A discussion of Fashion Victims

The current issue and full text archive of this journal is available at www.emeraldinsight.com/1742-2043.htm

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VIEWPOINT

A discussion of Fashion Victims Various responses to the report by War on Want

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George Cairns University of Essex, Colchester, UK, and

Joanne Roberts Newcastle University Business School, UK Abstract Purpose – The purpose of this paper is to present a selection of responses to the report Fashion Victims, published by War on Want in December 2006. It offers a range of viewpoints presented by members of the Editorial Advisory Board of CPOIB. These are presented in chronological order of submission. There is some cross-reference by contributors to the work of others, but no attempt is made to present a unified argument. Design/methodology/approach – Presents the full contributions of involved participants, without mediation or editorial change. Findings – A number of different perspectives are presented on the central issue that is summarised by the opening heading in War on Want’s report – “How cheap is too cheap?” It is seen that the answer to this question is very much dependent upon the standpoint of the respondent. Originality/value – In presenting this form of commentary, members of the CPOIB Editorial Board seek to stimulate debate about an issue of concern to contemporary society, without resort to the time delay and mediating processes of peer-review normally attached to academic writing. It is hoped that this discussion will provoke further contributions and a widening of the debate. Keywords Corporate social responsibility, Multinational companies, Conditions of employment, Trade unions Paper type Viewpoint

Introduction George Cairns and Joanne Roberts On Friday 8 December 2006, the UK NGO War on Want published a report entitled Fashion Victims (War on Want, 2006). In it, the organisation presented accounts of how three of the top suppliers of mass-market, low cost fashion clothing in the UK; Primark, Asda and Tesco; source garments from factories in Bangladesh in which the principles of decent working conditions and living wages, to which they have each signed up, are regularly flouted. The report provides accounts presented by workers in the factories, along with information and data from a range of sources, to show that audit procedures on wages and conditions are regularly ignored or are ineffectual, and that the true cost critical perspectives on international business Vol. 3 No. 2, 2007 pp. 170-185 q Emerald Group Publishing Limited 1742-2043 DOI 10.1108/17422040710744962

The authors of these viewpoints – Grazia Ietto-Gillies, Margaret Grieco, Phil Graham, Steve Linstead, Brendan McSweeney and Martin Parker – are all members of the Editorial Advisory Board of critical perspectives on international business. Their affiliations can be found in the EAB list at the front of this edition. George Cairns and Joanne Roberts edited the article.

of the competition in the UK fashion retail market is the continuing poverty of the workers in low-cost production zones. In response to the publication of this report, we decided to seek contributions to a debate on the issues raised from members of the Editorial Advisory Board of critical perspectives on international business. Board members come from a range of disciplines at institutions across the world, with a common interest in the journal’s key aim of engaging in critical discussion of the impact of international business activity on broader society and the environment. In seeking to ensure the immediacy and relevance of the response to the report, and to provide the broadest range of responses to it, it was decided that this paper would not be subject to the delaying and mediating processes of peer review. Neither would it be subject to editorial moderation of the content of individual contributions. As such, it offers a series of commentaries on both the report itself and on a broader range of issues that arose during the exchange of ideas. We hope that this discussion will represent the start of a wider debate on issues of global procurement, consumer demand for low-cost products versus worker rights to fair conditions of work and remuneration, and the ethical dimension of contemporary IB practice. We intend to circulate this discussion to War on Want and other NGOs, to seek their responses to it and to contribute to the widening of the debate. We hope that readers will be stimulated to offer further contributions, both through position papers and through submission of related peer-reviewed papers. Invitation to contribute – 6 December 2006 George Cairns and Joanne Roberts Dear All, The attached report has been published today by War on Want (see also www.waronwant. org/), and has already received coverage in the UK media. In seeking to address issues of relevance in contemporary society without the time lag of academic writing, submission, review, revision, etc., we would like to offer a discussion of issues raised by this study in the next edition of CPoIB. To this end, we would invite members of the Editorial Advisory Board to contribute to a forum by writing a short note (300-500 words) on questions raised by it, which might include: What is the relationship, if any, between consumers’ demand for goods at ever-lower real prices, and support for high-profile campaigns like Make Poverty History? Do members of society identify a linkage between their personal purchasing and the living standards and working conditions of others? Should this report cause concern to the companies named, or offer reassurance that there is no identified linkage by the vast majority? How might we, as academics, compare the type of research presented here, and covered in the media, and academic research presented in obscure (to society at large) journals like CPoIB? Will publications such as the report published today have a real impact on consumers, or will they provoke emotional/economic response only in those already committed to action? Finally, to draw upon EAB member Bent Flyvbjerg’s writing: What if anything should we do about it?

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We would ask you to send your contributions no later than Friday, 12 January 2007. In the meantime, we send best wishes for 2007. Regards.

