Inclusivity in the beauty community has been a hot topic for years now. Problems with diversity of options, especially in complexion products, have meant that darker-skinned makeup lovers often go through extra hurdles and spend extra money to achieve a flawless cosmetic look. While brands have been improving their ranges, the problem goes beyond the producers. In a competitive global economy, free markets are a useful tool for improving accessibility and inclusion and true capitalists should support efforts to make the beauty community open for everyone.
An obvious argument in the discussion about how markets can help make beauty more inclusive is that increased demand for quality, broad-ranged complexion products will naturally result in their creation. This is true to some extent. However, larger beauty conglomerates have been slower and often clumsier in their uptake of the mantle of inclusive beauty, while smaller indie brands have spearheaded the creation of products to fill the gap in the market. Black-owned beauty brands, like Juvia’s Place, Uoma and Beauty Bakerie, have made particular strides forwards by offering quality, mid-priced products for deeper skin tones.
This is where a competitive tax framework becomes important. Access to products, particularly from smaller brands, is often hindered by business regulation and burdensome tax codes. Larger beauty conglomerates are better able to tolerate the costs of entering a market, from paying licensing and registration fees to investing in production and distribution centres. Smaller businesses, unable to incur the costs of international expansion, are left with few options except to rely on international shipping, which can often cost more than the product itself.
The first step to making beauty more inclusive is to make capital investment cheaper. Britain currently has one of the worst capital investment climates in the OECD, ranking 33rd out of 36 overall on the Tax Foundation’s capital cost recovery index. The UK’s tax treatment of buildings ties with Japan and Hungary for worst in the OECD. The “factory tax” means that corporations are unable to fully recover the cost of capital investment on buildings and machinery, making these investments even more costly.
As it relates to beauty: labs, factories and distribution centres are major components of doing business. Improving capital investment tax treatment would make it easier for smaller brands to expand internationally, bringing new businesses and jobs to the British economy. Prohibitive shipping costs could be reduced if brands could build and write-off the cost of warehouses.
The cosmetics industry would become more competitive as larger brands are forced to compete with smaller brands in the British market. And most importantly, it would expand the range of products, both in terms of price point and shade range diversity, available to British consumers. Cheaper investment costs end up furthering social justice while being pro-business.
Another important way that markets can make beauty more inclusive is by negotiating strong free trade deals. In 2018, in response to tariffs imposed by the Trump administration, the European Union imposed a retaliatory tariff of 25 per cent on cosmetic products from the United States. In a post-Brexit world, the United Kingdom has the opportunity to retake control of the tariffs imposed on its borders and scrap costly import taxes which only harm consumers.
By supporting free trade, the British government can support inclusivity in the domestic beauty market. A tariff-free trade arrangement with the US would make it easier for Black-and non-Black-owned brands on both sides of the pond to ship and share their products. The elimination of tariffs on cosmetics would mean that products would be cheaper for British consumers, making these products that much more accessible.
It is common for free marketeers to shy away from talking about social issues. Markets have no morals or values except for the guiding concept of supply and demand, so why get bogged down in the ethical discussion? In reality, supporters of free markets should seize on the opportunity to talk about markets as a tool for inclusion. We must make the case for inclusive markets, lest the opportunity be lost to those who would institute a protectionist state in a misguided attempt to support diverse businesses.
Most importantly, it is through free trade and free markets that we will actually be able to respond to the diverse needs and demands of consumers around the world. Make beauty for everyone by opening up the economy to everyone.