I was out shopping for a new winter coat, hopping from store to store looking for a good deal. To my astonishment, it was almost impossible not to find a good deal. Coats of a quality that once cost hundreds of dollars were everywhere, with prices ranging from $65-150. I’m sure I could have found some at three and four times as much, but I would have had to make a special trip to a specialty shop like Burberry and pay a high price for status shopping.In times when most everything has gone up in price and down in quality, clothing seems like an outlier.
It made me curious about what’s happened in the world of clothing over the last 25 years or so. In this time, we’ve seen several major trends happen. Anytime between the Great Depression and the end of the Reagan years, the clothing you bought mostly came from the local department store. Or you could order through a gigantic catalog delivered to your home. That was about it.
Today, discount and secondhand stores are everywhere. You can get designer labels at prices that are surprisingly low. Or you can head to the local big box and pick up just about any sports clothes for a song. Or you can decide to shop online, where you can get anything from sports clothes for next to nothing to high-end suits and shirts for $100 or so. If you know what you are doing, you can dress like Savile Row on a pauper’s budget.
This is a dramatic change. The digital age has opened up options for people who once had very few. In addition, billions of people are in the market as producers who were once not part of it. China was closed in the old days. So were Eastern Europe, India, and Russia. Today, they are all part of the mix. This led to screams of outrage on the part of American textile manufacturers. The end of the world was coming, they said. Except that it didn’t come. All that happened was that clothing became cheaper for American consumers.
Check out this 25-year chart of apparel prices versus the consumer price index generally:
This confirms my intuition. What’s more, I don’t think this picture fully explains what has happened. Clothing is no longer a problem for humanity. It is abundant, just like food and technology. The market has triumphed despite every attempt by government to hobble and wreck it. The long-run trends show that the opening up of the world, competition in the industry, and the advance of technology have made clothing more available than ever before at ever cheaper prices.
Matthew 5:40 instructs believers with what once must have been a very hard teaching: “And if anyone wants to sue you and take your shirt, hand over your coat as well.” Today, people might think: Oh, that’s no problem at all. I’ll just snag another one at T.J. Maxx. If that’s all it takes to avoid a lawsuit, I’m in!
And recall too in the story recounted in Genesis, what a gigantic fuss was created over Joseph’s “coat of many colors.” His brothers were so jealous that they plotted his death. When they failed, they stole it and sold their brother into slavery. Then they took the coat back to their father to prove his death, presuming that no one would part with such a thing absent death. These days, Joseph’s brothers would find much more peaceful ways to overcome their jealousy by shopping on eBay.
These instructions are hardly surprising. The struggle to finding clothing to wear was one of the great time- and resource-consuming undertakings of mankind, coming in right after the struggle for shelter and food. It has defined the course of history.
From the beginning of time until 1,000 years ago, clothing consisted of hot and heavy animal skins, horribly scratchy wool, and linen, or so reports William J. Bernstein in A Splendid Exchange. Cotton was relatively rare, and silk even more so (many fleets of ships and thousands of lives were lost in making silk a universal fabric). The synthetic fabrics that are part of everyone’s daily wardrobe were unknown.
Now we take their availability for granted. Only a generation ago, everyone patched jeans to make them last as long as possible. Now people buy jeans that are deliberately scruffy, torn, and patched just to get the look of old clothing, since hardly anything is actually old. (That people buy these things at all is, to me, the ultimate proof of the subjective theory of economic value!)
To be sure, people complain about quality. Nothing lasts like it used to! But that’s actually not true. If you spent today what people commonly spent on a pair of pants in 1980, which was probably about $30, you would spend $85. But mostly, people don’t spend that. If they did, they could obtain some pretty impressive trousers. Instead, people buy cheaper clothing so that they can replace it more often to keep up with fashions. You can always pay more for clothes that will last, but this is not where the consumer preferences currently are.
