Used Clothes as Development Aid: The Political Economy of Rags (SIDA) Part II-A: Analysis of the effects of the used-clothes trade in general Chapter 5: Theoretical welfare effects of unsubsidized imports (introduction...) Initial assumptions: Perfect markets (full employment of resources), free trade Why are used-clothes imports welfare-maximizing? (Real goods are real income) Our analytic strategy Government support via production subsidy to capture positive externality Other arguments for protection of infant industries Production subsidy effects on exporting, and benefits Less than fully functioning markets: Unemployment Government support via import tariffs The negative side-effect of tariffs Less than fully functioning markets: Unemployment again Conclusions Chapter 6: Empirical welfare effects of unsubsidized imports (introduction...) Haggblade's analysis of the economic effects of used-clothes imports in Rwanda Global extensions of Haggblade's analysis, including a multi-market model Conclusion Chapter 7: A brief history and sociology of the used-clothes trade (introduction...) LDCs: Hansen's study of used clothes in modern Zambia The re-use of second-hand goods in modern industrial countries Lemire's study of the used-clothes trade in eighteenth century Britain Used clothes for disaster relief Conclusions

Used Clothes as Development Aid: The Political Economy of Rags (SIDA)

Part II-A: Analysis of the effects of the used-clothes trade in general

Chapter 5: Theoretical welfare effects of unsubsidized imports

In Part I we saw that there is a large worldwide trade in used clothes, and that there are strong negative feelings towards this trade, especially on the part of LDC clothing producers and workers; that national governments for the most part are fairly tolerant of the trade; and that many NGOs have reservations about it but also participate in it in various ways. Now we will analyze the theoretical impact of used-clothes imports on economic welfare in a small LDC. The theoretical analysis we will present is rather simple, but it is important to notice carefully exactly how we do it.

To begin with, we might imagine what we take to be a fairly realistic situation in a small less-developed country. There might be:

a) masses of people too poor to buy domestically-produced clothes; or even
b) no domestic textile production; or
c) no legal commercial import of used clothes.
There might also be:
d) poorly functioning factor markets resulting in massive unemployment;
e) and an uncompetitive industry that is unable to export domestically-produced clothes;
f) but there might also be positive external benefits associated with actual or potential industrial production in the early stages of industrialization - the infant industry argument.

Basically, we want to know:

1. What would be the effects on such an economy of allowing used-clothes imports?
2. What would be the effects of subsidizing (and thus presumably increasing) those imports?

But this is not the situation we will begin by analyzing; this is far too complex to start with. We will start with a simple, "ideal" model, and then we will consider the implications of changing various assumptions to make the situation more realistic (and complex).

Initial assumptions: Perfect markets (full employment of resources), free trade

For instance, we initially assume perfectly functioning markets, so that there are no unemployed resources (including labor), and there are no distortions (including externalities). We assume that the country does have a domestic clothing industry, but that there is no clothes export. We assume that the country allows free importation of both new and used clothes, and we assume that the economy is in external balance.

Thus we initially explicitly contradict four of our six "realistic" conditions above (b, c, d, and f). We will simply ignore one point for awhile (a: poor people), and we will actually accept (initially) only one of the conditions above (e: no exports).

We assume of course that domestic and imported new clothes and used clothes are all substitutes for each other, but not perfect substitutes. We consider these three markets separately: domestic new clothes will be designated with subscript _d, imported new clothes with subscript _i, and imported used clothes with subscript _u; while all other goods and services are aggregated into a single sector (subscript _o). We do not try to show the impact on the latter sector (all other goods and services) in our diagrams.

The first set of diagrams (Diagrams 1_d, 1_i, and 1_u) show the situations in our three separate but interrelated clothes markets when the economy is in initial equilibrium. In Diagram 1_d, the demand curve for domestic new clothes (D_d) is downward sloping, as it is for the corresponding goods in the following diagrams. Domestic supply of new clothes (S_d) increases with price. The market has price p_d and quantity q_d. (For the moment, ignore the shifted supply and demand curves in the diagrams, and the corresponding prices and quantities, all of which are indicated by prime ('); we will come back to them several pages further on.)

Diagram 1_d: Domestic new clothes (with production subsidy)

The next diagram (1_i) represents the market for imported new clothes. Since we assume that the country in question is small, the price of imports (p_i) is independent of the level of domestic demand. We thus get a horizontal supply curve (S_i).

