Posts Tagged Trade
Of Robots, T-Shirts and Iron Ore
Have you ever wondered what goes into the making of a t-shirt, business shirt or blouse – like the one you are most likely wearing right now?
Obviously there are the raw materials – cotton most probably, some plastics perhaps – but what else is important when making a piece of clothing? Most probably the shirt was made with a sewing machine; in a factory; which sat at the end of a road-way or a train-line enabling the raw materials to arrive at the factory gate, and the shirts to leave for sale; the factory probably ran on electricity; the workers were trained to use the sewing machines, in the company culture and values; whilst other workers generated the design and plans for each shirt; whilst still other workers focused on efficient management, incentive schemes, productivity improvements, finance, risk analysis, marketing, sales and surveys.
As you can see, there is a lot going on to make the humble t-shirt.
But what about something more complicated, like a production-line robot? Or something less complicated to find, but just as complicated to make commercially available like iron ore? Robots need similar inputs to t-shirts – labour, raw materials, designs, electricity roads and so on – but they need different raw materials, and more precise scientific knowledge. Iron ore needs mining equipment, engineering knowledge, and of course, an endowment of iron ore to discover and extract.
Now consider the fact that t-shirts, robots and iron-ore are not made in the same place, by the same country. A likely source for your shirt is Pakistan, whilst the manufacturing robotics comes from Germany, yet Australia is the home of global iron ore production. It is worth pausing to consider why should that be? Why should some countries produce only some goods or services to the exclusion of others?
Craig Mawdsley is Director of OneSeed a textiles importing business bringing hand-made dresses, bags and other textiles from Cambodia to the markets of Australia. The business began around 6 years ago with Craig’s $500 tax return as seed capital and growing ever since with sales in 2011 expected to hit $100,000. In this podcast Craig explains the philosophy behind OneSeed, and what OneSeed does for the Cambodians employed by it. Along the way, we discuss international trade theory, labour laws, specialisation, micro-business and the notorious sweat-shops of Cambodia. Craig is also a graduate of Monash University and the second-year economics unit, “Prosperity, Poverty and Sustainability”.
Or download the podcast here: download (mp3)