#454; In which a Stand is taken...is actually kind of wrong.

Joined: 10 May 2007 Posts: 6

According to their annual report, "in 2007, Fair trade certified sales amounted to approximately €2.3 billion (US $3.62 billion) worldwide, a 47% year-to-year increase."

So companies are going broke - or at least losing significant amounts of trade - by expecting customers to put self-interest ahead of principle.

Wikipedia

ten out of ten · Posted: Sat Oct 25, 2008 1:12 am

BUUUUUUUUUUUUUUR malaki!

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

I don't dispute your numbers, nor do I intend to make any sort of ideological stand on the matter, but I don't think what you're saying invalidates my statement!

Some companies may lose business as a result of competing fair-trade businesses seeing an uptick, but I'll bet there are plenty of others in the "unfair"-trade sector continuing to do gangbuster business. (And probably moreso as consumer spending declines in the face of an uncertain economy.)

I defy you to find an account of any business in any industry actually failing with a business model predicated on offering the cheapest products on market without regard to issues like fair-trade that some consumers may have an ethical opinion on.

welcome to the forums!

ten out of ten · Posted: Sat Oct 25, 2008 1:12 am

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

sam

ten out of ten · Posted: Sat Oct 25, 2008 1:12 am

did not do the research

ten out of ten · Posted: Sat Oct 25, 2008 1:15 am

actually i think one of the main reasons people buy fairtraid is because it's a trendy thing to do and, just like with mac computers, brand-name clothes, and girlfriends, part of what you are paying for is the ability to shove it in the faces of other less fortunate people who still buy from slave holding whities.

ten out of ten · Posted: Sat Oct 25, 2008 1:15 am

oh hey dkl hey man have you seen my elephant i left it around here somewhere p.s. i got an email about Machine of Death and I am really excited about that are you?

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

i'm pretty stoked about it sam!

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

p.s. have you looked under the couch

ten out of ten · Posted: Sat Oct 25, 2008 11:05 am

holy shit

ten out of ten · Posted: Sat Oct 25, 2008 11:05 am

no elephant but i found my wallet

Joined: 10 May 2007 Posts: 6

darthkittenlover wrote:

I defy you to find an account of any business in any industry actually failing with a business model predicated on offering the cheapest products on market without regard to issues like fair-trade that some consumers may have an ethical opinion on.

Every business that isn't fair trade has "a business model...without regard to issues like fair-trade".

So, taking your challenge as written, you're saying that you can't imagine that any business has gone bankrupt, other than fair trade businesses. Surprised

But what you probably mean is something like "there's no non-fair-trade business which went broke, where it demonstrably wouldn't have gone broke if it was fair trade."

The trouble with that is that

i) no business ever really goes broke for exactly one reason, and

ii) there's no way to prove what would have happened, there's only speculation.

So this challenge is unanswerable, for any factor. For example, there's no business which went broke without a business plan, where it demonstrably wouldn't have gone broke if it had a business plan. This doesn't prove that business plans are over-rated and don't really work, it just shows that the standard of proof can never be met.

Posted: Sat Oct 25, 2008 4:58 pm

David, I do not believe that a man could poop enough to fill a barrel. Please try to make these comics more realistic.

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

Age of Fable wrote:

Every business that isn't fair trade has "a business model...without regard to issues like fair-trade".

So, taking your challenge as written, you're saying that you can't imagine that any business has gone bankrupt, other than fair trade businesses. Surprised

Nope! That's not what I'm saying.

I'm asking about business with "a business model predicated on offering the cheapest products on market without regard to issues like fair-trade."

That's different than asking about businesses with "a business model...without regard to issues like fair-trade".

Age of Fable wrote:

But what you probably mean is something like "there's no non-fair-trade business which went broke, where it demonstrably wouldn't have gone broke if it was fair trade."

Also not quite understanding me. The questions as you've posed them are unanswerable, but they're not the question I'm asking!

And it's possible that my real challenge is unanswerable, depending on the availability of record-keeping, but the answer isn't really important because the question is rhetorical anyway.

The point is not whether a non-fair-trade business has ever failed. The point is that businesses that serve consumers' most basic self-interest -- i.e. offer lower prices -- are not, as far as I'm concerned ever, driven out of business by businesses that appeal to consumers' ethical considerations.

Do businesses that offer lower prices at all costs ever fail? Sometimes they are put out of business by government regulation or safety violations. But the market does not drive them under, because consumers in the aggregate are not high-minded enough to sacrifice for the sake of (or even come to an agreement on) ethics.