Diagram 1_i: Imported new clothes (with domestic production subsidy)

The third market is for imported used clothes (Diagram 1_u). It has essentially the same characteristics as the previous one, that is, a given world market price (p_u) and a horizontal supply curve (S_u).

Diagram 1_u: Imported used clothes (with domestic production subsidy)

The rest of the economy (the all other goods and services sector) consists of a mixture of non-tradables and tradables: The market for non-tradables clears domestically by definition, while the price in the tradables sector is set on the world market, adjusted for trade taxes; we do not need to go into details about this sector for the analysis undertaken here.

As we have assumed initially that there are no distortions in the markets (including in factor markets such as labor), the allocation reflected in the diagrams above - including the presence of used-clothes imports - can be shown to be welfare-maximizing.

Why are used-clothes imports welfare-maximizing? (Real goods are real income)

In these simple "ideal" conditions, importing used clothes is welfare-maximizing because, on the one hand (as indicated by the downward-sloping demand curve for used clothes), some people would have been willing to pay considerably more for the used clothes they got, so that there is "consumer surplus" when they are able to buy used clothes for less; and, on the other hand (as indicated by the upward-sloping supply curve for domestic new clothes), producing more new clothes domestically instead would have cost relatively more.

Another way to look at it is that, since clothes, even used clothes, clearly have value in the marketplace, they constitute real wealth, or real income to those who receive them. Simply discarding this wealth must therefore result in a net worldwide loss, while re-using it must result in net worldwide gains. The land otherwise engaged in fiber production, the labor and capital otherwise involved in textile production, can all be put to higher and better uses than re-creating clothes which already exist, thus generating increased real income. And this is true even before considering any possible gains to the environment from having less overall production required to produce the same level of income and wealth.

Our analytic strategy

However, two types of realistic conditions which we noted above (d and f) might cause less than optimal resource allocation, and would thus imply less than maximum welfare. One of these is unemployment due to poorly functioning factor markets - which also make resource reallocation difficult - and the other is positive externalities associated with clothes production. We want to consider the effects of used-clothes imports under these two conditions. If there are negative effects, we want to consider how to counter them.

But it is not really the direct effects of used-clothes imports that we are mostly concerned with. The used-clothes imports themselves create jobs and income, and provide consumers with usable goods at cheap prices. So far, so good.

But what we are mostly concerned with are the indirect effects of used-clothes imports on other sectors of the economy - on domestic new clothes production, for instance. Since used clothes are at least a partial substitute for new clothes, allowing cheaper used-clothes imports will reduce demand for domestically-produced new clothes, causing decreased domestic production, employment, and income, at least in that sector. If we should want to counter these negative effects, to maintain production of domestic new clothes in the face of imports of competitive (used) clothes - or to increase production, or to reduce the decrease in production - we could do so either directly, with a production subsidy, or indirectly, by restricting the competing imports.

The natural order might seem to be to consider the economy with no used-clothes imports - due perhaps to a prohibitive tariff, or to an outright ban, or even to a simple lack of supply - and then to consider the change in welfare when imports come in. However, we will do the opposite. We have already constructed a hypothetical welfare-maximizing situation with open borders. We can now imagine closing the borders (restricting imports) in order to support domestic production. We can compare this indirect method of supporting domestic production with the more direct method of a production subsidy. Because the more direct production subsidy results in a cleaner, simpler analysis, we will actually do that first.

As for the reasons why we might wish to support domestic clothes production, while the first distorting condition (poorly-functioning factor markets resulting in unemployment) is the more obvious and perhaps the bigger problem, it is also the more complicated and perhaps the more intractable one, so we will look at the second condition (positive externalities) first.

Thus, to summarize our strategy, we will first analyze the results of a hypothetical production subsidy to capture a positive externality associated with clothes production, and then we will examine the effects of such a subsidy if there is unemployment. Then we will analyze the results of the alternative support mechanism - an import restriction (tariff or ban) intended to capture the same externality - and then we will again examine its effects if there is unemployment. Finally (in Chapter 8), once we understand the effects of used-clothes imports in general, we will consider the effects if we not only allow, but subsidize, used-clothes imports.