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Some thoughts on the issues raised by the War on Want Report Grazia Ietto-Gillies Preamble The title, research and structure of the report seem very loaded towards the assumption that the consumers in developed countries are responsible for the situation and can rectify it, if only they could be persuaded to behave more responsibly and ethically. This is further complicated by the fact that the consumers of most of the low price products, allegedly responsible for the problems, are themselves very often exploited and low income people in developed countries. However, the issues may be far wider and complex and this paper is an attempt to disentangle some of them. The issues I start from the premise that production under capitalist conditions is based on exploitation of the workers to generate surplus which mostly takes the form of profits. Several questions and issues derive from this premise: (1) Are there levels of acceptable, or of excessive and unacceptable exploitation? (2) Does it matter who the recipient of the profit is: a domestic or a foreign firm’s shareholders? (3) Is there an issue linked to how the profits from exploitation are utilized? Regarding 1. Most people in contemporary developed societies would consider the level of exploitation described in the report far too excessive, indeed appalling. Nonetheless, one occasionally hears voices to the following effects: . the modern advanced countries have gone through processes of similar, or worse, brutal exploitation in the course of their development; . such brutal exploitation is an unfortunate, but necessary, phase in the development process; and . The calls for less exploitative conditions are linked to a desire to diminish the competition that labour in developed countries faces from cheap labour in developing countries. I dismiss these objections on the following ground. The conditions of human and social life are not immutable, but vary historically: what may have been acceptable one hundred years ago is no longer acceptable today. On point (c), the question is how to shift the discourse from competition between workers in developed versus developing countries, to the real one of conflict between levels and utilization of profits versus levels of exploitation, as well as utilization and development of human resources. Regarding 2. Does it matter whether the exploiter of labour is a foreign transnational company (TNC) or a domestic company? The arguments against the TNCs seem to be the following: . foreign companies are less embedded in the local and domestic economies, and thus, their spillover effects are less strong;

the profits are repatriated, rather than reinvested in the economy where they were generated; the TNCs are too powerful for labour to be able to resist; and the TNCs use their power to develop linkages with the domestic political class, which may deflect policies from local concerns and interests.


On the other hand, it is also claimed that TNCs bring advantages to developing countries, particularly in the following:

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they bring investments to capital scarce economies; and they bring much needed innovation methods in the technological, as well as the organizational and managerial fields.

Regarding 3. Many people would take the view that the main issue is not how much exploitation there is, but whether the surpluses from that exploitation are utilized for the benefit of the developing economies. How does one insure that profits are reinvested in the domestic economy and that the investment is in sectors that are basic for long term development? In the last analysis, the issue may be not so much (or not only) about exploitation and its unacceptable levels, but about policies and strategies for development. What is to be done? Is consumer pressure useful for cutting down the level of exploitation? It may help in the short run. However, it is not going to have an impact on the real issue, which is long term development in poor countries. Should TNCs be held responsible for the exploitation of their suppliers in spite of the fact that they are not the legal employers? The answer is “yes”, because the workers’ exploitation in developing countries is a direct result of strategies by TNCs. It is these strategies that lead to fragmentation (Ietto-Gillies, 2002) of the work force across nation states and organizationally (across different legal institutions/firms). However, the strategic thinking (Cowling and Sugden, 1987) behind all this leads to the HQs of TNCs being in the main cities of western countries. Development is the main route towards declining, and eventually ending, excessive exploitation. Development requires strategic planning in developing countries. The countries themselves must take charge of their strategies and policies. Some countries in South America are going in this direction. Among the strategies needed are the following: . Strengthening the power of the working people by helping them to organize and resist excessive exploitation. . We in the west should put pressure for the development of a transnational institutional structure favourable to labour: an ILO (International Labour Office) with teeth to counteract the power of the WTO. . We should hammer down the point that full scale liberalization is not in the interest of most developing countries. . What may be needed is a process of targeted protection for some sectors and gradual liberalization for others.

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Developing countries may need to be able to give some protection to their infant industries, as was indeed done decades or centuries ago by the current developed countries (Chang, 2002). Investment by foreign TNCs may be welcome, provided it is targeted to fit in with a development strategy by domestic governments. This can, among other advantages, be strategically targeted to foster synergies and spillover effects into the domestic economy. Single developing countries may find it very difficult to resist pressure from the west and from internal forces. Co-operation with other developing countries is essential. We are seeing the seeds of this in what is happening in South America and in the emerging collaboration of many developed countries within the WTO.

Fair trade fashion: a catwalk for social science Margaret Grieco There is a history of critical evaluation of the fashion industry and the garment business. The campaigns to end the use of fur, the campaigns to end the amplified sexualisation of women’s dress, and the campaigns to improve the wages of garment workers are all prominent elements of contemporary history. The fur trade begins to recover as the wealth of new markets in Russia and Asia provides new and less ‘conscienticised’ buyers. Focus now falls more firmly on the headscarf and the veil as the unacceptable anomalies of women’s dress, and the poor wages of garment workers are disguised by faulty social audit processes, which promise the high street purchaser a fair trade type deal at a low price. In respect of the latter, the task as laid out by Bent Flyvbjerg is not to be waylaid by this faulty social audit process of the moment, but rather, to better interrogate these processes by investigating, recording and relaying the detail of this default. It becomes the task of the social researcher to make use of the power of relay, and the affordances of the new information communication technology to amplify this power of relay, to raise the community and public consciousness of the default. The lived local experiences of young women in Bangladesh can be transmitted in their detail to a global audience: local ontology can be globalised, given the competences of the technology to provide high levels of detail alongside the maintenance of cohesive narratives. Labels which promise respectful deals for workers to the high street client have to be held to that deal, and within Britain the development of the Fair Trade movement and the establishment of Fair Trade towns and cities suggest that progress can indeed be made on this front. Involving the Fair Trade civic movement more fully as a movement is one path that can be taken, and making use of the new information communication technology to accomplish this makes considerable sense. New technology can permit the direct alerting of Fair Trade organizations to bad practices by those directly affected by those practices. Providing pathways for cell phone communication between workers and Fair Trade civic organizations around breaches of advertised practice is an obvious first step, and one that can be enacted relatively easily: developing whistle blower channels would be a relevant role for a social scientist concerned to ensure Fair Trade fashion. The technical structures are there, but the social scientific vision to bring them together is wanting. Social science still has time to take its place on the cat walk and demonstrate what it can do to improve the world in which we live, rather than simply

