The Economist December 18th 2021 Holiday specials 43
fashionO NE WOMAN’S
T RASH
A
flat whitemight last three minutes; a bottle of
fine whiskey a year if it is savoured slowly. iPhones
are typically replaced after two or three years, and cars
after a decade or so. Some possessions are likely to out
live you, most notably your house. Some outlast civili
sations: look at Ancient Roman jewellery. Everything
you own lies on a spectrum, with consumption goods,
such as a coffee or newspaper, at one end and invest
ment goods, such as a house or a diamond, at the oth
er. In the middle are durable or “durableish” goods,
such as cars, coffee tables and washing machines.
Investment goods decay so slowly that, if scarce,
their value may increase. Durable ones have utility and
thus value for many years, but tend to depreciate while
you own them. (Rare exceptions include vintage cars
and Moonlanding editions of the New York Times.)
Where goods lie on this spectrum determines not
only how long they last but what sort of market devel
ops to trade in them. Many more people buy used
homes or rent properties than buy newbuilds, and
only around a quarter of car purchases are of new vehi
cles. No one, by contrast, tries to resell bagged lettuce.
Clothing lies in between. Wellmade leather or denim
items may last for a decade; a flimsy silk camisole for a
season. But durability is not the only factor. Fashion
matters, too: desirability can be fleeting.
All the more so in an era of justintime supply
chains and socialmedia influencers. People now
spend a lower share of their income on clothing than
ever before, but the number of items purchased each
year has ballooned. Many items are worn a few times
before being discarded; 95% of the clothes Americans
send to landfills are in good enough nick to be reused
or resold. This is wasteful and environmentally trou
bling. Reliable estimates are scarce, but industry stud
ies reckon that clothing manufacture and distribution
account for between 2% and 8% of global carbon emis
sions. The fashion industry probably emits more car
bon than aviation (3% of emissions) or shipping (2%).
Yet technology is reducing the friction in trade of
all kinds. This started in financial markets, where
whizzy algorithms and vast amounts of data have
pushed trading costs practically to zero. More recently
online platforms such as OpenDoor and Redfin, which
use data about property features and locations to esti
mate values of homes algorithmically, have started to
drive down estate agents’ commissions. The trend
then extended beyond investment goods. That was en
tirely more radical since it made markets where none
had existed. Look at Airbnb and Uber, which turned
empty homes and idle cars into sources of income.
Now it has moved to goods in the middle of the in
vestmentconsumption spectrum. A decade ago you
would have struggled to offload secondhand clothing,
let alone get paid for it. Emptying your closet meant a
trip to a charity shop. A few highvalue items could be
resold, says Julie Wainwright, the founder of The Real
Real, an online secondhandclothing site, but largely
in “pawn shops or local consignment stores, where the
experience and the payouts were not good”.
This all meant that the market, in economist
speak, was thin and illiquid. Matching buyers and sell
ers was tricky; transactions were rare; commissions
were high. “One kind of illiquid market used to be the
market for knickknacks in the attic,” says Alvin Roth,
an economist at Stanford University who won a Nobel
prize for his work on market structure. “But the interN EW YORK
Technology has made it easy and worthwhile to sell old clothes.
That is changing how people perceive clothing, and what they buy