The economics of clothing involve three processes: production, making the clothing; distribution, getting the clothing from the maker to the consumer; and consumption, actually using the clothing. Although consumption drives production and distribution, the three processes are in many ways inseparable. The system is fiercely competitive at all stages, partly but not entirely because clothing is a fashion good. Although some plain utilitarian garments may seem to be little affected by fashion, their production and distribution are highly competitive as well.
In developed nations, fashions in clothing and other goods and services change so rapidly and in so many ways that it’s difficult to keep track. People may assume that, in ancient cultures or isolated societies, styles of clothing, dwellings, tools, and customs remained static for generations. Yet scholars discern small incremental changes when they can find sufficient data. Major features of the economics of clothing today have roots in the distant past.
Perhaps in prehistoric times, or on the frontier of pioneer America, isolated family units produced all their own clothing. But in fact, most people probably hunted in groups for large, fur-bearing animals and specialized in doing certain tasks. Production of apparel has always been highly labor-intensive, and evidence of specialization appears early.
Twenty thousand to twenty-six thousand years ago, in the north of what is now Russia, a young man was buried in a shirt and trousers elaborately embroidered with ivory beads. At roughly the same time, in what is now France, craftsmen were carving delicate sewing needles from bone. To shape and drill beads or make needles with the materials and tools available then would require both inherent manual skill and considerable practice. Probably only one person in a settlement or a cluster of settlements mastered the skills for such work; others did tasks such as harvesting and processing fibers or skins and assembling garments. Presumably these specialists bartered what they made for goods and services of other group members. Specialization optimizes use of individuals’ time and abilities and makes better quality clothing possible for all. Scientists who uncovered the grave of the youth in the beaded outfit concluded that he was a person of importance-he or his family possessed wealth or power to command a costume of such splendor. Clothing already expressed status, more than 200 centuries ago.
A Global Economy
The apparel economy is truly global. From earliest times, it has extended to the limits of human occupation. In each geographic area, people exploited native plants, animals, and minerals. The Chinese learned the secrets of the silkworm; linen grew in the Nile valley, cotton in the Indus River valley; Mesopotamians raised sheep for their wool. Shellfish found at the eastern end of the Mediterranean sea provided precious purple dye. Polar cultures relied upon the furs and skins of local creatures, both land and sea. Natives of what is now the Pacific coast of Canada used cedar bark garments to shed rain; some peoples made cloaks of grasses.
In time, precious textiles, furs, and ornaments moved by long, difficult overland trade routes or hazardous water voyages. Later, textile centers evolved where people demanded large quantities of luxury fabrics and were willing to pay well for them. Byzantium, as well as Sicily, produced fine silks during the Middle Ages, although they were far from the original sources of silk. Even so, proximity of raw materials gave some geographic areas advantages over others. Certain districts in Italy, Germany, Flanders, and England became textile centers, specializing in locally produced fibers and distinctive techniques. In medieval times, traveling merchants transported fine textiles from production centers to regional trade fairs on a regular basis.
The ramifications of trade in textiles and other apparel materials extended far beyond the obvious. In ancient Mesopotamia, the need to record exchanges of these and other goods stimulated development of counting systems and writing. Eventually, coinage evolved to expedite transactions. Still later, Italians pioneered bookkeeping, banking, and legal systems to facilitate and organize international commerce.
The great plague, the Black Death, which killed as many as one-third of the people in Europe, may have reached Europe from Asia in the middle 1300s, transported by infected fleas on furs carried by caravans along the ancient silk road. As the plague abated, fashion change accelerated because of greater concentration of population in cities, shifts in the distribution of wealth, and growing importance of commercial life. The demand for furs in the sixteenth century, including beaver skins to make fine felt hats, became a major force driving the exploration of North America. Remote Australia and New Zealand were settled largely because sheep could be raised profitably there.
In the Middle Ages and Renaissance, members of guilds produced elegant and costly clothing to order for wealthy and high-ranking people on the European continent. Guilds were part civic associations, part trade associations, part labor unions. Guilds specialized in certain crafts ranging from hats to shoes. Membership was strictly controlled; new members served long apprenticeships and had to meet strict criteria for admission. Detailed rules served to uphold quality of production and limit competition. In general, men dominated the guilds; women did certain specialized tasks such as embroidery but had little role in governance. Not until the late 1600s, as guilds were ebbing in power, was the first guild controlled by women, the mantua makers, officially recognized in France.
National Pride and Profit
Nations have long promoted fashions to stimulate demand for their products. In the 1600s, King Louis XIV displayed the beauty of French silks and laces by wearing them and dictating that members of the French nobility also showcase French products. France sent dolls dressed in the latest fashions to other nations to create desire for French goods among the upper classes. According to Mr. Pepys’ diary, Charles II of England introduced a subdued style of men’s clothing in England in 1666, partly to promote English wool and linen fabrics.
The Concept of Fashion
“Fashion” is a complex concept, but economic analyses require simple, operational definitions. Therefore this essay uses definitions based on those stated by Paul Nystrom in his 1928 book, Economics of Fashion. He defined “style” as “a characteristic or distinctive mode or method of expression in the field of some art” (p. 3) and “fashion” as “the prevailing style at any given time” (p. 4). A source of confusion is that the word “fashion” can be used to mean either “content” or “process.
In writing or speech, the word “fashion” is often misused as a synonym for women’s clothing. Yet most consumer goods and services are subject to the fashion process. Fashion also affects noneconomic matters such as social customs. The economic structure of consumer goods industries reflects the role of fashion, which in turn indirectly affects basic industries. Because “fashion” can involve virtually all aspects of contemporary life, this essay concentrates on the economics of clothing.
“Demand” is not a quantity; it is the relationship between prices and how much consumers are willing to buy at various prices. If demand for a commodity is great, people will generally buy larger amounts of it at various prices than they will buy if demand is small.