The poverty of fair trade

Mark Fischer argues that Proudhon is the unacknowledged theoretical daddy of many of today's campaigners who want to see the end of poverty and international justice through 'fair trade'

There is a section of Marx and Engel's 1848 Communist manifesto titled 'Conservative or bourgeois socialism', which almost reads as though it could have been penned with the likes of Geldof and Bono in mind. The founders of the modern communist movement wrote that this political trend was staffed by "economists, philanthropists, humanitarians, improvers of the conditions of the working class, organisers of charity, members of societies for the prevention of cruelty to animals, temperance fanatics, hole-and-corner reformers of every imaginable kind". Characteristic of bourgeois socialism - worked up into "complete systems" by the likes of the French anarchist, Pierre-Joseph Proudhon (1809-1865), with his theory of mutualism - was that it wanted "all the advantages of modern social conditions without the struggles and dangers necessarily resulting therefrom "¦ [It wishes] for a bourgeoisie without a proletariat." The contemporary slogan that expresses this same pious, backward-looking schema for society is the call for 'fair trade' coming both from official government sources and the Make Poverty History luminaries - a rearticulation of ideas that were deeply flawed when first elaborated by Proudhon over 160 years ago. Proudhon was a towering figure on the left for a time during the mid-19th century. However, his system was devastatingly critiqued by Marx in The poverty of philosophy and by the 20th century had been completely marginalised by the growth of the explicitly Marxist working class movement. It is a measure of the programmatic confusion and retrogression in today's political world that his ideas are being consciously or unconsciously reinvented and are gaining a wide audience once again. Undoubtedly Proudhon was an anti-capitalist - he was a savage and often very effective critic, but he did not go beyond the categories of the system. Like today's advocates of 'fair trade', he simply wanted to curb capitalism's excesses. Of course, the man is most famous today for the catchy aphorism, "Property is theft", coined in the work What is property? (1840). However, his other, less well known, aphorism, "Property is freedom", points to the limitations of his ideas. It is essential to understand what Proudhon meant by "property" - he drew a distinction between it and the natural right to individual "possession" and envisaged a world of small capitalists, all trading 'fairly' with each other. In Proudhon's system, the property of a landowner or capitalist is theft because its source is the exploitation of others. For the peasant or artisan labourer, property - or more precisely possession - is freedom as it takes the form of a home, a plot of land to cultivate, or the tools of this or that trade - but never to a right to exploit the labour of others. Thus, individual possession - distinguished from private property - ensured both liberty and an efficient economy. He used the example of how common land could be overgrazed, as each individual attempted to squeeze their own little bit of value from it. With a system of small-scale ownership, he asserted, more care would be taken of such natural resources and thus a more productive economy ensured in the long run. His ideal world would be composed of self-employed, independent artisans and peasants. There would be markets, but they would be non-capitalist, without wage labour or large-scale private property. Workplaces such as factories would be run by democratic, but localised 'labour associations'. However, where production could be undertaken on an individualised basis - that is, in the realm of the artisan or peasant farmer - it would not be organised by collectives of any sort. He saw this type of work as inherently "sovereign" and "free". Clearly, this was a reactionary approach even in Proudhon's day. Nowadays, it is positively insane. Yet an explicit aim of much of the 'trade justice' movement is to trap whole swathes of the world into small-scale peasant production. For example, Fair Trade (the umbrella organisation that certifies and labels over 700 'fairly produced' items sold in Britain) specifically supports "small producers; those that are not structurally dependent on permanent hired labour, managing their farm mainly with their own and their family's labour-force "¦ Of every Fair Trade-certified product sold by the organisation, more than 50% of the volume must be produced by small producers" (www.fairtrade.net). This is wrong on a number of different levels. First, this sort of rural production invariably entails grinding self-exploitation of farmers and their families, stunting their opportunities to develop themselves more fully as human beings. Women are particularly oppressed in what is a patriarchal system of production. Second, it effectively imposes on these people a model of life shaped far more by a manufactured nostalgia (prevalent amongst guilt-wracked sections of the liberal establishment in the west) for some pre-industrial idyll than by their own aspirations and hopes for the future for themselves and their children. Third, it traps millions of people around the world into a form of production that is both profoundly inefficient and highly susceptible to shifts in global commodity prices, innovations in technology or simply changing trends of consumption in the advanced capitalist countries. The example of the coffee glut in the world market of a few years ago underlines the hopelessness of the project of 'fair trade'. The entry of Vietnam into coffee production and the jump in productivity in Brazil impacted dramatically on the poor of underdeveloped countries such as Ethiopia, Rwanda and Uganda. Oxfam identified this crisis as "a key element in the global challenge to make trade fair" (Oxfam report Mugged: poverty in your coffee cup