Monday, December 12, 2005

Travels of a T-Shirt

There's a book that deals with some of the themes of my posts over the past couple of days. I haven't read it but I've read discussions of it and have read its introduction. The book is The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade. Here's a link to its Find-in-a-Library page and one to its Amazon page.

Back in October, the author, Pietra Rivoli, Georgetown University, participated in an IMF Book Forum to discuss it. Here's a link to a transcript of the session on the IMF site. You can read about the participants at this IMF page.

Here are some extracts from the forum. At the end, I give a link to the book's introduction and some extracts from it.

MR. LANKES (of IMF): A few words of introduction to the book: I think the organizers made a really splendid choice here. The book is about textiles, which are kind of symbolic of everything that's good and bad about globalization, and are a particularly hot topic this year. ... It contains a whole range of anecdotes and insights and ironies that are very useful. I'll just mention my favorite, which is that the growth of the North Carolina textile mills in the late 1800s when they were established was driven by sales to China! ... More fundamental is an insight that I gained from the book and I found truly remarkable: the role that the textile mills, warts and all, have played and are continuing to play in the emancipation of women in male-dominated rural societies. I found that to be a very interesting aspect of the book.

The book steers mercifully clear of moralizing. It is sort of like circling a Buddhist stone garden. One slips into every conceivable perspective on this issue and there are no villains, only actors in what I call an epic struggle and a fantastically complex, forward-driving, and culture-transforming enterprise.

DR. RIVOLI (the author): I like to think of the book as a biography. It is a biography of a particular cotton T-shirt that I bought five or six years ago in Fort Lauderdale, Florida. I brought it with me today just so you could see what it looks like.

Pietra Rivoli

The premise that motivates the book is that these very simple things in the global economy can have very big stories to tell. So we can take this $6 product and try to see what it can illuminate about the very complex and complicated world of trade and globalization.

You can see the basic chronology of the T-shirt's life on a very nifty map that National Public Radio put together when they did the series on the book. If you look at the map, you can see that, as best as we can tell, the T-shirt was probably born around Lubbock, Texas. West Texas is the biggest producer of cotton in the United States. It's the most important cotton-growing region. And if you took that area around Lubbock all by itself, it would be the eighth-biggest cotton producer in the world if you called that region of Texas a country.

The cotton was shipped—cotton is shipped in bales of about 500 pounds—to Shanghai, China. China is America's biggest customer, biggest importer of raw cotton. And there the cotton was spun into yarn, and the yarn was knit into cloth, and the T-shirt was cut into pieces and sewn back together and so forth.
The T-shirt then came back into the United States as an import as part of the wave of imports of textiles and clothing that's coming from China into the United States, and that's where I bought it. But more than the geographical journey back from China to the United States, what I'm looking at in the book is the trade policy and the structures that we have or at least had in place that govern how clothing gets from one place to another. So, really, the T-shirt is traveling through a web of trade policy, and that's one of the middle sections of the book.

Now, of course I'm going to keep this particular T-shirt, but once most people are finished with their T-shirts they throw them away. One of the things that a lot of people find the most interesting about the book is the story of what happens next. Tanzania on the east coast of Africa lists used clothing as its single largest import from the United States. So it's the number one export from the U.S. to Tanzania. So, as I tried to tell this biography, I even tried to figure out what happens to the T-shirt in the afterlife, and it's kind of an interesting story. About half of the clothing that we throw away in the United States ends up being exported. A small amount stays here and gets sold, you know, in your thrift shops or what have you. About a quarter of it is turned into wiping rags and sold to factories. Another quarter is shredded. And maybe you're sitting on it right now because one of the biggest uses for shredded used clothing is to pad furniture.

So I came from the beginning of the life of the T-shirt, its birth in the Texas cotton field, to the very end with its afterlife, whether it's as used clothing in Tanzania or stuffing in the bottom of our chairs. That's the chronology, or the biography's highlights I guess you'd say.

Another thing that made this project very interesting is that almost every chapter in this T-shirt's life is right now a hotbed of some kind of controversy. It was very interesting to me to think about how such a simple thing could be embroiled in so many current public policy battles.

