Review of The Contest for Value in Global Value Chains: Correcting for Distorted Distribution in the Global Apparel Industry

Abstract

In this book, The Contest for Value in Global Value Chains, Lilac Nachum and Yoshiteru Uramoto provide a complex picture of global value chains by zooming in on the global apparel industry. The home of infamous "sweatshops" and labor-intensive work, the apparel industry is often seen as a representation of how power relations are unequally distributed among actors in global value chains, where the lead firms in the chains, that is, branded marketers and large retailers like H&M, Uniqlo and Zara (the buyers in "buyer-driven chains"), can appropriate a large amount of value and squeeze their suppliers' profits, taking advantage of low-wage labor in the Global South. In some cases, workers in labor-intensive industries consist of young migrant women, working in export-processing zones, threatened with anti-union strategies, sometimes through military or paramilitary meanscharacteristics born out of the long history of a capitalist world economy that has brought us today's neoliberal policies favored by foreign investors. It is also not uncommon that disasters occur, such as the collapse of the Rana Plaza, home to a garment factory, in Bangladesh in 2013, where 1,134 workers died, most of them women.Nachum and Uramoto claim that there's more complexity to this bleak representation, at least if we see the apparel industry on different levels. Using concepts of value appropriation ("approximated by profit margins, which reflect the difference between total income and total cost incurred in the production") and value creation ("measured by the difference between sales and the purchase of components, materials, and services from other firms")and how the two intersect (p. 38-39)and doing a case study of the Bangladesh apparel industry, they derive a few conclusions. Admitting that their findings may not be able to be applied across the apparel industry, Nachum and Uramoto nonetheless offer some insightful points. I will focus on two.First, the authors find that the power between the suppliers and the lead firms seems to be more balanced than what is usually assumed, seen from the comparison between the value appropriation/creation of Bangladesh's local apparel manufacturers and the lead multinational apparel firms, mostly headquartered in the Global North, which outsourced their production in Bangladesh. This is also in line with the profit data that shows that the profit margins of top global apparel companies have not changed much in recent years (see Chapter 4). Of course, we have to keep in mind that we are here comparing giant multinational corporations (MNCs) and their local suppliers, with MNCs having profit Book review 699