“It’s The Economy, Stupid”: The Rise of Neoliberalism and Its Control on Fashion

In 1971, a New York cab driver picked up a businessman who had come from France. Upon learning of his origins, the driver mentioned that he loved the country. The passenger asked what he loved about France, and whether he knew who the president was at that time. No, he replied, but he knew of another famous Frenchman – Christian Dior.

Over a decade later, the same Frenchman swooped in to swallow a bankrupt textile and retail company, whose portfolio happened to include the House of Dior. He closed the deal with the financial assistance from Lazard – a European investment bank. In the course of two years, the man known as ‘Wolf in Cashmere’ had fired thousands of employees. Thus began Bernard Arnault’s ruthless quest to build fashion’s biggest empire. 

And Arnault was not the only one on a buying spree. 

A (Not-So) New Form of Capitalism

The neoliberal world is not a borderless market without states but a doubled world kept safe from mass demands for social justice and redistributive equality by the guardians of the economic constitution.

The current rules all but ensure that governments act in the interests of capital, since, if businesses do not like a certain country’s policies (say, a proposal that corporations pay their fair share of taxes), they can disrupt the economy by abruptly withdrawing from that country.

Quinn Slobodian, Globalists: The End of Empire and the Birth of Neoliberalism

Bernard Arnault at an LVMH Shareholders General Meeting

19th century saw the rise of industrial capitalism in the Western hemisphere. Countries who were able to mix labour, technology and natural resources to produce goods and services for mass consumption prospered. Governments regulated banks and flow of capital to encourage growth. Under the banner of capitalism, a new epoch was born.

Fast forward a century later, industrial capitalism has evolved into a different beast; a new form of free market, one that Adam Smith warned against. Though It looks immensely attractive on the surface, it is stuffed with cardboard and horse glue like a pair of knock-off Louboutins. This metamorphosis into 21st century free-market economic system remains an esoteric topic while still flying under the banner of capitalism. It is no wonder that the masses are confused. In schools we were taught the greatness of industrial capitalism, but what we are getting is a new form of economic feudalism. The name of this system is neoliberalism.

Neoliberalism is free-market capitalism on steroids that promotes the interests of transnational corporations, often at the expense of national sovereignty. Not to be confused with international trading – a practice which has spanned many centuries -these corporations control capital flow with the aid of global financial systems, and sometimes carry out regime changes and colour revolutions wherever necessary. It is a hyperindividualistic economic system devoid of empathy.

The resulting finance-capital gains have become the easiest way to acquire fortunes, which take the form of rent-extracting claims on the economy, not new means of production to support “real” economic prosperity and rising living standards.

Michael Hudson

The result is demonstrably all too visible for us to ignore. After decades of neoliberalism, we see a world run by powerful oligarchies who can influence the economic development of nations as well as its labour policies, and funnel the transfer of wealth to the very top. They are supported by the transnational financial class who have direct links (notoriously shown via revolving employment) to US Federal Reserve, Bank of England and European Central Bank. As companies consolidate into giant conglomerates, we get the illusion of choice and diversity when in fact, our choices are more limited than ever. 

For the lay consumers, this may seem like par for the course, but knowing how global corporations operate explains why the middle class is shrinking, why diversity feels like an illusion, and why we are currently in a state of depression, anxiety and unease. Identifying the problem opens the door to finding solutions.

Fashion, Globalism and Neoliberalism

In 1999, a French businessman who made his money in the timber industry started a game of tug-of-war with Mr. Arnault. The prize: Gucci. That bitter rivalry ended only 2 years later, when Mr. Pinault was given the rights to purchase the remaining shares of Gucci, forcing Mr Arnault to capitulate his shares. Thus began François Pinault’s quest to become France’s second luxury oligarch1.

Just like Bernard Arnault, François Pinault amassed his fortune by buying and selling companies using government aid. Once a bastion of socialism in 20th century, France turned 180 degree to support neoliberal economic policies, approximately around the same time as the rise of Margaret Thatcher and Ronald Reagan. Together with the rest of Europe, bureaucrats ‘liberalised’ the economy, reduced banking rules and regulations, turned a blind eye to predatory mergers, while creating job instability for the middle and working class with free-for-all labour policies. 

As dramatic as the rise of the multinational corporation has been its increased political prominence.” 

Joseph Nye, Multinational Corporations in World Politics, 1974

So goes the prediction. While attracting lucrative foreign investments, many governments even then had come to fear this kind of economic takeover as their predecessors had been concerned about military invasion.