record and comment from a safely endorsed, government-funded, social policy distance. Time for a fashion change Heather Ho¨pfl Twenty years ago, when I was working at Lancaster University, I used to take my son to a childminder in the town. She was a very warm, motherly, working class woman who had a houseful of children from all sorts of backgrounds. At the university, we had an informal circle for passing on baby things. My son was given clothes that had been passed on – Mick Dillon passed his kids things to Mike Hughes, Mike Hughes to me, and me to Andy Wood. It worked very well. However, at the childminder’s house the poorest parents took great pride in buying “the best” for their children, were shocked at the suggestion that their children should have to “put up with” second hand clothes, and passed on to me new clothes that they thought not stylish enough for their offspring. Of course, in part, this might have had to do with the conditions of their own upbringing, but having grown up wearing clothes labelled with Cash’s woven name tapes in the name of Rowena Scott, I myself had no such qualms. I must explain that I did not see my fellow mums with the smug conscience of middle class correctness, but rather, as victims of a relentless consumerism. What had persuaded these women that “labels” and social betterment went hand in hand? I felt they were short-changed and yet I never said anything. I admired their expensive purchases, as was expected of me, and made the appropriate noises. This Christmas I have talked to several old friends about the holiday period and they nearly all said the same. Christmas was fine but a bit of a let down; a lot of expense but very little satisfaction. Friends of my own age bemoaned the passing of simpler times. In my own family we do not go in for big presents, so everyone gets several small presents but, even for us, the question “What do you want?” produced responses such as that of my seventeen year old son, “I don’t need anything”. “Can I buy you a new shirt?” “I don’t need one”. “A new coat?” “No”. So, it’s a book, toiletries and some chocolate. Actually we had a great Christmas and did not spend lots of money. Again, it sounds as if I am congratulating myself on something we have achieved, but that is not my intention. I actually tried to persuade my family to come up with suggestions of things they wanted. The reality is that they want for very little. The obsession with excess is a pervasive one. Yet, I feel it is important to cultivate habits which go against the commitment to acquisition. Charity shops are a great place to find oneself in a more satisfying relationship to goods. I was heartened recently when my elder son’s girlfriend taught herself how to knit socks. In many ways these are extremely trivial examples against a very serious subject. But, in one sense, I think this is where we have to start. We need to give more attention to the practical implications of desire and meaning, identity and its representation and the paralysing consequences of excess. Praxis begins with the personal. Time for a change. Unfashionable fashions: the double-bound victims of global corporatism Phil Graham In Australia it is practically impossible to buy consumer goods, especially clothing, that is not made by underpaid hands living in the “third” world. Our emerging neighbours – Indonesia, India, China, Vietnam, to name but a few – provide most of the cheap labour that makes the clothes, furniture, and just about every class of


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consumer goods that fill the shelves and floors of our retail outlets. On the flip side, here in Australia the manufacturing base has been gutted. What was, in 1974, an “emerging industrial giant” is now a largely casualised economy of hospitality workers, retailers, miners, and itinerant farmhands. The “top end of town” consists of financial and property speculators. The paucity of trades workers and the bureaucratic bloat in government has produced qualitatively new middle and working classes. And while Australia lags behind the United States in inequality, according to GINI coefficient comparisons (mostly thanks to a partially intact, though greatly eroded welfare system), it is becoming a more unequal society every day. The point here is that, even if the bulk of Australians wanted to replace cheaply made goods imported from Asia with, say, locally produced goods, there is practically no industrial base from which to do so: no plant, no labour, no knowledge. It may even be the case that we have lost to Australian culture the knowledge and ability to do anything truly productive, other than dig for minerals and overproduce water-hungry crops for export. The new leader of the Australian Labor Party, Kevin Rudd, wants to re-establish Australian manufacturing as a major economic force in the country. But, should we want to rebuild a manufacturing base? Would clothes or anything else made by well paid Australian labour be in any sense more ethical? Would more first world manufacturing help alleviate third-world poverty? It may go some way to reducing labour exploitation in neighbouring countries, but with what results for the workers? There are apparent indications that people in Australia will pay more for ethically produced products (The New International (TNI), 2006). At the “top end of town” there is also fast growth in the field of “ethical investments”: brokers whose specialty is investing only in companies that have no known labour, environmental, or trade practices violations are doing well (TNI, 2006). In terms of assisting our fellow human beings who are trapped in poverty, the admonition by War on Want to boycott brands that engage in unfair trade through labour exploitation poses intense and paradoxical difficulties, as does the suggestion that Australia or any other developed country should re-establish strong manufacturing sectors. The first of these suggestions – a boycott – would mean, at least in the short term, very damaging job losses in the new manufacturing centres, especially damaging since the money economy has come to dominate new areas. That may seem a rather right-wing statement that places my argument directly within the lines spouted by anti-anti-globalisation apologists. But I do not wish to make such an easy statement. Taking such a line (cheap consumer bait-and-all), one is easily tempted to make a comparison between the new manufacturing nations and post-war Japan: consumers scoffed at the “Made in Japan” label up until about 1981, when the USA trade deficit with Japan was telling the world that Japanese producers could make things not only cheaper but better. Not only that, the Japanese had good working conditions, high levels of pay, and a ferocious national pride in all things Japanese, just at the time the Thatcher/Reagan project had started in earnest and the old industrial powers had begun gutting themselves, divesting themselves of problematic labour and costly factories in order to make the most of finance-led shenanigans and exploit that gleaming chalice of ever-cheaper labour from the third world. But, to compare Japan with, say, Vietnam or Cambodia is to ignore decades of feverish industrialism in Japan prior to the Second World War. The economic, cultural, and institutional history required to capitalise on cheap labour costs through national innovation programs and other welfare-state era, nation-building projects simply do not exist in the new sites of exploitation. For centuries previous, most had been sites of colonial exploitation and