Government support via production subsidy to capture positive externality

It is often argued that there is a positive externality associated with industrial production in the early stages of industrialization - the basic infant industry argument. This implies that there are grounds for supporting the domestic clothes industry to increase production. The direct avenue to deal with this distortion would be to give production subsidies to the domestic clothing industry directly. If we do this, we shift S_d to S_d' in Diagram 1_d, giving us a lower domestic market price (p_d') for domestically-produced new clothes, and increased output as desired (q_d'). This causes increased employment in the domestic clothing industry, and more learning by doing. If such a positive externality really exists, then this intervention is welfare enhancing.

The magnitude of the impact of such a production subsidy on the other sectors will vary with the relevant elasticities. There should be some reduction in demand for imported new clothes, reducing clothes imports to q_i'. Since we assume perfect markets, this is not going to lead to a trade balance surplus, but the different effects of changing relative prices will balance external trade.

Demand for used clothes should decline somewhat, although one may assume that the degree of substitutability between new clothes and used clothes is less than that between domestic new clothes and imported new clothes. The shift in D_u should be downwards, but not so much.

Finally, what happens to the rest of the economy is hard to tell: Supply should be reduced somewhat if the domestic textile sector attracts more resources. On the other hand, the used-clothes handling and distribution sector, and the imported new-clothes sector, should both shed some labor. We cannot tell a priori which effect would dominate. Still, there is going to be a restructuring of the economy under the impact of the production subsidy. Since we assume full employment of resources initially, employment levels would not change, but since the production subsidy eliminates a distortion, real income would increase over time, due to productivity increases resulting from increased industrial experience.

Other arguments for protection of infant industries

We have seen that a large share of clothing imports into industrial countries themselves originate in LDCs, but it may be difficult for new LDCs to enter the export market unless they have a secure domestic base on which to build. Given the differences required in style, and perhaps in quality as well, this does not seem absolutely necessary, as the example of multi-national manufacturing for export demonstrates.

Still, it may be that certain countries or regions, which would be capable of supporting textile and clothes production once they got started, and which might have comparative advantages in such production, nevertheless have not developed those industries due to accidents of history and perhaps the incidence of power, and may not be able to do so now or in the future without temporary protection or support. This could be the case, for example, if there are scale advantages which an entrant in the field could not take sufficient advantage of soon enough to be able to compete with lower-cost imports, and would thus be forced out of business before establishing itself. This is essentially a strategic trade argument, which might call for some form of government support to develop a new industry.

Production subsidy effects on exporting, and benefits

If the domestic industry were producing already for foreign markets, then a production subsidy would also stimulate exports. Much recent research suggests that exporting by itself has a positive externality effect on growth, by exposing the economy to an international and more competitive environment. Thus such a subsidy could have a doubly-positive effect.

Less than fully functioning markets: Unemployment

If there were unemployment, the results of a production subsidy would be less clear-cut. The employment effect would depend on the combined price and income effects. Employment would obviously increase in the domestic new clothes sector. However, despite existing unemployment, it might be that the increased competition for labor due to subsidized production would have some increasing effect on wages, which would tend to reduce employment outside the subsidized sector. It might also be the case that the shrinking used-clothes sector is more labor intensive than the expanding clothing industry, which in itself would tend to depress employment. In the end, the employment effect of a production subsidy would be uncertain, and might depend on whether a positive income effect (due to capturing positive externalities in clothing production) could compensate for other losses.

Government support via import tariffs

What about a tariff on imported clothes to support the domestic clothing industry, instead of a production subsidy? A tariff on used clothes would shift the used-clothes supply curve (S_u, in Diagram 1_u above) up. Exactly what would happen to the demand curve would depend on the general equilibrium effects of this price change, but the end result would be a reduced quantity of imported used clothes at a higher price than before.

This would lead to some increase in the demand for domestic new clothes, giving us a higher domestic price, and a larger quantity, as desired. There would also perhaps be some increase in the demand for imported new clothes, unless it were also controlled via trade policy intervention, such as a tariff.

The negative side-effect of tariffs

What type of welfare effect would we have in this case? There would be increased production in the domestic clothing sector, beyond the original market-determined equilibrium level. This would draw resources from the rest of the economy, where they were more productively employed at the original relative prices. But would this not be welfare improving, when there is a positive externality associated with this production?

