Forget 'Fairtrade' – just give cash to the poorest, philosopher says

Well-meaning ethical consumerism campaigns, such as boycotting sweatshop clothes and buying "Fairtrade" goods, can be misguided and even counter-productive, according to a young British philosopher advocating ethical lifestyle choices.

Will MacAskill is at the vanguard of the "effective altruism" movement, which encourages people to give large chunks of their income to what it deems to be the most effective charities, such as those providing malaria nets to the world's poorest.

MacAskill, who gives away everything he earns above the British median income of around $35,000, thinks giving cash is a better way to do good than changing purchasing habits through ethical sourcing or boycotts, which he calls "confused."

Global Fairtrade revenues exceeded $6.4 billion in 2014, says Fairtrade International, with Britain accounting for the largest proportion of sales.

Fairtrade firms offer workers more generous pay and working conditions, for which consumers pay a premium. MacAskill is skeptical of its benefits, but Fairtrade campaigners strongly reject his criticism.

Another side of ethical consumerism is the boycotting of producers who do not treat workers well.

Many clothes sold in the West are made in "sweatshops," where low-paid workers toil in shoddily built buildings like the Rana Plaza factory in Bangladesh which collapsed in April 2013, killing at least 1,100, leading some campaigners to call for boycotts.

"People rightly recognize that sweatshops are absolutely horrific places to work, no one doubts that at all," said MacAskill, who teaches at the University of Oxford.

"But the alternatives are even worse. Things like scavenging from dumps, unemployment, prostitution, street hustling, or back breaking farm labor, often all those things are low pay as well as being horrific," he told the Thomson Reuters Foundation.

Historically, countries have got richer by selling cheap goods, putting more money in people's pockets and allowing them to escape poverty, he said, highlighting examples in East Asia such as South Korea and Taiwan.

People should look for bargains and donate the extra cash in their pockets to causes which seek to end the underlying poverty, said MacAskill, author of "Doing Good Better".

"The best way I know for individuals to do that is through well-targeted donations to extremely effective charities."

The Fairtrade logo is an increasingly common sight in Western supermarkets, but MacAskill thinks the scheme is misguided.

He says little of the extra cash paid by consumers reaches farmers, and that farmers guaranteed a minimum price tend to oversupply, meaning non-fair trade workers cannot compete.

Because meeting Fairtrade standards is hard to verify, he said, licenses tend to go to farmers in middle-income countries like those in Latin America rather than the very poorest farmers, who are mainly concentrated in sub-Saharan Africa.

"Often the choice is between buying a fair trade item from the richer country, or a non-fair trade item from a much poorer country, where obviously giving money to very poor people is going to do more good."

However the London-based Fairtrade Foundation said this analysis was "inaccurate" and that half of Fairtrade farmers are in low-income countries, and that there is huge inequality within the middle-income countries where other producers live.

"Studies prove that Fairtrade makes a huge difference to the lives of 1.4 million farmers and workers across 70 countries and also leads to further positive changes in their communities," said Barbara Crowther, director of policy and public affairs.

According to Fairtrade International, roughly half of Fairtrade producers are in East Africa, with about a fifth in Kenya.

MacAskill's organization 80,000 Hours, named after how long on average people spend at work in a lifetime, aims to help people direct their career decisions to do as much good as possible.

It has reached some counter-intuitive conclusions, such as that taking a high paying job in the finance sector and giving money away may help more people than working directly for a charity.

Australian philosopher Peter Singer, the intellectual godfather of the effective altruism movement, credits MacAskill with developing this idea, known as "earning to give."

"It has been controversial, but has attracted a lot of publicity – and led to a lot of money going to effective charities," Singer told the Thomson Reuters Foundation.

MacAskill, who is also an animal welfare campaigner, thinks it is important not to just give cash to any charity, but to one which evidence shows helps does the most good.

He thinks one of the reasons "ineffective" charities and schemes prosper is that people do not scrutinize them to the same extent they scrutinize other purchases they make.

"If you buy a laptop and it's a rubbish laptop, you find out because you're the beneficiary as well as the person paying the money," said MacAskill.

• Reporting By Joseph D'Urso; editing by Ros Russell. This story originally appeared on the website of the Thomson Reuters Foundation, the charitable arm of Thomson Reuters that covers humanitarian news, women's rights, trafficking, corruption, and climate change. Visit www.trust.org.