How we are trying to buy an identity in capitalist economies
Trade deals are not really about trade
This is a realisation that has made me rethink the role that we as consumers play in the game of international trade. They are a tool with which developed countries create a position of superiority on the global economic stage. This position is disguised as global efficiency.
Neoclassical economists suggest that valuable trade deals maximise utility and minimise opportunity cost. This is the principle of comparative advantage. Hence, global efficiency is synonymous with maximalism in terms of quantity of output. Put simply, value is equal to more.
Yanis Varoufakis said that ‘we produce value collectively, but then smart privateers tax it and become the oligarchs’. Only a few players reap the rewards despite their reliance on us, the consumers, who make their product useful. However, Varoufakis failed to mention how the intricacies of trade deals, backed by monopoly capitalism, influence the behaviour of everyday Australians.
Capitalism is no longer about fulfilling needs or improving competition; it is about conditioning society to view material things as synonymous with success, wellbeing, and identity. Capitalists need us to uphold their idea of global efficiency; they want us to need and desire their products.
This level of dependence is a two-way street, with modern international trade trapping developing countries into export-led growth. They are lost in a specialised system of low value-added manufacturing and importing high value-added goods such as oil and fossil fuels for electricity.
Maximalism is a part of our identity, which makes sense considering our opinions are entrenched in the narratives that surround us since birth. We have formed competitive markets within the way that we compete individually for value.
Value has many meanings, but a common definition is the flow of wealth, a cynical but simple explanation. This definition is not contemporary but serves me well in illustrating the following point and how it links to trade deals. I believe that we attempt to reflect our value to the world and develop a sense of personal value by creating the illusion of wealth relative to our neighbours’.
A simple example of this is fashion. Clothing mirrors how we want to be perceived and is a tool with which we explore our own individuality by experimenting with different personas. This sounds quite pure, but it forms the basis of an environmentally and ethically exploitative industry that we import conveniently to our doorstep.
Fast fashion is rooted in neoclassical trade theory with retailers in developed countries producing apparel in developing countries where it is less costly to do so. Economists argue that developing countries have a comparative advantage in their abundance of low wage labour. Developed economies have an abundance of capital-intensive resources such as technology and will therefore exchange higher value-added goods with apparel produced in low wage countries to maximise economic efficiency.
Fast fashion has exacerbated economic and operational demands for suppliers and heightened competition amongst manufacturers to obtain orders. Firms absorb these pressures by cutting costs and lowering wages.
Concurrently, we are accustomed to cheap, trendy clothing and have an insatiable appetite for fashionable goods which abuses a system that was established to maximise efficiency but now exploits changing trade regimes. This makes sense considering fashion trends are a reflection of the economic climate.
Take the rise and fall of clothing brand Juicy Couture as an example. The brand opened in 1995 while the economy was recovering from the 1990-91 recession. Consumers were hungry for luxury which reflected their purchasing behaviour.
Juicy Couture’s iconic 2000s velour tracksuits were heavily branded and with a $155 price point bridged the gap between affordability and luxury perfectly. Fast forward to the 2008 Global Financial Crisis (GFC), Juicy Couture’s garish branding no longer resonated with customers as the recession inspired a movement toward minimalism.
Capitalism is not just a master manipulator; we as consumers are chameleons, favouring styles of clothing that reflect our surrounding environment. The economy is driven by growth and maximising resources by cutting corners and making selfish trade deals and so are we. We reflect personal growth in our changing wardrobe and maximise the value of our dollar by investing in fast fashion, favouring what the clothing can represent instead of the garment itself.
The solution requires significant structural change, with the goal of enabling economic and monetary sovereignty in developing countries. In her 2017 TEDx presentation, Haley Edwards, editor at Time magazine suggested that trade is about setting the standards that we would like to live by.
The way forward involves moving away from temporary solutions of debt repayment such as the privatisation of state-owned enterprises, debt restructuring and labour market flexibility. Instead, it focuses on creating a standard of global prosperity through food and energy sovereignty and transitioning labour away from fast fashion toward value-added driven industrial policies. It encompasses taking what developing countries already have and making it more efficient.
A movement toward eco-sustainability would influence how the everyday consumer understands value. By reducing the amount of fashion that is outsourced, the price of clothing would increase, causing a decrease in demand. The global north would produce clothing at home and face the environmental/ethical impacts of fast fashion or implement a sustainable production framework.
Trade deals will not be considered valuable if it encourages maximalism exclusively, they must require eco-maximalism which considers people and the planet instead of quantity and price.
If we continue to be trade tyrants, the economic possibilities of the future are quite bleak. Visualise The Hunger Games with the Global North as The Capital and the Global South as the impoverished districts.
Or consider the film The Lorax. The Global North is the Once-ler who let his greed for the thneed dominate his respect for nature. His environmental destruction and hunger for power ultimately created a mythical utopia called Thneedville, built upon artificial vegetation and the privatisation of air. This may no longer be a work of fiction if we continue down the path of global efficiency.
After all, fiction is only a version of reality that is deemed too farfetched for the norm. However, it still resides in our consciousness and manifests itself in palatable art such as film. Sounds like everyone already knows what is going on, we are just too material to see value if it is not in our hands or up for sale.
Source: Independent Australia, 14 Oct 2021
https://independentaustralia.net/politics/politics -display/how-we-are-trying-to-buy-an-identity-in capitalist-economies,15629
Molly Richardson is a student at the University of Adelaide