In fact I'd argue that "ethical" business models are almost always co-opted for marketing reasons, if not adopted for that reason in the first place. Whole Foods couldn't get away with its prices if the customers didn't think they were being "better people" (in any of a number of ways) by shopping there. However the profitability of Whole Foods does not always lead to positive change for the causes that the customers believe they are helping. (Not all the produce is organic, for example, and very little of it is local. Subject to verification; my memory's fuzzy.) However this last point isn't really what the comic in question is about.

mackj srlsy

Posted: Sat Oct 25, 2008 7:11 pm

Also congratulations, now one of your incoming keywords is "poop enough to fill a barrel"!

ten out of ten · Posted: Sat Oct 25, 2008 9:39 pm

Age of Fable wrote:

darthkittenlover wrote:

I defy you to find an account of any business in any industry actually failing with a business model predicated on offering the cheapest products on market without regard to issues like fair-trade that some consumers may have an ethical opinion on.

Every business that isn't fair trade has "a business model...without regard to issues like fair-trade".

So, taking your challenge as written, you're saying that you can't imagine that any business has gone bankrupt, other than fair trade businesses. Surprised

But what you probably mean is something like "there's no non-fair-trade business which went broke, where it demonstrably wouldn't have gone broke if it was fair trade."

The trouble with that is that

i) no business ever really goes broke for exactly one reason, and

ii) there's no way to prove what would have happened, there's only speculation.

So this challenge is unanswerable, for any factor. For example, there's no business which went broke without a business plan, where it demonstrably wouldn't have gone broke if it had a business plan. This doesn't prove that business plans are over-rated and don't really work, it just shows that the standard of proof can never be met.

all you'd have to do is a statistical regression of business failures with pro- and non-free trade business compared. easy.

Joined: 13 Jun 2008 Posts: 1108 Location: PA

*did not get email, but checks Machine of Death site*

Aw man, mine's going to look crummy in comparison now, I bet, if it's still going in it. But if so, that's still pretty cool, because maybe I'll look more famous than I am!

Joined: 10 May 2007 Posts: 6

darthkittenlover wrote:

The point is not whether a non-fair-trade business has ever failed. The point is that businesses that serve consumers' most basic self-interest -- i.e. offer lower prices -- are not, as far as I'm concerned ever, driven out of business by businesses that appeal to consumers' ethical considerations.

Do businesses that offer lower prices at all costs ever fail? Sometimes they are put out of business by government regulation or safety violations. But the market does not drive them under, because consumers in the aggregate are not high-minded enough to sacrifice for the sake of (or even come to an agreement on) ethics.

OK, so what you're saying is, there are three kinds of businesses:

i) model based on lower prices
ii) model based on ethics
iii) model based on something else eg quality, convenience

and

a) Businesses with model ii) can never compete with businesses with model i).

b) Businesses with model i) never go broke unless government regulations or safety violations make them go broke.

In Australia, we have something called the New Enterprise Initiative Scheme, which is a government scheme designed to get unemployed people starting their own businesses.

I've done it twice - failed the first time, passed the second.

One of the things they teach you is about 'market niches' ie the thing that you cite as the reason people shold buy from you and not your competitors. 'They' by the way are actual business owners.

One market niche is price - selling the same product (or a slightly worse version) for less.

What you're saying is one of those things that 'everyone knows', which isn't true.

Price is, according to the people who run the course, the first one everyone thinks of, and the worst one to have.

The world is full of people who tried to start a business based on price and failed at the get-go.

An easy thought experiment: if you turned your comic into a ripoff of Dinosaur Comics, and marketed it as 'a ripoff of Dinosaur Comics but we sell our books a dollar cheaper', do you think that'd make you invulnerable to going broke, or the opposite?

And, as the figures I cited show, there are lots of businesses that are based on ethics that are out-competing their rivals.

In fact I'd imagine that the 'businesses based on price' that you're thinking of, in a lot of cases, would turn out not to compete entirely on price anyway. Convenience and location are presumably huge factors in the success of Wal-Mart and the like (otherwise why would they want to build stores everywhere?)

Joined: 10 May 2007 Posts: 6

darthkittenlover wrote:

In fact I'd argue that "ethical" business models are almost always co-opted for marketing reasons, if not adopted for that reason in the first place. Whole Foods couldn't get away with its prices if the customers didn't think they were being "better people" (in any of a number of ways) by shopping there.

If that's true, then the people who are doing it must think that an ethical business model is going to out-compete a model based on price.

I've noticed a common contradiction in criticisms of fair trade. The people who say

"ha ha, good luck trying to get anyone to buy your organic Tibetan granola"

often also say

"and the infuriating thing is the way they can double their prices and their stupid customers still shop there" Surprised

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

Age of Fable wrote:

The world is full of people who tried to start a business based on price and failed at the get-go.

I'll concede this, but I think maybe we've gotten into an overly-nitpicky argument (and I'm guilty of it as well).

