It is aptly said, “Fashion is a way to say who you are without having to speak.” But when it comes to the industry blooming under the name of fashion, it is loud enough to be a glorious global affair worth $2.7 trillion, with a lot of hidden economic undertones.

The ripple effects fabricated by technology, globalization, creative business models, demographics and social media have resulted in almost double the fashion production process in the past 10 years, greater credits to the flourishing middle-class shoppers across the globe, thereby increasing the per capita sales and claiming a huge segment of the economy. The pace of change, the occurrence of short-lived replaceable trends and the evident mutation of styles thus highlight the essential economic undercurrents involved.

The foremost, yet the least attended question remains – is favouritism in fashion just about the innovation with no hidden economics involved? Are the mediocre average brands refused by a certain class because they don’t fit in their version of social repute and esteem?
Simply put, fashion is an art. Art of creating things. It is rooted in the French dialect as facon meaning ‘various ways’. It is often regarded as synonymous to innovation and change, yet it stands out distinctively from all. Considering the preconceived dynamics between fashion and economics, fashion and rationality would appear in the tough rivalry. This is because rationality is the norms of economic analysis and fashion apparels are translated as mere physical requirements.

Fashion has been prone to altering perspectives when it comes to consumerism, industrialization and advancement. Fashion, in the sense of clothing, is best explained with class dynamics. Historically supported, different kinds of clothing were subject to different classes that existed. The nature of clothing, or simply the level of luxurious clothing in terms of money, was a representative of status and class, and that was a priority. Fashion spoke the loudest in rooms of prestige symbolizing the wearer’s standing. Thus, fashion here is the most appropriate exploration and perhaps validation of Veblen’s concept of conspicuous consumption – lavish consumption of luxuries to upgrade one’s stature. Therefore, in line with economics, fashion is a mere expression of wealth.

If we review the past, gone are the days when someone’s favourite piece of clothing would ever be a classic and not a passing trend. Gone are the days when clothes survived years. Not only has the demand for fashion outcomes increased, but so has the mass’ affordability. Hence, apparel is seldom worn before it’s thrown.
This is the emerging outlook on apparel consumption by the masses. This started when fashion became a massive global industry. The industrial revolution birthed one of the oldest establishments – the garment industry. Interestingly, it appears to be one of the first segments to be industrialised and step up on global platforms beginning right from the exchange of raw materials. Fashion, as an industry is also a livelihood of over 3.4 billion people! With technological advancements and viable mechanization, comes a by-product called fast fashion, which is essentially the answer to never having enough clothes. Fast fashion, as the name suggests, is the shortest fashion cycle at its fastest pace from concept to cloth to stores to rag. The speed allows variety and the mass production entails low costs for the consumer. But does anything that impacts economies ever come at a low price? What initially appeared to be a rocket for economic catalysts, actually spared a horror and disturbed the economic system with giant piles of discarded clothing, quick and ruthless extraction of resources and unbeatable wastages. 

Then came an important wave of systematic disinvestment of the 1980s.  Often considered a ‘capital flight’ from the Americas and the newly industrialised though very few Asian nations, it changed the game for lands of East Asia where workers were already accustomed to toil for lesser wages. With adaptations and acceptance of mass liberalisation, relations with the capitalist West bloomed. What we now widely acknowledged as a common industrial practise of outsourcing, is an outcome of the then process of relocation of production also termed as ‘Global Reconstructing’. This thus led to the emergence of a new global system of division of labour powered by the ruthless benefit of cheap labour, put to its most optimal use. The trend of capital flight to low wage countries in the world-system periphery and semi-periphery stayed consistent even with the de-industrialization of strategic nations. Worthy to note, an industry such as fashion is a major driver of classic economic developments in the world.

However, the neo-liberal model thus presented was still vulnerable to questions of sustainability and rights of labour working in the industry. The wage differentials created labour shortages in a garment factory, further sparked by the relative nature of work, resulting in resistance. Even today, the parent companies operating from the West reap huge profits, significantly because their annual reports lack account for out-sourcing in the organizational limits. The calculations however do include quantitative factors like duties, excise, and taxation and qualitative measures like political stability and approach towards business and investor programmes. Thus, the micro cloth consumption pattern traces back to cheap clothing produced by an exploited labourer.

Not to forget, the supply chains of the fashion industry exclusively branch into every country in the world and are considered one of the longest and most complicated ones. The fashion industry alone accounts for 3% of global GDP and the global demand is expected to grow by 5% annually. But, at what cost?



Conspicuous consumption

Fast fashion

Read other articles in this series:

  1. The Economics of Food Technology
  2. The coffee economics

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