conflict. If there is any bright side to it, the money economy has at least given us some way of quantifying how badly these people have been exploited in the past. Things have gone so far in what is almost 30 years of a corporatist globalisation project that, like farmers in southern USA before the American Civil War, global corporations have become almost totally dependent on their slave labour. Worse, because they outsource the management, housing, and welfare of their cheaply bought slaves, they are literally losing, or in many cases have totally lost, the ability to do anything productive themselves. Instead, they largely confine themselves to moving information (typically forms of money) around, and leaving the primitive and earthly work of production and distribution to the cheapest outsourcing services; piling transaction cost upon transaction cost, thereby increasing the need for cheaper and cheaper labour. Nations, in turn, have become dependent on staples supplied by global corporations, and on export income provided by the vast corporate overproduction of primary goods. There is no discourse of self-sufficiency anywhere in global corporatism and that, I think, is one of its main problems. The new corporatism shares with its capitalist predecessor assumptions about the inherent inequality of people and the rightness thereof. But, it is more vicious because it bears no direct responsibility for how its labour is treated, or how its inequalities are played out on a daily basis. Its corporate agents bear no responsibility for the welfare of labour and permit of no transparency in how it coerces people to act as slaves. Many commentators, such as Kevin Bales (1999), have argued that the slaves of Southern USA were better off than the “fashion victims” of global corporatism, because there is no social contract, no duty of care, and no direct relationship between these new slaves and their corporate overlords – there is just an oppressive discourse of competition, cheapness, and profits, implemented by corporations and governments alike. Global corporatism is also more vicious than capital, because consumerism is at its foundation. Even in capitalism, consumerism was never about “keeping up with the Joneses”. Its main message was about how to be better than them, about getting ahead and staying there. The concept “Fashion” is the very core of consumerism and it pervades global corporatism in media discourse, economic discourse, political discourse, and consumerist discourse: all are intellectual (or if you like, semiotic) fashions – “fancy dress” for the mind. Fashion has clearly revealed itself as the antithesis of innovation. It is about the latest, the newest, the cheapest, the best; about running with the herd in order to get ahead of it; about understanding the cultivated nuance of slight differences in appearance; about following the seemingly most successful in order to avoid irrelevance, or extinction, or ridicule, or some other imagined horror. The double bind in all of this means that there is no clear way out for the “fashion victims” identified in the War on Want report. I think the report actually misses the point, at least in terms of providing any viable long-term solutions. Would boycotting the products of cheap labour make life better for anyone? If we consciously decided to pay more for our goods, could we be guaranteed that any of our money would flow to labourers? Would the domestic relocation of manufacturing help our fellow human beings who spend their lives in low-wage jobs? If we were to successfully advocate a “Fordising” of the third world, raising wages while still touting the alleged benefits of cheap goods, would that be of benefit? If the prices in my local retailers are any indication, there is already plenty of “fat” in the current system available for redistribution. But, the corporatist, globalised, “consumerised” political economy permits of no obvious equitable solutions in respect of production or distribution. That is because there is no accountability or responsibility built into the system; because corporations have no explicit or implicit


