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army1987 comments on Contrarian LW views and their economic implications - Less Wrong Discussion
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I agree with your general argument, but that particular example isn't true IME -- ISTM fair-trade products are cheaper than non-fair-trade products of the same quality (e.g. the fair-trade t-shirt I own cost me €3 IIRC, and after three years I've owned it it doesn't show that much wear and tear). I suspect customers refrain from buying them out of ideological reasons or something.