Embedded Illusions

Manufacturing Low-Cost Fashion in the Southern Cone

Some sweatshops feel like home. At least, this is Juan’s case. Admittedly, the images we have of sweatshops as sites of exploitation and mechanical, unimaginative work don’t match what I witnessed the day I visited his factory. Far from the dazzling lights of the country’s capital, Buenos Aires, and located in a shabby house whose number Google Maps cannot detect, Juan’s workshop was in full swing. There was no time to waste. The freshly manufactured children’s caps had to be adorned with a ring, apparently in fashion among children and teens. Then, they had to be packed and boxed. Ready for the post office.

No one in Juan’s workshop seemed unhappy with the working conditions. On the contrary, I would say. I had known Juan Montero for a long time when we shared time at his stall in La Salada, in the outskirts of Buenos Aires, while I was conducting the ethnography for the book Making it at Any Cost. But I had never visited his new workshop, where he employs 16 family members and friends. Juan started making clothes in 2001, using a family sewing machine that he bought with US$50 that his mother lent him. After 23 years, Juan has survived the pandemic, has two small factories and more than 15 employees, and produces about 10,000 children’s caps a month.

Shelves of clothes in Juan’s workshop (Photo by author)

 Workshops like Juan’s don’t feature in scholarship on the garment industry in Latin America—Central America and Mexico are the classic examples of the sector in the region. At the same time, little or nothing is known about what is happening in this industry further south. Duke sociologist Gary Gerreffi and his associates teach us about global value chains, global dynamics and the role of maquilas (garment assembly)  in countries like Honduras, El Salvador, Guatemala and Mexico.

Yet we see nothing similar in countries like Argentina and Brazil. These countries aren’t part of free trade zones, and most people get dressed thanks to vibrant informal trade networks of garments manufactured in workshops like Juan’s, wholesaled in marketplaces, and purchased by customers eager for low-cost, fashionable pieces of garment. With much anticipation, Juan begins to imagine the next collection, evaluate color combinations, test patterns, buy items and calculate fabric and money. He tries to grasp what his imaginary customer would like to wear.

Rolls of fabric in Juan’s workshop (photo by author)

The garment business model prevalent in the Southern Cone is part of a relatively new configuration of the garment industry that is particularly ubiquitous in Argentina and Brazil, with branches extending to Chile, Paraguay, Uruguay and Bolivia: garments are manufactured in workshops and then commercialized through informal marketplaces and trade networks. Juan does not own a workshop that works for fast-fashion companies that outsource certain operations. On the contrary, he is the one who plays the role of the fast-fashion companies. We could say he does not work for Zara, he works like Zara: he assesses the preferences of his target audience; he analyzes potential trends in colors, fabrics or accessories; he studies whether The Joker or a Disney character is in fashion among teenagers, and then he decides on the garments to be made, estimates the costs and organizes the work “backward.” Juan reacts quickly, bringing new batches of garments and finishing the items in his facilities, just in time. To speed up the process, Juan subcontracts work, especially sewing or attaching zippers and buttons. Then, he goes to the marketplace, where he rents a stall and sells his products. At the marketplace, he will come into contact with customers who pass information about new trends, tastes or ideas from customers thousands of miles away from Juan’s workshop.

Cutting table in Juan’s workshop

The downstream garment entrepreneur

Juan—and the thousands like him—represents a new player in Latin America’s garment sector. They are not seamstresses, apprentices, ironers or buttonholers working as intermediaries commissioned by fast fashion multinationals, as the literature on global value chains teaches us. We are confronted with people who define themselves as entrepreneurs and manage labor in small or medium-sized enterprises. They are people who have learned how to survive successive economic and political crises and still managed to make material progress. These entrepreneurs, who run some 60,000 informal workshops in Argentina alone, are driven by a force rooted in the nature of their own activity: they do creative work based on the continuous monitoring of the imaginations and ideas—preferences, in economic parlance—of those they consider their target customers for their following collections. Juan launches a product that results from a creative and interpretative process with his future customers in mind. It is often the result of what we could aptly define, in line with the literature on global value chains, as “upgrading”: products with improved components, fabrics with different prints, textures, or materials or accessories designed ad hoc.

“For this print [on synthetic fabric], you know what I did?” Juan’s wife questions with pride. “I went to bake shops that sell children’s cakes and looked at the characters they use [on the top]. In [the city of] Laferrere, kids seem to like Spiderman. We also looked on the Internet. The boys like Spiderman, and the girls like the princess from Frozen.”

Juan’s wife, who also runs the family business, explained the creative process of the new product one Saturday morning when she was resting with her family at a hotel in downtown Buenos Aires. Although Lafererre is not far away, going to the city of Buenos Aires is still something different, considered exceptional, and evidence of an ever-present stigma that separates the City of Buenos Aires from places like Laferrere. Juan likes to repeat, “in the capital [city of Buenos Aires] live educated people.”