For example, the number one contentious issue right now probably in the Doha Round of trade negotiations is agricultural subsidies, and the poster child for agricultural subsidies has been America's subsidies to its cotton growers. If you look at what derailed the trade talks in Cancun, it was American subsidies paid to cotton farmers. So since I started work on the book and continuing so this moment, these cotton subsidies have been at the forefront of what's happening in international trade.

Then if we think about what's happened on China on the public policy front in the past year, you know, there's just no end to the list of controversies. If you talk to U.S. Congress or you talk to U.S. manufacturers, you can take your pick. Do you want to complain about their subsidies? Do you want to complain about the state-owned enterprises? Do you want to complain about nonperforming loans? Do you want to complain about the undervalued currency? Or if you're an activist, do you want to complain about the working conditions, or do you want to complain about the lack of a free press? I mean China is just this big hotbed of controversies coming from all angles, and that was something that I just kind of had to keep sorting out as I did this research.

The T-shirt's journey back to the United States is also fraught with controversy. As probably all of you know, most of the remaining import quotas on clothing were lifted on January 1 after 40 years of limiting imports of clothing into the United States from most important developing countries. Once those quotas were eliminated, we started to see, you know, various kinds of gushes of goods from China. If you compare the first quarter of 2005 to the first quarter of 2004, U.S. imports from China of cotton knit shirts—in other words, T-shirts, although they might also include something like a polo shirt—are up about 1,200 percent. That's what we mean by a gush. The quotas were lifted and they sort of just gushed in. And that, of course, has created its own controversy, and if I'm not mistaken, the U.S. chief textile negotiator is in Beijing right now, or else he's on his way back or something. They are trying to negotiate a solution to this so-called China problem. And if you think about it, it's kind of amazing that there is somebody in the United States whose job is chief textile negotiator. I mean, we don't have a chief automobile negotiator or a chief airplane negotiator, but we have a chief textile negotiator whose job it is to try to sort out these trade frictions that have been the result of decades and decades of all kinds of unintended consequences of trade policy.

So it seems like everywhere this T-shirt goes, it's in the middle of one debate or another. The fact that the T-shirt was embroiled in such controversy gave the book a lot of immediacy and made it a very exciting project. But it also relates to one of the lessons I got as I wrote and finished this book, because I will say that the story of the T-shirt's life didn't really turn out the way I thought it was going to turn out.

If you look at cotton subsidies, for example, this is an example of a phenomenon where a group with political power is using structures to protect themselves from markets. This is not about the markets pummeling the poor. The same thing is true in China when we look at the women who stitch clothing together. The set of rules in place that govern household registration in China essentially keep these women from participating in the market as full citizens. And, of course, when we look at the trade policy of the more powerful players in the world economy—the U.S. and Europe—and the way they have been able to protect themselves from imports from producers in poorer countries, you once again have an example of keeping other people from being able to play. I found this as a theme over and over again, except in the very last place of the T-shirt's journey: Things were different in Tanzania.

So this T-shirt then, in the context of the globalization debate, doesn't put forth the markets as either the savior of humanity or the villain. Instead, what the T-shirt has to say to all of us is that what needs examining are the rules by which we all play.

Thank you very much.


QUESTIONER: Fascinating story, and certainly I'll be looking forward to reading it. You don't seem to have mentioned enormous role of companies that are bulk buyers of products and also companies which are involved in the grading and marketing of T-shirts and so on.

DR. RIVOLI: Well, this is what you hear quite a bit about Wal-Mart. I keep hearing the statistic that if Wal-Mart were a country, it would be our eighth or ninth—or something—biggest exporter to the U.S. I did look at this to some extent in the book. I looked at the apparel supply chain. Generally what you have with apparel is you have a system of subcontracting. You have virtually no American apparel firms that produce their own apparel anymore. All of it is subcontracted out, and most of it is imported.

QUESTIONER: I'm Stephen Hendrickson from the Wilson Center. There was an article today in the Financial Times about the increased production of computer components in China and subsequent increase in research and development there as well.

