eBay to unveil fair-trade marketplace

CNet: eBay to unveil fair-trade marketplace

SAN MATEO, Calif.--Catering to a rising tide of socially-conscious shoppers, eBay this summer plans to help publicly launch WorldofGood.com, a marketplace for buying fair-trade products, according to Robert Chatwani, eBay's general manager of the project.

eBay, in partnership with a separate fair-trade company World of Good Inc., has already built a community site for people interested in goods that are made of recycled materials or produced by fairly treated workers, for example. But the two organizations plan to open a shopping site that will cater to these "social change consumers," Chatwani said here Tuesday at the Dow Jones Environment Conference.

That segment of shopper spends as much as $45 billion on green products annually, he estimated.

"Those people aren't on eBay. We believe only between 7 and 12 percent of these social change consumers are eBay users now ... so this could be accretive to the business," Chatwani said on a panel at the two-day conference. ...

Comments

[Danny Gamache]

Thanks for this post. I've been very intrigued by the idea of fair-trade. Our campus, like many others I'm sure, has a group of fair-trade fanatics. Sometimes I worry about how "fair" that fair-trade really is. It would be interesting to hear your thoughts on this.

[Michael W. Kruse]

Danny you may know about this stuff than I do. I'm highly ambivalant "fair-trade" initiatives. There clearly is exploitation of workers in some places. No humane person wants others to live in the conditions many workers endure. And yet, in many places, the alternative to the degrading work is hunger, prostitution and even death.

Some of the environmental, labor, and other regulations ensure that only locally wealthy farmers can participate, thus harming poorer farmers. I need to see specific cases to make an assessment.

I think championing free trade in the sense of ending government corpution, formalizing property rights, and opening up markets to products from emerging nations are probably far better routes. I'm not sure the poorest nations can spring directly into free trade and certain types protectionism against certain goods could be legitimate in the beginning but I think the end game is a society with growing economy based on trade.

What drew me to this story was eBay seeing a market for this type of service. What are your thoughts?

[Danny Gamache]

In general I think fair trade is getting better. Fair trade providers seem to have ironed out some of the early concerns.

The main advantage I see in fair trade is how it cuts out some of the middlemen who hold significant monopsony power over the farmers. One of my concerns is about which local farmers get to be part of a fair trade cooperative and which ones don't.

I certainly agree with all of your suggestions. Unfortunately not all markets have enough competition to work efficiently.

[Michael W. Kruse]

"Unfortunately not all markets have enough competition to work efficiently."

Yes. Precisely. I think in terms of a patient in the hospital whose immune system is week. You will restrict that patient from certain environments and inject her with certain drugs. But you only do this toward the goal of being able to re-enter normal environments without need of supplements.

I think the goal for emerging nations should be open market economies. I suspect that some fair-trade policies can be intermediate steps on the way to "health."

I will say this, however. I'm suspicious of the political motivation of many for calling the measures "fair" trade, thus implying that "free" trade is somewhere inherently unfair or sinister. Free trade, by definition, is non-coerced exchange within a context of protected property rights and respect for personal liberties. Capitalists from capitalist nations have frequently exploited workers in emerging nations that had not legal protection and could not freely negotiate their wages (among other things). Exploiters defended their actions in the name of "free trade," which it was not. Therefore, the answer to the injustice is truly free trade. Free trade is fair trade.

I fear for many "fair trade" language becomes a back door way of de-legitimizing trade and justifying government dominated economies.

[VanSkaamper]

I fear for many "fair trade" language becomes a back door way of de-legitimizing trade and justifying government dominated economies.

Well put, Michael.