History of Fair Trade - The Origins of Fair Trade

The Origins of Fair Trade

Fair trade principles have deep roots in European societies long before the first structured alternative trading organizations (ATOs) emerged following World War II. Many of the fundamental concepts behind fair trade actually show a great resemblance with pre-capitalist ideas about the organization of the economy and society.

The notion of the ‘old moral economy’ is a fitting example of such conceptions. E. P. Thompson, in his work on 18th century England, described a society where “notions of common well being, often supported by paternalistic traditional authorities, imposed some limits on the free operations of the market”. Farmers were then not allowed to manipulate prices by withholding their products to wait for price increases. The actions of the middlemen were always considered legally suspect, were severely restricted and the poor were provided opportunities to buy basic staple foods in small parcels. Fair trade was already seen as a way to address market failures; although the concept mainly revolved around consumer, rather than producer, rights.

In 1827 in Philadelphia, Pennsylvania, a moral and economic boycott of slave-derived goods began with the formation of the "Free Produce Society", founded by Thomas M'Clintock and other abolitionist members of the Religious Society of Friends (Quakers). In the Free produce movement, they sought to fight against slavery with a new tactic, one that emphasized the value of the honest labor of free men and women, and to try and determine the unseen added costs to goods such as cotton and sugar which came from the toil of slaves. In 1830, African Americans formed the "Colored Free Produce Society", and women formed their own branch in 1831. In 1838, supporters from a number of states came together in the American Free Produce Association, which promoted their cause by seeking non-slave alternates to products from slaveholders, forming non-slave distribution channels, and publishing a number of pamphlets, tracts, and the journal Non-Slaveholder. The movement did not grow large enough to gain the benefit of the economies of scale, and the cost of "free produce" was always higher than competing goods. The national association disbanded in 1847, but Quakers in Philadelphia continued until 1856.

There have been a few instances in which fair trade in the 'old moral economy' was focused on producer rights: as early as 1859, Dutch author Multatuli (the pen name of Eduard Douwes Dekker) questioned the injustice of the colonial and capitalist system towards commodity producers in his novel Max Havelaar. The fictional tale recounts the story of Max Havelaar, a Nederlandse Trade Company employee, who leaves everything to work in solidarity with local Indonesian workers. This account draws a direct correlation between the wealth and the prosperity of Europe and the poverty of the suffering of other parts of the world.