Why no-one’s buying clothes any more: The introduction

 

No-one’s buying clothes any more for much the same reason voters are disenchanted.

What I originally wrote for publication after the 2016 UK Brexit referendum more or less explains the disenchantment: I’ll move on to why they’re not buying clothes any more in subsequent articles

In August 2016  I agreed to soften an article I’d written profoundly disagreeing with one  written by Robert Antoshak, an American textile-industry consultant and occasional columnist.

I now believe doing so was a mistake. Robert expressed views – widely held in the clothing industry – that I believe seriously misunderstand Western  voters (which means our customers) and how politics work in the West. Those misunderstandings have led to huge problems throughout our industry – and typify many of the reasons for the financial mess our industry is in today.

So I’m now publishing what I really thought in August 2016. Some of the facts now sound a bit dated – but the problems are generally unchanged. Over the next few weeks, I’ll be developing a number of avenues here, all aimed to develop understanding of where we are. I must stress that these are my own views entirely.

 Taking the hysteria out of global supply chains

Robert Antoshak’s  recent review of the political crisis facing international trade seemed to display an extraordinary misunderstanding of public opinion. As a result, I believe he’s got the problem almost completely upside down

Robert seems to misunderstand the politics of both the UK and  US

It’s absurd to allege, as Robert does, that in the recent referendum “a majority of the British electorate rejected global integration and repudiated more than 30 years of globalisation” I’ve spent the past six months campaigning to stay in the EU –  but not once did I hear anything like that from my opponents. Nor from a single member of the new, Brexit-friendly, British Cabinet..

It’s also missing a key issue to claim simply that “Should Trump become president, then we will see a rejection of globalisation.” This claim isn’t absurd: Trump certainly will be hostile to trade. But Trump’s going to have the US Congress to deal with – and they’re a lot more divided. Robert seems as confused about the US Constitution as Trump – which is very worrying in a man who boasts about advising the US government.

Let’s look at both misunderstandings

• What many British voted against.

Scarcely a single person in Britain opposes global economic integration. What 52% of those voting were against was:

• The lack of any control over 440 million other Europeans’ ability to move into Britain and immediately have unfettered access to British jobs and welfare benefits
• The subordination of almost all British law to two European treaties, presided over by courts based outside the UK
• The barriers imposed by EU membership against trade with the world outside the EU
• A net annual bill of around GBP 9 billion to fund the bureaucracy of running an organisation many believed was holding Britain’s economy back.

It’s impossible to imagine anyone in Obama’s America or Trudeau’s Canada accepting this external interference in their country’s management – or the requirement to pay for it. No-one would dream for a second of accusing an American or Canadian opposed to such external control of “repudiating globalisation”.

Brexit supporters in the reshuffled British government just  want a simple free trade agreement with the rest of Western Europe – and similar deals with the rest of the world. They won’t get one without more or less staying in the EU, so they’re going to be disappointed. But where do commentators get all this “anti-foreign trade” nonsense from?

I think Brexiteers have been badly misled, and I’m going to go on opposing their ideas. But effective opposition starts with understanding what your opponents want.

Brexiteers just want an end to the extravagantly overengineered, spendthrift and inward-looking protectionism they (accurately in my view) believe the EU imposes on its members. I opposed Brexiteers, like most of the British business community. But it’s just silly to pretend  I’m a 100% supporter of the way the EU is currently run.

Or that I or most of the 52% of the British population who supported Brexit want to build a wall around our country. I oppose Brexiteers  because I believe their ambitions are unrealistic and potentially damaging. But they’re not looking for anything Obama or Trudeau wouldn’t find perfectly acceptable.

• Which Americans are rejecting globalisation?

As far as foreign trade is concerned, both Trump and Clinton are just as far as each other from the European consensus:

•  Both – like the overwhelming majority of US trade unions – now oppose the Trans-Pacific Partnership, so it’s in real danger of disappearing altogether, writing off seven years hard work by negotiators from twelve countries. Though, to be fair, it’s practically impossible to find anything at all in it benefiting most Americans
• With Britain, till now the EU’s most trade-friendly member, no longer involved, the Transatlantic Trade and Investment Partnership (TTIP) looks threatened too – and opposition to it is hardening throughout Continental Europe.
• Meanwhile, the Canada-EU free trade deal is heading for trouble, as the EU now wants it ratifying by both all its national parliaments AND by the EU’s central systems. The seven years spent negotiating it may not be entirely wasted, though: officials see it as a perfect first draft of a trade deal between Canada and the UK.

