Sisyphus. The French Algerian writer Albert Camus popularized the fate of Sisyphus in his famous essay, "The Myth of Sisyphus." According to Greek mythology, Sisyphus was condemned to forever push a rock up a hill only to have it roll back down time and again. The poor guy was locked in this perpetual struggle-a metaphor for the absurdity of life, said Camus.
So what can we learn from the plight of Sisyphus? In its simplest meaning, whatever goes up must come down. In today's terms, that can easily apply to markets. Talk about absurdity-take a look at cotton prices. Going up and down like Sisyphus's rock.
After months of soaring prices, it appears that cotton prices may be easing. But the big question is for how long?
An Invisible Hand
As I am waxing philosophical, there's an essential theory in economics that I'd like to mention as I feel it's particularly relevant as a tie in for cotton's Sisyphean behavior over the last year or so- namely, Adam Smith's "invisible hand" of the market.
The "invisible hand" is an analogy for market forces. As we know so well in the cotton and textile business, we all welcome lower raw material costs, but it's hard to ignore higher costs no matter what we do. When cotton prices rise, sooner or later those higher costs will translate into higher prices for textiles and eventually higher prices for made-up products such as clothing and home furnishings.
Then again, I think the textile supply chain often fights the invisible hand of the market-with a futility of Sisyphus-by trying to absorb as much of the higher cotton costs as possible before passing increases on to customers. This is especially true during recessionary times. Yet despite the best efforts to do otherwise, eventually price increases, due to higher raw material costs, have to be passed on to customers. Maybe it's futile to fight higher prices, but that's the point; confronted by such adversity-and uncertainty-companies persevere. And it's that perseverance which keeps some companies in business and forces others out.
Originally published in TEXTILE QUARTERLY magazine.
Views presented here are of Mr. Robert Antoshak, Managing Director of &sec=article&uinfo=<%=server.URLEncode(3396)%>" target="_blank">Olah Inc.