The Moral Problem of Fair Trade Essay

1189 Words 5 Pages
1. Summary The present economy is not based on one country or even two; it is global and its “profits now” mentality threatens to destroy small scale producers who get in the way. Small farmers and producers have little hope of competing with corporate powerhouses and are left with little resources or prospects for their future. Many third world children have little choice but to work rather than attend school for an education and end up being exploited all in the name of revenue returns. Fair Trade was introduced to balance this inequality and help exploited producers break free of the vicious cycle of poverty. This paper tackles the moral problem of fair trade.

There exists a dilemma here, with respect to the role of corporate actors
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An early commodity targeted in the fair trade movement was coffee, where a consumer in the West could pay over $2 for a cup of coffee, where the farmer might be paid a few pennies for the equivalent number of beans. For some, this was simply a matter of multiple stages in between farm to mug, combined with profit-taking at each stage. For others, it represented a major ethical dilemma according to the principle of distributive justice (Miller 2010). The moral dilemma is that corporate managers should only be concerned with enhancing the profit of their enterprise (Friedman 1970), and that this conflicts with the principle of distributive justice. This paper will take the position that fair trade is an appropriate application of distributive justice, where the reduction of information asymmetry diminishes the bargaining power of end marketers, resulting in more equitable pricing at the raw materials level. From an ethical point of view, this is the right thing to do.

3. Moral Arguments The first component of the moral argument here is to determine what the role of business in society is. The view that Friedman holds is that business strictly exist to provide a return for shareholders. The form of business is not relevant, for example, nor is the industry in which it operates. A corporation is simply an entity by which capital investment is converted to returns for the investors. While he is right about that,

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