If the positive externality is sufficiently large, this would be the case, but here, differently from the subsidy case, we cannot be sure that the overall welfare effect would be positive. The difference between the previous case and the present one is that we now not only correct the production distortion, but we also introduce a consumption distortion. This is a negative side-effect. Now consumers are optimizing against a price for imported clothes (the world market price plus the tariff) that is different from the alternative cost to the economy to import them (the world market price). Therefore, this is not an optimal intervention, although we cannot say for sure that it is welfare-reducing.

A tariff on imported new clothes would give the same consumption distortion. The positive effect on domestic clothes production might be larger, but this would be an empirical matter.

Tariffs such as these are a common result of efforts to implement a strategic trade policy in support of infant industries. But as Paul Krugman (1994) points out: "Concepts such as strategic trade policy can all too easily be used to rationalize good old-fashioned protectionism." And as the head of the new World Trade Organization, Renato Ruggiero, says: "Governments may try to preserve some jobs in uncompetitive industries by using trade barriers, but they will do so at the cost of jobs in the efficient export sectors. Studies... indicate that the annual cost of protecting a job by import barriers is typically anywhere from three to eight times the annual wage of that job... Protection... costs jobs in unprotected industries, although we never see these job losses directly reported. It is a fallacy to believe that the only effects of protection are the visible effects - jobs apparently saved in protected industries. The jobs lost in other industries are just as real. Protection increases costs, reduces sales (because it taxes consumers), and leads to fewer jobs in unprotected industries."

It has also been argued by some that, in some rural areas where markets barely exist at all, reducing the availability to consumers of a major category of important and affordable goods (used clothes) would reduce their willingness to produce goods for the market themselves, as producers - or vice versa, that encouraging availability of such consumer goods can increase their willingness to produce for the market (whereby they can earn the income to buy the consumer goods) - thus having a major impact on economic development.

Less than fully functioning markets: Unemployment again

What if there are distortions in factor markets, so that it is not so easy for resources to shift, and there is unemployment? And what if we pose the question the other way, as whether to remove an existing tariff or ban? In this case, although removing the import restriction would decrease one distortion, so that consumers were now facing the world market price in the used-clothes market, it would possibly increase unemployment, at least in the short run. The net short-run effect might well be welfare-reducing, although gains would be possible in the longer run through improving the functioning of factor markets.

Our conclusions here are thus the standard ones: If there are distortions (such as a positive externality, factor-market rigidities causing unemployment, or an import tariff or ban), one should try to remove them without creating new distortions. (We will discover a similar result when we turn to the issue of whether one should subsidize the import of used clothes.)

Conclusions

Given positive externalities and/or unemployment, imports can be damaging at least in the short run; any protective measures should be limited and temporary

The case for outright banning of used-clothes imports seems rather slim, but it is not clear that there are no negative consequences of such imports at all. Indeed, like any other import-substituting industries, textile and clothes production may be hard hit when import rules are liberalized. There may be a difficult period of restructuring, perhaps aggravated if such changes are made quickly, and national governments may want to make special efforts to help displaced workers find new employment. As we have seen, they may also come under intense pressure from domestic industries seeking protection, and they may find themselves politically required to accommodate those pressures with tariffs for awhile. Protective measures should be temporary, however, and every reasonable effort should be made to help factor markets function more smoothly and affected industries restructure towards increased productivity, perhaps for the export market directly. Such a strategy takes advantage of the increased real income which used-clothes imports can undoubtedly allow in the long run.

Chapter 6: Empirical welfare effects of unsubsidized imports

What are the actual, practical effects of all these imports in reality? Do used-clothes imports in fact disrupt or depress markets in Third World countries to such an extent, with resultant losses of jobs and income, that protection for domestic industry against cheap imports is necessary? Or, even if there are direct disincentive effects, are those effects outweighed by income gains to consumers, by distributional gains to the poor, by employment gains in related or unrelated industries, by productivity gains in restructured industries, by revenue gains to the government, by environmental gains worldwide, or by any combination of these?

In terms of empirical market analysis, these questions are at the heart of the matter. If imports cause overall damage, clearly their negative effects should not be increased via subsidies. However, we will see that, at least in the case of Rwanda, the damage is not so obvious; in fact, a case can be made that there are net benefits from used-clothes imports. It is true that Rwanda is a special case, but it is nevertheless a very interesting one. It is also the only one for which we have a good prior empirical study of economic effects.

