And yet, it might not though! I’m not sure which way it goes.
Say you have £10 to spend on chocolate.
You can buy 4 bars of Fairtrade chocolate
which will benefit an average of 4 farmers
to the tune of (£10 divided by 4) multiplied by the fraction of money that goes to farmers.
You can buy 6 bars of regular chocolate
which will benefit an average of 6 farmers
to the tune of (£10 divided by 6) multiplied by the fraction of money that goes to farmers.
Presumably ten farmers getting £1 each is ‘fairer’ than five farmers getting £2. How about ten farmers getting £1 versus one farmer getting £1000? Or ten farmers getting £100 or nine farmers getting £1000? What calculation do we use to cut the cake?
Ceteris paribus buying cheaper-per-weight chocolate pays more farmers, with smaller wages. So Fairtrade means we benefit fewer farmers. My question is, do the gains to each farmer outweigh the losses presented by there being fewer jobs available in third-world farming? Do the majority of farmers, who don’t get the luxury of affiliating with a fairtrade trader, suffer even smaller wages, by there being a surplus of unable-to-get-the-fairtrade-price farmers? A market-wide price-floor on waging for chocolate farmers, per any price restriction, shifts the demand curve. I’m wondering: is this desirable for the good of chocolate growers?
(Perhaps the effect of people being more willing to chocolate given an ethical option increases the demand for chocolate and offsets this?)
This is why I’m not an econ professor yet.