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social function, other than to increase profit ratios; and because the intellectual and discursive fashions of our contemporary milieu are oriented towards the competition of everyone against everyone. While the system of ideas and practices underpinning global corporatism are in place there can be no relief. Only a complete redefinition of common goods and common needs, propagated and enacted politically at global and local scales, can change the plight of the “fashion victims”. Further thoughts Margaret Grieco Heather’s piece triggers some thinking about low cost goods and social identity and some steps that might be taken. Low cost goods are important to low income people and some thought has to be given to how to meet these needs within the context of a fair trade philosophy. And that brings us to the world of second hand shops, web-based recycling schemes and eBay. The world of second hand shops has been left to charities, pawnbrokers, vintage clothiers, and has remained firmly outside the concern of labour’s political parties – Heather’s paper provides us with an index of the cultural consequences of this void. The politics of labour that shaped the cooperative movement have no direct counterpart in modern retail space: ensuring that low income people have systematic access to affordable goods and services has not been a political priority. Web-based recycling schemes demonstrate the advantage that new technologies can provide in reducing waste, by providing a venue in which matches can be made between those who wish to dispense with an object and those who wish to acquire it. Such schemes have been given push by concerns about the environment, waste and pollution and are a product of green politics in the main. And then, of course, there is eBay, which is an enormous market in the world of re-use. The same consumers who avoid the charity shop second hand goods as stigmatising have rushed in abundance to the world of eBay. eBay fits with an ethic of reuse, but not necessarily of progressive redistribution and, as far as I can ascertain, there is no redistributive ethical discussion within or around eBay as of yet. Through the success of eBay, the charity shop, with its explicit commitment to redistribution, finds a clear rival for the market space of re-used goods (or pre-owned as they say in the States). More thoughts Steve Linstead Further to Margaret’s comment, a knock-on effect of eBay is that some charity chains have now had their stock appraised by valuers, to deter bargain-hunters from purchasing their stock cheaply, only to immediately place it on eBay for much higher prices. The imponderables of an auction, of course, mean that the charity shops do not go for the asking price, but make a realistic discount of around half. But, it does mean the real bargains are disappearing, and the likelihood of finding really cheap designer gear is often greater in a new store, like TKMaxx or Primark, than in a charity shop. Sweatshops: why the neo-liberals are wrong Brendan McSweeney This commentary on the War on Want (2006) report Fashion Victims first identifies the specific type of fashion clothing manufactured in Bangladesh. As discussed below, Bangladesh largely manufactures one type of fashion clothing – albeit globally a crucial one in terms of physical and financial volume. Fashion clothing type has crucial

implications for the appropriate focus of attempts to “clean up fashion” (War on Want, 2006). It then considers two questions. Is outsourcing to “cheap” labour countries undesirable? And is boycotting of stores and manufacturers which source clothing (or other products) from sweatshops advisable? Different fashion segments. Clothing manufacturers in the UK, the USA, Germany and other “developed” countries have increasingly moved production (but not necessarily design) to cheaper manufacturing areas. Average manufacturing costs for garment making in India, Eastern Europe; China, and Turkey are about 20 per cent; 30 per cent; 40 per cent; and 50 per cent respectively of EU (excluding Eastern European country) costs. But not all EU/USA clothing manufacturers have relocated or sub-contracted their production. The extent and location of clothing manufacturing transfer (if any) is largely determined by type of clothing fashion manufactured. The clothing industry can be divided into four segments: high fashion; fast fashion; moderate fashion (fashion basics); and low fashion (continuity) (see Table I). High fashion manufacturers. They seek rapid responsiveness and flexibility from their suppliers. Sourcing outside of EU/USA might damage the exclusive image of these garments – a Valentino outfit made in Bangladesh would be unlikely to obtain the huge mark-up at the point of final sale. And, production in Bangladesh at present cannot meet that segment’s need for rapid interaction at the design stage and, especially, speed of delivery. So, the focus remains on near-sourcing. Within the EU, Italy and France remain the main locations of this type of manufacturing. Moderate fashion manufacturers. Their products have a considerably longer shelf-life than high fashion. Polo-shirts, for instance, change little from year to year. This fashion durability reduces the requirement for supplier responsiveness, and the longer-term planning makes possible manufacturing and sourcing in cheap labour locations such as many Asian countries, Eastern Europe, North Africa, and Mexico. Fast fashion manufacturers. Their products have a short shelf-life, and thus, like high-fashion but unlike moderate fashion, a premium is placed on supplier responsiveness. There is, thus, an emphasis on domestic or nearby production – including in Eastern Europe and North Africa. For example, most of Zara’s items are manufactured in Spain as it replenishes its shops in multiple countries twice per week, designs new collections in four to five weeks, and produces in one week. Continuity manufacturers. Their products have a long shelf-life and price competition is central. The emphasis is on sourcing as cheaply as possible, and responsiveness is not an important issue. Some of these companies source cheap “near-shore” locations. For example, many such items are manufactured for German companies in Turkey. Post-colonial links have been influential. There is, for example, a French bias to Vietnam and a UK focus on India and Bangladesh. These goods are sometimes called “low fashion”. Pockets of this type of product manufacturing in the “developed” countries are largely located with ethnic minority communities – in so-called “ethnic enclaves” (Werbner, 2001) in cities such as Chicago, Style

