Fair Vs. Free Trade

Among economists, there is rather little debate in the Free Vs. Fair Trade Argument. The fundamental basis of economics is that markets are by and large the best way of solving problems; a view held by Adam Smith (see the invisible hand), through even to Professor Arrow (see the first and second fundamental theorems of welfare), and appearing in Professor Mankiw's Princples of Economics. Whilst many would argue that markets do sometimes fail (the extent and regularity is more contentious), there are a number of established means by which these failures can be remedied, and Fair Trade is not one of them.

Among many of a liberal frame of mind, and a great and growing proportion of the public; particularly the student portion thereof, the argument for Fair Trade products is clearly identifiable as a moral imperative.

So, which group is right?

The answer is difficult to arrive at, and the debate will doubtless go on for many years to come; anyone who is interested in it may want to consult the Reading Online News debate on this matter this month; my esteemed colleague George Stefanidis is taking up the argument for Free Trade, while have leant my weak and feeble voice to the Fair Traders.