
Finland
n.d.
5,5 Finland
0,3
Belgium
0,6
4,4 Belgium
1
Austria
n.d.
2,7 Austria
0,7
Sweden
1
1,8 Sweden
0,8
Denmark
0,9
2 Denmark
1,8
Norway
n.d.
0,6 Norway
0,3
Ireland
n.d.
0,5 Ireland
0,5
The Netherlands
n.d.
4,2 The Netherlands
2,7
Luxembourg
n.d.
4 Luxembourg
3,3
Italy
n.d.
1,2 Italy
0,1
Germany
n.d.
1 Germany
1
Source: (Krier 2001; Krier 2005)
2004
20
6
0,4
1,7
2,3
1
2
0,9
2
n.d.
n.d.
n.d.
1
Although agricultural commodities represent the bulk of fair trade products, the
list of products available as FTC continues to expand each year. FTC products now
include processed goods such as soccer balls, beer and wine. In addition to the increase in
labeled products, there has been a decided movement toward mainstreaming FTC
products in the US and Europe. Consumers no longer need to go to specialty stores to
purchase fair trade products because they are widely available in common retail outlets
(Linton 2006). Fair trade coffee, and to a lesser degree produce, can be found in many
diverse North American and European supermarkets and even in such ironic places as
Wal-Mart which has recently launched its own fair trade certified coffee and carries fair
trade certified flowers in its Sam’s Club stores.8 The growth of types of FTC products
suggest the power of the movement continues to be driven by information campaigns that
have caused a rising awareness of problems related to globalization regarding unequal
10
market access and unfair price policies (Pelsmacker and Janssens 2007). According to a
recent study, “[F]air Trade is entering a new stage. From modest beginnings in the 1950s
it has now developed into a world wide movement, benefiting millions of producers and
their families, farmers and workers in developing countries” (Krier 2005).
Overcoming the Harms of Globalization: Fair Trade Organization Strategies
The actual work of fair trade agencies has also grown since the beginning of the
movement. To benefit producers, fair trade organizations pay higher prices for the
products, assure more profits accrue directly to the producing communities, provide
distribution networks in industrialized countries, strengthen local producer groups, and
establish continuous and stable trading relationships between the developed and
underdeveloped world. For producers, fair trade associations provide education regarding
market demand and structures, consumer expectations, and production standards. They
also try to prevent the exploitation of children by incorporating restrictive labour
standards into the labelling process and to establish sustainable production methods. Fair
trade associations also educate consumers about the positive effects of higher prices.
Watson argues that this:
[…] involves a narrative strategy, through which campaigners tell
stories about the lives of the producers who stand to benefit from the
adoption of fair trade norms. This is not only about how such
producers would benefit, and neither is it only about why it is ethically
right that they should benefit. It is specifically focused on who benefits
– putting names and faces to the process of global trade (Watson
2005:217)
As a result, these NGOs increase transparency and dialogue in international trade
relations by reincorporating moral and ethical aspects and stressing the social aspects of
11
trade and consumption. (Watson 2005:216). Fair trade organizations also create the
networks through which production is monitored, thereby providing assurances to the
consumer that strict production guidelines are being met. The applied certification
schemes, visualized through various fair trade labels, assure that the mutually agreed
production, social, health and development goals will be respected and controlled – or
generally that the social and moral agenda that the consumer would endorse is met. As
the fair trade movement has grown, consumers in industrialized countries have become
knowledgeable about negative development and social practices linked to exported
products. This information comes from many sources including fair trade advocates and
has created a willingness by some consumers to pay slightly higher prices for FTC goods
to assure that profits go directly to the small producers.
Thus, the fair trade movement has addressed two interrelated issues. First, the
relationship between fair trade consumer and producer is a purely market-based
relationship. There is no government intervention into choices of the consumer to
purchase FTC products. The success of the fair trade movement is based on the more
complete dissemination of information regarding the export of the product and the
difference between where profits accumulate for non-FTC versus FTC products. The
market operates by individuals having more complete information to make decisions
about their purchases. Therefore, the fair trade movement has used the market to
overcome the socioeconomic dislocation of producers in the developing world.
Second, while the market may be the primary mechanism for fair trade, the costbenefit calculus of the consumer is not one of simple allocation of resources. There are
normative considerations at work in the decisions to purchase fair trade products instead
12
of their non-fair trade counterparts. The fair trade ideology highlights the fact, that
peoples’ behaviour under specific circumstances, run counter to the metaphor of the
impersonal market that follows the “natural” price mechanism and decisions are not
based on crude utilitarianism. It is the social values or norms of the consumer that
motivates them to purchase products that are often higher priced. This suggest that
deliberately set action, strongly based on moral and ethical grounds, can alter existing
trade relationships and create win-win situations on both ends of the production and
distribution chain.
Fair trade also manages to overcome the de-connection of producers and
consumers, one of the central features of globalization in its current form which is
defined by transnational and global networks of production and distribution (Held et al.
1999). Technological progress in transportation and information and communication
technologies has facilitated the creation of global production and distribution networks,
often embodied in form of multinational corporations (MNCs), which connect far away
markets and production sites. Production and consumption have been radically separated
by time and space and are characterized by anonymity.9 For the consumer this means
that he/she often has no idea where products originated and under which circumstances
they have been produced (Linton et al. 2004:231). Fair trade tries to reconnect the
“local”, (i.e. producers) and consumers, through transparent global trading networks.
Although often based on geographical long-distance relations, this form of repersonalized trade has much in common with the environment in which Adam Smith
made his observations regarding to the establishment and functioning of markets. In
Smith’s time markets were localized and characterized by close personal relationships
13
between seller and buyer (Heilbroner 2000:71). There also existed a strong sense for
morally sound and legitimate business practices rooted in “social norms and obligations,
of the proper economic functions of several parties within the community, which taken
together, can be said to constitute [a] moral economy” (Thompson 1971:79). Socially and
economically, fair trade resembles localized trade which works through global trade
relations and – to borrow Rosenau’s term – represents a “distant proximity” (Rosenau
2003). However, to fully understand this movement our theories need to be able to
understand the societal and normative contexts in which individuals make choices that
run contrary to the simple rationality of economics. To do so, our theories need to
consider the role of morality and values, which opens the door for reconsidering the
ontological basis of our theories and revisiting the insights from classical political
economy.
