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     May 7, 2005
Globalization ideologues have no clothes
The Travels of a T-shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade by Pietra Rivoli

Reviewed by Gary LaMoshi

Like most economists, Georgetown University business professor Pietra Rivoli believes in free trade. But anti-globalization demonstrators on campus and around the world led her to re-examine her view.

To move past strident rhetoric on both flanks, Rivoli follows the path of a US$5.99 souvenir T-shirt scooped from a bin at a Walgreen's drugstore in Fort Lauderdale, Florida. Rivoli combines the threads of the T-shirt's journey through the global supply chain to weave a rich tapestry of globalization past and present that focuses on real people to rip fabrications on all sides of the debate. Beyond that, The Travels of a T-shirt in the Global Economy is a great read.

The humble T-shirt is a particularly good choice for Rivoli's narrative. The story is timely, because this year marks the end of US textile import quotas under the 40-year-old Multifiber Agreement. It's timeless, because cotton goods have been at the center of global trade debates since the 17th century.

England's wool industry won protection against cotton-cloth imports in 1701. That policy spurred growth of domestic cotton milling and, through it, the industrial revolution, creating demand beyond the means of cotton farmers in China and India. This pattern repeats throughout trade history: bottlenecks lead to innovations, but only where social and political systems embrace change; trade restraints foster unintended consequences; and textile production is less a "race to the bottom" than the first rung on a climb up the industrialization ladder.

The parrot design on Rivoli's T-shirt was printed in Florida, but the shirt carries a "made in China" label - Rivoli later explains why that's not as common as you think - and she tracks down the manufacturer. She meets Shanghai Knitwear manager Patrick Xu during one of his sales trips to the United States, and he promises to show Rivoli the entire manufacturing process in China, from spinning the thread to sewing the sleeves. But, Rivoli asks, what about the farm where the cotton is grown? Xu replies that the cotton probably was raised far from Shanghai, in "Teksa". "Where's that?" Rivoli demands. Xu points on Rivoli's office globe to Texas.

Since the 19th century, the US south has dominated global cotton cultivation, and since the 1930s, west Texas has been the leading producer. A confluence of innovation, entrepreneurship, and cooperation has transformed the barren landscape around Lubbock into the Silicon Valley of cotton farming. But in Texas, as in China and other stops along the T-shirt's journey, it's not Adam Smith's invisible hand that determine winners in global trade, but the ability of farmers, manufacturers and distributors to foil market mechanisms.

In 1793, Eli Whitney's cotton gin solved the problem of removing seeds from sticky cotton fiber that dominate the US crop, but there's a larger problem with cotton farming: labor. Delicate cotton puffs must be harvested at specific but unpredictable times, and every grower in an area needs pickers at the same time. To break this bottleneck, farmers needed a guaranteed supply of labor. From slavery to sharecropping to Mexican guest workers, public policy provided farm labor on demand - until government-aided technological advances allowed farmers such as Nelson Reinsch of Smyer, Texas, to tend his 1,000 acres (about 400 hectares) virtually alone. Only in recent decades have direct subsidies and import restrictions - key poor-country complaints in current global trade forums - supplanted more subtle forms of government support to cotton farmers.

Chinese textile manufacturers' current competitive advantage, cheap labor, stems in part from the hukou system, a communist innovation that ties farm families to their villages. Virtually every urban migrant worker is in violation of hukou rules, rendering them compliant and tolerant of sweatshop conditions. But legal restrictions and shop-floor misery didn't stop Jiang Lan from coming to Shanghai any more than they kept earlier generations from swarming into Manchester, England, and New Hampshire.

Rivoli points out that for workers, overwhelmingly women from rural areas, the opportunity to be exploited in a factory beats their future on a farm. Compared with picking cotton or an arranged marriage at age 14, a factory job is a great leap forward economically and socially. Beyond sending money home to the family, working in the city, even living in a company dormitory or 19th-century rooming house with restrictions to protect feminine morals, grants independence and opportunities unimagined in Carolina's foothills or China's dust bowl.

Westerners may be appalled at Shanghai No 36 Mill's 48-hour workweek amid deafening noise, stifling heat and dust for $4 a day, but decades of activism have significantly improved factory conditions. Rivoli reviews reports of maimings and deaths in English mills in 1843, then observes that today's Shanghai Brightness Factory employees retain all their limbs, have never heard of brown-lung disease, and boast a longer life expectancy than New Yorkers, as well as money in their pockets and optimism about their futures.

Leaving the Chinese mill, Rivoli's T-shirt confronts US import restrictions designed to protect dwindling domestic textile manufacturers. Volumes of arcane rules have proved most effective at producing employment for lobbyists, rather than saving textile jobs in the US south. Rivoli also notes that China has lost far more textile jobs than the US over the past decade as it gains new technologies to boost efficiency and, like the US, Japan and South Korea, progresses up the value chain to computers and cars.

Lucky T-shirts that vault US entry barriers often have another journey ahead. American consumers cast off more than 250,000 tons of clothing a year, much of which finds it way from Salvation Army bins into the global used-clothing market. For Rivoli the economist, this voyage is the most fascinating because, at long last, the T-shirt meets a global free market.

At Trans-Americas Trading Co on the waterfront of Brooklyn, New York, 80 employees pick through affluent Americans' castoffs. It's a "snowflake" business: every item is unique. Workers sort clothing into 400 categories, separating pieces suitable only for industrial rags or upholstery stuffing from jeans or Led Zeppelin T-shirts that can fetch hundreds or even thousands of dollars at vintage-clothing stores in Tribeca or Tokyo. (Vintage clothing is like pornography: hard to define, but experts know it when they see it.) Most of Trans-Americas' harvest is exported to the poorest countries on Earth. In Tanzania, a recovering East African socialist basket case, mitumba (Swahili for "used clothing") is the top US import.

Rivoli rejects the value judgments on both sides of the Atlantic that label the trade in used clothing as "shadowy" and accuse "middlemen" of exacting "huge profits" on items that sell for pennies. To the arguments that donated clothing should simply be given to the world's poor, Rivoli asks, how? Market forces make it more likely consumers will get mitumba they want at prices they'll pay. The alternative is an underground business in which bureaucrats and border guards pocket illegal profits.

As for the argument that used clothing stifles fledgling textile industries, Rivoli notes that while Tanzania banned used (and most other) clothing imports until economic reforms in 1985, factories ran at 40% capacity. Mitumba isn't holding Tanzania back from economic development, according to Rivoli, it's one of the few positive signs of it. Geofrey Mionge and fellow mitumba dealers lining Morogoro Road on the outskirts of Dar es Salaam not only practice free-market disciplines, they provide more jobs for sorters, washers, tailors and hawkers than most textile mills.

Critics charge that wearing the West's castoffs is humiliating, but Tanzanians know the real humiliation is having nothing to wear. In a straightforward, entertaining fashion, Rivoli demonstrates that ideologues on the both sides of the globalization debate ignore the realities of world trade. These hypocrites, like Tanzanians under the mitumba ban, have no clothes.

The Travels of a T-shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade, by Pietra Rivoli, John Wiley & Sons, 2005, Hoboken, New Jersey. ISBN: 0-471-64849-3. Price: US$29.95, 254 pages.

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