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Globalization has produced more prosperity in the past 60 years than in the previous two thousand. But unless we include the 80% of people that are excluded from the system, they will bring globalization down.
– Hernando de Soto featured in Globalization at the Crossroads (2009).
Today coffee is by far the leading “fair trade” product, the commodity we use more than any other to think about how the world economy works and what to do about it.
–Sedgewick (2020), Augustine in Coffeeland.
1. Introduction
Globalization is at a crossroads. Although globalization has been a dominant trend in the world economy, perceptions of its benefits are divided. While neoliberalists believe that free trade and unrestricted cross-border capital flows lead to modernization, economic development and freedom (Ricks, 2003), others hold the view that the process of accumulating capital and distribution of benefits has been uneven (Meyer, 2017). The uneven distribution has deepened the central and peripheral regional structures of world production (Hart, 2010; Reeves and Harnoss, 2017), with the developed countries benefiting monopoly profits and the developing countries performing low-value activities. While it is generally agreed that globalization has increased aggregate prosperity, enduring concerns against the conventional exploitative structure of international trade and multinational enterprises (MNEs) remain. These concerns have centered on social injustice, ecological damage and poverty in developing countries (Buckley and Boddewyn, 2015; The Economist, 2017).
In the conventional production and trade structure, MNEs in developed countries control spatially dispersed global value chains (GVCs), which are depicted by Gereffi et al. (2005) as captive value chains. Small suppliers from developing countries who are dependent on transactions with MNEs are captive suppliers. With limited bargaining power and resources, captive suppliers such as farmers and agricultural producers at the bottom of the pyramid (Prahalad, 2005) are marginalized or excluded from sharing the benefits of GVCs. The coffee industry was an example of captive value chains. Coffee, as a primary commodity, was dominated by a small number of multinational roasting and retailing companies in the US and European countries. Millions of smallholder coffee growers in developing countries received only 13% of the price of a cup of coffee sold in a café in Europe or North America (Fairtrade Foundation, 2012). These farmers and growers lived...