Haggblade's analysis of the economic effects of used-clothes imports in Rwanda

Unfortunately, there is almost no literature thoroughly researching the true economic effects of used-clothes imports. The best study which exists is economist Steven Haggblade's 1990 article "The Flip Side of Fashion: Used Clothing Exports to the Third World", based primarily on his research in Rwanda before its recent civil war.

Haggblade found that, at least in a country like Rwanda with no domestic textile or ready-made apparel industries, employment gains in handling, cleaning, repairing, restyling, and distributing used clothes came very close to offsetting the related employment losses in tailoring and/or distributing new clothes. Further, comparing equal values purchased of used clothes, ready-made clothes, and tailored clothes, national income was highest with used clothes, due to higher value added domestically. Still further, these income gains meant that the relatively poor handlers, cleaners, repairers, restylers, and distributors of used clothes could earn roughly equal incomes in less time than the tailors who were (partly) displaced by used-clothing sales - in other words, there were "higher returns to labor in used-clothing distribution".

At the same time, the government reaped higher revenues (due to higher tariffs on used clothes than on imported cloth), while the relatively rich used-clothes wholesalers also benefited. Low-income consumers also gained from the availability of cheaper, used clothes, as they were able to purchase more clothes for the same expenditure, or to buy the same quantity of clothes plus something else. Since it is mostly the rural poor who buy used clothes, it was mostly they who benefited as consumers. It short, it was found that "used clothing generates maximum income per unit of sales, supplies consumers at the lowest cost, benefits the poorest consumers most directly, and generates nearly as much employment as small-scale tailoring."

As Haggblade pointed out, all of his meticulous calculations concerned only first-round effects; "they do not take into account the multiplier effects of increased real income among used-clothes consumers and suppliers." In other words, income gains may lead to better-clothed, better-fed, even better-housed and better-educated families, resulting in productivity gains for the future. How is all of this possible? Can we understand these results intuitively, in real terms?

Used clothes are real goods. If they were received for free, they would constitute real income without labor, which would not be a totally unenviable state, especially if one's time and labor were left free for other pursuits, whether income-generating or not. In the case of Rwanda in Haggblade's study, there is certainly some cost to the nation as a whole, in terms of the purchase price of used-clothes bales imported from industrial countries by wholesale importers, and the corresponding potential transfer of real goods or services out of the country to finance the purchases. But there is no domestic textile industry in Rwanda, and thus no textile production displaced. The costs of importing used clothes are apparently less than the cost of equivalent textile imports, and thus there is a net saving with the import of used clothes. Wearable clothes are produced at less cost, and in fact are largely produced by poor people, as well. Thus poor people can better afford to clothe themselves, while retaining part of their erstwhile clothing expenditure for other purposes.

Global extensions of Haggblade's analysis, including a multi-market model

However, we are not, and cannot be, simply concerned with any single country. It is possible that the fiber or textile production displaced by used-clothes exports to Rwanda is displaced in fiber- or textile-producing LDCs, either elsewhere in Africa, or elsewhere in the world. And, what is essentially the same thing, we must also consider used-clothes exports from industrial countries directly to those fiber- or textile-producing less-developed countries. If employment losses in manufacturing and distribution of new clothes in Rwanda were barely offset by employment generated with used clothes, it is clear that the overall global employment losses, including those in fiber and textile production, must be larger than the employment generated by redistributing used clothes. Unfortunately, we have found little information which would enable us to accurately estimate these losses. Empirical work might be required to rectify this lack.

A related question concerns the fact that Haggblade's estimates are based on equal values of used clothes, tailored clothes, and ready-made clothes. But the price ratios he reports for these categories are roughly 1:4:10. In other words, a used article of clothing could generally be purchased in Rwanda for roughly one-fourth the cost of a newly tailored article, or for one-tenth the cost of an imported ready-made article. Presumably, with the introduction of cheaper used-clothes imports, the entire budget previously devoted to tailored and ready-made clothes would not continue to be devoted to clothing. The fall in the average price of clothing and the increased purchasing power available would probably lead to more of all categories of clothing being purchased, but the income effect of cheaper clothes would also lead to increased purchase of other goods and services. Some of the previous clothing budget would now be shifted to those other goods and services. How much employment and income would be generated in those other industries?

