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Perhaps they should but do they?

Summary:
An interesting little commentary on Milton Friedman’s insistence that a company should - within the law and prevailing mores - attempt to maximise profits. But there’s no getting away from it at Asos where sales are up by a fifth, annual profits have quadrupled and the chain added more than 3m customers in just 12 months....As long as its young customer base can still buy the latest trendy gear at knock-down prices, who cares if there are widespread concerns about how the so-called fast fashion industry makes its margins and whether they’ve been built on the misfortune of others?...If we’ve learnt one thing from the scandal that engulfed Boohoo, it’s that for all the talk of younger customers being more socially conscious, the truth is that they care more about dressing well, and dressing

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An interesting little commentary on Milton Friedman’s insistence that a company should - within the law and prevailing mores - attempt to maximise profits.

But there’s no getting away from it at Asos where sales are up by a fifth, annual profits have quadrupled and the chain added more than 3m customers in just 12 months.

...

As long as its young customer base can still buy the latest trendy gear at knock-down prices, who cares if there are widespread concerns about how the so-called fast fashion industry makes its margins and whether they’ve been built on the misfortune of others?

...

If we’ve learnt one thing from the scandal that engulfed Boohoo, it’s that for all the talk of younger customers being more socially conscious, the truth is that they care more about dressing well, and dressing cheaply, so the fast-fashion juggernaut hurtles on.

There’s a lot of insistence about what fast fashion ought to be doing - like not existing - from the morally minded out there. Yet clearly large numbers of people - they are handing over their own money, voluntarily, after all - find their lives enhanced by the availability of said fast fashion.

So, what increase human utility the most? Bowing to the moral demands or pumping the stuff out so that people may consume it? Clearly, it’s the second. Further, what maximises profits at the producing firms? Again, clearly the second.

So, the profit maximising option here, continue to make fast fashion fast and cheap, is also the utility maximising option. Given that utility maximisation is the name of the entire economic game, of even having an economy at all, profit maximisation is therefore in conflict with our goal in what manner?

Another way to put this is that you can only make a profit if you’re pleasing the customers so why wouldn’t we want people to try to please the customers in order to make a profit?

It’s even true that perhaps, according to some sets of moral precepts, that people should reject fast fashion. But do they? Apparently not which means that attempting to force its absence upon them is not, in itself, moral.


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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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