With money comes power. Luxury conglomerates can obtain preferential treatment from government bodies and leverage financial instruments to hold on to their prime positions. This was especially evident during the height of the pandemic. When small to medium sized businesses were forced to weather the storm on their own, LVMH was given close-to-zero interest rate loan to take over Tiffany’s directly from European Central Bank via its quantitative easing program (a fancy term for money-printing that favours lending via low interest rates to the privileged few). It is as close to a collusion between public and private money that would be viewed as corruption if it were to occur in Asia or Africa. 

As with all mergers and acquisitions, downsizing would have inevitably occurred. French executives were flown in to take the reigns after the takeover, including Arnault’s 28-year-old son.

Nepotism is legal – and widely-practiced – in European conglomerates. Corporate owners pick the front-facing ‘creative directors’ while power remains in the family. François Pinault handed over Kering to his son, François-Henry. At 23, Jean Arnault, youngest son of Bernard, is the director of marketing and development for Louis Vuitton watches. When Frédéric Arnault was 25, he was named CEO of TAG Heuer, making him the second-youngest Arnault to obtain that position after his brother Alexandre. From their resume, we can see that they play a game of merry-go-round every few years. Most people their age struggle to get their first entry-level job, let alone be allowed to run a multi-million dollar brand. One cannot help but wonder whether at that age they would have developed the emotional capability, worldview and experience to empathise with the people working for them, amongst a myriad of other ethical issues tied to nepotism. 

While hereditary baton-passing is a common practice for most ‘family-run business’,  there is a difference between the typical SME family-run business in Berlin and Dallas, and these modern globalists. SMEs do not dictate government policies. They can lobby for changes if they organise themselves, but they cannot control capital flow to short the economy or manipulate labour laws. Global corporations do. The age of neo-feudalism2 has arrived. 

“Neoliberalism is like the bind weed. Starts out innocently, sprouts some pretty flowers, then thorns and then it binds any vegetation and kills it soon taking over the whole garden.”

– Anonymous

Across the pond, the influence of neoliberalism takes shape in a different way. While European luxury brands are less inclined to move much of their production out of Europe3, public companies across the Atlantic have embraced off-shore production with much fervour. 

Like Apple, VF Corp, and Target, Nike keeps its high-paying jobs in Portland, Oregon, but delegates its manufacturing to sub-contractors in faraway lands. Nike began its offshore production in South Korea and Taiwan in 1970s when the labour costs were low, before tapping Chinese labour market in 1981, then Indonesia and Vietnam. Subcontracting manufacturing enables corporations to subcontract empathy, so they do not have to concern themselves with trivial matters such as wage suppression or enforcing long working hours in order to meet the production targets that have been set in the headquarters. In the event that the local government decides to enact protective labour laws, these corporations will take their business elsewhere4. The race to the bottom is truly well and alive in this industry.  

For all the talks about corporate social responsibility, meaningful actions for workers and the environment will not be carried out, because it is not in the interests of company shareholders. Fashion conglomerates in the US operate as public companies whose common (non-insider) majority shareholders boil down to mostly three names – Vanguard, BlackRock5 and State Street. VF Corp, Nike, PVH, Tapestry Inc, Burlington, Target, you name it, they are in it. These shareholders are institutional investors who represent private clients, funds, hedges, banks, insurance companies etc obfuscated in complex financial arrangements to funnel flow of capital and profits to money managers and their clients – the hallmark of a rentier economy. 

All public companies have a fiduciary duty to their shareholders. They will pay lip service to sustainability until the moon turns blue, they will never speak of increasing wages, nor will they change their business models to reduce the volume of production – because all of these measures will increase expenses and reduce company profits, and ultimately bring down their bloated company size and managerial remunerations. Shareholders will dump their stocks, and there will be multi-million dollar lawsuits filed against all relevant parties for breaching their duty. Hence the perpetual chase for growth on the backs of the Global South and the environment. 

Welcome to The Ponzi Scheme

or Marketing As A Weapon of Corporate Propaganda

Understanding how easy it has been for all of us to ignore the effects of neoliberalism – while social malaise, inflation and widening of income inequality sets in around us – boils down to dissecting the effectiveness of corporate propaganda. Resourceful fashion companies – with the help of the global advertising and PR agencies – are able to present themselves as the good guys, then proceed to sell their products as the panacea to our psychological ills. Individuals fighting back against this psychological warfare have as much power as tiny krills sucked into the belly of a whale.

In order for companies to paint themselves as the good guys, or at least downplay their roles in bringing about the state of the world we live in, they employ marketing and operational strategies to build goodwill. Goodwill is an intangible asset that has direct correlation to the monetary value of a brand. The better people feel about a brand, the higher the amount they are willing to spend on its products. Here are some of the usual tactics.