This is the type of analysis we have already undertaken in the previous chapter, in a totally abstract, theoretical way. In order to properly evaluate these effects in practice, we would need to construct a multi-market model, with price and income elasticities for used clothes, for new clothes, and for all other goods and services on the consumption side, and with employment and value-added in each of these categories on the production side. If such a social accounting matrix could be constructed with relevant weighted global average values, we could evaluate the net global changes in income and employment from recycling used clothes. As we saw in our previous theoretical discussion, we should also consider externalities and the degree to which markets are functioning, the flexibility of resources. This is theoretically possible, but it would be a daunting task in practice, and we certainly do not have the data available to attempt it now.

Conclusion

Net positive or negative effects are not clear empirically

If we had a clear and strong case for damage resulting from imports, we could rule out subsidizing imports in any situation which would likely add to that damage. But in the case of Rwanda, it is not obvious that there is damage from imported used clothes - perhaps there are rather small employment losses - while in fact it appears that there are actual gains in productivity, income, and distribution, and this is only on the first round, without considering multiplier effects.

But Rwanda is a special case, without domestic textile or ready-made garment production, and empirical analysis has not considered potential losses from the loss of positive externalities possibly associated with such production. On a global scale, while ideally we believe that there must be gains from re-using still serviceable goods, in fact the results might depend on the level of externalities and the degree to which markets are functioning, or not. Thus we cannot conclude positively that that there is or is not overall damage from importing used clothes.

Chapter 7: A brief history and sociology of the used-clothes trade

We have discussed the theoretical possibility that used-clothes imports (in the presence of poorly-functioning factor markets and/or positive externalities) may cause net damage at least in the short run, but we have not been able to document that damage from the only careful, thorough empirical study available. We now take a look more broadly at the effects of re-using second-hand clothes, historically and sociologically.

LDCs: Hansen's study of used clothes in modern Zambia

Anthropologist Karen Tranberg Hansen, who has studied the distribution and re-use of second-hand clothes extensively in Africa (in Chapter 2 we quoted her description of the distribution of used clothes in Zambia), believes that "the master narrative that regards Lusaka's booming secondhand clothes markets as just another example of exchange relations that continue to link countries like Zambia to the West in dependency terms is inadequate. It reduces all that is African, and in this case Zambian and local, to mass capitulation to western-type consumption and trivializes the active engagement between people and clothing into a warped imitation of the West... Recommodified at the point of resale, the transformation of the West's cast-off clothes into 'new' garments in Zambia involves distribution and sales practices in local markets and subsequent incorporations into clothing practices that reflect and engage everyday experiences in spite of the recognizable western imprint of the garments."

Hansen goes on to report that "this trade is not new but its present scale is unprecedented. By the inter-war years [~1920-40], if not before, the used clothing trade reached Zambia from Zaire... The name of Mokambo, a busy Zambia-Zaire crossing point, became a common term for the clothes and the traders. It had a negative connotation [at that time] and people did their best to hide that they were wearing mokambo... Today, Zambians have no qualms about buying salaula; they will stop you on the street to ask if your skirt is 'from salaula or from the shops'."

Hansen continues later: "Customers demand a wide selection of new salaula items... The desire to be smartly turned out, even if the garments are shabby, makes clothes-conscious Zambians insist on immaculate ensembles whose elements are laundered and ironed. Thus, detailed care for clothing helps to transform old clothes into new ensembles.

"Customers, traders, and tailors work hard to make salaula into their own creation... The overall combination of the ensemble's elements is always in process. In the very act of appropriating them into 'the latest', Zambians undercut their western imprint...

"The rapid increase of salaula since the late 1980s has made affordable clothing available to a broad spectrum of people. This contributes toward satisfying the need for clothing and the desire for style. The wide range of salaula gives shoppers a welcome opportunity to browse and choose...

"Throughout the 1980s, urban and rural Zambians increasingly relied on saluala... The growing availability and acceptability of used clothing was the theme of a 1988 record, 'Salaula', by popular singer Teddy Chilambe. The lyrics told of the time now past when the salaula market was only for the household servant and maid. Now even the most fashionable office workers wear secondhand suits. The song praised Zaireans for bringing salaula to Zambia, and blamed those who shunned it for wasting money they should use to feed their children. Zambians no longer look down on salaula or hide the fact that they wear it. Few traders or shoppers... had questions or concerns about why or how the West's discarded clothing ends up as a desirable commodity in Zambia... What they most cared about was the availability of affordable clothing."