Whose job is it to deal with it?

Not politicians’, for a start. If there’s one thing I disagree with Robert on more than anything else, it’s his claim that “the problem lies with politicians who have poorly described the benefits of free trade”. Politicians shouldn’t act as lobbyists for interest groups, though too many do: if the retailers and brands who’ve profited from our industry’s free trade can’t be bothered making the case for it, they simply don’t deserve it. And of course, they’ve got to find a few reasons American voters would support more free trade.

So far they’ve failed.

Eh?

In the West, a large proportion of voters now mistrust changes imposed on them by governments that rarely deliver tangible advantages to ordinary people. That’s often inconvenient: more often, they’re accompanied by promises that either:

• don’t materialise, like UK governments’ repeated promises to cut immigration, or
• are simply unbelievable, like Obama’s projections of US job creation as a result of the TPP, or
• are just irrelevant, like the complicated methods in America’s trade deals for not really dealing with – or more often, not dealing with at all – labour abuses.

Voters’ irritation has been inflamed in the past decade by:

• the recession, which left a lot of people poorer, a very few a great deal richer, and most Western economies a great deal more sluggish
• ageing populations – putting pressure on government expenditure at a time there’s less tax revenue to support it
• widespread tax-dodging by new businesses.

Many people feel grumpy about this, and the clothing industry is often in the front line for being grumpy at. But what really worried me while out campaigning has been the sanctimonious hysteria with which “winners”  insult those who see themselves as victims of the past decade’s economic changes. “It’s bad enough losing your job, and worse having to take one paying less than half” said one Brexit supporter. “But when someone who’s been far luckier than me tells me I’m a bigot or a racist for complaining….”

It doesn’t just rankle. I came across lots of voters originally disposed to remain in the EU, who changed their minds when confronted with the vituperation and distortions from the official Remain campaign

When Robert accuses Brexit voters – who’d love to buy their wheat from Canada, their clothes from China and their cars from the US without the distortions of punitive import duty – of “repudiating globalisation”, he’s repeating the uninformed exaggerations that lost it for Britain’s inept Remain campaign. And I repeat: what on earth gives him the impression the policies currently followed by Obama and Trudeau are any less anti-global than those advocated by Brexit leaders?

Trump’s solutions to the problem are extreme and to my mind dangerous. But he’s not invented the problem he’s exploiting: he’s just got the wrong solutions.

So what’s to be done?

Robert’s not the only person over-reacting to Brexit, or blaming Trump for the hostility mismanaged globalisation has created to our way of doing business.

What’s been central to our industry’s globalisation in our industry is that Western governments have lowered barriers to apparel retailers and brands moving production jobs to poorer countries. Those (like me) who argued for lower barriers on our industry’s imports assumed there’d be compensating benefits for Western workers.

There were certainly lower clothes prices to start with – though in the UK, those benefits seemed quite quickly at places like BHS or Sports Direct to make owners richer. Their workers have got poorer. And not even the respectable end of the trade has taken any responsibility for the social costs incurred as a result.

Meanwhile, those other compensating benefits simply never materialised. But the trade’s still arguing for more free trade.

No wonder Simon Wolfson, CEO of UK retailer Next, has a charming metaphor for businesses demanding government concessions without explaining how they’re going to be funded: “they’re standing in a circle of pickpockets” he said in London just before the Brexit poll.

Expecting governments to do your dirty work is even worse. Outside Britain – which has been committed to global supply chains since it invented industrialisation 200 years ago – public opinion has long been turning against free trade. Indeed, of all the Western populist movements today (not just Trump, but the xenophobic parties in France, Germany, Italy and the Netherlands), Britain’s is unique in pitching for more truly free trade

Robert’s absolutely wrong when he concludes that “the challenge for political leaders will be how to illustrate the benefits of globalisation” The challenge is for traders to persuade voters there are any. Before 2008, there  were benefits in the West: they’ve more or less disappeared since.

Clothing retailers and brands are supposed to be skilled at understanding shoppers, and certainly wouldn’t expect someone else to talk to them on our behalf. If we can’t persuade our shoppers that globalisation’s working for them any more, that’s probably because it’s not.

Perhaps we should actually listen to them. We might find they’ve got a point.