March 25, 2023

It’s the Economy: Economic Recovery, Made in Bangladesh?

Nearly every rich country has gone through a “T-shirt phase” — an economic period in which there are a significant number of poor farmers who, rather than toil on unproductive land, accept harsh work conditions and low wages in textile and apparel factories. Britain started its T-shirt phase in the late 18th century; the United States had two — New England in the 19th century, then the South in the 20th. During the last 80 or so years, many Asian countries — first Japan, then Korea, Taiwan and China — progressed from the T-shirt phase into broader economic development. Cambodia, Vietnam, parts of India and Sri Lanka are passing through this now. But Bangladesh, where an eight-story apparel factory tragically collapsed last month, killing hundreds of workers and devastating the country, is in the midst of a particularly confusing T-shirt phase. The question is whether it will emerge into a more developed economy, like its many predecessors, or remain stuck, like Haiti.

According to the comprehensive “Ashgate Companion to the History of Textile Workers,” a study of 21 countries over 350 years, nearly every nation suffered through its T-shirt phase differently. Argentina’s brutal encomienda system literally worked indigenous laborers to death. The Hapsburg monarchy’s T-shirt phase coincided with its own collapse. Japan’s progress was slowed by a world war; Germany’s was all but destroyed by two. New England’s textile workers had it relatively good; if conditions didn’t improve, they could threaten to leave for the frontier.

All these countries, however, experienced the same broad phenomenon. Lex Heerma van Voss, an editor of the “Ashgate Companion,” told me that the T-shirt phase lasts only as long as there are large populations of farmers with few options. This is known as a “race to the bottom.” Factory owners compete by offering low prices, which are accomplished by paying workers tiny wages. Cutting costs by a few pennies per shirt may sound trivial, but mass-market brands find that even a slight increase in price destroys demand. And those pennies at wholesale become dollars at retail.

But once the factories have absorbed all these desperate farmers, they need to find a new competitive advantage. That usually involves making better products. When the T-shirt phase ends, a “race to the top” usually begins. Factories often shift to finer clothes, like dress shirts, which require skilled workers. This phase often involves the growth of unions and rising wages. It’s typically followed by one in which factory owners, forced to pay more, seek out ever more profitable lines of business. That can mean the move to low-end electronics assembly, then auto plants and maybe even airplane manufacturing. At the high end of the spectrum, you begin to see what the U.S. manufacturing economy is going through now — expensive products, like medical devices, which are often made by machines that are operated by highly skilled workers.

Bangladesh is in that moment when the race to the bottom coincides with the beginning of a race to the top. Munir Quddus, dean of the business school at Prairie View AM University in Texas, remembers living as a teenager in Bangladesh, in the ’70s, when it was one of the poorest countries on earth. Since the arrival of textile manufacturing, in the late 1970s, the country’s poverty rate has fallen to less than 40 percent from 70. The average Bangladeshi went from living on about $1 a day to more than $5. But while there have been modest improvements in some factories (“They have air-conditioning,” Quddus says), there are still thousands of decrepit ones with minimal oversight. Quddus also points out that roughly 10 percent of Parliament seats are occupied by factory owners, and others have strong political ties. This includes Sohel Rana, the owner of the factory building that recently collapsed.

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State of the Art: Financing the Stuff of Dreams Through Kickstarter

Come on, people. Open your minds. You don’t have to participate, but at least let the youngsters have their fun.

And then I started hearing people rave about I was mystified by its success — and alarmed that I didn’t get it. Was I suffering from Early-Onset Fuddy-Duddyism?

Kickstarter is a “crowd-funding” site. It’s a place for creative people to get enough start-up money to get their projects off the ground. The categories include music, film, art, design, food, publishing and technology. The projects seeking support might be recording a CD, putting on a play, producing a short film or developing a cool new tech product.

Suppose you’re the one who needs money. You describe your project with a video, a description and a target dollar amount. Listing your project is free.

If the citizens of the Web pledge enough money to meet your target by the deadline you set, then you get your money and you proceed with your project. At that point, Kickstarter takes 5 percent, and you pay 3 to 5 percent to’s credit card service.

If you don’t raise the money by the deadline, the deal is off. Your contributors keep their money, and Kickstarter takes nothing.

But here’s the part I had trouble understanding: These are not investments. If you make a pledge, you’ll never see your money again, even if the play, movie or gadget becomes a huge hit. You do get some little memento of your financial involvement — a T-shirt or a CD, for example, or a chance to preorder the gadget being developed — but nothing else tangible. Not even a tax deduction.

Furthermore, you have no guarantee that the project will even see the light of day. All kinds of things happen between inspiration and production. People lose interest, get married, move away, have trouble lining up a factory. The whole thing dies, and it was all for nothing.

So why, I kept wondering, does anybody participate? Who would give money for so little in return?

Now, when you’re a tech columnist, you get e-mail pitches every day from P.R. people hoping you’ll write about their clients’ products. But in the last few months, I’ve started getting something really strange: pitch letters about products on Kickstarter. Products that aren’t even products, just concepts. Weirder yet, these pitches aren’t coming from the creators of those products. They’re coming from ordinary citizens.

I started reading about their projects. The one that seemed to be drumming up the most interest lately is called the Elevation Dock. It’s just a charging stand for the iPhone, but wow, what a stand. It’s exquisitely milled from solid, Applesque aluminum. You don’t have to take your iPhone (or iPod Touch) out of its case to insert it into this dock. And the dock is solid enough that you can yank the phone out of it with one hand. The dock stays on the desk.

The engineer behind this dock, Casey Hopkins, needed to raise $75,000 to make his dock a real product. But his pitch was so popular, it met that goal in only eight hours. “In 24 hours, it was at $168,000,” Mr. Hopkins told me by e-mail. “It was shocking. I couldn’t eat and I didn’t sleep for about three days. The euphoria lasted about a week; then it was nose to the grindstone to start getting all the manufacturing and a million other things in place.”

Today, with 16 days left to his deadline, he’s raised $700,000. That’s a Kickstarter success story, all right.

So is the TikTok Watchband, which turns an iPod Nano into a touch-screen watch/computer on your wrist. Its goal: $15,000. Its final take: $942,578. It’s now a real product and it’s for sale in the Apple Store.

The creators of the PID-Controlled Espresso Machine, a new design that brings the consistency of expensive espresso machines to a low-cost machine, sought $20,000 — and raised $369,569 by its deadline last week. The Cosmonaut wide-grip stylus for tablets blew past its target back in April; the video points out that for a low-resolution surface where you can’t rest your hand, a fat stylus makes more sense than a pencil-like one.


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