Wielding the Thread: Local Textile Markets and Global Competition in the Periphery, circa 1860-1960

Elise van Nederveen Meerkerk, Utrecht University
Katharine Frederick, Utrecht University

This paper analyzes domestic cloth production in relation to consumer preference in Java and sub-Saharan Africa, with the aim of uncovering how local industries coped with the effects of broader global and colonial forces during the nineteenth and early twentieth centuries. Market-oriented deindustrialization theories based on Ricardian theory purport that, by the nineteenth century, world regions with a comparative advantage in manufacturing (primarily the West) prevailed as providers of industrial goods to the global market place, while regions with a comparative advantage in raw materials production (the Global South) abandoned industrial manufacturing for domestic markets in favor of tropical commodity production oriented toward global markets. However, the survival of numerous handicraft industries well into the twentieth century is a clear indication that simple comparative advantage is an insufficient explanation of industrial vitality. Inspired by contemporary business theory, we argue that many domestic handicraft producers in the Global South in the nineteenth and early twentieth centuries wielded certain competitive advantages – derived from the very different production and marketing strategies pursued by handicraft manufacturers relative to factory producers – which provided competitive protection despite increasing globalization. We place particular emphasis on one crucial, yet understudied element in the explanation for the resilience of local production: the capacity of local producers to accommodate local consumer preference. Specifically, strategies of product differentiation and responsiveness to shifting consumer needs, along with flexibility in manufacturing methods, enabled local producers to remain competitive in confrontation with mounting imports from early factory producers, who typically offered cheap, but lower quality and less unique products. Moreover, some local manufacturers could even compete on the basis of price given the very low labor costs involved in seasonally oriented handicraft production.

No extended abstract or paper available

 Presented in Session 184. Innovation and Disruption: Beyond Creative Destruction