September 18 2002). Oxfam's response to this "global challenge" was its 'Coffee Rescue Plan', at the core of which was the project "to make the coffee market benefit the poor as well as the rich". The central irrationality of this stems from its misunderstanding of what a market actually is under capitalism. The capitalist market is not some eternal norm: it is a historically constituted phenomenon that came into being as result of a bitter struggle between two groups of people - crudely put, the 'poor' and the 'rich'. As Ellen Meiksins Wood argues, the evolution of capitalism, a system which subordinates all production to profit and the self-expansion of capital, "required something more than the simple growth of markets and the traditional practices of buying cheap and selling dear". Capitalism "presupposes a transformation of social property relations", which directly subordinate direct producers to "market imperatives in historically unprecedented ways", by making their very access to the means of subsistence "market-dependent" (E Meiksins Wood Democracy against capitalism Cambridge 1995, p156). Thus, the scope of the capitalist market that faces us today was actually determined historically by the political defeat of our peasant ancestors, the enclosure of common land and the creation of a class of wage labourers who had been separated from the means of production. They have no choice but to sell their ability to labour. Labour is therefore subordinated to capital and its need for limitless accumulation. So, by definition, far from being a neutral arena where different groups of people meet as equals, the contemporary market embodies an organic imbalance in favour of capital. The trick of capitalism, does not lie, as Proudhon mistakenly thought, in cheating. As explained by Marx, on average workers are paid the real price for their labour-power according to the value of their work done. Living labour produces surplus labour - the general source of profit and accumulation. Exploitation, though hidden by an equal exchange in the market, takes place - and is just as real - as the naked extra-economic exploitation characteristic of the slave and feudal modes of production. Moreover, declining capitalism, especially post-1945 US superimperialism, has added transnational monopoly, finance capital and a whole, elaborate structure of organised domination over the functioning of the world market. In alliance with its partners in the European Union, through the World Bank, the IMF, etc, the US exploits the whole planet. The unequal market of classic capitalism has become structurally an instrument for hoovering up wealth throughout the globe. The corrupt bureaucratic elites and local businesses in the third world are nowadays little more than intermediaries serving the interests of the giant transnationals and top imperialist powers. To be fair, the Oxfam report is intelligent enough to half-recognise this: "Asking some of the poorest and powerless people in the world to negotiate in an open market with some of the richest and powerful results, unsurprisingly, in the rich getting richer and the poor getting poorer." Essentially, the charity's response to this structural inequality was to urge that capitalist giants such as Kraft or Nestlé pay a 'fair price' to the small coffee producers of the world - to cease to operate by the rules of the market itself, in effect. This is simply impossible. A central defining feature of capitalism as a social system is its ceaseless drive towards expansion. This impels it to constantly lower costs - including by forcing down the price of wages and inputs. If for some reason a company does not comply with these imperatives, competition from others will ensure that, sooner or later, it will be squeezed out of existence. 'Fair trade' in such a system is a call for self-extinction: one may as well make a moral case for vegetarianism to Bengal tigers. For all his passion and occasional brilliance in exposing the injustices of the plight of the poor in his world, Proudhon suffered from exactly the same lack of historical vision that blights the current Make Poverty History movement. Marx saw the flaws in Proudhon's bourgeois socialism most starkly revealed in his notion that 'justice' for the poor of the world lay in the victory of the principle, to each according to the value of their labour. For Proudhon, producers should be able to consume the full value of the product. Likewise, anyone who consumes goods should pay the full value of the cost of producing them. This formulation encapsulates the outlook of those who recoil before the destructive and exploitative realities - but also the productive achievements - of capitalism. Proudhon cannot envisage positively superseding capitalism. Instead he opts for a doomed project to remake a past that has already vanished and in reality never existed. Bono, Geldof, Make Poverty History and the whole charity industry do the same thing. Of course, peasant and artisan production can never be a happy idyll of harmony, fulfilment and contentment. In medieval times life for such people was - as it still is in the so-called third world - parochial, grasping and full of endless drudge. The call to make the world market more 'fair' is not simply utopian, given the nature of the capitalist beast: it is also hopelessly cramped in its historical vision. The grotesque spectacle of 'third world' poverty that has moved millions of people to protest is an inevitable product of the laws of capitalism. Thus, the only adequate response to this horror is for us to formulate a programme that points beyond these laws - beyond exploitation, wage labour and the market itself. Marx rejected the idea of refashioning society on the basis of to each according to the value of their labour. Freedom is dependent on the victory of the principle, to each according to their need. What is required is a decisive and complete break from capitalism's law of value, not its resuscitation l