A Brief Review of “The Divide” -- The economic history that made fast fashion possible.
If you were to look at the tag on your t-shirt to see where it was made, where do you think it would say?
Most clothing manufacturing today takes place in China, Bangladesh, Vietnam, India, Hong Kong, Turkey, and Indonesia. The majority of the clothing we buy today is made in what is commonly referred to as the Global South. Some of these countries rely so heavily on the revenue generated from this industry, that their economic systems would collapse without it. One of these countries is Bangladesh with an estimated 77% of the country’s exports being clothing according to the World Trade Organization.
Bangladesh is the cheapest country in the world in which to manufacture clothing, leading most Western clothing corporations to produce their clothing there. In 2012 the textile industry accounted for 45% of all industrial employment in the country, yet only contributed 5% of the Bangladesh's total national income (Keane, 2008). On average, a typical garment worker might take home less than $40 a month (France-Presse, 2013). But why is the labor so cheap there? Why is labor so cheap in the countries where production happens? Why are most of the countries that produce our clothing in the Global South? Why is there such a big divide between the economies of those who make our clothes versus those who are buying them?
While these questions seem relatively straightforward, the answers require the length and complexity of an encyclopedia. This article does not do justice to the nuance and complexities that are required to truly understand this history, but there are a few key historical factors that can provide a brief explanation for this phenomenon, mostly understood through the contributions of Jason Hickel’s The Divide: Global Inequality from Conquest to Free Markets.
Firstly, one cannot understand the current economic divide between countries in the Global North and countries in the Global South without first addressing colonialism, which monumentally shaped the global economic and political system we see today. Colonialism was morally justified as the extension of civilization built on the idea of racial and cultural superiority of the Western world over the non-Western World. Through many different types of colonization, including settler colonialism and exploitation colonialism, the land, labor, resources, and capital of colonized nations were essentially seized and siphoned out of those countries for the economic benefit of the colonizer. A long line of conquistadors from various European countries massacred indigenous tribes and plundered gold and silver out of the mountains of Latin America, which helped fund their development through trade and industrialization. European merchants established the first slave trade posts in West Africa, where it is estimated that over 15 million African men and women were torn from their homes, families, and cultures, and shipped across the sea to the America’s where they were forced to do grueling work on plantations and in mines. The wealth extracted coercively from the bodies of Africans and indigenous Americans is almost unquantifiable, and essentially funded Europe’s Industrial Revolution, securing their leading role on the world stage. This does not even begin to cover the atrocities of colonialism that took place across the globe, including in almost all countries of Africa, in India, and many South Asian countries. Essentially, the wealth and capital that was present in the Global South countries that would have provided for adequate development was effectively stolen and harnessed for European development. Colonial extraction was the driving force behind capital accumulation, and capital accumulation is what made capitalism possible.
As capitalism became the global economic engine through the twentieth century, the Western countries in the Global North came out on top, which meant they were able to write the rules of the global systems. While formal colonization of countries seemingly ended in the 1960’s, there were only a few years of economic independence before new forms of control were introduced through the use of violent coups, structural adjustment policies, and free trade agreements. During these short years of economic independence, many countries previously starved of resources and capital through colonialism used protectionist policies to build up their own economies, and many saw great success with wages rising and poverty decreasing. However, this meant stricter access to resources and capital and higher taxes on foreign investors (who might as well be synonymous with previous colonizers). Subsequently, violent coups were supported by Western nations across a plethora of countries in the Global South, establishing dictatorial leaders who were amenable to Western economic policies - most of which required forms of economic liberalisation and therefore continued access to resources and capital to foreign interests.
Another form of economic control emerged through structural adjustment programs. In an effort to create new markets for accumulated wealth, Global North countries, specifically the United States, generated loans for developing countries levied through the World Bank. During the 1980’s, the US Federal Reserve hiked up interest rates up to 20% to combat “stagflation,” a phenomenon of wage stagnation and inflation happening simultaneously. As a result, the interest rates on these international loans skyrocketed, putting the borrowers in massive amounts of debt. Some countries even defaulted on their loans, unable to shoulder the exorbitant increase in debt payments. Structural adjustment programs were then developed as a way to enforce payment of debt from the borrowing countries. These programs required all existing cash flows be redirected to debt services and radical economic deregulation - both of which are things that combat general social welfare and economic stabilization. This yet again funneled extreme amounts of wealth back into the banks in the Global North. Retrospectively, it is widely accepted that structural adjustment programs were one of the single greatest causes of poverty in the global South, after colonialism.
