A few weeks ago, the IEA published an in-depth study of Fair Trade, Fair Trade Without the Froth. The Hilton/Cameron-rebranded Conservative Party likes Fair Trade and there are good reasons why it might.

Fair trade products are freely bought by customers – there has been double digit growth in the sales of Fair Trade products in recent years. It is a private labelling and certification system. Private regulation is generally crowded out by government regulation whereas in this field it isn’t. No doubt, David Cameron would describe Fair Trade as the Big Society at work – I would describe it as the free market at work.

The fact that we might like the idea of private certification schemes in principle does not mean that every scheme works in practice. There are genuine questions about what Fair Trade achieves. Even researchers sympathetic to Fair Trade have suggested that only about 25% of the price premium finds its way back to the suppliers in poor countries..

Read the rest of the article on the ConservativeHome website.

Philip Booth 154x154
Philip Booth is Academic and Research Director at the Institute of Economic Affairs and Professor of Finance, Public Policy and Ethics at St. Mary's University, Twickenham. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. Previously, Philip Booth worked for the Bank of England as an advisor on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs and on the editorial boards of various other academic journals. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.