Corporate Philanthropy


  • Build brand associations to cement brand narrative, eg. sports teams
  • Increase brand exposure to the masses. Higher exposure increases positive associations towards brands
  • Product placements in various media that are popular amongst their intended target audience

Political Rhetorics

  • In recent times it has becomes fashionable for brands to pander to trendy political movements6, so long as it does not awaken class consciousness.

Having whitewashed their unethical behaviour, they lure consumers by employing the usual marketing tactics that appeal to emotions, individual’s lack of self esteem, or the desire for happiness, love and respect. Edward Bernays# would be very proud.

The typical fashion company today spends less money on labour and product development than on marketing and advertising campaigns. The value of the product no longer lies in the scarcity of textile or labour intensity or aesthetic value, but rather on an artificially-stoked desire and artificially induced shortage. That is why PR and marketing managers are some of the highest-paid professions in this business.

The reason why marketing is becoming an important factor over labour, materials and technology is no different from the reason why neoliberalism needs propaganda to sustain itself as it slowly brings about economic implosion. The more people believe in the brand, or an empty economic system, the more people they can lure into the Ponzi scheme to prop up the belief system spun out of thin air. Wealth can then be funnelled from the proletariat to the upper class elites who game the system.

With so many brands competing in the market, we get the illusion of choice that masks their owners who espouse the same corporate values. Whilst monopolies in other sectors such as media and telecom cause prices to rise and standards to drop, what happens when our received ideas, culture and information are dominated by just a few companies?

Impact on entrepreneurship and creativity

During an interview with Dries Van Noten, renowned fashion critic Vanessa Friedman broached the topic of conglomerates. He saw his suppliers being taken over, and as a result, he lost access to their services. Despite his big losses, he refused to be bought out by the big guys because he did not want to lose his freedom, thus he had to fight for his own survival.

As manufacturing moved to countries with lower cost of living, factories in developed industries struggled to stay competitive. Their demise has been well-documented in the past three decades. With a smaller pool of manufacturers to choose from, new brands face the issue of finding reliable local manufacturers, as they have to compete with larger brands who can meet higher minimums. Faced with the barrier of entry to local production, younger generation of designers would have to increasingly depend on large corporations for their livelihood. Or rely on wealthy patrons to support their burgeoning business. The proliferation of digital fashion is borne out of the short-sighted industrial policy that has erased the manufacturing base in developed nations. It is difficult for the time being to conclude whether digital fashion is economically viable and sustainable in the long run. However, it is safe to say that those who have no access to capital will see the desire to be economically autonomous in the fashion industry turn into nothing more than a pipe dream. 

As marketing propaganda proliferates the consumer culture that we live in, the human brain – which develops positive sentiments to those that we are most familiar with – will pick out brands that can pay for maximum screen time. Smaller brands who struggle to compete for attention see their sales diminish. Over the years, the slow death of independent brands has lead to a dearth in diversity, and I do not mean skin colour and body sizes in advertising. As the middle class shrinks, the mid-market segment also loses its fight to ultra-luxury and cheap fashion. Beauty and aesthetics are defined by an increasingly narrow perimeter that panders to social media audience. Rich cultural tapestries around the world which used to inspire designers have given way to streetwear and easily-digestible branding.

Mr. Van Noten’s choice to stay privately-owned, alongside his colleagues Rick Owens, Rei Kawakubo, Issey Miyake, and so few others is not something that should be taken lightly. Other designers have not been so lucky with their decision to surrender their ownership. One only needs to look at Jil Sander, Helmut Lang and Martin Margiela, who sold their brands and called it quits not long after.

You can still help yourself

Understanding that the world is not fair, never has been and never will be, is the first step towards building internal fortitude. However, it is important to recognise that this inequality has been exacerbated for decades due to lack of empathy for the middle and working class. Heads of large corporations have little concern for the industry other than perpetual growth, cementing their legacy and building a multi-generational dynasty. Government bureaucrats whose job is to enact laws protecting the majority have been rendered powerless after decades of deregulation and legalised corruption. Now that the majority of Western populations holds far less wealth than the global elites, there is little monetary incentive to serve the people.

I struggle to put forth pithy hypothetical solutions to bring down the neoliberal system for many reasons. Societies in developed nations are too distracted and divided to fight against the corporate elites. There is a pervasive wave of depression and anxiety brought about by unceasing assault on job security and lack of meaningful work. Those who are lucky enough to work for the conglomerates are reluctant to walk away from their comfortable salaries, especially when well-paying jobs are hard to come by. While Gen-Z is distracting themselves from reality, my generation is slowly descending into apathy.

