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

Erasmus Student

Olivier Manzardo

Seminar:

Die Handelspolitik

der Vereinigten Staaten

Dozent: Tobias Leeg

The Travels of a T-Shirt in the Global Economy: an Economist examines the Markets, the Power, and Politics of World Trade

(Wiley 2015 Second Edition)

Pietra Rivoli, Georgetown University’s McDonough School of Business

Synopsis and Analysis

The book is about textiles, which are kind of symbolic of everything that's good and bad about globalization and contains a whole range of anecdotes, insights and ironies that are very useful to understand the debate between proponents and opponents of free trade, of protectionism and the relationship between wealthy and poor nations.

In the US and also in Europe in the last 20 years, the apparel industry has been at the center of the globalization debate because people are very worried about the very poor labor conditions in the so- called sweatshops where apparel is made especially in Asia.

In The Travels of a T-Shirt in the Global Economy Pietra Rivoli, an Economist, analyzes the complexities of global economy through the lens of cotton production wrapped in the journey of a T-shirt. The book is written in an interesting and effective manner to reach its goal of educating about the global economy.

The book is a biography of a particular cotton T-shirt that the author bought a few years before in Fort Lauderdale, Florida for 6 $. The story begins with Rivoli watching a group of students gathering at the centerpiece of Georgetown University to demonstrate against the International Monetary Fund, the World Trade Organization and the global working conditions as a result of free trade. The crowd, the author noticed, had “a moral certainty, a unity of purpose” that permitted it to distinguish black from white and good from evil “with perfect clarity.” A young woman confronted the crowd with a set of questions: “Who made your T-shirt? Was it a child in Vietnam? Or a young girl from India earning 18 cents per hour? Did you know that she lives 12 to a room? That she shares her bed and has only gruel to eat?” Taking these questions very seriously, Rivoli starts a journey to discover not just who manufactures T-shirts but also who is involved in each step of the supply chain.

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 one takes that area around Lubbock all by itself, it would be the eighth-biggest cotton producer in the world. The history of the American cotton industry is a history of various efforts to shield cotton growers from markets, and in particular, to shield them from competitive labor markets through slavery, sharecropping, through company towns, through the bracero program of guest workers. And also, of

course, shielding them from supply and demand through agricultural subsidies that account for a

significant fraction of cotton growers' current revenues. Textile and apparel producers likewise have been seeking protection from market forces, in particular foreign competition, since before the Industrial Revolution. Even today, Texas owes much of its success to factors outside the “free market,” like universities and other institutions that have helped to integrate ginning, packaging and shipping, and programs to familiarize farmers with technology. Most of all, American farmers benefit from government subsidies, whose effect is to put out of the picture lower-cost cotton from poor nations of West Africa. If one thinks that these subsidies amount to more than the US entire development aid budget for the continent of Africa one can argue the Chinese are not alone in departing from free and unrestricted competition.

Once produced 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. So that's where the cotton was transformed, essentially from plant into clothing.

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 the author bought it. But more than the geographical journey back from China to the United States, what the author is looking at in the book is the trade policy and the structures that the US  have 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 (tariffs, quotas, barriers to the import to protect the American workforce in the apparel industry, trade agreements), and that's one of the middle sections of the book in which the author explains how the US domestic market of textile finished goods has been one of the most protected market in the world. “The T-shirt journey from China to the United States has been engineered by a web of highly political constraints on markets, in which both rich- and poor-country producers seek political protection from markets, and especially from the China threat.”