Price

Example

High fashion Moderate fashion Fast fashion Continuity

High Moderate-high Low-moderate Low

Valentino Lacoste Zara Tesco


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Bradford, London, New York. There are wage and working condition issues, also, in many of those locations but these are not discussed here (Mayhew and Quinlan, 1999). The great majority of clothing manufactured in Bangladesh is of the “continuity” type – principally shirts, trousers, T-shirts, sweaters. Even in Europe (and probably in other “developed” countries – but I have no direct knowledge of this), sweatshop wages and conditions like those in Asian “continuity” manufacturing are used by some retailers, and other buyers or specifiers. This is done to try to reduce wages and conditions in clothing manufacturers and their suppliers in all clothing fashion segments – not just in the continuity segment – through threats to source elsewhere, including obtaining counterfeits. An important feature of the continuity clothing segment is the absence of significant independent consumer brands. In contrast with, say, a Ralph Lauren polo-shirt or a Toast jacket, the crucial “brand” is the retail outlet. Is foreign outsourcing undesirable?. An answer to that question first requires a definition of: undesirable for whom? The recent announcement by Burberry that it is to close a polo shirt (moderate fashion, above) factory in the UK is hugely undesirable for the 300 workers who will lose their jobs, for their families, and for the wider community. Manufacturing is to be relocated to somewhere in Asia or Latin America. The relocation might benefit the workers in the new location. Their working conditions and wages are as yet unknown. We must distinguish between cheap labour; in the sense of inadequate for the workers’ local needs; and cheaper labour – that which is less than that in the former location. The War on Want report does not complain that manufacturing in Bangladesh is cheaper than in the UK, but that it is so cheap that it is inadequate for the workers’ basic needs. Manufacturing cheapness is also achieved by gross neglect of health and safety and many other human rights. What is happening is not just cheap in the sense of lower cost, but cheap in the sense of contemptible treatment of workers. It is not for nothing these clothing factories are called “sweatshops”. Of course, some cocooned commentators; such as Nicholas Kristof (2002), editorialist for the New York Times, and Jagdish Bhagwati (2002) of Columbia University; claim that the world needs more, not fewer, sweatshops. The argument is that these sweatshops offer a way out of crippling rural poverty. A similar claim is made by the so-called “new growth” theorists who assert that any interventions would create market distortions and undermine incentives which would reduce economic growth rates (Perotti, 1992; Persson and Tabellini, 1994, for instance). In the brief space available to me, I point to some flaws with these neo-liberal claims. Even if broadly we accept the logic of argument – that despite the appalling working conditions small wages are better than no wages – would higher wages not be even better? In 1998 labour costs from “developing” countries accounted for only about 4 per cent of the total cost of a Nike shoe (Harrison and Scorse, 2006). The impact on total costs of increasing wages to locally appropriate rates in the clothing, shoe, and other industries would be comparatively small, but the impact on the lives of workers would be enormous. Of course, if it is supposed that the productivity of workers paid an adequate, rather than an inadequate, wage does not improve – a contested view – returns to shareholders might be marginally affected. Those who proselytise in the name of maximization of shareholder value robustly protest against such policies (Copeland et al., 2000). In those utterances, greed and indifference to adverse human consequences are clouded by spurious claims that “a rising tide lifts all boats” or “trickle-down” assertions. The pursuit of maximum shareholder value is said to benefit all “stakeholders”. The War on Want report has helped to tear aside that veil of deceit.

But, isn’t raising wages not the worst of two evils? Will the sweatshop countries not be even worse off because they won’t get the work? For a country as a whole, a policy of attracting manufacturing by allowing them to pay inadequate wages and having unsatisfactory working conditions is a guarantee of continuing national poverty. Here, I briefly set-out two counter-examples to the prophesies of the “let there be more sweatshops” brigade such as Bhagwati and Kristof. The Daily Telegraph once stated that the only thing that distinguished Ireland from the “Third-World” was the weather, but the per capita income in Ireland is now higher than that of the UK. There were and are, of course, differences between Ireland and Bangladesh, but there were similarities, including a predominantly rural population and heavy reliance on “emigrants” remittances’. But, rather than offer Ireland as a cheap labour location with minimal worker rights, high-value added companies were sought and workers rights were not weakened but strengthened, to the extent that the trade union movement plays a key role at national planning levels. Success was achieved, not by following the neo-liberal formula but, by inverting it. Of course the ill-informed attribute Ireland’s success to “EU grants”. Many other countries and regions in Europe have received as much EU income, but they have not prospered to anywhere near the same extent. External income may contribute to economic growth, and thus, I am not arguing for less development grants to Bangladesh, but it does not work as an explanation of Ireland’s economic success. A policy of cheap labour is the road to continuing national poverty not growth. More specifically, what has the record of successful anti-sweatshop campaigns been? Harrison and Scorse (2006) examined the results of an effective campaign against Indonesian sweatshops. As a result, the average daily minimum wage rose considerably, and monitoring and enforcement of wage and working conditions compliance greatly intensified. If Bhagwati et al. are correct the rising wages would have resulted in lower levels of employment. However, whilst wages “soared”, “employment remained steady in textiles and apparel” (Harrison and Scorse, 2006, p. 158). During the period studied by Harrison and Scorse, after the wage increases exports of clothing grew, rather than fell. The biggest threat to the clothing industry in Bangladesh, Indonesia and other smaller Asian countries comes from the removal, in 2008, of the remaining restrictions on import of textiles and clothing from China into the EU and the USA. Fair-minded supporters of free trade recognise that this will not result in free trade. China’s blatant disregard for intellectual property rights and human rights, and other factors such as state-subsidized market share capture, ensures that competition will not take place on a “level playing field” (Li, 2004). Furthermore, in recent years, USA Government policy on clothing and textiles has also focused on giving priority treatment through the Middle East Free Trade Area Initiative to Middle East countries to the detriment of smaller Asian countries. Can a boycott of stores and manufacturers sourcing from sweatshops be an effective tactic? The case-study above, of Indonesia, demonstrates that pressure can be effective in improving wage and working conditions without detriment to employment levels. The Cold War had abated by the 1970s, and its end in the 1980s marked the closure of a distinct era of the relations between labour and capital. Both the ideal and the fear of an alternative to capitalism have gone. In some countries, but only some, the parasitism of vampire – as distinct from productive – capitalism dominates. There, capitalism has increasingly begun to reshape the institutions and organizations which had been built up to “civilize capitalism” (Kristensen, 2005). Increasingly, we see changes in models of