Behind the fog of decadence, fashion is ultimately built on the backs of farming and manufacturing. For those who do want to pursue economic autonomy in the field of fashion design, and if there is no other option on the table domestically, my suggestion is this: migrate to a place where people still make actual goods and provide services en masse; where modest-sized businesses are given room to grow and thrive. Success is never guaranteed, but you never know until you try.

“It’s the economy, stupid”

For decades, corporate spin masters have indoctrinated the public (especially via schools) on the myths of neoliberalism; that the freer the market, the richer the economy. Popular rhetorics include, but are not limited to: deregulation creates trickle-down effect that encourages employment and enriches the bottom rungs of society, protecting the labour class is communism, and industrial policies stifles development; all the while hoovering profits to the top of the pyramid. What they neglected to mention is that the freedom of ‘free market’ is only granted to the upper echelons of the business class. Under this economic serfdom, everyone else has to play under a different set of rules.

I always liked being number one.

Bernard Arnault

Few leaders of fashion conglomerates actually care for fashion. The designers, technicians and workers labouring for them are the ones who contribute to the industry, not the self-absorbed managers. One cannot help but wonder if creativity and beauty would be more widespread if it weren’t controlled by the few.

I spent the entirety of my school life shuttling between Singapore, Australia and Europe, and came to the conclusion that they offered little opportunity for someone like me – who has neither the capital nor industry network – to build something from scratch. My cohort was presented with the ashes of the Great Recession as a parting gift upon graduation. Job opportunity in fashion for non-EU graduates was next to zero, and barriers to entry for entrepreneurship was insurmountable, especially for outsiders. Singapore had become completely dependent on the rent-seeking FIRE sector, while Australia lacked the logistical agility and manufacturing flexibility that is crucial for small companies, especially if raw materials have to be imported. And so I decided to take a gander at China, and have not left since.

Understanding how the economic system is rigged is the first step towards working around it. Despite facing a severely unequal playing field, I refuse to grow nihilistic. In my own modest way I want to bring the love of clothes back into this industry. Perhaps in a few decades, a coalition of small businesses, labour unions and governments of countries non-allied with hegemonic Western coalition can rise up and challenge the supremacy of the transnational capital owners. Hope springs eternal.

Humans as a species have always migrated to greener pastures. For now, if staying at home hinders your fight for your survival, seek opportunities somewhere else. 

1. Notice how we reserve the term oligarchs for Russian and Eastern European billionaires, but not for their Western counterparts, despite the latter group wielding far more control over global economies. Neoliberalism goes hand-in-hand with its usage of language as a form of control, similar to Orwellian doublespeak. Paris and New York does ‘Fashion’. Guangzhou, Dhaka and Bandung does ‘apparel’.

2. The transfer of wealth and power down to the next generation is akin to the feudalism that ruled across medieval Europe. We only need to look at the success of centuries-old European dynasties such as the Louis-Dreyfus clan (of which a certain Julia who has graced TV screens for decades belongs to), and the Rothschild dynasty. Today we are seeing the birth of new dynastic empires in South Korea with the ruling chaebols.

3. Instead preferring to rely on the vast network of informal cottage industry who hire mostly migrant workers.

4. As standard of living and cost of labour rise in China within the last twenty years, many companies have moved their production to Vietnam, Cambodia and Ethiopia. Some companies such as Nike and On Running maintain a majority of their productions in China as it has evolved into a technologically-competitive production and logistics hub for performance wear.

5. BlackRock shares a cosy relationship with the US administration. Several BlackRock alumni occupy spots in the Joe Biden administration. BlackRock received authority to allocate the Federal Reserve’s corporate bond purchase program in response to COVID-19 — buying up several of their own ETFs in the process. 

6. PR companies disseminate their clients’ messages through influencers, gatekeepers and paid bots. The audience regurgitates the messaging to stay edgy and “well-informed”, sometimes agreeing, sometimes replying in faux outrage, but not enough to stop the PR gears from turning. These rhetorics aim to paint an ethical picture of the company, with the (un?)intended consequence of dividing and distracting us from fighting against the elite corporate class.

Further reading/watching

Globalists: The End of Empire and the Birth of Neoliberalism, by Quinn Slobodian, 2020

J is for Junk Economics: A Guide to Reality in an Age of Deception, by Michael Hudson, 2017

#The Century of Self, by Adam Curtis, 2002. A documentary on Edward Bernays, father of Public Relations and Marketing Propaganda

Worlds Apart: How neoliberalism shapes the global economy and limits the power of democracies, by Patrick Iber, 2018.

Neoliberal Capitalism at a Dead End, by Utsa Patnaik and Prabhat Patnaik, 2018

From Neoliberal Fashion to New Ways of Clothing, by Jerónimo Montero Bressán, 2020

Neoliberalism: Political Success, Economic Failure, by Robert Kuttner, 2019

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