Stall at La Salada marketplace, Buenos Aires (Credit: Sarah Pabst, La Salada Project)

Academic scholarship also reproduces this stigma every time it is claimed that entrepreneurs like Juan or his wife are simply copying. Sure, using the Frozen Princess or Spiderman conflicts with the trademark rights of others. Still, Juan also uses other designs as templates to add details, accessories or colors. Is it copying to buy a garment in a store, take it apart, and use the pattern as inspiration? Is this same practice—using other people’s designs as inspiration—not in the repertoire of Zara and many other companies in the fast fashion sector? The stigma is reproduced when, even though it is common wisdom that practices of monitoring the market and using certain pieces as “inspiration” are standard in the fast-fashion world, scholars insist that companies like Juan’s copy while fast-fashion multinationals create.

Entrepreneurs’ Exit Strategy

Entrepreneurs like Juan also represent a new type of player in the region’s informal sector. Rather than working upstream, providing sewing services to retailers who formally sell garments, Juan’s enterprise is the productive link in a circuit in which distribution is also informal. From the purchase of fabrics, often done off the books, to the sale to the final consumer, all processes are submerged in informality. This informality is not the result of companies decentralizing production to peripheral workshops due to growing international competition, as Princeton sociologist Alejandro Portes, for example, would argue. Nor should we look for the causes in the intricate web of state regulations that discourage entrepreneurship, as Peruvian economist Hernando de Soto’s neoliberal explanation would have it.

Rather, the explanation for the informality of the economy in which Juan works should be sought in the need to keep costs low, which incites people to “exit from legality,” World Bank chief economist William Maloney would have it. Entrepreneurs like Juan and all those who participate in the distribution network are able to operate successfully because they don’t comply with tax, safety, labor, health and building regulations. Juan’s 16 employees are not formally employed, and the production facilities don’t meet the required safety standards. Juan avoids paying sale taxes, and the transportation of large quantities of garments doesn’t pay customs duties. And when the chain has reached the end consumer, sales are done off the books. In short, the competitiveness of the entire sector depends on a massive reduction in costs, which in the end is nothing more than a vast non-compliance, an economy disconnected from any kind of formal legal process.

All available explanations of informality in the region assume that governments have a strong interest in formalizing workers. This widespread assumption in the academic debate may be surprising, especially when there are serious doubts as to whether the state and governments of the region have the capacity or the interest to formalize. In recent years, several researchers, including myself, have argued that enforcement, or rather the non-enforcement—or forbearance, as Harvard political scientist Alisha Holland has suggested—should be highlighted as a specific state action enabling generalized law-breaking behaviors.

Security cameras at La Salada marketplace, Buenos Aires (Credit: Sarah Pabst, La Salada Project)

National and local governments use this strategy heavily when engaging with the economy that Juan represents. Something similar can be said about the many different government agencies tasked with overseeing garment factories, the marketplace, the resale centers or the vehicles transporting garments. Why does the state opt for non-enforcement or forbearance rather than proper enforcement? Traditionally, governments have benefited from the La Salada economy. They have taken advantage of its dynamism, which allows them to provide safe havens for those excluded from the formal labor market and to offer low-cost garment items to impoverished consumers. The fact that an economic sector can offer an informal alternative to unemployment and provide basic goods at affordable prices is undoubtedly an attractive solution for those in power who have either no interest or few instruments to change this reality. Given the high level of informal employment, economies such as La Salada generate real income opportunities and protect many local governments, starting with those in the Buenos Aires metropolitan area, from social conflicts and protests.

As if that were not enough, La Salada creates an economy that stimulates consumption and, more importantly, provides garments to sectors of the population that have increasingly lost their purchasing power and access to legally produced garments.

Jeans stall at La Salada marketplace, Buenos Aires (Credit: Sarah Pabst, La Salada Project)

Embedded Projects

Just as we cannot understand the success of this low-cost fashion economy without alluding to the creativity of entrepreneurs trained to interpret the imaginations of their customers, neither should we lose sight of the fact that the robustness of this economy can be explained by government forbearance. The latter is motivated by electoral calculations or the simple political need to avoid conflict and create social peace. Here, we can see the political economy of the phenomenon in which Juan is one of the protagonists. Ethnographic work serves to identify the meaning actors give to their actions and, in the realm of informality or outright illegality, to capture things that are kept silent most of the time: as when Juan, on the day he invited me to his new workshop, told me at the end, almost without meaning to, that “here no one has a bank account, we only have virtual wallets, and we manage everything with the two [virtual wallets] that each of my 16 employees have.” What broader structures allow millions of entrepreneurs like Juan to thrive, plan garment collections, manage dozens of employees, and run a business in a region that is many things, but certainly not stable? La Salada is embedded in a set of relationships with governments that provide forbearance in exchange for politically useful benefits such as access to garments, informal employment or material improvement. People’s projects and illusions are free to emerge as long as governments see the convenience of overlooking Juan’s economy.

Matías Dewey is a sociologist and Professor of Latin American Studies at the University of St. Gallen, Switzerland. He has conducted extensive field research on the relationship between informal and illegal economies, politics and the state in Latin America. He is the author of the ethnography Making It at Any Cost: Aspirations and Politics in a Counterfeit Clothing Marketplace (University of Texas Press, 2020) and co-author of Low-Cost Fashion: The Political Economy of Garment Production and Distribution in Latin America (Cambridge University Press, forthcoming)