Thursday, December 17, 2020

Review of The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade by Pietra Rivoli

This review was written by Eugene Kernes

Book can be found in:
Genre = Economics
Intriguing Connections = 1) Learning Economics: Basic to Advanced

Short Description

Elaborate Description

This book combines research with anecdote to show what occurs in the life of a t-shit from various perspectives.  From the different sides of labor negotiations to the different sides of international trade negotiations, Rivoli does a wonderful job at expressing the complexity and the intention of each perspective.  Each different perspective shapes the way the t-shirt lives in the economy.  Rather than having nefarious reasons, the actors from each perspective respond to the global economy. 

Dominance in any world market is tenuous.  Industries tend to shift their comparative advantages.  Growing cotton seems strange in an advanced economy with high labor costs producing a product that is very homogenous, has intense price competition, and low barriers to entry and yet the U.S. has held dominance in growing cotton for about two centuries.  Due to climatic reason for growing cotton, the U.S. is competing with poor African countries who claim that U.S. subsidies violate global trade rules and impoverish African industry.

Subsidies are beneficial to the U.S. cotton industry but U.S. dominance cannot credit everything to subsidies.  Subsidies entered the U.S. cotton industry after the industry gained dominance.  The people in the U.S. industry have been very creative in figuring out how to enable more efficient cotton production, and has been very responsive to economic shifts.  The subsidies do ensure that the farmers have a set minimum income for a year.  Many times, the American farms earn more than other countries farmers normally, while still getting a boost from the subsidies.  There was a lot of outrage against the cotton subsidies, but they remained intact as the politicians packaged the cotton subsidies with many other beneficiaries to ensure that it had few opponents.  Countries whose farmers were hurt by the subsidies do not dislike the American subsidies as much as they want their own government subsidies and protections. 

Cotton is extremely susceptible to being damaged by various environmental aspects and risks of various pests taking cotton.  Labor for cotton production is temporary making it hard to obtain when needed for production.  As cotton is very fragile, cotton prices are very volatile which incur many business risks.  For each risk and uncertainty, the cotton industry developed methods to avoid them by either facing them communally or moving production outside the market.

As cotton required labor at uncertain times sporadically, drove cotton production to initially use slavery.  To use slaves in the production required developing systems of control, monitoring, and incentives to induce slaves to perform repetitive and exhaustive physical labor.  Many unethical practices in the cotton industry stem from the industry’s avoiding and suppressing markets.  Other countries with cotton industries which had a large labor force could not increase their production readily because they lacked capitalistic incentives which reward improvement.  After slavery ended, the system of sharecropping set root.  But sharecropping, rather than providing an incentive to improve, held the farmers back.  Alternative farmers started to mechanize their cotton production which yielded more cotton and did not need as much labor.  Technology improved the efficiency and efficacy of cotton production.  Technology had become more environmentally friendly by being more fuel efficient than before.

Growing cotton now takes more chemicals which is in part alarming and in part beneficial.  Chemicals that kill weeds also harm cotton, but cotton became genetically modified to resist the particular chemical.  The fear is that chemical resistant weeds will reproduce and create a bigger problem as the offspring will be resistant to the chemical, requiring different chemicals.  The chemicals used to kill pest require more chemicals to kill the secondary pests which the initial pests kept under control.  The chemicals being used now are far more environmentally friendly than before.  Overall, there seems to be much less chemical use than before due to genetically modified cotton.  Another problem with the genetic modification and chemicals are the fact that they are owned by Monsanto.  Farmers and Monsanto benefit from the relationship, but Monsanto seems to hold concentrated property rights which harm those who do not want to use their products. 

Cotton production used to create a lot of waste, but now, the waste is used in other products such as food.  The waste sold improves the profitability of the farm.  With more efficient cotton sorting mechanism, American cotton has an expected quality while there is a quality risk of other countries cotton.  Although farmers have become increasingly solitary due to technology, they have started to ban together politically.  Rather than selling their cotton individually and being forced to take a price for their cotton, they have made marketing pools which stores the cotton until the market price is right, at which point the cotton is sold and the farmers get their share.  The risk-sharing agreement prevent major losses or gains to any farmer. 