Normative Theory in IR and IPE
The incorporation of normative theory into concerns about global politics has
been of interest to the larger field of international relations for several decades.
Normative theory in international relations has a long tradition and has greatly influenced
the discourse in the discipline. Grotius’ argument for a law of nations based on universal
values, Kant’s ethical construction of a cosmopolitan international society, and theories
of just war doctrines by numerous scholars like Grotius, Kant and more recently Walzer
(Walzer 1977) all represent the normative considerations within international relations.
Even E.H. Carr – the still staple reading of first year IR graduate classes – argues that
“political action must be based on a coordination of morality and power,” and that this
14
must drive not only our practical actions but also out theoretical endeavors. Carr asserts
that to ignore morality theoretically is as problematic as ignoring power (Carr
1946/1981:97). Normative international relations theory is often described as including
the question of what ought to be instead of simply what is empirically testable (Viotti and
Kauppi 1999:397). The “ought” suggests the incorporation of values and moral
preferences in the conduct and study of international relations (Doyle 2000).
Normative theoretical considerations, however, go beyond the prescriptive
definition of values that should be included in preferences to also include the “body of
work which addresses the moral dimension of international relations and the wider
questions of meaning and interpretation generated by the discipline” (Brown 1994:3).
The inclusion of morals in the study of IR has been greatly influenced by the English
School tradition (Bull 1977; Wight 1949) and to some degree the critical and
constructivist theoretical orientations.10 What brings these theoretical schools together is
their agreement that norms matter and must be considered.
The lack of inclusion of the normative in mainstream discourse is not simply a
matter of philosophical or methodological debate. Individual and state preferences and
policies represent deeply held values, thus normative concerns matter. The renewed
interest in normative theory is rooted on trying to unpack the decisions and actions of
states, non-state actors and individuals as well as better recognizing underlying motives
and values. This theoretical work has been particularly dynamic in the fields of foreign
policy and security. Continued concerns about the justness of war reemerged with the
declaration of the “War on Terror” and normative theorists chimed in both supporting
and decrying the morality of this war (Crawford 2003; Elshtain 2003). The genocide in
15
Rwanda and the failure of the UN to act raised the question about the moral responsibility
of international institutions (Erskine 2003). Continuing debates about the appropriateness
of humanitarian intervention and whether states are morally responsible for intervening in
a complex emergency shape both UN actions and scholarship on the issue (Biersteker
2002:164).
These issues exemplify how a normative ontology is informing foreign policy and
security issues, but normative considerations have not been as influential in IPE,
particularly in the dominant version of IPE which tends to privilege empiricism and
positivism (Cohen 2007). Although there are certainly events that raise moral issues the
focus of IPE scholarship has largely been state-centric and based on explaining state or
interest group choices in terms of utility maximizing given specific interests and
constraints (Doyle 2000; Frieden and Martin 2002). Attempts to incorporate the
normative into IPE theory do exist (Woods 1995), but to re-orient IPE theory to consider
issues like fair trade one must recognize the limits of the rationalist ontology that
underlies much of the field. Likewise, the historical development of economic thought in
general has privileged rationalist frameworks and this has shaped the discourse. Instead
of embracing the role that morality plays or perhaps should play in market decisions,
these issues, and the voices that endorsed them have been marginalized. What has
emerged instead is a dominant ontology that privileges rationality thus cannot speak to
issue of fair trade.
Mainstream IPE Ontology: Of Market Relations and Rational Actors
16
One remarkable development in IPE has been the predominance of
methodological individualism and the concept of the rational actor or homo economicus
(Pareto 1971). Rational choice theory has gained considerable prominence in the study of
global economic issues. Particularly in the American academy, this form of theorizing
has been dominant and drives the research agenda (Cohen 2007; Frieden and Martin
2002). It focuses on individual choice in situations of uncertainty and explains outcomes
in the international political economy on the basis of individual actors’ preferences
(Putnam 1988; Rogowski 1989). Within this framework, actors are assumed to be utility
maximizers who attempt to maximize their gains while minimizing their losses. The
rational actor carefully calculates costs and benefits, before choosing the best path of
action (Carlson 2000). While this form of theory built on the works of classical political
economists like Jeremy Bentham, Jean-Baptiste Say, John Stuart Mill, Frédéric Bastiat,
rational choice theory was only fully developed within the neoclassical economic
tradition. Economists like Stanley Jevons, Carl Menger and Leon Walras formulated
versions of utility theory of value, which remains at the heart of neoclassical orthodoxy to
this day (Hunt 2002:250f).
The IR or IPE version of this theory became known as game theory and attempted
to develop theoretical and mathematical instruments to analyze and predict actor behavior
in situations of uncertainty. The concept of the rational and utility maximizing actor has
become widely accepted in IR and IPE theory. States, non-state actors and individuals are
assumed to act within certain parameters of behavior that privilege decisions based on
maximizing self interests, however defined. The attraction of this form of theorizing is
17
that it generates empirically testable hypotheses that emerge from accepted assumptions
about human behavior (Carlson 2000).
Prominent work on trade has been particularly focused on rational choice theory
whether the subject is trade strategy and conditions for cooperation (Grieco 1988; Oye
1986), the conditions under which free trade would be provided as a public good (Lake
1993; Keohane 1984), or the interaction between domestic and international policies that
influences trade policies (Rogowski 1989; Milner 1997). The rational actor construct is
so widely accepted in IPE that it even underlies the implicit formulation of the field.
Scholars often frame debates in terms of the “states and markets” approach. Actors in
both spheres are depicted as following their own internal logics (rational terms). States
try to maximize power, markets try to maximize profits (Balaam and Veseth 2008:14).
Murphy and Tooze identify the connections of this approach to rational choice theorizing
by arguing that, “Orthodox IPE scholarship displays a clear, if often unstated,
commitment to explaining events in terms of the rational action of individuals or of state
actors treated as individuals – a commitment to a relatively radical form of
methodological individualism that denies ultimate validity to contextually bound
explanations as well as explanations in terms of concrete social wholes (Murphy and
Tooze 1991).”
