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Fair prices & common sense

Isn’t it remarkable that sometimes you clearly know that what you are doing is not right, and yet, you are not able to do it differently.

 

In a previous blog I wrote that paying a fair price for all that I - as a consumer - purchase is a matter of common sense: Blog on Fairtrade. But if I do my daily shopping and would strictly only buy products with ‘true prices’, it will not be easy to find everything I need. An ordinary supermarket has about 20,000 products on its shelves, but just a few dozen of these articles have true prices. The remaining 19,964 articles do not have a fair price!

 

That is, they are either too expensive or they are too cheap. Often they are too expensive and too cheap at the same time. How is that possible?

 

A product is too expensive when a disproportionate share of the price of an item is paid to parties who only have a small part in the production process. Here we can think of financers (such as banks or investment funds) or owners (shareholders such as pension funds) that/who sometimes receive amounts - in the form of interest or dividends - out of proportion to their contribution.

 

An article is too cheap when people who participated in the production process receive too little to live a decent life. An article is also too cheap when during the production process environmental damage is caused while this damage is not compensated out of the proceeds of the same article.

 

A fair, or right or true price is such a price that all parties concerned receive a fair compensation for their part in the production of an article, while the production process is at the same time as sustainable as possible with regard to the earth as the foundation of all life.

 

Now you see that it is not easy for consumers to buy products with a fair price. That leads us to the question: what is needed to give products a true price?

More about that next time.

 

John Hogervorst, November 2013


John  |  2013 11 13  |  Permalink  |  Share

1 reaction

Clint Summer  |  2015 07 23

It's even more complicated than that. The value of the buyer's currency (to the buyer) also should be taken into consideration. If I earn $10 (or 10 Euros) per hour, my money is much more valuable to me than that of someone who earns 5 or 10 times that much. The only truly fair price is one that's reached by negotiation - one that feels fair or acceptable to both or all parties. Money is a medium of exchange, and an exchange can only be fair if we're looking at what both/all parties have done.

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