Hansen concludes that: "A world-systems, dependency-thesis interpretation of unilineal transfer and blame is clearly out of tune with popular Zambian sensibilities and reactions. These reactions... celebrate salaula. Chokako Weka means 'move yourself' in Nyanja. Written on the sign of the Caroussel Botique, it captures some of the popular attractions of salaula in Zambia. Salaula implies progress; the ability to dress tells of improvement. In the popular view, after years of standing in queues and ending up empty handed, when people had little money, and clothing was not piled up waiting to be bought, salaula means that ordinary people can now afford to wear clothes rather than rags. It also means that more consumers than ever before can make choices in a booming clothing market. The salaula trade offers work and therefore hope about new opportunities to young women and men who might not find formal jobs.

"Salaula is celebrated in urban and rural areas alike. Rural areas, which used to be characterized with statements like 'there is nothing there - they don't know sugar, tea, bread, clothes, what it is like,' were described in 1992 with some optimism: 'There is even salaula now.' After the long, hard years of the Kaunda regime's austerity programs and deteriorating terms of trade both between rural and urban areas and between Zambia and the world economy, commentaries on the recent rapid increase in salaula availability and consumption express not only disenchantment with the previous government and its state, but also the attainability of future hopes and aspirations."

The re-use of second-hand goods in modern industrial countries

The practice of re-using second-hand clothes (and other used goods) has by no means died out in industrial countries. The used clothes which are donated to charities in Sweden, in the U.S., and presumably in many other industrial countries, are first sorted for those suitable for resale locally. "Thrift shops" and "second-hand stores" selling used clothes at prices far below those for new clothes are by no means uncommon; some (as we discussed in Chapter 4) are even run by professional management companies operating on a for-profit basis. "Flea-markets" and other mechanisms for redistributing used clothes and other used goods are also rather common. Many families acquire large portions of their wardrobes through such mechanisms, while children are known to pass clothes down as they grow older, thus reusing clothes within families as well.

Lemire's study of the used-clothes trade in eighteenth century Britain

Used clothes (and other used goods) have been re-used extensively in many societies over long periods of time, without any obvious psychological harm, and seemingly with economic benefit. Some fascinating examples come from Beverly Lemire's 1991 book "Fashion's Favourite: The Cotton Trade and the Consumer in Britain, 1660-1800", which we quote extensively in Appendix 9. Lemire concludes:

"The trade in clothes and the movement of items of dress through society and through the market was a salient feature of pre-industrial and early industrial Britain, providing an element of choice to a greater portion of the population than has been recognized to date. Pawnbrokers, clothes salesmen, and dealers of a general sort worked in rural and urban settings, buying, trading, and selling clothes of all sorts, but looking in particular for the type of clothing they knew would be most in demand by their customers... The second-hand trade was a critical factor enabling a large portion of the population to buy more apparel. The percentage of income spent on clothing would be more flexible when a part of the cost of a suit of clothes, a gown, or accessories could be recouped from the resale of old clothes. Thus a proportionately greater access to relatively more-fashionable clothes was possible, modifying dress as the mood or the style demanded."

Used clothes for disaster relief

Clearly there are also circumstances in which the charitable provision of used clothes internationally is accepted and very much needed and appreciated. Even the well-known private development agency Oxfam, which has raised serious questions about the disincentive effects of food aid, for instance, and which almost never ships used clothes overseas, occasionally has special projects in which they do so, such as its current "'Cold Front' appeal for winter coats for Bosnia and the Transcaucasus, and T-shirts into Renamo controlled areas of Mozambique." We saw in Chapter 4 that Swedish NGOs are also involved in relief efforts of this sort.

Conclusions

Re-use of second-hand goods is a widespread phenomenon; no historical or sociological basis is found for banning used-clothes imports

Based on historical and sociological evidence, it seems clear that we cannot conclude that the export of used clothes to LDCs is categorically bad, and should perhaps be banned, but never subsidized. The re-use of second-hand clothes seem to have a variety of benefits in many times, places, and situations. To answer whether used-clothes imports should ever be subsidized, and if so, under what circumstances, we will have to consider the specific effects of subsidizing used-clothes imports.