Methodological individualism and the dominance of the rational choice approach
in IPE has led many to criticize the utility of these theories for understanding and
explaining economic interactions. Ferguson and Mansbach argue, “game theory achieved
little, in part because its assumptions were unrealistic: for example, that players had
perfect knowledge either of one another’s preferences or of the alternatives available to
18
them” (Ferguson and Mansbach 2003:136). Others have pointed to the inability of these
theories to account for the constraints that actors encounter through “networks, contexts,
and institutions” in which they are “embedded” (Booth et al. 1993:1). Likewise,
methodological individualism and a focus on the predictable behavior of individuals
removes the possibility that humans (or states) have complex decision-making processes
that often do not privilege what is defined as “rational.” These criticisms are relevant in
terms of understanding fair trade, since theories based on a rationalist ontology are likely
to be unable to explain the motivations of fair trade consumers. In order to better
understand the broader contextual nature of economic agency (and fair trade), one should
take into account “the accumulated and recorded products of past human intellectual
activity” (Oakley 2002). Therefore, the next section will revisit the work of classical
political economy to make the case for incorporating normative aspects into IPE.
Classic Political Economists and Fair Trade: Re-Introducing the Normative
The tradition of normative IR theory can contribute to the re-orientation of IPE
and help explain issues like fair trade; likewise constructivist or radical critiques can
suggest alternative trading norms and ideologies. But classical political economists
should be considered in our endeavor to make IPE more norm sensitive and have much to
add to the discussion since their contributions are central to the IPE discourse. The works
of – among others – Adam Smith, Thorstein Veblen or Karl Polanyi reveal many
valuable insights with regard to moral and/or ethical considerations related to the study of
IPE and speak to the issues of fair trade. These theorists included issues of social
responsibility and morality in their writings but they did so in the context of the market.
19
The fair trade movement has built upon market mechanisms. It has never tried to
overthrow the market and replace it with some alternative socioeconomic relationship, as,
for example, Marxist scholars have (Crance and Amawi 1991:9). Instead fair trade tries
to humanize market relations by reducing dramatic price fluctuations which would
increase long term predictability and generate stable incomes for producers in Third
World countries. Likewise, Smith, Veblen and Polanyi never aimed at eliminating the
market. Instead they were interested in understanding the social and cultural foundations
of markets and how markets (sometimes with help from governments) can solve socioeconomic problems.11 Moreover, each of the three addresses specific aspects of
economic relationships which could enrich the theoretical discussions of fair trade and
IPE in general by – above all – questioning the rational actor concept.
Adam Smith’s work is perhaps the most significant for incorporating moral issues
into thinking about IPE because he is widely viewed by many people as the founder of
the discipline of economics. It is worth noting that his first major book concerned
questions of moral philosophy. In the “Theory of Moral Sentiments”, Smith explores the
question how people acquire the moral feelings that enable them to distinguish right from
wrong. The answer, according to Smith, was his concept of the impartial spectator. It
allowed people to put themselves in the position of a third person (the impartial spectator)
who judges actions not only from the viewpoint of their own selfish interests, but also
from the objective observer’s perspective. This would allow people to act in ways that
were morally right and in ways that considered society as well as individualism
(Pressman 1999:21; Smith 1759/1982).
20
Because individuals are social beings, they develop feelings of guilt – unless
otherwise educated – when exposed to the negative consequences of personal
misbehaviour. For Smith we remain unrecognizable to ourselves except within the
context of society. This observation is condensed in his well known “mirror metaphor”:
Were it possible that a human creature could grow up to manhood in some
solitary place, without any communication with his own species, he could no
more think of his own character, or the propriety or demerit of his own
sentiments and conduct, of the beauty or deformity of his own mind, than of
the beauty or deformity of his own face. All these are objects which he cannot
easily see, which naturally he does not look at, and with regard to which he is
provided with no mirror which can present them to his view. Bring him into
society and he is immediately provided with the mirror which he wanted
before (Smith 1759/1982).
Although primarily known as an economist, the issues raised in his moral-philosophical
works continue to be reflected in his economic treatises. Smith grounds his analysis on
the assumption that human behavior naturally is based on self interest, but he continues to
explore the issue of how the individual can contribute positively to society and argues
that by “pursuing his own interest he frequently promotes that of the society more
effectually than when he really intends to promote it” (Smith 1776/2003:572).
Smith is mostly known for having coined the term of the “invisible hand,”
describing his assumption that individual selfishness can unintentionally generate
positive societal outcomes. However, recent interpretations of Smith have raised doubts
with regard to the centrality of the invisible hand metaphor to his work. For Alan Kruger
“there can be little doubt that Smith’s faith in the power of the invisible hand has been
exaggerated by modern commentators ” (Kruger 1776/2003). Smith was constantly
worried about the encroachment of government on economic affairs, however, he was
nonetheless tolerant of certain forms of (limited) state intervention, particularly when
21
society was served by state intervention. Concerning labor regulation he passionately
argued: “When the regulation, therefore, is in support of the workmen, it is always just
and equitable; but it is sometimes otherwise when in favour of the masters” (Smith
1776/2003:195).
Smith displays a deep seated awareness for issues of social justice when he
declares: “No society can surely be flourishing and happy, of which the far greater part of
the members are poor and miserable. It is but equity, besides, that they who feed, clothe
and lodge the whole body of the people, should have such a share of the produce of their
own labour as to be themselves tolerably well fed, clothed and lodged”(Smith
1776/2003:110). His compassion for the disadvantaged inevitably caused conflict in his
own thinking. How much (economic) efficiency should be sacrificed to assure a
minimum of public welfare? Smith wrestled with the answer to this question as can be
seen in his writings about taxation. At one point he favors some sort of flat tax by arguing
that subjects “ought to contribute toward the support of the government as nearly as
possible to in proportion to their respective capabilities” (Smith 1776/2003:1043). Yet he
also argues that it “is not very unreasonable that the rich should contribute to the public
expense, not only in proportion to their revenue, but something more than in that
proportion” (Smith 1776/2003:1065).