In China, where t-shirts tended to be put together have been mechanizing, but some part of production are difficult to mechanize.  The sewing stage of the t-shirt is difficult to mechanize and is the preeminent example of sweatshops.  Sewing was primarily done by women because their labor was cheaper and their dependents made them more willing to accept the work.  Docility and energy were needed in the production, and China’s engineered system of laws produced the workers needed for the labor.  Many women now choose sweatshops because it is a better alternative to working on the farm.  The factory work provides more autonomy and economic independence. 

Many consumers want the products being purchased to be produced with favorable labor practices.  Many times in history have corporations and businesses resisted changing their labor practices, but over time, labor practices do change.  Many large purchasers have banned together to force corporations to look into improving labor practices, because corporations want to keep their profits.  It is in countries with functioning markets in which corporations listen and adjust to what consumers want. 

In the production of the t-shirt, central planning loses to capitalistic markets.  Central planning ignores incentives to change to markets, does not improve facilities, and crush intelligence.  Global trade reduced pollution in production while producing more.  Open market countries facilitated clean technologies and adoption of clean technologies in other countries.  In globalized production, companies adopt heavier environmental regulations so as to be able to sell to more countries.  Market competition creates demand for environmental protection. 

The U.S. t-shirt industry influenced politics to limit trade.  They are avoiding competition by writing the rules.  Presidents and other politicians please the industry in order to get reelected while also trying not to limit the imports from other countries.  An outcome of this was as very complicated quota system.  A system that was rife with speculation and manipulation.  Many policies which were meant to be temporary, either resisted being removed or took a long time to be removed. 

The last journey in the life of a t-shirt is how it is recycled.  Most t-shirts in the U.S. are donated.  The shirts go through sorting company which sells the cloths to those who have need for the particular type of t-shirt or the material that the t-shirt is made out of.  Some donated t-shirts can sell for a lot, while others will go on to be rags. 

The t-shit is a global product.  The actors in its production are bound together.  Tying diverse international relationships which otherwise might not have occurred.  Some actors retain their competitive edge for a while due to legal, cultural, and innovative means, while other vie the market for their income.  The industries which have adapted to the changes have survived and rose to meet demands, while those who resisted adaptation to new circumstance lost preeminence.  Rivoli provides a detailed and complex view of the markets in the t-shirt production.  Not glorifying or vilifying markets as the industry has many political reactions and implications.  Globalized markets with humans writing and changing the rules every day. 

Questions to Consider while Reading the Book
•What is the raison d’etre of the book?  For what purpose did the author write the book?
•Why are there different perspectives on the production of a t-shit?  Do they have nefarious reasons to oppose changes? 
•Why does it appear from an economic stance that growing cotton in the U.S. improbable?
•What are the environmental challenges with growing cotton?
•What are the economic challenges with growing cotton?
•Why did the cotton industry need slave labor?  Was slave labor the reason for U.S. cotton dominance? 
•Why were some farmers incentivized to mechanize their cotton production while others retained their usual practices? 
•What are sharecroppers and how did federal farm bills impact their farm practices?
•What are the benefits of using chemicals? What are the consequences?
•Why use genetically modified cotton? 
•How do farmers in other countries view American subsidies?
•Why do farmers use cotton marketing pools?
•Why are t-shirts made in China?  Are they still going to be produced in China?
•What kind of workers are needed in the sewing stage of production?  
•China’s t-shirt production is both debilitating and provides opportunities.  How is this contradiction possible?
•Why do labor practices change?  Why is change resisted? 
•Do companies care about the environment?
•Why the complexity with the trade quotas? 
•Who do the trade quotas help? 
•Why is the t-shirt industry so influential in politics? 
•How does a t-shirt get reused? 

Book Details
Edition ISBN:  9781118950166
Pages to read:   341
Publication:     2014
1st Edition:      2005
Format:            eBook

Ratings out of 5:
Readability    5
Content          5
Overall           5