Skip to Content

Stanford Business magazine

 

Consumer Choices Can Reform Sweatshops

Giving the back of his hand to Adam Smith’s notion that an “invisible hand” guides markets, the Business School’s Hayagreeva “Huggy” Rao argued that it is instead the “visible joint hands of activists that shape markets and can exert a profound effect” on sweatshop operations overseas.

Rao, an expert on cultural causes of organizational change, said consumers can wield influence over the working conditions at manufacturers. “By educating, by moralizing consumers, movements can create natural incentives for firms to differentiate themselves,” he said.

Rao was among a group of Stanford faculty convened last fall to discuss the role of the University, the garment industry, and social movements as they relate to working conditions for the men and women who make gear emblazoned with Stanford’s logo.

“We’ve always exercised great care in how the Stanford name is used,” University President John Hennessy said. “That should apply not only to the name of the University around the world with respect to research and education, but also in the way it’s used with apparel products.

“Just as Stanford has adopted standards on its own core campus talking about having a healthy, safe, secure working environment, we should expect the same thing for the products we use and the products that carry our name."