HALF-BURIED in the Guardian in late January last year was a “long read” entitled Behind the Label. It was an edited extract from Worn: A People’s History of Clothing by Sofi Thanhauser.   

This extract — though you might not guess it from the title — is lucidly revealing and insightful about the workings of post-colonial, globalised, neoliberal imperialism with regard to textile production and trade between the Caribbean Basin and the US from the 1980s onwards.  

One outcome of the changes that had taken place is illustrated by the fact that 40 per cent of all clothing bought in the US in 1997 had been produced at home, while in 2012 the figure was less than 3 per cent.  

In short, textile production in the US had been massively reduced — necessarily at a cost to US workers in the field — and had massively increased in Honduras.

This development was achieved, predictably, by low-cost outsourcing at the behest of transnational companies, through the abolition of US import tariffs and quotas, and carte blanche freedom for the movement of finance capital.

The negative effect for working people was twofold: a hollowed-out domestic industry in the US had taken away long-present solid work for Americans; while work outsourced to Hondurans had generated poverty pay in a now heavily exporting industry.   

At the root of this particular neoliberal journey, Thanhauser explains, lay the Reagan government’s fear in the early 1980s of communism creeping forward in the Caribbean Basin.   

The answer was to extend the US grip by funding the local military, and alongside to grant “one-way duty free access to the US market for a designated range of products.”   

This was labelled the Caribbean Basin Initiative. But the gift was qualified. The incentive for exports from Caribbean countries to the US was offset by a requirement for the exporters to use US cloth.

The arrangement was made realistic by US funding provision for supporting infrastructure in Honduras (including water supply, transport and telecommunications).

Underpinning the scheme too was a 1986 Special Access Programme, specifically permitting clothing (derived from US cloth) made in the Caribbean to enter the US with low or no tariffs. Before long, the value of these exports doubled, with US and outsider investors lavishly benefiting.

Not surprisingly, domestic industry in the Caribbean suffered. In Jamaica, Thanhauser notes, between 1980 and 1992, the percentage of locally manufactured clothing for Jamaicans dropped from 85 per cent to 15 per cent, and Jamaica’s indebtedness rose enormously.

So it was that profiting US clothing retailers, such as Walmart and Calvin Klein, made sure they were administratively distanced as far as possible from the appalling pay and conditions of Caribbean workers.

In the shadows hides the Achilles heel of capitalism: the ever-widening gap — unless offset by  war or other temporary expedients — between the growing productive potential of the system and the ability of consumers to pay for its output.  

The prospect of recession — the overall contraction of the economy — never disappears. Against this background, between 1979 and 1989, Walden Bello tells us in his Dilemmas of Domination, the hourly wages of 80 per cent of the US workforce declined, in real terms on average per head by almost 5 per cent. Yet the top 1 per cent could only complain about handsome gains.

In the shadows too is the long-run drive of the US, backed up by allies including servile Britain, to maintain military reach across the continents, suppressing socially progressive and independent-minded regimes whenever it deems necessary, and keeping strategic control of Middle Eastern oil.

By the time the Caribbean Basin Initiative was invoked, global scale neoliberalism was well entrenched. Its beginnings were evidenced in the early 1970s when the advanced industrial countries felt obliged to resist pressure from ex-colonial countries for greater economic self-sufficiency (India, Indonesia and Ghana among them), who were grouped in the Non-Aligned Movement (NAM).

This pressure was enhanced by the dramatic unilateral imposition in 1973 of a substantial oil price rise by Opec (Organisation of Petroleum Exporting Countries), led by Saudi Arabia.

But the West was able to fend off an alliance between both sets of upstart countries, and to push back pressure from the Non-Aligned countries.

As early as 1975 a small gathering of advanced economies (the US, Germany, France, Britain and more, making up the G7) were quietly sounding the case for deindustrialisation in Europe and outsourcing.  

A note of a G7 meeting in November that year quotes German chancellor Helmut Schmidt: “Given the high wages in Europe, I cannot help but believe that in the long run textile industries here will have to vanish … But wages in East Asia are very low compared with ours.”

Britain’s own textile industry had indeed largely evaporated by the early 1980s, replaced by outsourcing to Asian countries.  

So it was that Labour governments headed successively by Harold Wilson and James Callaghan went along with the opening up of a neoliberal agenda, to be advanced much more brutally under the Conservative regime of Margaret Thatcher in Britain and under the Ronald Reagan presidency in the US.

Crucial to the plan were the financial resources and policing powers of the International Monetary Fund and the World Bank, both effectively controlled by the US “as largest shareholder.”  Their operational ambit had broadened since origination at the 1944 Bretton Woods Conference.  They were to be the means of keeping indebted victim countries in order, through loan conditions which frequently included provision for cutting public services and privatising publicly owned assets.

The grim outcome of the neoliberal scheme as a whole has been that the weaker countries have been to a growing extent the victims of the new imperialism, with workers in the advanced countries losing out too.

Dollar lending by the IMF has created an unwelcome additional problem for debtor countries whenever the dollar’s value rises — as it has done since 2019.  

The consequence has been that the debtor’s own currency falls in value, the total debt owed rises, and imports become more costly.

The World Bank was reported in December 2022 as expecting that in the same year 75 of the world’s poorest countries (often facing extreme weather challenges) would pay 35 per cent more in debt interest than previously, producing a total amount of £63 billion.  

The full debt of all these countries was reckoned to be around $1 trillion.

A mitigating factor in IMF policy is noted in Jamie Martin’s The Meddlers: Sovereignty, Empire, and the Birth of Global Economic Governance in relation to debt owed to China arising from its Belt and Road investments around the globe.  

China’s loan conditions in the event of default have avoided insistence on public services cuts and privatisation.  

The frequent sanction has been the extension of the loan period. This less draconian policing of debt is said by Martin to push the IMF towards being less draconian too.

Last October the World Bank’s chief economist, Indermit Gill, was reported to state that the UN’s target of a reduction of extreme poverty to 3 per cent of the world’s population by 2030, would on current trends be missed. 

“We are totally off course. Poverty reduction has come to a stop.” Guardian columnist Larry Elliott commented: “The crunch point is fast arriving.”

Global neoliberal capitalism, while generating, as it has, eye-watering benefits to its billionaires and multimillionaires, has over recent decades hit the world’s poor very hard, suffering exacerbated by extreme weathers due to the climate change crisis.  

Capitalism is itself in deep trouble, while aggressive Western military policy places us all at risk.