Some of this is taken from libcom’s excellent introduction to capitalism which features a lot more than what I mention, check it out here.
Capitalism is an economic system based on: wage labour (working for a wage), private ownership or control of the means of production (e.g. factories, machinery, farms, offices), and production for the purpose of exchange and profit.
Under capitalism production is in the hands of capitalists (the bourgeoisie). Therefore, in order to survive, we (the proletariat) must sell our labour-power to capitalists (i.e. work for them) in exchange for a wage.
Aware of the dependency of the proletariat on wage-labour, we are compelled to work for capitalists to not only work to produce enough to cover their overhead production costs, but they also compel us to work extra unpaid hours, producing ‘surplus value’ i.e. profit for the capitalists we work for. This extraction of surplus value from unpaid labour is the basis of exploitation under capitalism.
Capitalists compete with each other in the pursuit for profit, so find ways to extract as much surplus value as possible from workers. This results in the lowering of wages and other labour costs. By paying less for labour, they can afford to sell goods for lower their prices. In doing so they are able to sell more than their competitors to consumers, who desire cheap goods.
As an example, lets look at the garms industry. Under capitalism, the priority of the capitalists who own these clothing brands is to make profits right, and one crucial way to ensure this, is to save money they invest in the production of garms. Brands therefore choose to source their labour force in countries where laws aren’t as strict on workers’ rights, and where countries are made extremely poor by developed countries, to the point where they are willing to cut corners, as demanded by Western brands, to ensure continued investment in their economy from these countries. As a result, brands can easily cut costs in these countries by offering poor wages, investing little in workers’ safety and wellbeing, and forcing factories to produce a lot in a small amount of time through overtime and subcontracting (definition of subcontracting pending). This allows them to save on production costs, so they can afford to produce clothes for as cheap as possible, ensuring they succeed in the competition between brands to produce clothes cheaper than each other and therefore sell more than the other, increasing profits.
This is why brands and capitalists generally are keen to push ethical fashion, recycling projects etc, because it allows us to steer the blame away from the capitalists who are to blame for the dire conditions workers are facing, and instead focuses our attention on our own behaviours e.g. what we buy. There needs to be a balance, but one in which the focus is the capitalist system that creates these conditions in the first place.