All this said it becomes clear that the work of Smith is more nuanced with regard
to social, moral and ethical aspects of economic relations, than is generally
acknowledged. This seems especially noteworthy with regard to IPE’s mainstream
teaching about economic liberalism, which almost exclusively focuses on the “invisible
hand” aspects of Smith’s work, while neglecting the moral parameters of his work (Ward
22
2004:44). With regard to fair trade, Smith’s work provides arguments in support of a
broader perspective on socio-economic interactions than generally associated with the
liberal IPE perspective. As shown above, liberal thought at one point did in fact pay
closer attention to moral concerns. The rational actor does not automatically have to act
with individual economic benefit in mind and is understood as social being which has the
potential for compassion. People can pay attention to “non-rational” issues which opens
the way for moral and ethical considerations of human economic behavior.
Among the political economists discussed in this paper, Thorstein Veblen clearly
takes over the role of “enfant térrible”. Although his stated focus was on economics and
economies, he remained largely ignored by neo-classical mainstream. His analyses never
focused exclusively on the economic, but instead tried to combine sociopolitical,
anthropological and psychological aspects within an “evolutionary” framework – all of
which grounded in his understanding of human nature and its dynamic interrelationships
with the social process (Dowd 2002:37). Veblen’s primary goal was to understand the
culture of capitalism, which he called the “pecuniary culture”. From his point of view,
the leisure class advertised its superiority through “conspicuous consumption” and the
public and/or private displaying of its material wealth (Veblen 1899/1994:78). The
members of the leisure class “are by custom exempt from industrial occupations, and are
reserved for certain employments to which a degree of honor attaches […] and this
exemption is the economic expression of their superior rank” (Veblen 1899/1994:1). The
importance of this for Veblen was that the leisure class was emulated by all other (lower
and labor) classes.
23
Veblen is also famous for his detailed description of how the leisure class displays
its predatory prowess through conspicuous consumption and conspicuous use of leisure.
The labor class, skillfully trained to master the innovation, production and distribution
processes within the capitalist market economy (Veblen 1914/2006) represented a
constant danger in the sense “that the traits associated with the instinct of workmanship –
clear logical thinking, cooperation, mutual aid, and general humanitarianism – would
increasing to the point where such workers would turn to anarchism or socialism in order
to promote the hegemony of workmanlike traits over pecuniary, predatory traits (Hunt
2002:339).” One instrument to reduce this threat was the supporting of emulative
behavior by the lower classes, enshrined in “emulative consumption” (Veblen
1899/1994:chapter 5).
Veblen, pointing out the sources, uses and consequences of widespread social
irrationality, argued that it could never be enough for those who seek an alternative
(better) society to exclusively focus on the political economy. “ [I]t was essential also to
recognize the social and human constrains created and encouraged by capitalism; a
system whose success is measured in entirely quantitative terms having to do with the
accumulation of capital and the commodification of everything and the suppression of
other human needs – at the same time as it allows, requires, and facilitates environmental
disaster” (Dowd 2002:55).
Veblen’s contribution to a better understanding of fair trade is related to his
cultural perspective on economics. Culture is based and reproduced on the basis of
purposefully established and commonly accepted norms and rules. However, those norms
and rules may change under specific circumstances. The fair trade movement aims at
24
proactively transforming consumer behavior – and thereby consumer culture in a broader
sense – by questioning its predominating characteristics (“more bang for your bucks”,
economic, social and environmental aspects of production and distribution etc.). Veblen’s
insights regarding consumer culture – especially its stabilization process into commonly
accepted institutions – goes hand in hand with recently growing social constructivist
scholarship on IPE and globalization which reinterpret global economic relations as
socially embedded and therefore socially constructed relations. These relations and
interaction processes are not naturally given and do not simply follow natural laws of for
example, supply and demand. Instead they are purposefully established to serve specific
political, social and economic interests (Palan 2000). With regard to the fair trade issue,
however, it remains to be seen if emulative behavior, in Veblen’s sense, can enlarge the
impact of socially aware consumption and transform a fast growing niche-market into a
more mainstream phenomenon.12
The last representative of classical political economy is Karl Polanyi, who has
often been described as a “moral economist” (Akturk 2006:100). One of Polanyi’s central
concepts is that of embeddedness, a term which has made its way into some of IPE’s
major contributions (Ruggie 1982). Polanyi starts by emphasizing that the entire tradition
of modern (classical) economic theory rests on the concept of the economy as an
interlocking system of markets that automatically adjusts supply and demand through the
price mechanism. Even when economists agree on the occasional necessity of state
intervention to overcome market failure, they do so by understanding the economy as an
equilibrating system of integrated markets. Polanyi’s goal was to show how sharply this
conception differs from societal experiences throughout history (Polanyi 1944/2001:71).
25
Polanyi has been misinterpreted by many of his readers as saying that with the
rise of capitalism in the nineteenth century the economy – i.e. the market – was
successfully disembedded from society and came to dominate it. In his opinion, that is
what classical economists tried to achieve by influencing politicians, but this was utopian,
because “[s]uch an institution could not exist for any length of time without annihilating
the human and natural substance of society; it would have physically destroyed man and
transformed his surroundings into a wilderness” (Polanyi 1944/2001:3). The phrase
“double movement” describes the further evolution of the economic system in the early
twentieth century (Polanyi 1944/2001:136). The first part of this development was
marked by states’ efforts to create a liberal market system. This required the creating of
labor markets, where people sold their labor for wages, combined with little welfare
protection, some degree of free trade and adherence to the gold standard (Polanyi
1944/2001:81). The second part of the movement was the growing resistance of
disadvantaged social classes (labor and landed classes) who demanded protection from
the effects of automatic adjustment mechanisms under the gold standard: “[t]he other
[movement] was the principle of social protection aiming at the conservation of man and
nature as well as productive organization, relying on the varying support of those most
immediately affected by the deleterious action of the market […] and using protective
legislation restrictive associations, and other instruments of intervention as its
methods”(Polanyi 1944/2001:138).
What was the problem of liberal markets? The main problem was the assumption
of classical economists that people were a commodity adjusting to the supply and
demand of the market in the same way that commodities such as land or capital might
26
adjust. People were regarded as labor and policies assumed that they would freely accept
the automatic adjustment, i.e. lowering, of wages and income according to the
requirements of the market. Instead, people were demanding their governments to react
by applying protectionist policies. But protectionism did not solve the problems, but
triggered the disintegration and fundamental disturbance of the market mechanism.
