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Fair Trade: Towards an Economics of Virtue

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Abstract

Over the past 10 years the sales of Fair Trade goods – particularly those carrying the Fair Trade Labelling Organizations International (FLO) certification mark – have grown exponentially. Academic interest in Fair Trade has also grown significantly over the past decade with researchers analysing the model from a wide range of theoretical perspectives. Whilst Fair Trade is generally acknowledged as a new supply chain model, it has tended to be studied at the micro/organisational level rather than at the macro/systems level. As a consequence, its wider impact as institutional innovation at the field level appears to have been under-theorised so far. In order to address this research gap, this article uses a neo- institutionalist perspective to analyse Fair Trade not simply as a new exchange model working within existing organisational and economic structures, but rather as an agent of institutional entrepreneurship at, and beyond, the field level. From this latter perspective, Fair Trade brings a new set of transformational meanings to extant exchange and consumption models and reforms fields of economic exchange by disrupting and then re-assembling key institutional elements around modern consumption to roll back commodity fetishism and reconnect consumers and producers. The type of institutional change driven by Fair Trade can be seen as a form of social entrepreneurship.

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    Alex Nicholls

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Nicholls, A. Fair Trade: Towards an Economics of Virtue. J Bus Ethics 92 (Suppl 2), 241–255 (2010). https://doi.org/10.1007/s10551-010-0581-3

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