Doing Good Better: Effective Altruism and a Radical New Way to Make a Difference

by William MacAskill

That means that even if buying Fairtrade was a good way of paying farmers more, you might make a bigger difference by buying non-Fairtrade goods that are produced in the poorest countries rather than Fairtrade goods that are produced in richer countries. Because Costa Rica is ten times richer than Ethiopia, $1 is worth more to the average Ethiopian than several dollars is to the average Costa Rican. Second, of the additional money that is spent on Fairtrade, only a very small portion ends up in the hands of the farmers who earn that money. Middlemen take the rest. The Fairtrade Foundation does not provide figures on how much of the additional price reaches coffee produces, but independent researchers have provided some estimates. Dr Peter Griffiths, an economic consultant for the World Bank, worked out that for one British café chain, less than 1% of the additional price of their Fairtrade coffee reached coffee exporters in poor countries. Finnish Professors Joni Valkila, Pertti Haaparanta and Niina Niemi found out that, of Fairtrade coffee sold in Finland, only 11% of the additional price reached the coffee-producing countries. Professor Bernard Kilian and colleagues from INCAE Business School found that, in the US, while Fairtrade coffee would sell for $5 per pound more than conventional coffee, coffee producers would receive only 40¢ per pound, or 8% of that increased price. In contrast, remember that, if you donate $1 to GiveDirectly, 90¢ ultimately reaches the poor. F...