DR. RIVOLI: You know, I for one would not want to say to China or to any other country that your role in the global economy is to produce cheap T-shirts and mine is to produce research. The whole point of stepping on this industrialization ladder to begin with is that you want to end up near the top of the ladder. I don't think that there's a limited amount of research to be done, and I don't think the size of the pie is fixed. The notion that there's a fixed pie that China is getting a bigger piece of is an erroneous one.

What's interesting with China right now in textiles and apparel is you have some very advanced research taking place. They used to just sell the cheap T-shirts, but now they're doing the research on textile processes. That makes sense. That's where the research should be going on. You know, we don't have the mills in South Carolina. So it doesn't make sense for Clemson University to be doing that research anymore. It makes sense for it to be happening in Shanghai. So I view it as an example of the process working rather than not working.

MR. LANKES: Okay. Well, thank you very much, Pietra and Brink.



Excerpt: The Travels of a T-Shirt in the Global Economy

Preface: How Student Protests Sent a Business Professor Around the World


[About WTO protestors:] In 1999, I watched a young woman seize the microphone. "Who made your t-shirt?" she asked the crowd. "Was it a child in Vietnam, chained to a sewing machine without food or water? Or a young girl from India earning 18 cents per hour and allowed to visit the bathroom only twice per day? Did you know that she lives 12 to a room? That she shares her bed and has only gruel to eat? That she is forced to work 90 hours each week, without overtime? Did you know that she has no right to speak out, no right to unionize? That she lives not only in poverty, but also in filth and sickness, all in the name of Nike's profits?"

I did not know all this. And I wondered about the young woman at the microphone. How did she know?

During the next several years, I traveled the world to investigate. I not only found out who made my t-shirt, but I also followed its life over thousands of miles and across three continents. This book is the story of the people, politics, and markets that created my cotton t-shirt. It is a story about globalization.

Trade and globalization debates have long been polarized on the virtues versus evils of global markets.. Economists in general argue that international market competition creates a tide of wealth that (at least eventually) will lift all boats, while critics worry about the effects of unrelenting market forces, especially upon workers. Free trade in apparel, in particular, critics worry, leads only to a downward spiral of wages and working conditions that ends somewhere in the depths of a Charles Dickens novel.

My t-shirt's life suggests, however, that the importance of markets might be overstated by both globalizers and critics. While my t-shirt's life story is certainly influenced by competitive economic markets, the key events in the t-shirt's life are less about competitive markets than they are about politics, history, and creative maneuvers to avoid markets. Even those who laud the effects of highly competitive markets are loathe to experience them personally, so the winners at various stages of my t-shirt's life are adept not so much at competing in markets but in avoiding them. The effects of these avoidance maneuvers can have more damaging effects on the poor and powerless than market competition itself. In short, my t-shirt's story has turned out to be less about markets than I would have predicted, and more about the historical and political webs of intrigue in which the markets are embedded. In peeling the onion of my t-shirt's life -- especially as it relates to current debates--I kept being led back to history and politics.

Many once-poor countries (e.g., Taiwan or Japan) have become rich due to globalization, and many still poor countries (e.g., China or India) are nowhere near as poor as they once were. The poorest countries in the world, however, largely in Africa, have yet to benefit from globalization in any sustained way, and even in rapidly growing countries such as China many are left behind. My t-shirt's life is a story of the wealth-enhancing possibilities of globalization in some settings, but a "can't win" trap in others, a trap where power imbalances and poorly functioning politics and markets seem to doom the economic future.

During the past five years, the students and their compatriots around the globe have made remarkable progress in changing the rules in the race to the bottom, and in changing the way some of the world's largest companies do business. Thanks to the backlash, the life story of a t-shirt made today is a different and better story than that of a t-shirt made just a few years ago. I thought, when I started this book, that I would in the end have a story that would help the students to see things my way, to understand the virtues of markets in improving the lives of the poor. I do have such a story, I hope, but it is not the whole story. To the students, I also say, I (now) see where you're coming from.

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