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income distribution and the comparative rights of capital and labour (Traxler et al., 2001). But, as the example of Ireland shows, an economy, its workers, its management and shareholders can all benefit from non-neo-liberal policies. Realistically, there is little if anything we as individuals can do to change the policies of companies committed to maximizing shareholder value, or of those governments, such as that in the UK, which are committed to neo-liberal economic policies. But, we can leverage the goal of maximizing shareholder value by reducing the sales revenues of sweatshop exploiting companies – by boycotting them. Profit is the difference between two numbers: revenue and costs. If companies seek to push down costs below humane levels, committed consumers can push down their revenues and, alternatively, reward companies who do not do so, or cease to do so. To move beyond a general commitment to fair manufacturing and trade we need to know who is actually complying and who is not and, as consumers, to be regularly reminded. Espoused corporate commitments are necessary but not sufficient. We need evidence of real compliance not spin. War on Want’s “name and shame” policy is very welcome and helpful. But, to avoid consumer amnesia we all need regular reminders. As described above, clothing produced in Bangladesh is largely of the continuity type which does not have strong independent brands. The campaign against Nike is, therefore, not a very relevant model for a drive to improve wages and working conditions in clothing manufacturing in Bangladesh. Strongly branded goods, if produced in unacceptable working conditions, are identifiable regardless of where they are sold. But, the only way we can realistically know about and, as consumers, act against inappropriate continuity clothing manufacturing conditions is to have the outlets identified – as the War on Want report has done. These outlets are not merely the locations of continuity clothing sales, but they have the power to change working conditions. Most large retailers have their own product design and input specifying departments and their purchasing power means that they effectively control the entire production chain. The power of UK retailers is particularly strong. The top 10 UK clothing retailers account for 42 per cent of sales. Within the EU, the next highest concentration level is in Germany, where the top 10 control a much lower at 14 per cent. The levels for France, Spain and Italy are 11 per cent, 10 per cent and 5 per cent, respectively (Deutsche Bank, 2002). Furthermore, within the UK, two of the companies named in the War on Want report – Asda and Tesco – have identified clothing as a growth priority. Clothing manufacturing relies on many inputs, including textiles, trimmings, and fasteners (buttons, zips, hook and eye, and so forth). Almost all of the raw materials used in clothing manufacturing in Bangladesh are imported – predominantly from China, India, and Pakistan. As ethical consumers, we should not only demand that Asda et al. improve working conditions within the Bangladeshi manufacturers they effectively control, but also, that they provide honest assurances that the inputs have also been sourced from humane sources. As far as the eye can see Martin Parker In November 2006, a new Primark store opened in Stoke-on-Trent, a poor industrial city in the English North Midlands. It was, at the time, the second largest Primark in the UK; on three floors, with shining escalators and racks of clothes sweeping off into a halogen bright distance. On its first weekend of opening, 30 thousand people ransacked the shop and queues stretched around the walls. The pre-Christmas tills ding-donged

merrily and much money was spent. On a pillar next to the escalator there is a small sign:


Ethical Trading Initiative. Primark is a member of the Ethical Trading Initiative. The company is committed to monitoring and progressively improving the conditions of the people who make products for Primark. Primark Stores Ltd.

Stoke is a city that once thrived on pottery, coal and steel, but is now scratching a living on distribution warehouses and call centres. Its house prices are about 60 per cent of the national average, life spans are shorter, wages are low, social problems are substantial. The schools are underperforming, and there are large areas of dereliction in the urban core. No wonder that people were keen on the idea of buying clothes for £4, and that there were letters to the paper thanking Primark for its bargains. No wonder that the store was deluged with applicants for its short term jobs, most paying near-minimum wage and, according to some local accounts, subjected to draconian management practices. Like much of the UK, the job market in Stoke, even for university graduates, revolves around part-time, or short-term contract work in the retail sector. My fourteen year old daughter, Zoe, was one of the people who went to buy clothes at Primark. When I asked her why she thought the clothes were so cheap, she said that it was because people in “Less Economically Developed Countries” are badly paid and made to work long hours. When I asked why they took those jobs, she said that they were “forced”, which meant that “they have no choice because they cannot get any other kind of work”. When I asked her if she would pay more if the workers were paid more, she said that she would not trust Primark to actually pass the extra money on. She told me that she feels bad about buying these clothes, but that she does not actually think about it that much. “People don’t know about the situation” because they do not see it. They see cheap clothes, and cannot really afford expensive clothes anyway. After reading the War on Want report, she felt guiltier, because “I know more about it now”. Zoe understands that people in Stoke get paid more than people in Bangladesh. She understands that companies like Primark, Asda and Tesco make money for people in rich countries at the expense of people in poor countries, and she does feel guilt about that. In various ways, Adam Smith, Emmanuel Levinas, Carol Gilligan and Zygmunt Bauman have all suggested that sympathy, or care, is a concept that is deeply related to ideas about proximity. Those that are closest to us tug our heart strings most, and those that are further than the eye can see are concepts, rather than people. Of course, there is a complex interplay of different senses of proximity here – physical, national, racial, occupational and so on – but the general point still stands. If I can see pain, I am more likely to resonate with it myself. Zoe understands that garment workers in Bangladesh get paid around £17 a month for working 60-90 hours a week, and she feels guilt. She also understands that this is part of a system of international capitalism that she, a girl in Stoke-on-Trent, can do little about. So, the guilt is abstract, almost impersonal. The afternoon after we talked, she went to Primark with her friend and bought a very nice winter coat for £8. This is not a complaint about absolute ethical insensitivity. I am happy that my daughter is warm in the winter. I care about her more than virtually anyone else in the

