Pietra Rivoli, associate professor at Georgetown University’s McDonough School of Business, got the idea for this book when a crowd of raucous students invaded the Georgetown campus in 1999 to protest evil corporations, globalization, the International Monetary Fund, and the World Trade Organization. One young woman seized the microphone and shouted “Who made your T-shirt? Was it a child in Vietnam chained to a sewing machine without food or water? Or a young girl from India earning 18 cents per hour and allowed to visit the bathroom only twice per day? Did you know that she lives 12 to a room? That she shares her bed and has only gruel to eat? That she is forced to work 90 hours each week, without overtime pay? . . . All in the name of [corporate] profits.” How did the young woman know all this? Rivoli, a college professor, did not know about these things. But she determined to find out.
Her search began in Florida. She reached into a large bin of T-shirts ($5.99 each; 2 for $10) near the exit of a Walgreen’s drugstore and pulled out a white shirt printed with a flamboyantly colored parrot. “You’re it,” she said; she would trace that particular shirt to its origin.
Rivoli’s tale is delightful and informative. It covers the history of the U.s. cotton industry from cotton farming, to the development of the textile industry, to the globalization of trade in fabrics and clothing. Her conclusion, as she researches the background of her T-shirt,·is that the production and marketing of cotton, cotton textiles, and cotton T-shirts have not been the result of free markets and free trade. Rather they have been supported, assisted, and subsidized from beginning to end by countless government interventions. She follows the trail of cotton production from pre-Civil War southern plantations to Industrial Revolution factories in England, from New England and the South to China and other Asian nations, and finally to secondhand markets in Africa.
At every step along the way, producers enjoyed the assistance of government. Thanks to slavery, the cotton planters of the South had at hand an ample supply of workers who were forced to pick cotton under the lash – they had no alternative. The textile factories in England benefited from the availability of many desperate and docile workers – paupers, children, and farmers who had been forced off the land by the enclosure movement. When Eli Whitney’s cotton gin made it possible to separate the seeds from the fiber much faster and more easily than before, U.S. cotton farmers could expand production, thanks again to the inexpensive labor of slaves. Thus U.S. cotton farmers were able to keep up with the demand of the mechanized British textile factories. Although the British tried to prevent the export of textile machines and technological
know-how, the industry gradually shifted in the 19th century to the United States and New England, where new factories again· found a ready supply of docile, desperate, hardy, uncomplaining workers – young women dissatisfied with life on the farm and willing to work at low wages.
The U.S. government has assisted cotton farmers in many ways. Department of Agriculture scientists helped them improve the quality of their crop. The FDA also developed new insecticides, new fertilizers, and new techniques for extracting oil from cotton seeds, as well as new uses for the oil. Government marketing specialists helped cotton farmers find markets and encouraged the creation of marketing cooperatives. Government irrigation and crop insurance guaranteed farmers that they could survive droughts without going bankrupt. As new machines were invented, cotton farming became a large scale business that no longer required big numbers of
Tenant farmers, who couldn’t afford big machines, dropped out of cotton farming, pushed off the soil by bureaucrats.
manual laborers to weed fields, spray pesticides, pick cotton, and clean cotton seeds. New technology and government red tape helped big operators by discouraging would-be competitors. Small, uneducated sharecroppers or tenant farmers, who couldn’t afford big machines or read well enough to understand the instructions or the government regulations, dropped out of cotton farming, pushed off the soil by bureaucrats. Of course, government also subsidized cotton farmers directly. And now that textile manufacturing has largely shifted overseas, government protects domestic producers with a complicated system of quotas, tariffs, and import duties, depending on where the textiles were manufactured, where the fibers came from, and where the garments were cut, sewn, and assembled.
As Rivoli tells the story, the production, worldwide distribution, and sale of cotton T-shirts has not been a victory for free markets and competition, but rather for government assistance. She concludes that the only truly free market in the world is now in Africa, where secondhand clothing and T- shirts, cast off by well-to-do American consumers, find eager buyers.
It is true that the production and marketing of cotton, cotton textiles, and cotton T-shirts has had the .sup- port of countless government interventions at every stage in the process. But in my view Rivoli doesn’t stress strongly enough the most important factor – that the market, even if not completely free, has operated all along. The market consists of individuals, dealing with one another, buying, sell- ing, transporting and combining raw materials, producing goods, and supplying services. And that market, directed by entrepreneurs, has functioned. Cotton fanners were already growing cotton when government began offering subsidies, set up the FDA, the AAA (Agricultural Adjustment Administration) and other acronymic agencies. Factories were already operating when government enacted labor rules and regulations in an attempt to prevent employers from “exploiting” workers. Chinese factories were already producing textiles and manufacturing cotton T-shirts with inexpensive local workers, placing U.S. factories .at a competitive disadvantage, when the government was asked to introduce tariffs and import quotas to protect U.S. manufacturers.
The entire textile industry owes its development, its pattern of production and trade, to the activities of energetic, innovative, industrious entrepreneurs, savers, and investors who at every stage of production were trying to cope with the situation as it actually existed, trying to satisfy the wants of consumers. They were always looking for ways to produce better, cheaper things that consumers wanted. Once slavery was abolished, no one was forced to work on a farm or in a factory unless she preferred that work to all other opportunities.
Entrepreneurs who are engaged in the production and trade of cotton textiles and manufactured goods do not operate in a completely free market – nothing is perfect in this world of imperfect men. They operate in a hampered market economy, in which producers frequently seek special advantages from government for themselves and others in their industry. Entrepreneurs have been helped at times and hindered at others by government taxes, interventions, subsidies, tariffs, rules, and regulations. Such government interventions inevitably alter the pat-
terns of production and trade. They influence the market. But the interventions – the laws, the government rules and regulations – are political, non- market phenomena. The entrepreneurs, not the interventions, are responsible for production. Entrepreneurs, not government interventionists, have been the prime m.overs in the hampered market economy in which cotton and cotton textile businesses have functioned since they began.
