Travels of a T-Shirt on the Global Economy

The Travels of a T-Shirt in the Global Economy
Pietra Rivoli PhD

Overview

Pietra Rivoli is an associate professor at Georgetown University’s McDonough School of Business, specializing in international business, finance, and social issues in business. Dr. Rivoli earned both her bachelors of science and PhD from the University of Florida, where her doctoral work was in Finance and International Economics. Dr. Rivoli’s expertise lies in international finance as well as in ethical and social issues concerning business. Given the main focus of the book I would say that her experience and work in the fields of social issues and ethics make her a fantastic commentator on the globalized world of business and the economies that are succeeding on the new playing field.

A brief overview of the book is best served through a timeline of events that are discussed. “T-Shirt” follows the value chain of American cotton from seed, to string, to shirt, to grease rag, and describes the production and political issues related to each stop and locale in a T-Shirts life and death. Some of the most interesting discussion in the book is not that concerning foreign powers but the historical context that is given in relation to our own country. Throughout history the political lobbies are the most powerful people in our country, especially when they represent billion dollar industries. The detail and depth given to the political arena in this book is astounding, especially when the main topic is not a political history.

“T-Shirt” also takes a very hard look at the topic of globalization and analyzes the game, the players, and the critics with careful scrutiny. Most important Dr. Rivoli takes very few positions throughout and leaves much of the decision making to the reader. In essence along with “The World is Flat” this is an essential read for folks with an opinion on the globalization topic.

Significance

“T-Shirt” begins with a look at Lubbock Texas, “the cottonest city in the world”, a key notch in the American Cotton Belt and how cotton has remained at the forefront of the American economy for so long. In fact in the United States has dominated the cotton industry for over 200 years, since the 1790’s. The invention of Eli Whitney’s cotton gin spurred this country’s economic boom and creativity on the part of cotton farmers and lots of support from our government have kept us in the lead in the cotton fields. We also have had a few other advantages that other countries have never been able to duplicate until recently.

Cotton production in our country boomed as a result of British demand, before this cotton producing nations were all about even. As the British middle class grew exponentially in the late 1700’s so did their appetite for comfortable yet stylish clothing, cotton was the answer. Immediately following the invention of the cotton gin the Americans, because of our capitalist nature, seized the opportunity to clothe the British. Seize the market we did, and we have never looked back.

The more interesting story is how we stayed on top, Dr. Rivoli credits “creativity”, and a network of knowledge unrivaled in world history at the time. United States agriculture has been the beneficiary of higher education for a very long time. Because of our capitalist nature we were always willing to find a new system for production that we could sell to someone else and through land grant universities across the country we had cheap researchers to run trials.

As the timeline progresses we see a much darker reality, our industries have also always survived because of a captive labor force, technology and restrictions to free trade. Regardless of our public statement our country is not the biggest fan of free trade. One would think that overtime and as our country’s economy became less industrial and more service based that cotton production would be outsourced. However, because of powerful political allies, like Strom Thurmond, American cotton has always had a home in America. Through multiple farm bills the American cotton farmer has been able to extract as much from the government as possible. Making the government truly work for its people though is no easy task. Through millions of dollars in lobbyist salary the cotton industry has been able to levy high tariffs on imported cotton, garner government money for research in how to use every part of the cotton plant from seed to lint to leaf, and has even received a hearty subsidy check on top of it all. As Senator Hammond said before the Civil War, “Cotton is King”.

From the protected borders of the United States cotton makes its way to China where it is processed. Here Dr. Rivoli paints a portrait of globalization that seems contrary to typical belief. The relationship between the American cotton farmer and he Chinese clothier has made a lot of money for a lot of people, and though the relationship changes the quantity always grows. Since opening up trade with China the American consumer has desired more and more Chinese T-shirts while the Chinese have desired more and more American cotton.

Since 1980 Chinese apparel exports have increased 10 fold, now at over 30% of the world export market, indeed the global marketplace has been good to the Chinese. More interestingly though is the picture of the Chinese factory worker. Dr. Rivoli who specializes in international business ethics takes a surprising stance on the life of the factory worker. She quotes one worker as saying, and I am paraphrasing, that at lest in the factory you get shade and a chair. It seems that for most factory workers the alternative is not much alternative at all. If they did not work in factories they would live in the countryside where there is little governmental support and even less opportunity. Poverty is rampant and for many a factory job is a step in the right direction.

From China the T-shirt returns to the States where, in its finished form, it is only beginning its life. After a short life on the back of an American the T-shirts often find their way into the most competitive and few truly free markets in the value chain, the used clothing market. Dr. Rivoli introduces us here to Ed Stubin, owner of Trans-America’s Trading Company, which specializes in used apparel. After the Salvation Army bin and the thrift store shelves clothing ends up in a place like Trans-America. Here we meet a nimble and intelligent entrepreneur who manages his supply chain closely and understands the needs of his customers. Mr. Stubin’s chief customers are developing and least developed countries like Tanzania.

In Tanzania the used clothing market is one of the largest industries providing great opportunities for entrepreneurs who enjoy high risk and a challenge. Bales of used clothing finds its way to docks where it is purchased by a retailer and sold at the American equivalent of a flea market, a one-stop shop for townspeople where the consumer is as savvy as any American. The mitumba (used clothing) shopper in Tanzania is quite demanding and they know what they want and what they are willing to pay. Retailers embark in an unregulated free market bidding for goods that could only be likened to an American auction, and then only loosely.

Reaction

It is interesting in a book about economics to find that the only free markets are the ones found at the end of the value chain. I found it extremely intriguing to learn how much of each cotton boll is used and how many people are affected by an industry that is for the most part taken for granted by folks who are not involved in it.

The most astounding part of the book in my opinion though was Part III where Dr. Rivoli provides the reader with a history lesson in American economic policy and how free trade becomes such a protectionist mess. I found the topics covered in “T-Shirt” to be both enlightening and inspiring at times. It was very interesting to see how a hard working spirit put into action in a place with so much opportunity like Tanzania can bring great successes to those who want the work. The historical context provided I found both in depth and accurate and was at no point dry in my opinion. Then again I am kind of a history nerd.

The Travels of a T-Shirt in the Global Economy left me very convinced that in the end globalization is a good thing. Although, sometimes good intentions may become skewed or convoluted through politics the end result is an economy that yields many benefits for many people. I would echo what I said earlier concerning policy and globalization, if you have an interest this is certainly a read for you.