The Fast Fashion Dilemma – Econlib

Shoppers are filling their carts, both literally and digitally, with last-minute gifts. One tempting purchase, whether for gifting or for showing up in style at a holiday sweater party, is ultra-cheap clothing from Shein. Like many around the world, the French hunt for deals in December.

During a recent interview with journalist Thomas Mahler, I learned that fast fashion has become a political flashpoint in France, the country known for haute couture. French lawmakers are considering measures aimed at threatening the economic viability of Shein, the Chinese company that dominates ultra-cheap clothing globally. 

Millions of French consumers shop through Shein regularly. Mahler asked me: Can politicians persuade consumers to buy domestically-made clothes instead, in a country with a proud tradition in domestic fashion? My reply was that this dilemma extends beyond France. Wealthy countries do not manufacture much apparel at home. It’s cheaper to produce at scale in lower-income countries, and residents of rich nations rarely aspire to work in garment factories. 

The French government’s proposed intervention is an “eco-penalty” on fast-fashion items, a tax that could eventually add €10 per garment. The purpose is to make French-made clothing more competitive while also discouraging the environmental excesses of disposable fashion.

Fast fashion generates garbage. Trend cycles in cheap apparel last for only weeks instead of seasons. Shein adds many new items daily, while a traditional French fashion house releases only a few designs each year. Much of the clothing is so cheaply made that it’s worn only a few times before being thrown away. Even charities struggle to accept donated garments because of the flood of unwanted clothes. Discarded polyester shirts pile up in landfills at best, or pollute rivers and beaches at worst. Synthetic fibers shed microplastics. These are real externalities. 

France’s approach thus combines modern environmentalism with a familiar protectionism. It may be politically easier to sell a tariff when it’s framed as discouraging “wasteful” consumption rather than only protecting domestic producers.

Revealed preferences, meaning the preferences people demonstrate through their actual purchasing behavior rather than their stated ideals, show that consumers want affordability and variety. That puts them at odds with protectionist policymakers. When a Shein dress costs €15 and a French-made equivalent costs €100, even patriotic consumers face a hard trade-off. The price gap reflects not just labor costs, but supply-chain efficiencies, economies of scale, and a fundamentally different business model.

Even if these measures succeeded in reducing the amount of clothing bought from Shien, would the French people take garment manufacturing jobs that are “brought back” to France? French youth unemployment hovers above 17%, but garment work doesn’t match the aspirations of an educated workforce. In the United States, the few apparel factories that remain largely employ recent immigrants. Is trying to rebuild a mid-20th-century industrial base like trying to resurrect typewriters? Nostalgia is not an economic strategy in a technologically advancing world. Furthermore, would robots soon “take” most jobs that could be done by French people today in garment manufacturing? 

Mahler also asked me whether people could simply buy fewer clothes to help the environment. It’s an interesting question because we also see this dilemma with food in the rich world today. Calories were once expensive; now the binding constraint is waistlines, not income. Clothing has followed the same pattern. After the Multi-Fiber Arrangement ended in 2005, global textile trade boomed. For example, one Chinese city now produces more than 20 billion pairs of socks per year, which they can export at low prices. For many consumers, the price of clothes is not the main constraint on how many garments they purchase. The result has been the democratization of style and abundance.

Reasonable people can debate the appropriate policy response. A Pigouvian tax on new garments to fund recycling or reduce waste, akin to a carbon tax, is worth considering. Better labeling, such as durability ratings, could help consumers make more informed decisions on how long garments will last so they can appropriately trade off price versus quality. Cultural norms are shifting such that some consumers brag about thrift-store finds rather than new purchases, somewhat reducing the flow of new clothes to landfills. 

While addressing the excesses of cheap fashion, we should resist romanticizing the past. We should not return to a world in which only the rich could afford variety and comfort. Countries like Bangladesh and Vietnam have reduced poverty by joining global garment supply chains. Bangladesh’s GDP per capita was under $500 in 1998; today it is over $2,500. 

Fast fashion is neither a triumph nor a catastrophe. It is the outcome of solving an important problem: how to clothe billions of people affordably. The French, along with many of us around the world, now face a more pleasant question: how much is enough once basic scarcity has been conquered?

Someone from 1850, wearing his one patched coat, would be astonished to learn that we are debating whether people buy too many clothes. That we have the luxury to ask is evidence that, despite its problems, the system has delivered something extraordinary.