Lady Gaga announced last Sunday, “I’d love to have a fashion line when I stop making music.” While Lady Gaga will likely prove to be an innovative designer and create fresh trends, original designers are not the integral force that drives the fashion world forward. Ground-breaking fashion relies on free, unobstructed markets. Without adhering to traditional economic theory, the fashion industry would stagnate and lose its creative ingenuity.
High-end designers, however, disagree. They have even gathered together to fight the lack of piracy laws in their industry. The Council of Fashion Designers of America (CFDA) has created a bill it hopes to pass through Congress. The group argues, “The current absence of design protection denies U.S. fashion designers the rightful rewards of their creativity, and since the U.S. is the only industrialized country that does not protect against fashion design piracy, puts U.S. designers at a great disadvantage in the global context.” The organization’s main argument, across the board, is that piracy laws would protect their profits.
Unlike books, music, and movies, fashion designs are not protected under any trademark or intellectual property rights. That hot trend of classic chic or bright colors is essentially up for grabs by any designer, no matter who first thought of it. The fashion industry operates as a top-down model; it starts with the elite sect of designers creating one-of-a-kind pieces, whose ideas then slowly trickle down to department stores and eventually discount stores. Cheaper imitations and knockoffs are the direct result of this laissez-faire system.
Viewing piracy and trademark laws through a myopic lens, it seems as though the CFDA has a valid point and are justly concerned. However, while piracy laws help most industries thrive, the opposite is true for the world of fashion. There is an incredibly high turnover in fashion; new trends pop up with each season. This requires patrons to constantly renew and update their wardrobes in order to stay fashionable. Women and youths, in particular, are slaves to fashion; they offer an endless pool of demand. In fact, despite what the CFDA claims, the industry’s profits are very high — it enjoys a comfortable revenue margin. In 2010 alone, luxury brand designers gained $1.36 billion in profits; that is about how much the Libya Contact Group pledged in aid to the Libyan opposition. I’d say it is clear that the fashion industry does not need to worry about losing money any time soon.
If anything, the industry’s current profits are increased by the lack of piracy laws. The imitations and knockoffs created through fashion’s free market drive competition and force designers to continually innovate. Without a cheaper version of runway looks, vogue designers would not have a pressing need to create new styles.
In short, Adam Smith’s economic theory is what keeps fashion trends going. So do not fret when Lady Gaga’s line ultimately hits the runway; in a few months, it will show up in your local thrift store.
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