January 2, 2014 fair trade
(2000’s | activese | “ethical”)
This phrase bears watching, for it has already gone through three distinct meanings in the last 75 years, not to mention two changes in part of speech. An expression like that can always sneak off and pick up something new — just promiscuous, that’s all.
“Fair trade laws,” which seem to have become established during the Depression and persisted until the 1960’s, were a form of government price fixing. Not that the government actually set prices, but it did explicitly permit manufacturers to set minimum resale prices for their products, so retailers were forbidden to offer discounts. These were federal laws, mind you, enforced across state lines. They started to disappear in the fifties, as courts started throwing them out. By my childhood, they were almost extinct.
By my childhood, of course, “fair trade” had taken on a new life in international commerce. We didn’t have NAFTA back then, kids, but we did have GATT and other international trade conventions, which limited tariffs and other protectionist practices in the interest of promoting free — that is, unregulated — trade. If you were a politician with national aspirations back then, sooner or later you would be caught saying, “Free trade must be fair trade” (that precise formulation is taken from Jimmy Carter’s 1978 State of the Union address). The same sentiment dripped often from official lips from the 1970’s until 1990 or so. By then, our solons had stopped talking in any terms other than those of free trade, which was understood to be not only fair by definition but best for everyone by acclamation. That tacit understanding saved politicians the bother of making a case that that there was anything fair about free trade.
But the phrase even then was not permitted to leave the stage, for it rose again to be applied to products — produce, usually — that meet certain labor and environmental standards. (Now it changes back to an adjective after a sojourn as a noun.) Purchasers of fair-trade goods deliberately pay a premium for products that help make the world a better place, which has the effect of turning fair-trade goods into luxury goods. Histories of fair-trade practices generally date the concept to the aftermath of World War II, but the term as we use it does not seem to have appeared until the 1980’s. I found a few instances from the U.K. in LexisNexis before 1990, but it did not become common in the U.S. until at least a decade later. Most of us first heard the term applied to coffee, and it still refers most often to comestibles, although handicrafts, cut flowers, skin care products, even soccer balls may also qualify. Recently, fair-trade principles have been used to condemn clothing made in sweatshops.
So there you have it. The three meanings do have some common features. Fair-trade practices today have the effect of giving the producer a price floor higher than an unregulated market would permit, for example, just as fair-trade laws did. But the underlying axiom that really binds all of them together is simply this: Fair trade is the opposite of free trade. Unregulated commerce will not produce equitable results; therefore, fair trade must involve some outside regulation and principles beyond brute profit motive. Legendary labor leader George Meany put it starkly in 1977: “The answer is fair trade — do unto others as they do to us, barrier for barrier, closed door for closed door.” What do you expect from a union boss? But the fact is, politicians of nearly every stripe will say something similar if cornered. The fundamental purpose of most economic regulation is to give someone besides the one percent a chance, and we need that because free markets concentrate wealth, and past a certain point, that makes our system of government untenable. That’s why no one really believes in free trade, any more than anyone really believes in a free market. If the economy gets bad enough, any politician who wants to keep his job must admit as much.