Age of Fable wrote:

In fact I'd imagine that the 'businesses based on price' that you're thinking of, in a lot of cases, would turn out not to compete entirely on price anyway.

Well, that's actually right. My original statement (in the comic) was that "no company has ever gone bankrupt expecting customers to put self-interest ahead of principle". "Price" is a major factor involved in "self-interest," and of course the one mentioned in the comic, but it's not all there is to it. My hypothetical ripoff of Dinosaur Comics wouldn't succeed because the customer would be getting an inferior product. But I'm pretty sure I sell more of my books through Amazon, which charges a cheaper price, than I do through my site -- even though most folks know (if they think about it) that I earn more money from sales through my site.

People shop at Wal-Mart entirely out of self-interest for all the reasons you mentioned: price, convenience, etc. Yet it's well-known (or at least it should be) that Wal-Mart treats its employees horribly, denies them benefits, doesn't allow them to unionize, etc. But when it comes down to a tough economy, people lose the luxury of being discerning, and turn a blind eye to the ethics of the situation because it's cheaper, more convenient, etc. Am I wrong there? Does that not happen?

That's all I'm saying. I'm not saying that fair-trade business or ones built on ethical principles cannot or do not succeed in some cases.

Posted: Sun Oct 26, 2008 10:43 am

kfunque wrote:

*did not get email, but checks Machine of Death site*

Don't worry, I'm apparently not on the mailing list either. Just what kind of two-bit jive-ass opt-in email operation are you running here, David?

Joined: 10 May 2007 Posts: 6

Quote:

Nope! That's not what I'm saying.

I'm asking about business with "a business model predicated on offering the cheapest products on market without regard to issues like fair-trade."

That's different than asking about businesses with "a business model...without regard to issues like fair-trade".

Quote:

Well, that's actually right. My original statement (in the comic) was that "no company has ever gone bankrupt expecting customers to put self-interest ahead of principle". "Price" is a major factor involved in "self-interest," and of course the one mentioned in the comic, but it's not all there is to it.

In the first statement your argument is that you're talking about price in particular, and I've misinterpreted you as talking about 'self-interest' in general.

In the second your argument is the exact opposite.

So I think you're 'moving the goalposts' a bit.

Joined: 10 Feb 2008 Posts: 2750 Location: three-day week

guys let's have an argument on the internet in which we discuss whether we're talking about the same thing or not

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

Boorishly P. Foundry wrote:

kfunque wrote:

*did not get email, but checks Machine of Death site*

Don't worry, I'm apparently not on the mailing list either. Just what kind of two-bit jive-ass opt-in email operation are you running here, David?

you have to subscribe to get the emails Matt. I ain't runnin' no spam shack.

Joined: 19 Jul 2005 Posts: 5828 Location: Los Angeles, CA

Age of Fable wrote:

Quote:

Nope! That's not what I'm saying.

I'm asking about business with "a business model predicated on offering the cheapest products on market without regard to issues like fair-trade."

That's different than asking about businesses with "a business model...without regard to issues like fair-trade".

Quote:

Well, that's actually right. My original statement (in the comic) was that "no company has ever gone bankrupt expecting customers to put self-interest ahead of principle". "Price" is a major factor involved in "self-interest," and of course the one mentioned in the comic, but it's not all there is to it.

In the first statement your argument is that you're talking about price in particular, and I've misinterpreted you as talking about 'self-interest' in general.

In the second your argument is the exact opposite.

So I think you're 'moving the goalposts' a bit.

bluh. semantic argument hooray.

In the first case, your example excluded price as well as any other form of self-interest. So I re-included price, because it's a form of self-interest.

In the second case I broadened "self-interest" to include other things because we then got hung up on just price.

I don't really disagree with anything you've said about the nature of business, I'm just not sure it's all related to whatever point I was making to begin with, which was both observational and rhetorical.

but either way I'm done arguing about it. I appreciate you bringing up the subject and causing me to do some thinking about what I meant to say. I may take this as a lesson and make all comics strictly about pooping in barrels from here on out.

Joined: 10 May 2007 Posts: 6

If you define 'appealling to self-interest' that broadly, then for most people, every business they know is one.

So of course they'll go to a business that appeals to their self-interest.

You can look at Wal-Mart, and 'prove' that businesses that appeal to self-interest succeed.

You could equally look at the 1000 would-be Wal-Marts that went broke, to 'prove' that those businesses fail.

The only way you can actually tell whether self-interest works is by looking at the rare cases where there's another option (ie fair-trade businesses).

People don't always choose the ethical option. But if any other business sector had increased its sales by 47% in a year, it'd be taken as obvious that it'd beaten other business models.