The Economics of Everyday Things

11. Cashmere

February 5, 2026

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  • The global demand for cashmere has democratized the fiber, moving it from a high-end luxury item to a widely available commodity, which has led to a massive increase in Mongolia's goat population to 27 million. 
  • Mongolian herders, who are nomadic and rely on cashmere for primary income, face economic strain due to inflation and limited processing capacity, as 80% of their raw cashmere is sent to China for milling. 
  • The massive increase in goat numbers, driven by demand, is causing significant environmental degradation in Mongolia, with overgrazing contributing to the degradation of 70% of the nation's grasslands. 

Segments

Sponsorship and Introduction
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(00:00:00)
  • Key Takeaway: Yale New Haven Health promotes its pioneering science in heart and vascular care, while Comcast Business advertises a five-year price lock for internet bundles.
  • Summary: Yale New Haven Health highlights groundbreaking research for heart failure treatment and new procedures for detecting coronary microvascular disease. Comcast Business offers a five-year business boost including a price lock and reliable Wi-Fi. The episode is introduced as part of The Economics of Everyday Things, hosted by Zachary Crockett.
Mongolian Landscape and Goats
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(00:01:09)
  • Key Takeaway: Southern Mongolia’s Gobi Desert region is home to 27 million cashmere goats, outnumbering the human population eight to one.
  • Summary: The Gobi Desert region of southern Mongolia is characterized by vast, arid land. A local interviewee, Miga, describes the scenic beauty, including sunsets over sand dunes. These goats are critically important as they produce a substantial share of the world’s annual cashmere supply.
Cashmere Luxury to Mass Market
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(00:02:15)
  • Key Takeaway: Cashmere transitioned from being associated with high-end luxury items like $2,000 turtlenecks to being democratized by direct-to-consumer brands selling $60 sweaters.
  • Summary: Cashmere is described as being very soft, sometimes compared to a baby’s butt. This shift in accessibility began in the 2000s, leading to widespread consumer demand. This increased demand benefits Mongolian herders but has also come at a cost.
Fiber Characteristics and History
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(00:03:08)
  • Key Takeaway: Cashmere is a soft undercoat grown by Central Asian goats in winter, six times finer than human hair, and its association with luxury began in the 1960s.
  • Summary: The soft wool grows underneath the outer coat during winter, primarily on the goat’s belly, underarms, and chin. Carolyn Yim notes that the fiber’s association with luxury is rooted in ‘old money’ style from the 1960s. Globally, 90% of the 30 to 40 million pounds of raw cashmere harvested annually comes from China and Mongolia.
Mongolian Herding Economics
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(00:04:46)
  • Key Takeaway: Privatization of herds in 1990 led to herding becoming Mongolia’s largest profession, where nomadic families must manage 500 goats to earn the median household income of $5,000.
  • Summary: Mongolian herders are nomadic, migrating hundreds of miles seeking pasture for their goats, contrasting with farmed goats in China. A single goat yields about $10 worth of raw cashmere annually, necessitating large herds for subsistence. Herders also rely on selling meat after slaughter season in November or December.
Supply Chain and Processing Gaps
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(00:07:35)
  • Key Takeaway: Mongolia’s geography limits herders’ ability to sell directly, allowing Chinese middlemen to collect raw cashmere and sell it to mills for more than double the purchase price, while 80% of the raw material ends up in China.
  • Summary: Traders on motorbikes collect raw material from remote herders, clean it, and sell it for about $100 per kilogram. Mongolia lacks sufficient processing capacity, preventing the country from fully benefiting from the industry’s value chain. The raw fiber undergoes carding and spinning to become usable yarn.
Yarn Production and Quality Metrics
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(00:10:34)
  • Key Takeaway: Turning raw cashmere into yarn involves carding and twisting, resulting in a final product that is 50% smaller by weight, meaning one sweater requires about five or six goats’ yield.
  • Summary: Most Mongolian cashmere is milled in China, where fibers are drawn out into strands and twisted like DNA to form yarn on cones. The gold standard for quality is pure white fiber measuring 14 microns wide and 36 millimeters long. Expert buyers can distinguish high-quality cashmere (peachy/creamy) from low-quality (dry/cardboardy).
Mass Production and Quality Decline
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(00:12:51)
  • Key Takeaway: The mass production era has led some brands to cut costs by using lower quality fibers or taking hair from non-belly areas, meaning today’s luxury sweaters are not equivalent to those from 20 years ago.
  • Summary: Brands selling sweaters under $100 often achieve low prices by compromising on material quality or quantity. Carolyn Yim notes that methods like bleaching are used to mask lower-grade fibers. This pressure to meet demand has resulted in cashmere fiber width increasing in Inner Mongolia, which is considered a negative indicator of quality.
Environmental and Sustainability Challenges
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(00:13:44)
  • Key Takeaway: Overgrazing from the exploded goat population has degraded 70% of Mongolia’s grasslands, while climate change and strict environmental permitting in China are forcing small manufacturers out of business.
  • Summary: Goats eat close to the roots and their hooves damage topsoil, leading to widespread grassland degradation. Mongolian officials are implementing livestock taxes to fund revegetation efforts. In China, high costs for environmental permits have bankrupted up to 50% of small knitwear manufacturers in the last five years.
Future Outlook and Identity
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(00:16:39)
  • Key Takeaway: Mongolians are focused on controlling the environmental, social, and economic impacts of the commodity to ensure a sustainable future for cashmere, which is integral to the country’s identity.
  • Summary: The nomadic herding practice has existed in Mongolia for hundreds of years and remains a core part of its identity. As international demand rises, the country must manage the commodity’s impact across multiple dimensions. Miga emphasizes that controlling these challenges is necessary for the trade’s longevity.
Credits and Final Ads
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(00:17:25)
  • Key Takeaway: The episode concludes with production credits, mentions of other networks, and advertisements for identity protection and respiratory illness awareness.
  • Summary: Zachary Crockett credits Sarah Lilly and Lyric Bowdich for production, and Jeremy Johnston for mixing. The segment includes promotions for 99% Invisible, LifeLock identity protection, and a CDC message regarding respiratory illness risk factors.