Disintegration caused increasing inter-state rivalry and fueled imperialism, the rise of
communism and fascism and two disastrous world wars (Polanyi 1944/2001:210; Hechter
1981:418). For Polanyi the current problems could only be solved by overturning the
belief that societies were subordinated to the market logic thus putting social relations
above market logic. By liberating individuals from this “obsolete market mentality”,
“[…] the path would be open to subordinate both national economies and the global
economy to democratic politics” (Block 1944/2001:XXXV). Polanyi envisioned
overcoming the pressures of the market through utilizing societal and moral actions and
advocated programs such as the New Deal as viable solutions (Block 1944/2001:XXXV).
Despite their different approaches, the three author’s together highlight two
aspects which might be deemed critical for theoretical reflections on fair trade. First, all
three represent a classical political economy approach which differs from the neoclassical
approach in that they observe and analyze markets and market actors within the broader
institutional settings in which markets are embedded. This also includes the manifold
interrelations between markets and their political and social contexts, thereby bridging
the “states and markets” approach which depicts both spheres as following mutually
excluding goals and mechanisms. Second, the authors point towards normative, moral
and cultural aspects of economic interactions. Not only are economic relations ultimately
27
understood as social relations, they are also seen as consciously constructed, and
therefore open to change. Therefore, they remind us that markets are not simply
following natural laws of supply and demand, but are ultimately based on human beings
and their interests, ideologies, and normative convictions which not necessarily have to
follow the rational actor model.
Conclusion
The fair trade movement has grown remarkably during the late 1990s and the first decade
of the 21st century. It has begun to influence the global discourse on trade relations and
successfully addresses the question of distributional justice between North and South.
Interestingly, the fair trade movement does not question the fundamental role of the
liberal market economy as the central means of distributing goods between producers and
consumers. Instead it has tried to increase awareness of how individual producers can be
harmed by market interactions and provide that information to consumer in order to
change their purchasing behaviour. It encourages “irrational” behaviour on the part of
the consumer by asking a higher price for a moral guarantee that products are produced in
a socially responsible way. For the producer, it increases benefits by cushioning them
against the worst consequences of free price mechanisms, unpredictable harvests and
global production and distribution chains that can not guarantee minimum incomes.
The fair trade movement has thus established an alternative form of trade by
transforming the relationships between consumers and producers. It reconnects
producers and consumers and global economic relations have been shrunk to local social
28
relations. This reconnection also represents a re-humanization of economic relations in
the sense of “lending a face and a story to the purchased product”.
From a theoretical point of view the recent phenomenon of fair trade poses an
interesting challenge for mainstream theories of IPE. As was argued in the paper, fair
trade is based on radically different consumer behaviour, furthered by NGOs applying
different strategies to increase awareness of existing socio-economic injustice, which is
not based on rational cost-benefit calculation and personal profit maximization. Rather, it
represents behaviour which is predominantly motivated by moral and ethical concerns
about social and economic justice in the global economy. The rational actor model, which
currently dominates the discipline, is therefore not well prepared to explain this
phenomenon. In order to better understand this new movement, we have argued that
normative traditions need to be examined particularly through the re-reading of classical
political economy works. Both normative and classical strands of thought add to the
discussion of fair trade by asking different questions: First, instead of analyzing the
status quo (“what is”), both – to varying degrees – are concerned with reflections of how
to actively change and improve the international (economic) system so that more people
can actually pursue a liveable life (“what should be”). Second, both strands of thought
expand the understanding of markets beyond a limited conception of economic
relationships based on supply and demand or the most efficient allocation of scarce
resources. Ultimately, economic relations are social relations, markets are embedded in
political and social contexts which are socially constructed and therefore open for
transformation under specific circumstances. The fair trade movement offers a vivid
example for alternative market conceptions that aim at the transformation of global trade
29
by reconnecting consumers and producers in radically new ways. This is particularly
relevant as we try to grapple with ways to re-humanize globalization and increase
humanity’s ability to address the needs of development, poverty and the dislocation that it
causes.
30
References
Akturk, S. (2006) 'Between Aristotle and the Welfare State: The Establishment,
Enforcement, and Transformation of the Moral Economy in Karl Polanyi's the
Great Transformation ', Theoria: A Journal of Social and Political Theory, April
2006:109, 100-22.
Balaam, D. N. & Veseth, M. (2008) Introduction to International Political Economy,
Harlow, Pearson/Prentice Hall.
Bernstein, W. J. (2008) A Splendid Exchange: How Trade Shaped the World, New York,
Atlantic Monthly Press.
Biersteker, T. J. (2002) 'State, Sovereignty and Territory', In Carlsnaes, W., Risse, T. &
Simmons, B. A. (Eds.) Handbook of International Relations. London, Sage.
Block, F. (1944/2001) 'Introduction', In the Great Transformation. Boston, Beacon Press.
Blowfield, M. (1999) 'Ethical Trade: A Review of Developments and Issues', Third
World Quarterly, 20:4, 18p.
Booth, W. J., James, P. & Meadwell, H. (1993) 'Introduction', In Booth, W. J., James, P.
& Meadwell, H. (Eds.) Politics and Rationality. New York, Cambridge
University Press.
Brown, C. (1994) International Relations Theory: New Normative Approaches, New
York, Columbia University Press.
Brown, C. (2007) 'Reimagining International Society and Global Community', In Held,
D. & McGrew, A. (Eds.) Globalization Theory: Approaches and Controversies.
Cambridge, Polity Press.
Bull, H. (1977) The Anarchical Society: A Study of Order in World Politics, New York,
Columbia University Press.
Carlson, L. J. (2000) 'Game Theory: International Trade, Conflict and Cooperation', In
Palan, R. (Ed.) Global Political Economy: Contemporary Theories. London,
Routledge.
Carr, E. H. (1946/1981) The Twenty Years' Crisis, 1919-1939: An Introduction to the
Study of International Relations, London, Macmillan Press.
Castells, M. (2000) The Information Age: Economy, Society and Culture: Vol. 1: The
Rise of the Network Society, Oxford, Blackwell.