In more recent years, the support for free trade policies, enforced by the World Trade Organization, has become more popular with wealthy countries, which seeks to remove any “distortions'' to the trade system, like tariffs, subsidies, and regulations. One insidious effect of free trade policies is the deregulation of capital flight. This allows for foreign investors to liquidate their capital from one country to another almost instantaneously. They might do this to capitalize on deregulation in other countries that make labor or resources cheaper, but what is left in the wake of this is humanitarian catastrophe. In efforts to secure the jobs and revenue created through production, countries compete against one another in a race to the bottom with respect to both wages and regulations. This leaves their people vulnerable to the dangers of capital flight, left without jobs and wages of the fleeing corporations.
Zabed Hasnain Chowdhury/SOPA Images/LightRocket via Getty Images
So how does all this connect back to the clothes that are made in countries like Bangladesh? Firstly, Bangladesh was colonized by European nations dating back to the late 1500s, where colonizers privatized land to benefit from the profits of growing cash crops such as sugar, tobacco, and silk. Since colonization, Bangladesh has also seen a number of violent coups, most notably the assassination of the secular Sheikh Mujibur Rahman in August of 1975, who served as the first President of Bangladesh and is considered as the driving force to Bangladesh’s independence (Lifschultz, 1979). It was later discovered that the United States played an active role in facilitating that coup, further exemplifying the reach that wealthy nations have on the economic and political wellbeing of other nations in efforts to secure their own interests. Bangladesh was also one of the first nations to implement structural adjustment policies from the International Monetary Fund in the 1970s and 1980s, including expanding the role of private enterprise, decreasing subsidies for agricultural inputs, and undertaking massive monetary reforms (Sobhan, 1993). These actions only furthered all of the economic crises that were taking place in the country and failed to provide any source of growth or stability for the region. During this time, Bangladesh began building its garment industry for export. The garment industry now accounts for 77% of all their exports. To compete with international industries, countries like Bangladesh have lowered wages and deregulated working conditions, enticing multinational corporations to set up shop. In today’s society, fast fashion is only possible with this extremely cheap labor, disregarding the harm done to the people of Bangladesh and the environment. Understanding just the beginnings of this complicated, nuanced history can illuminate the inequality of global structures and better arm us to seek a more just and sustainable world.
I want to acknowledge the glossing over of much of history in order to be brief with this article. It is important to recognize the immense human suffering that has taken place all over the world as a result of many of these political and economic policies. There is still immense suffering taking place today, especially in places like Bangladesh where multinational corporations are refusing to pay garment workers wages because of order cancellations due to COVID.
France-Presse, A. (2013, May 13). Bangladesh to Raise Garment Workers' Minimum Wages. Retrieved February 22, 2021, from https://www.industryweek.com/talent/article/21960228/bangladesh-to-raise-garment-workers-minimum-wages#:~:text=A%20typical%20Bangladeshi%20garment%20worker,as%20akin%20to%20slave%20labor.
Hickel, J. (2018). The Divide: A brief guide to global inequality and its solutions. London: Windmill Books.
Keane, J., & Willem te Velde, D. (2008, May 7).
The role of textile and clothing industries in growth and development strategies. Retrieved February 21, 2021, from https://www.odi.org/sites/odi.org.uk/files/odi-assets/publications-opinion-files/3361.pdf
Lifschultz, L., & Bird, K. (1979). Bangladesh: Anatomy of a Coup. Economic and Political Weekly, 14(49), 1999-2014. Retrieved February 22, 2021, from http://www.jstor.org/stable/4368204
Sobhan, R. (1993). Structural Maladjustment: Bangladesh's Experience with Market Reforms. Economic and Political Weekly, 28(19), 925-931. Retrieved February 22, 2021, from http://www.jstor.org/stable/4399699