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Apparel firms exist not to clothe people as common sense would suggest but to make a profit, and this practice of erring on the side of overproduction is more p
by babybjornborg 8mo ago
Apparel firms exist not to clothe people as common sense would suggest but to make a profit, and this practice of erring on the side of overproduction is more profitable than under production. The perfect solution would be to produce exactly the number of goods they will sell, but forecasts aren't perfect so they overproduce. Firms are already incentivised by profit to not waste, so this adds another incentive and removes the pollution externality they have been enjoying. So now either they err closer to under-production and risk missing out on sales or secondary market supply of their goods increases leading to possible brand dilution. So in the end the value of these companies ends up lower than before, less pollution, and apparel is cheaper. I'd like to know more about the equity and carbon effects of the process they will need to now follow. So they trade destruction with shipping a crate to Africa. What is the difference? Firms will be less profitable, manufacturing is reduced, who is impacted by that?
- Uvix 8mo agoHow will apparel be cheaper? When they lower production runs, it'll be less available, which will mean prices will go up.
- fn-mote 8mo agoThe only error in the whole post. I think it's more productive to ignore that and focus on the important stuff... which is about why this kind of market interference isn't going to work out the way a naive optimist would hope.
- babybjornborg 8mo ago[dead]
- deleted 8mo ago[deleted]
- usefulcat 8mo agoEconomically, producing less to start with is not very different from what is currently done, destroying excess inventory. Therefore I don't think it's at all a given that prices will go up.
- CoffeeOnWrite 8mo agoDestroying the inventory has a cost though.
- deleted 8mo ago[deleted]
- whywhywhywhy 8mo agoSetting up the production line is the expensive part, firing things off it once it’s running is what’s cheap. Storing stock is very expensive too. This incentivizes what’s happening if you’re making cheap clothes.
- babybjornborg 8mo ago[dead]
- gwerbin 8mo agoThis isn't exactly a supply and demand situation that might cause prices to increase by restricting supply, like what you sometimes see with global commodity cartels such as oil. What's happening in this case is that they are overproducing because profit margins are high enough that they can overproduce and still be happy with the profit after discarding the extra, in the hope of capturing the stochastic upside of extra sales from never being out of stock. This might cause various random fast fashion junk items to occasionally go out of stock when they wouldn't have in the past, but it's not like you're going to see long waiting lists or high aftermarket prices. People just won't buy that stuff because there will be lots of alternatives, are they just won't buy anything at all and realize they don't need it. So yes, in an abstract textbook sense, the price might go up in the sense that you might experience some probability of your desired items selling out when that probability was lowered before. But I don't think anybody in their right mind would argue that's a serious economic detriment. Maybe there's a case to be made that this is a crude way to address what is essentially an allocation failure. But that alone doesn't mean that we shouldn't try it or that it's bad policy.
- behringer 8mo agoIf they ship unused crates to Africa then they get cheap clothes. Win win all around.
- JoshTriplett 8mo agoNot always a win. There have been a few reports that sending large numbers of clothing donations to areas that don't specifically need them has the result of harming local industry that would otherwise be able to produce and sell clothes.
- Der_Einzige 8mo agoThe appearal industry is among the most exploitive in the world. It's good to kill it before it springs up. Bangladesh is not anyone's example of a model country.
- mint5 8mo agoYou seem so certain despite having it backwards as likely as not. the western ordered cheap quality overproduction solution of swamping developing countries with it, where much also ends in a trash heap, means they can continue the exploitive and environmentally destructive mass production. Smaller local industries would be economically better for the countries, supply more aligned so less waste, and there’d be less of the bad factories in Bangladesh.
- JoshTriplett 8mo agoNote specifically that I said local industry. I don't mean some factory owned by a global chain.
- Der_Einzige 8mo agoI'm specifically talking about local, small business. Giant companies usually have better labor protections in the 3rd-4th world than small buisness does.
- rapnie 8mo ago> Firms are already incentivised by profit to not waste Anecdotal but my perception is that clothing has become so extremely low quality, and I assume dirt cheap to produce, that they have less of an incentive to let it go to waste. When I buy socks they get holes after wearing them 7 times, and then they go in the bin too.
- gwerbin 8mo agoIf you can make a shirt for $1 and sell it for $10, you can throw out literally half of your inventory and still make $5 per shirt.
- randomNumber7 8mo agoIf you throw some plastics into a coal fired power plant it is almost the same as if you would burn oil.
- gwerbin 8mo agoI have a feeling nobody is paying particularly close attention to capturing usable energy from this process
- mfost 8mo agoThere is in France a kind of shared network of hot water used to heat up our homes (well, those that are connected and paying into the system at least). Part of the system works by burning trash and capturing the heat in the process. Supposedly they also work on using renewable energies to do the work. Some people argue that the whole system is going against the objectives of recycling stuff but at least it's better than just burning it to get rid of it.
- FarmerPotato 8mo agoThere are anecdotes about trash incinerators requiring less kerosene to finish the burn, because of the plastic content.
- 8mo ago
- vegabook 8mo agomore market economics framing of life, as if numerous very smart people haven't already tried to make this paradigm work for society, and failed.
- gwerbin 8mo agoThe funny thing is that textbook economics has all of the answers about why laissez-faire market economics doesn't work as a foundation for economic policy. It's almost as if it's never been about making good policy and always about doing whatever is best for big businesses and the small number of wealthy people who stand to gain the most from minimizing consumer surplus.
- vegabook 8mo agototally. In fact the current monopoly-coddling dispensation is antithetical to market economics, which clearly espouses real competition. It's kinda been coopted and hijacked.
- babybjornborg 8mo ago[dead]
- scotty79 8mo agoOverproduction is not an issue. The issue is that they damage unsold things instead selling them for a market price dictated by supply and demand. This is not only clothing and apparel, also sporting goods and many other items. This should be forbidden across all industries. Unsold stock should be delivered to non-profits at no cost for further distribution. If you can't prove that you either sold or transfer to non-profit an item you manufactured then you should be fined for each unaccounted item proportionally to their market price.
- eastbound 8mo agoAnd suddenly the EU becomes #1 in private non-profits, the first ever non-profits to turn up revenue and reinvest them into stock from Gap and H&M. Also the first non-profit to build gigalandfills in Africa.
- scotty79 8mo agoObviously there would be some rules for non-profits eligible for those donations.
- sophrosyne42 8mo agoIf firms prodice less, prices will be higher.
- babybjornborg 8mo ago[dead]
- nonethewiser 8mo ago> so this adds another incentive and removes the pollution externality they have been enjoying. Displaces it. And adds other externalities like C02 to do so.