Checkel, J. T. (1998) 'The Constructivist Turn in International Relations Theory', World
Politics, 50, 324-48.
Cohen, B. J. (2007) 'The Transatlantic Divide: Why Are American and British IPE So
Different', Review of International Political Economy, 14:2, 197-219.
Cohn, T. H. (2008) Global Political Economy: Theory and Practice, New York, Pearson
Longman.
Crance, G. T. & Amawi, A. (1991) The Theoretical Evolution of International Political
Economy: A Reader, Oxford, Oxford University Press.
Crawford, N. (2003) 'Just War Theory and the US Counterterror War', Perspectives on
Politics, 1:1, 5-25.
Cronin, P. (2002) 'The Doha Round: Prospects for the Rules-Based Trading System', In
Goddard, C. R., Cronin, P. & Dash, K. C. (Eds.) International Political Economy
31
: State-Market Relations in a Changing Global Order. 2nd ed. Boulder, Colo.,
Lynne Rienner Publishers.
Dowd, D. (2002) 'Thorstein Veblen: The Evolution of Capitalism from Economic and
Political to Social Dominance; Economics as Its Faithful Servant', In Dowd, D.
(Ed.) Understanding Capitalism: Critical Analysis from Karl Marx to Amartya
Sen. London, Pluto Press.
Downie, A. (2007) 'Fair Trade in Bloom', 2 October 2007.
http://www.nytimes.com/2007/10/02/business/worldbusiness/02trade.html?_r=1&
oref=slogin. Accessed: 2 October 2007
Doyle, M. W. (2000) 'Global Economic Inequalities: A Growing Moral Gap', In Wapner,
P. K. & Ruiz, L. E. J. (Eds.) Principled World Politics: The Challenge of
Normative International Relations. Lanham, Md., Rowman & Littlefield
Publishers.
Elshtain, J. B. (2003) Just War against Terror: The Burden of American Power in a
Violent World, New York, Basic Books.
Erskine, T. (2003) Can Institutions Have Responsibilities?: Collective Moral Agency and
International Relations, New York, Palgrave Macmillan.
Featherstone, L. (2007) 'In Brooklyn, Hipsters Sip 'Fair Trade' Brews', 22 April.
http://www.nytimes.com/2007/04/22/fashion/22trade.html?_r=1&oref+slogin
Accessed: 5 May 2008
Ferguson, Y. H. & Jones, R. J. B. (Eds.) (2002) Political Space: Frontiers of Change and
Governance in a Globalizing World, Albany, State University of New York Press.
Ferguson, Y. H. & Mansbach, R. W. (1996) Polities: Authority, Identities, and Change,
Columbia, S.C., University of South Carolina Press.
Ferguson, Y. H. & Mansbach, R. W. (2003) The Elusive Quest Continues: Theory and
Global Politics, Upper Saddle River, Prentice Hall.
Flo International (2008) 'What Is Fair Trade',
http://www.fairtrade.net/about_fairtrade.html Accessed: 15 February 2008
Frieden, J. & Martin, L. (2002) 'International Political Economy: The State of the SubDiscipline', The Political Economist, 10:2.
Frost, M. (2008) 'The Role of Normative Theory in IR', In Roach, S. C. (Ed.) Critical
Theory and International Relations: A Reader, New York, Routledge.
Goldstein, J. S. & Pevehouse, J. C. (2007) International Relations, New York ; London,
Pearson Longman.
Grieco, J. (1988) 'Realist Theory and the Problem of International Cooperation', Journal
of Politics, 50:3, 577-99.
Hechter, M. (1981) 'Karl Polanyi's Social Theory: A Critique', Politics & Society, 10:4,
399-429.
Heilbroner, R. (2000) The Worldly Philosophers: The Lives, Times and Ideas of Great
Economic Thinkers, New York, Penguin.
Held, D., McGrew, A., Goldblatt, D. & Perraton, J. (1999) Global Transformations:
Politics, Economics and Culture, Stanford, Stanford University Press.
Hewson, M. & Sinclair, T. J. (Eds.) (1999) Approaches to Global Governance Theory,
Albany, State University of New York Press.
Hunt, E. K. (2002) History of Economic Thought: A Critical Perspective, Armonk, NY,
M.E.Sharpe.
32
International Federation for Alternative Trade (IFAT) (2008) 'Sixty Years of Fair Trade',
http://www.ifat.org/index.php?option=com_content&task=view&id=10&Itemid=
17 Accessed: 16 April 2008
Katenstein, P. (Ed.) (1996) The Culture of National Security: Norms and Identity in
World Politics, New York, Columbia University Press.
Keohane, R. O. (1984) After Hegemony: Cooperation and Discord in the World Political
Economy, Princeton, Princeton University Press.
Krier, J.M. (2005) Fair Trade in Europe: Facts and Figures on Fair Trade in 25 European
Countries. Brussles, Fair Trade Advocacy Office.
Kruger, A. (1776/2003) 'Introduction', In the Wealth of Nations. New York, Bantam
Books.
Lake, D. A. (1993) 'Leadership, Hegemony and the International Economy: Naked
Emperor or Tattered Monarch with Potential? ' International Studies Quarterly,
37:4, 459-89.
Levi, M. & Linton, A. (2003) 'Fair Trade: A Cup at a Time?' Politics & Society, 31:3,
26p.
Linton, A. (2006) 'Partnering for Sustainability: Business-Ngo Alliances in the Coffee
Industry', In Eade, D. & Sayer, J. (Eds.) Development and the Private Sector:
Consuming Interests. Bloomfield, Kumarian Press.
Linton, A., Liou, C. C. & Shaw, K. A. (2004) 'A Taste of Trade Justice: Marketing
Global Social Responsibility Via Fair Trade Coffee', Globalizations, 1:2, 24p.
Maseland, R. & De Vaal, A. (2002) 'How Fair Is Fair Trade?' De Economist, 150:3, 27172.
Milner, H. (1997) Institutions and Information: Domestic Politics and International
Relations, Princeton, Princeton University Press.
Murphy, C. N. & Tooze, R. (1991) 'Getting Beyond the 'Common Sense' of the Ipe
Orthodoxy', In Murphy, C. N. & Tooze, R. (Eds.) The New International Political
Economy. Boulder, Lynne Reinner.
