The world in their web: the dynamics of textile multinationals. - book reviews

This valuable book provides a great deal of informtion and important insights into the organization, performance, and trends of the world textile industry. One of its main themes is tht the industry must be looked at in its full multistage as well as multinational complexity to understand contemporary developments. The stages extend from raw materials production (cotton farmers, chemical and petrochemical companies making chemical fibers), to trading, textile and clothing manufacturing, and, finally, to the wholesaling and retailing of clothing. The authors stress the poor bargaining and marketing position of the millions of natural fiber (notably cotton) producers in third world producing countries vis-a-vis the trading companies and higher level manufacturing and selling entities, and the devastating effect on the natural fiber producers of the power of the chemical-petrochemical firms. The latter have expended huge sums to develop new chemical fibers and to transform the old in ways that improve their end-use qualities and technological flexibility; and the chemical fiber manufacturers are able to exert influence on users by advertising, brand name cultivation, and sheer power. They can also adapt well to new demands and interests of the textile and clothing makers. Clairmonte and Cavanagh argue that because of the decentralization of cotton fiber producers, the cotton industry is passive, suffering steady attrition from lack of technological adaptation and the absence of any bargaining force pressing it upon late-stage users. The authors may underestimate the inherent technological adaptability of chemically based fibers (end uses, machine capability) as a factor in the displacement, but they still make a persuasive case that corporate resources and influence are making a big difference.

Another major theme is the differential impact of the rapid technological and structural changes in the textile industry by country type and within the various countries. While the textile market is profoundly influenced by its oligopolies of first world parentage, there is an important set of underdeveloped countries, the "giant dwarfs" (Hong Kong, South Korea, Taiwan, Brazil, Mexico, India, and perhaps Singapore) that have made an important place for themselves in the international textile market. They have prospered, although the gains have been highly skewed and the participation and power of foreign capital is great. For the bulk of third world countries, however, the textile revolution has been detrimental and continues to threaten mass welfare. In all the third world countries, keeping labor costs down has been a key to success, and technological change, competition, constantly shifting production sites, and repressive governments have kept labor insecure and wages low. Technology, competition, and state subsidy and power have also had seriously adverse effects on small cotton farmers, the mass at the bottom of the international textile pyramid, suffering the most grievous blows of the "free market." Most of the third world cotton-producing states are dominated by military-comprador elites, and are members of the "old" international order, operating under IMF-World Bank-private bank principles of debt repayment and export orientation above all else. Cotton exports require an "effificent" cotton industry. Thus, the mad paradox of declining internal food production, hungry people in growing numbers, increasing food imports, but a more efficient cotton industry producing exportable cotton surpluses.

Clairmonte and Cavanagh also stress the continuing technological revolution, now extending into clothing manufacture itself, the related concentration process in virtually all stages of textiles, and the continued power of the core multinational giants to make decisions spelling boon or disaster for millions worldwide. They contend that international textiles are "dominated" by oligopoly, but their empirical evidence points to the fact that oligopoly in the various phases of the business is imperfectly coordinated and is still incapable of preventing the emergence of serious excess capacity. The oligopolists struggle to escape from the constraints of the market, and they do possess real advantages over weaker rivals, suppliers, and customers, but their own furious activity in technical innovation and the constant search for better investment climes indicates that they are still subject to market pressures and threats. Their power is manifested in an ability to innovate and out-"hard sell" natural fibers, to institutionalize product differentiation in fabrics, cloth, and clothing, to fix the location of production sites, to bargain down and outfox suppliers and manipulate governments, and to neglect completely the social costs of their policies. This book sheds a great deal of light on the relations between these dynamic textile industry structures and their frequently delecterious social impacts.

Postscript: The authors Frederick Clairmonte and John Cavanaugh are veteran scholars and critics of the multinational; the former is a senior economic officer in the UN Conference on Trade and Development (UNCTAD), the latter, currently director of an Institute of Policy Studies project on the multinational corporation.

These authors recently achieved a certain notoriety by virtue of the fact that a study written by them under contract with the World Health Organization (WHO) on the international alcohol industry--Alcohol Beverages: Dimensions of Corporate Power--was refused final clearance for publication by the WHO, and is a candidate for permanent suppression. The reasons for this appear to be threats by the Reagan administration to withdraw funding (vide UNESCO) from any international organization out of its control (i.e., "politicized") and taking any actions threatening the ideologies and corporate constituency that it serves so loyally. A study critical of the $170 billion world booze industry, stressing the heavy orientation of its $2 billion ad budget toward women, children, and third world populations (booze sales in the third world quadrupled between 1972 and 1980) clearly fits the bill. See Kathleen Selvaggio, "WHO Bottles Up Alcohol Study," Multinational Monitor, November 1983.

COPYRIGHT 1984 Monthly Review Foundation, Inc.
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