I'm bitterly disappointed that I've yet to find a single Fairtrade activist willing to have a sensible debate on the subject of ethical consumerism. My own position is that ethics and economics are inextricably linked and therefore "ethical consumerism" has two components.
A suitable division of labour seems to be for the ethical activists to create demand for ethical products, and for economists to turn those intentions into effective demand. The former should convince the world that we should be concerned about the effects of our choices, and the latter should study what those effects are.
After all, economics is about mean-ends analysis. We're trained to say "is this strategy consistent with the stated aim?" Without this enquiry we are groping in the dark - buying Fairtrade coffee becomes no different to prayer. I disagree with Tim Worstall's acceptance that the voluntary status is all that matters (here), since economists should have a contribution to the debate on ethical consumerism. Economic reasoning switches on a light.
In America public toilets (typically) use paper towels. In the UK it's usually a hand drier. Which uses the most resources? I don't know, and it's wrong to assume that a lack of visible waste makes the automatic option 'better'. There's a lack of visible waste when using washable nappies, but depending on how you wash them, they can be more environmentally damaging than disposable ones. Does it make sense to spend 20mins in the car to drive to a bottle bank? Surely there's a point at which it'd be better to just bin it.
All too often environmentalists seem to think that it's the thought that counts. Surely, though, it's the action. In which case economics is the tool to perform some form of cost-benefit analysis, some calculation, to decide which option is the most environmentally friendly. Often, this may well conflict with whatever minimises visible waste. It may well be counter-intuitive. It may well be unseen.
Environmentalists seem to have their fingers in their ears, bemoaning the economist's analysis and skepticism. I understand this, since economists will all to often deny that there's even a problem. It needn't be so, since the consequence of honest enquiry needn't lead to nihilism. Re-cycling isn't futile. Action can work. But what type?
At the end of the day the action we desire (surely) is to discover solutions, and not simply to reduce middle class guilt. The problem is that the world (and therefore the economy) is highly complex. Try to count the number of professions required to produce a cup of coffee. And yet Fairtrade certification focusses on the coffee bean farmer. Why? Again, we shouldn't focus on the most visible.
Egalitarians treat resources as fixed (and therefore depleting), and preferences as variable - therefore it's necessary to alter people's behaviour. This seems to be the guiding message of ethical consumerism: to mend our ways. But do our individual actions really make a difference? I've made many transatlantic flights over the last few years, and so surely buying a car wouldn't deplete fossil fuels at all (in comparison). Am I being ethical to cancel my next planned trip to DC? If I do, then surely that's my contribution and I can ignore all other demands for my attention.
I don't think that it's right to simply add up our individual footprints and cast aspersions. I don't think that "one less flight" means I've done my bit, and can drive as much as I like. I don't think that years of recycling is "undone" by a holiday to Barcelona.
We need to realise that we all have different circumstances, and a solution won't come about from convincing people to do X,Y or Z. We shouldn't treat behaviour as the variable, and lambast those who fly long haul flights (who might only doing their job, afterall), but construct institutions that make environmentally-friendly choices automatic.
We need to change the rules of the game, not the behaviour of the players - i.e. constitutionalism.
The easiest way to determine the "footprint" of a particular decision is the price mechanism. Something that cost £5 will typically have used up fewer resources than something that costs £10. Maybe half as much, maybe not. Is it better to buy organic vegetables flown in from Africa, or non-organic ones trucked from Europe? Being "organic" is not enough to know that it's better for the enironment. But we can look at the price, and if we buy the cheapest we know that -- all else equal -- the production and shipping used fewer resources. Fortunately we don't need a lesson in ethical consumerism to buy the cheapest product. That, my friends, is the invisible hand!
The best way to reduce externalities (effects not born by the decision-maker, e.g. pollution) is to expand the marketplace so that such externalties become part of a competitive marketplace, and therefore part of the price mechanism. If the fishery can sue the upstream factory, you can be sure that "pollution" will fall. Global problems require global solutions. Government action is the solution, but they must treat institutions as variables.
So my conclusion is two fold: be a true ethical consumer, but realise the limits of individual action.
To be a good consumer you need economic literacy - so don't ignore the economists. You also should have an ethical conscious - so don't ignore the environmentalists. And to link the two together, we need branding and dialogue. Brands are a crucial part of ethical consumerism - without them there's no basis to distinguish between different products. And dialogue assigns the promises of a company to it's actions - it means we can rally behind firms we like, and shun those we don't.
But individual action is not enough. We need to pressure our leaders to make institutional changes that make ethical consumerism automatic. Therefore the agenda should be for expanding markets and freeing trade. Broad policies that encompass all industries, and deliver proven pathways to prosperity, empowerment and human freedom.
see Does it Really make any difference? Sunday Times News Review, April 2nd 2006
Greg Mankiw's discussion of Austrian economics (notice the difference between Galbraith and Hayek when it comes to advertising)
"Smug Alert!" South Park Season 10, Episode 2