O'Brien, R., Goetz, A. M., Scholte, J. A. & Williams, M. (2000) Contesting Global
Governance: Multilateral Economic Institutions and Global Social Movements,
Cambridge, UK ; New York, Cambridge University Press.
Oakley, A. (2002) Reconstructing Economic Theory: The Problem of Human Agency,
Cheltenham, Edward Elgar.
Oye, K. (Ed.) (1986) Cooperation under Anarchy, Princeton, Princeton University Press.
Palan, R. (2000) 'The Social Constructivist Underpinnings of the New International
Political Economy', In Palan, R. (Ed.) Global Political Economy: Contemporary
Theories. London, Routledge.
Pareto, V. (1971) Manual of Political Economy New York, A.M. Kelley.
Payne, A. (2005) The Global Politics of Unequal Development, Houndmills,
Basingstoke, Hampshire ; New York, Palgrave Macmillan.
Pelsmacker, P. D. & Janssens, W. (2007) 'A Model for Fair Trade Buying Behaviour:
The Role of Perceived Quantity and Quality of Information of Product-Specific
Attitudes', Journal of Business Ethics, 75:3, 361-80.
Peterson, V. S. (2003) A Critical Rewriting of Global Political Economy: Integrating
Reproductive, Productive and Virtual Economies, London, Routledge.
33
Petkova, I. (2006) 'Shifting Regimes of Governance in the Coffee Market: From Secular
Crisis to a New Equilibrium?' Review of International Political Economy, 13:2,
27.
Polanyi, K. (1944/2001) The Great Transformation, Boston, Beacon Press.
Pommeranz, K. & Topik, S. (2004) The World That Trade Created: Culture, Society and
the World Economy 1400 to the Present, Armonk, M.E.Sharpe.
Pressman, S. (1999) Fifty Major Economists, London, Routledge.
Putnam, R. D. (1988) 'Diplomacy and Domestic Politics: The Logic of Two-Level
Games', International Organization, 42, 427-260.
Risse-Kappen, T. (Ed.) (1995) Bringing Transnational Relations Back In: Non-State
Actors, Domestic Structures, and International Institutions, Cambridge ; New
York, NY, Cambridge University Press.
Rogowski, R. (1989) Commerce and Coalitions: How Trade Affects Domestic Political
Alignments, Princeton, Princeton University Press.
Rosenau, J. (2003) Distant Proximities: Dynamics beyond Globalization, Princeton,
Princeton University Press.
Rosenau, J. & Czempiel, E.-O. (Eds.) (1992) Governance without Government: Order
and Change in World Politics, Cambridge, Cambridge University Press.
Ruggie, J. (1982) 'International Regimes, Transaction and Change: Embedded Liberalism
in the Postwar Economic Order', International Organization, 36:2, 379-415.
Sassen, S. (2007) 'The Places and Spaces of the Global: An Expanded Analytical
Terrain', In Held, D. & McGrew, A. (Eds.) Globalization Theory: Approaches
and Controversies. Cambridge, Polity Press.
Serrv International (2008) 'History of Serrv International',
http://www.agreatergift.org/AboutUs/OurHistory.aspx Accessed: 30 March 2008
Smith, A. (1759/1982) The Theory of Moral Sentiment, Indianapolis, Liberty Press.
Smith, A. (1776/2003) The Wealth of Nations, New York, Bantam Books.
Stiglitz, J. E. (2006) Making Globalization Work, New York, W.W. Norton & Co.
Stiglitz, J. E., Charlton, A. & World Trade Organization. (2005) Fair Trade for All : How
Trade Can Promote Development, Oxford, United Kingdom, Oxford University
Press.
Ten Thousand Villages (2008) 'From the Needlework Lady to Today's Craftswoman: A
Brief History', http://www.tenthousandvillages.com/php/about.us/history.php
Accessed: 16 April 2008
Thompson, E. P. (1971) 'The Moral Economy of the English Crowd in the Eighteenth
Century', Past and Present, 50:2, 76-136.
Transfair USA (2008) 'Frequently Asked Questions - Basic FAQs',
http://www.transfairusa.org/content/resources/faq.php Accessed: 15 June 2008
Veblen, T. (1899/1994) The Theory of the Leisure Class, New York, Dover Publications.
Veblen, T. (1914/2006) The Instinct of Workmanship and the State of the Industrial Arts,
New York, Cosimo Classics.
Viotti, P. R. & Kauppi, M. V. (1999) International Relations Theory: Realism, Pluralism,
Globalism and Beyond, Boston, Allyn and Bacon.
Wal-Mart (2008) 'Wal-Mart Launches Exclusive Sam's Choice Line of Organic,
Rainforest Alliance and Fair Trade Certified Coffees',
34
http://walmartstores.com/FactsNews/NewsRoom/8162.aspx Accessed: 7 May
2008
Walzer, M. (1977) Just and Unjust Wars: A Moral Argument with Historical
Illustrations, New York, Basic Books.
Wapner, P. (2000) 'The Resurgence and Metamorphosis of Normative International
Relations: Principled Commitment and Scholarship in a New Millennium', In
Wapner, P. K. & Ruiz, L. E. J. (Eds.) Principled World Politics : The Challenge
of Normative International Relations. Lanham, Md., Rowman & Littlefield
Publishers.
Ward, T. J. (2004) 'Adam Smith's Views of Religion and Social Justice', International
Journal on World Peace, 21:2, 43-62.
Watson, M. (2005) Foundations of International Political Economy, Houndmills,
Basingstoke, Hampshire ; New York, Palgrave Macmillan.
Wight, M. (1949) Power Politics, London,, Royal Institute of International Affairs.
Woods, N. (1995) 'Economic Ideas and International Relations: Beyond Rational
Neglect', International Studies Quarterly, 39, 161-80.
