The suggestion that fewer and more expensive clothes being made will lead to higher wages isn’t at all persuasive
Should the Bangladeshi garment industry become more sustainable, even circular, in the way it operates?
Many people insist it should, but the more interesting question is whether they’re right.
Here in Europe the argument is made that fast fashion is somehow dangerous to the planet. Cheap clothes bought in volume are bringing on environmental collapse.
The argument is simply absurd.
There is talk of how the industry consumes irreplaceable water, for example. Which is really most odd indeed as we have a planetary water recycling system. Just look up: The clouds that are a major part of it.
No water is transferred out of the system in, say, growing cotton. It’s only borrowed for a bit. True, too much can be borrowed, as the disaster of the Aral Sea shows, but the base comment – that crops “use up” limited water – simply isn’t true.
Still, we Europeans are told we should buy fewer pieces of clothing, use them for longer, and pay more for them.
In effect, we should become poorer – and yes, this is what this means. We clearly like having fast fashion, the proof being how much of it we buy. If we deny ourselves this then we are poorer, because we will be getting less of what we clearly desire.
As far as Bangladesh is concerned that’s not good news. If we in Europe, at this end of the chain, buy less clothing then less needs to be produced at that other end. That will lower employment in the factories and so on.
The suggestion that fewer and more expensive clothes being made will lead to higher wages isn’t at all persuasive. Entirely the opposite would occur. If hundreds of thousands to millions are made unemployed as fewer clothes are manufactured, then wages for clothes makers will fall – there would be hundreds of thousands more people looking for employment, wouldn’t there?
So, there doesn’t seem to be much in it for Bangladesh, this move away from fast fashion towards more sustainability. It would be killing the country’s own industry.
On the other hand, if the consumers – the Europeans and Americans – do start demanding this then that’s fine. Pleasing the customers is the one necessary thing to do in business, after all. But are they demanding slow, expensive fashion?
The answer there is, Not in the slightest.
There are an awful lot of intellectually fashionable people who are shouting that fast fashion must die. But among people who actually buy fashion there’s no sign of slackening demand.
New brands continue to arrive, sales continue to rise, but we’re not seeing any consumer rush for that sustainability and circularity.
This speaks to one of the most basic human observations – talk is cheap.
To put it in economic jargon, revealed preferences are more important than expressed preferences.
People say all sorts of things, but what matters is what they actually do.
Here, with regard to fashion, we should forget what the intellectuals tell us should happen and observe the actual spending habits of consumers.
Are they actually buying less clothing? Are fewer garments flowing through the stores?
Then those customers don’t in fact care, do they? Even though they’re being told they ought to they still don’t.
This also leads to how we work this out. Prices are information, as Hayek kept pointing out.
We don’t have to go and conduct surveys in Europe about what fashionistas might say they want. We can just observe how much people are willing to pay us to make clothing.
Are they willing to pay more for something “sustainable”? If they’ll not pay more, then they don’t want it more – all the information we need is contained within the price.
Our information service, our intelligence service even, is simple. All we’ve got to do is follow the money.
That’s how consumers communicate their desires. Forget what they say and just do whatever opens their wallets.
For if enough of them do indeed value something other than fast fashion then they’ll spend their money on that something else.
And if they stick with what they have, then they don’t place more value on the virtuous alternative, do they?
Tim Worstall is a senior fellow at the Adam Smith Institute in London