There is another factor that has made the clothing market more dynamic, progressive, changing, and profitable. Clothing is not encumbered by the problem that afflicts so many other sectors of life, namely the imposition of copyright and patent. There are trademarks, but these have done little to stop “piracy” around the world. A world traveler will find so-called fakes freely sold in every country.
What most people do not know is that copyrights and patents are not part of the fashion market. The absence of copyrights and patents has made the clothing sector supercompetitive. What’s on the runway today is freely knocked off and on sale at a fraction of the designer price in big-box stores only a few months later. By this time, the original manufacturer has moved on to making more unique products in the hope of being first to market.
All this explosive creation and copying has made fashion and clothing superdynamic. This means that manufacturers aren’t having to constantly watch their back for fear of being sued or otherwise getting in trouble with the law. This creates one of the freest sectors of trade in the world today.
It is hardly surprising that one of the freest sectors also happens to one in which prices are constantly falling in service of the consumer, with ever more options for regular people. Clothing is an example of mass manufacturing in service of the masses, and the data reveal just this.
There are lessons here. The freer the sector of economic life, the more it serves society. It illustrates the resilience of the market even in the face of every government attempt to hobble industry and keep economic activity stagnant and predictable. If we applied the same institutional arrangements to health care, education, energy, and transportation, we would see similar progress in these fields, rather than the same old archaic patterns generation after generation.
Further, a look at the clothing industry illustrates that the market is always full of profit opportunities and surprises for those look for them. No one would have predicted that we would today live in a world flooded with clothes, and that even the rarest of things such as coats would be available at low prices to even the poorest in the developing world.
Who is giving the institution of the market economy credit for such wonderful achievements? To understand the cause and effect is to see a path forward for every sector, including health care, education, and even law and justice. Falling prices and rising consumer service are the marks of economic health, and the reverse is the sign that the hand of government is in control.
Jeffrey TuckerThe Laissez Faire Club
P.S. As I wrote in “Kids Are Smarter Than Adults” it is a proven fact that designer labels actually have value in the marketplace. Fortunately, places like Overstock.com and eBay allow you to get them at extremely low prices. We are living in an age of hyperabundance of clothing. We are crazy not to take advantage of it.
P.P.S. I’ve interview the author of today’s book release, The Concise Guide to Economics.
Original article posted on Laissez-Faire Today
I'm executive editor of Laissez Faire Books and the proprietor of the Laissez Faire Club. I'm the author of two books in the field of economics and one on early music. My main professional work between 1985 and 2011 was with the MIses Institute but I've also worked with the Acton Institute and Mackinac Institute, as well as written thousands of published articles. My personal twitter account @jeffreyatucker FB is @jeffrey.albert.tucker Plain old email is firstname.lastname@example.org
More than a decade ago, Addison Wiggin helped co-found the Daily Reckoning with Bill Bonner. Today, he recalls this life-changing experience, and explains how - despite being rooted in the world of finance - it is and will always be about much more than money. Read on...
Halloween is tonight! And just in case you waited until the last second to think about what you're going to wear, here are four costume ideas you can easily put together in about 10 minutes or less. With these costumes you'll be the hit of your friend's party - provided you're friends with a bunch of economists. (Downloadable masks included...) Happy Halloween!
The financial news is full of misinformation - reported by unreliable pundits and taken at face value by an easily swayed public that doesn't really no better. That's why today, Bill Bonner relays the four basic truths he's discovered during his 30 year career in the financial industry to help you make sense of it all. Read on...
For those who doubt the effectiveness of the Swiss Gold Initiative, Grant Williams has a few startling charts to show you. Today, he relays just how popular this movement is, and how you can actually influence the outcome... no matter where in the world you call home. Read on...
For most of the year, no one wanted small cap stocks in their portfolios. But over the last three weeks, few sectors of the market have performed better than small caps. Greg Guenthner explains how to use this to your advantage... and what to expect for the rest of 2014. Read on...