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310. A framework for Fair Trade: Exit, voice and loyalty

I have moved four times since I finished graduate school more than 10 years ago.  Precious few of my textbooks have traveled with me through all those long-distance moves.  One that has is a slender, dog-eared volume that advances in relatively few pages an exceptionally robust conceptual framework: Albert Hirschman’s Exit, Voice and Loyalty.  Applying Hirschman’s thinking to the brawl over Fair Trade coffee may help make sense of all the tumult.

  • Exit and Voice

Hirschman’s elegant argument outlines and explores the two basic options we face when the institutions that serve us fail to meet our needs: exit or voice.  When the consumer products we use fail to keep pace with our evolving preferences, we can switch to another brand (exit), or communicate with the company that sells them to make our preferences known in the hope it will be responsive to our voice.  If a government enacts a law we find reprehensible, we can emigrate (exit) or raise our voices in protest.  The options are not mutually exclusive, and indeed may be sequential: I may try to voice my dissent but reserve the right to exit if my loyalty is worn thin by continued unresponsiveness to my demands.

  • Loyalty

Hirschman further suggests that a third variable – loyalty – will shape to an important extent how we react to situations like the ones mentioned above.  Steve Jobs fans are known for their fierce loyalty to Apple – a consideration that might compel them to send email complaints rather than switch to a PC.  If the government that passes the law is one whose ascent to office you supported, you might opt to raise your voice in protest before packing your bags for another country.  Alternatively, if you are a first-time Mac user or a voter who opposed the current government from the start, the software glitch or the odious law might be enough for you to opt out.

I have always found the dynamic relationship between voice and loyalty to be a particularly interesting aspect of Hirschman’s construct.  A customer or citizen may choose voice over exit because she is loyal; but she may be loyal because she believes her voice is heard.  When she chooses voice over exit and is heard again, it can increase her loyalty, influencing the choices she makes in the future.

  • Exit, Voice, Loyalty and “The Brawl over Fair Trade Coffee”

A testament to the power of Hirschman’s framework is its applicability to a wide range of contexts.  It seems to me that it is helpfully applied to recent exits in Fair Trade – both FTUSA’s withdrawal from FLO and the migration of FTUSA licensees to FT Canada.  In both cases, the actors who chose to exit perceived a decline in the services they received, a challenge to their principles, or both.

FTUSA made it very clear that it did not feel well-served by FLO at the time it decided to break with Bonn: FTUSA suggested here that it wasn’t getting enough return on the investment of its membership dues, and was frustrated that FLO wasn’t moving to embrace rule changes that would make estates and independent smallholder farmers eligible to enter markets for coffee and other smallholder-only crops. FTUSA raised its voice within FLO and exited only after it was convinced it would be unable to achieve the changes it sought.

It could be that this decision had little to do with loyalty, and was guided by the adage that ran through the Godfather trilogy: “It’s not personal.  It’s business.”  So I will resist the temptation to speculate about what role loyalty may have played in those decisions.  But as FLO’s U.S. affiliate gets off the ground and U.S. licensees face the choice between exit and voice, I will keep in mind Hirschman’s argument about loyalty.


  • Rodney North says:

    I think this is an important insights and indeed a useful lens for the topic. I’ll take the opportunity to run with it a bit.

    Many in the US Fair Trade movement certainly offered considerable loyalty to FTUSA/TransFair USA after its launch in 1998. And from early on many of us (maybe most notably Equal Exchange and many members of Cooperative Coffees) did indeed raise our voices repeatedly – as there were troubling signs & actions from the start. Often we used our voice in private, but at other times it had to be public (like during the infamous surprise 2003 SCAA conf. announcement that TransFair wanted to certify plantations).

    Over the 14 years (’98 – ’12) many of us in the movement increasingly felt that our voices were not heard and consequently our loyalty dissipated. And the disaffection spread beyond hard-core Fair Trade coffee roasters to include chocolate & sugar & health care enterprises (eg Divine, Theo, Wholesome, Dr. Bronner’s & others) and civil society groups like USFT, FWP, food co-ops and faith-based groups, and, not least, the farmer co-ops themselves.

    But, of course, it has not merely led to many ‘exiting’ but it has also led to active ‘opposition’ – another option, and a more vigorous, proactive one. Did Hirschman anticipate or discuss that possibility?

    A problem with the voice/exit dichotomy is that it presumes, or suggests, that there is just one game in town (run by someone else) and your choice is only to ‘play’, or ‘not play’. But in reality one can also ‘start their own game’. So just as FTUSA has done that (by leaving FLO, etc.) now many of us are doing likewise by leaving FTUSA.

    By the way, another way to look at this is – Did FTUSA exercise their voice within the US Fair Trade movement before ‘exiting’ from it? Why did they not extend their loyalty to it? I’d suggest that this was a conversation that FTUSA did not feel was necessary.

    I’ve my own theories on how FTUSA perceived its role and that of the nation’s FT movement and why things went the way they have, but I’ll let others opine on this Q of ‘What was FTUSA’s obligation – if any – to be loyal to the nation’s Fair Trade movement?’

  • Chris London says:

    Rodney’s point about opposition is a good one. It gets at my reaction to your post, namely that what is absent from Hirschman’s model is the problem of power, and the related issues of domination and freedom. Rodney’s opposition is only possible when there is freedom to pose an alternative, and such freedom is always conditioned by the power to act. Were it not for the fact that FLO, EE, and others are not without teeth, FTUSAs unilateralism would not necessarily pose an EVL situation, rather it could create a where some stick with FTUSA not because of loyalty but because neither exit nor voice are options. Fortunately, that is not the case.

    As you suggest, time will tell. In the meantime, the complaints that have been voiced for more than a decade about certification initiatives, that they spend more time fighting among themselves instead of working with business to make a unified system that works, will continue to get fodder. The end result of all of this, I suspect, is that it will limit the growth of FT and certification generally as more business will either remain on the sidelines where they’ve been, or go it alone with ‘direct trade’ initiatives that often lack the transparency and accountability of third party certification.

  • Emma says:

    Hi, I’m Emma, working with Fairtrade International USA, the new organization representing the international Fairtrade system here in the US. We are up and running, please check out our website

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