How to build an ethical design business?
The designer brings their understanding of the customer and market into the game. The craftsperson brings their own understanding of fabric, colour, and technique. In the case of ikat, for example, they bring a very sophisticated understanding of dyeing of warp and weft into patterns. Locating the business close to the craft source is a good way to ensure there is ongoing collaboration between the designer and the craftsperson.
It's hard for one person to have all the abilities to make everything work. But if you look at successful designers, you'll see that they all have sharp commercial acumen as well. They've managed to figure out how to finance their business. They've figured out pricing and margins. They've often started out with very low overhead costs, and only later taken on big fixed expenses. They've learnt the fine art of storytelling around their work, creating the necessary buzz (even when their marketing budgets were close to zero). These are fundamental entrepreneurial skills, which someone like Yazad has to cultivate if he is serious about getting into the design business.
How does one survive in a market like that? As a designer, you have to look at creating a unique value proposition that will allow you to survive even at those higher prices. Customers must be convinced that your products offer them value for the premium that they pay you. And it has to be real value, not some marketing gimmick. What are you giving them, that someone else isn't? Designers must answer that question with brutal clarity if they want to succeed. In the process, you must also define who you want as your customer. And who you don't. Here's the thing: You cannot build an ethical business that will cater to everyone.