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world. I am also happy that some people in Stoke have jobs in a big new store, and that my run down city centre might see an influx of shoppers from elsewhere. And my guilt for Lina, 22 years old, with her ill husband and a poverty wage for Bangladesh? It is abstract guilt, like Zoe’s. Now, we might want to say that Zoe and I should care more, that our eyes should see further; that the 30 thousand people from a poor city with bags overflowing with cheap clothes should, must, all see Lina more clearly. But that is not going to happen, so such sermonising will really only benefit the person giving the sermon, and the warm feeling of heroically combating injustice might keep them insulated against the winter. What will help Lina? The Ethical Trading Initiative will not, because its members include most of the major clothing retailers in the UK already. All they actually have to do is produce an annual report detailing what they have done to audit their supply chain. The major sanction that the ETI has is to suspend companies from using its name in any marketing, but few people seemed to see that little notice by the elevators anyway. Taking it down is unlikely to hurt profits too much. Even if there was a reliable form of fair trade certification for clothing, most people in Stoke would not pay extra anyway, any more than they would pay more for their coffee, tea, chocolate, or bananas. I would, and I think Zoe would, but our abstract guilt will not make that much difference to Lina. In fact, the only thing that will make much difference to Lina is not free trade, or fair trade, but forms of protectionism backed up by international trade unions, and international law. In order to prevent an employer exploiting an employee, we would not normally begin by looking at the purchaser of the product. We start with building legal worker associations and enforceable employment law. Globalisation does not make this strategy impossible; it merely makes it more difficult. Capitalism has not changed that much. It has simply moved its poverty wages and unhealthy working conditions from Stoke to Dhaka. To help Lina, we need laws and unions that make our short sightedness irrelevant. Working for Primark in Stoke involves better pay and working hours than working for Primark (via a sub-contractor) in Bangladesh. That is Lina’s most immediate hope, not expecting “ethics” to do the work for us. Response Margaret Grieco On Martin’s very insightful piece, I think perhaps we can get one step further and think about how international unionism (global unions) can be combined with fair trade consciousness. Labour can ally with social movements around fair trade consciousness as part of global union consciousness. To be continued . . . References Bales, K. (1999), Disposable People: New Slavery in the Global Economy, University of California Press, Berkeley, CA. Bhagwati, J. (2002), Free Trade Today, Princeton University Press, Princeton, NY. Chang, H-J. (2002), Kicking away the Ladder. Development Strategy in Historical Perspective, Anthem Press, London. Copeland, T., Koller, T. and Murrin, J. (2000), Valuation: Measuring and Managing the Value of Companies, 3rd ed., John Wiley & Sons, New York, NY. Cowling, K. and Sugden, R. (1987), Transnational Monopoly Capitalism, Wheatsheaf, Brighton.

Deutsche Bank (2002), UK Clothing Sector, January. Harrison, A. and Scorse, J. (2006), “Improving the conditions of workers? Minimum wage legislation and anti-sweatshop activism”, California Management Review, Vol. 48 No. 2, pp. 144-60. Ietto-Gillies, G. (2002), Transnational Corporations. Fragmentation amidst Integration, Routledge, London. Kristensen, P.H. (2005), “Modelling national business systems and the civilizing process”, in Morgan, G., Whitley, R. and Moen, E. (Eds), Changing Capitalisms? Internationalization, Institutional Change, and Systems of Economic Organization, Oxford University Press, Oxford, pp. 383-414. Kristof, N.D. (2002), “Let them sweat”, New York Times, 25 June. Li, S. (2004), “Why is property right protection lacking in China?”, California Management Review, Vol. 46 No. 3, pp. 100-15. Mayhew, C. and Quinlan, M. (1999), “The effects of outsourcing on occupational health and safety: a comparative study of factory-based workers and outworkers in the Australian clothing industry”, International Journal of Health Services, Vol. 29 No. 1, pp. 83-107. (The) New International (2006), Consumption Facts, available at: www.newint.org/features/2006/ 11/01/facts/ (accessed 11 January 2006). Perotti, R. (1992), “Income distribution, politics, and growth”, American Economic Review, Vol. 82, pp. 311-16. Persson, T. and Tabellini, G. (1994), “Is inequality harmful for growth? Theory and evidence”, American Economic Review, Vol. 84, pp. 600-21. Traxler, F., Blaschke, S. and Kittel, B. (2001), National Labour Relations in Internationalized Markets, Oxford University Press, Oxford. War on Want (2006), Fashion Victims, War on Want, London, available at: www.waronwant.org/ Fashion þ Victims þ 13593.twl (accessed 6 December 2006). Werbner, P. (2001), “Metaphors of spatiality and networks in the plural city: a critique of the ethnic enclave economy debate”, Sociology, Vol. 35, pp. 671-93. Further reading Tannien, H. (1999), “Income, inequality, government expenditure and growth”, Applied Economics, Vol. 31, pp. 1109-17. Corresponding author George Cairns can be contacted at: [email protected]

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