1
Fair trade products are not necessarily produced to organic standards. Some labeling organizations
restrict the use of dangerous fertilizers or pesticides, but products most are certified without meeting the
organic standards. Instead, environmental sustainability is based on small local production that
traditionally uses more environmentally sound methods. For example, hand harvesting produces fewer
carbon emissions than machine harvest. See Transfair USA (2008) 'Frequently Asked Questions - Basic
FAQs', http://www.transfairusa.org/content/resources/faq.php Accessed: 15 June 2008
2
Some exceptions include: Blowfield, M. (1999) 'Ethical Trade: A Review of Developments and Issues',
Third World Quarterly, 20:4, 18p, Linton, A., Liou, C. C. & Shaw, K. A. (2004) 'A Taste of Trade Justice:
Marketing Global Social Responsibility Via Fair Trade Coffee', Globalizations, 1:2, 24p, Levi, M. &
Linton, A. (2003) 'Fair Trade: A Cup at a Time?' Politics & Society, 31:3, 26p, Petkova, I. (2006) 'Shifting
Regimes of Governance in the Coffee Market: From Secular Crisis to a New Equilibrium?' Review of
International Political Economy, 13:2, 27.
3
For further discussion of these issues within the current WTO Doha Trade Round see Payne, A. (2005)
The Global Politics of Unequal Development, Houndmills, Basingstoke, Hampshire ; New York, Palgrave
Macmillan.
4
All three of the definitions above are based on market relationships but address different problems created
the market. The “level playing field” approach addresses developing countries’ inability or unwillingness
to guarantee equal labor standards as developed countries. Stiglitz’ discussion stresses the structural
inequalities between North and South in the current global trade system, where Northern countries deny
Southern producers free access to their agricultural markets. In the FINE conception, Southern producers
are not treated fairly because existing markets and trade structures systematically disadvantage Southern
commodity producers who suffer from unfavorable terms of trade.
5
These are the main “Northern” fair trade organizations: Fairtrade Labeling Organizations International
(FLO), The International Federation for Alternative Trade (IFAT), the Network of European Shops
(NEWS!) and the European Fair Trade Association (EFTA).
6
For example there are over 20 labeling initiatives in Europe representing dozens of organizations and
prominent “Southern” regional networks, which coordinate dozens of national networks. These include
Asia Fair Trade Forum (AFTF1), the Cooperation for Fair Trade in Africa (COFTA), the Association
Latino Americana de Commercio Justo (IFAT LA)
7
On the concept and impact of global society see Brown, C. (2007) 'Reimagining International Society and
Global Community', In Held, D. & McGrew, A. (Eds.) Globalization Theory: Approaches and
Controversies. Cambridge, Polity Press, O'Brien, R., Goetz, A. M., Scholte, J. A. & Williams, M. (2000)
35
Contesting Global Governance : Multilateral Economic Institutions and Global Social Movements,
Cambridge, UK ; New York, Cambridge University Press, Risse-Kappen, T. (Ed.) (1995) Bringing
Transnational Relations Back In : Non-State Actors, Domestic Structures, and International Institutions,
Cambridge ; New York, NY, Cambridge University Press.
8
Wal-Mart has sold fair trade certified coffee under the Millstone brand for years, but in 2006 they
partnered with a Brazilian company named Café Bom Dia which carried the fair trade certification to
produce coffee for the Wal-Mart Sam’s Club label. In April 2008, Wal-Mart launched fair trade coffee
under the Wal-Mart brand Sam’s Choice Wal-Mart (2008) 'Wal-Mart Launches Exclusive Sam's Choice
Line of Organic, Rainforest Alliance and Fair Trade Certified Coffees',
http://walmartstores.com/FactsNews/NewsRoom/8162.aspx Accessed: 7 May 2008.
9
Trade has always been characterized by the connection of distant places. However, current economic
globalization is based on radically different interaction patterns (volume, actors, structures) clearly
distinguishable from earlier forms of “thin” globalization. For the history of trade see Bernstein, W. J.
(2008) A Splendid Exchange: How Trade Shaped the World, New York, Atlantic Monthly Press and
Pommeranz, K. & Topik, S. (2004) The World That Trade Created: Culture, Society and the World
Economy 1400 to the Present, Armonk, M.E.Sharpe.. For the effects of globalization on the local-global
nexus see Sassen, S. (2007) 'The Places and Spaces of the Global: An Expanded Analytical Terrain', In
Held, D. & McGrew, A. (Eds.) Globalization Theory: Approaches and Controversies. Cambridge, Polity
Press, Castells, M. (2000) The Information Age: Economy, Society and Culture: Vol. 1: The Rise of the
Network Society, Oxford, Blackwell.; chapter 6.
10
There is a vast literature in both of these traditions. Constructivist theories have taken up the issues of
how norms become accepted in the international community but have had less to say about moral
imperatives. See Katenstein, P. (Ed.) (1996) The Culture of National Security: Norms and Identity in World
Politics, New York, Columbia University Press, Checkel, J. T. (1998) 'The Constructivist Turn in
International Relations Theory', World Politics, 50, 324-48.. Critical theorists have focused on issues of
equality. See Peterson, V. S. (2003) A Critical Rewriting of Global Political Economy: Integrating
Reproductive, Productive and Virtual Economies, London, Routledge. Both schools are interested in
understanding normative questions and how norms affect international and individual behaviour.
11
NGOs and individual consumers are central to fair trade and are an interesting example of “governance
without government”, since states have not been involved in the establishment of the fair trade movement.
On governance without government see Rosenau, J. & Czempiel, E.-O. (Eds.) (1992) Governance without
Government: Order and Change in World Politics, Cambridge, Cambridge University Press.. For broader
discussions of post-internationalism and global politics see Ferguson, Y. H. & Mansbach, R. W. (1996)
Polities: Authority, Identities, and Change, Columbia, S.C., University of South Carolina Press, Hewson,
M. & Sinclair, T. J. (Eds.) (1999) Approaches to Global Governance Theory, Albany, State University of
New York Press, Ferguson, Y. H. & Jones, R. J. B. (Eds.) (2002) Political Space: Frontiers of Change and
Governance in a Globalizing World, Albany, State University of New York Press..
12
Currently the market for fair trade products is challenged by a supply and quality problem. NGOs
labelling new farmers can not keep up with the growing market demand. The greatest challenge for fair
trade coffee is the assuring of high quality standards expected by premium roasters. See Petkova, I. (2006)
'Shifting Regimes of Governance in the Coffee Market: From Secular Crisis to a New Equilibrium?' Review
of International Political Economy, 13:2, 27.
36