My thesis: Design can have broad redeeming social purposes, Fashion has only the narrow purposes of sending signals related to social status and mating potential.
Shoes offer a good subject for examining the difference between design and fashion. On the design side we have developments such as cushioning material like Dupont's Vibram, structural shock-absorbing heels such as those marketed by Clarks and Nike, traction-increasing soles for slippery conditions and laces versus other closure methods. Plus better production methods which make good shoes available at lower prices.
On the fashion side we have developments such as high heels and decoration, including coloration of the soles. There is little functional difference between a contemporary shoe design and a Chinese one from the late 1800s.
Since the only real function of fashion is to communicate social signals, the examples shown above indicate, at their core, a willingness to suffer and submit to social pressure, thereby sending a signal to potential mates or employers interested in those characteristics.
Historically, some fashions had a real-world reference. For example, if the sleeves of a Central-Asian man's robes hung down way over his hands, it was a sign he did not have to use his hands, meaning he was an aristocrat. In contrast, the skimpiness of mens' clothing in current fashion and the exposure of their hands and feet indicates, notwithstanding the princely sums they may have spent on the clothing, they are slaves. Not only is fashion promoting wasteful consumption, it is also helping maintain a society in which slaves are deluded into thinking the uniforms of their slavery are fashionable. (This same delusion operates with respect to electronic communication devices. The slaves take pride in having the latest, thinnest and fastest device for chaining them to the workplace.)
Where to begin the therapy for such widespread pathology? What river can we divert to run through the society to clean out the fashionable muck which has filled the stores and closets of the country (not to mention the minds)? How can we end the infantile obsession with newness? No..., "infantile" is the wrong word. A healthy infant can find endless interest in a simple object and does not need the unnatural stimulation of an endless flow of new things until it is corrupted by the adult world. This is an adult pathology, an illness originating in unbalanced production and wastefulness in a decadent society.
At the moment I can only generalize. The best thing we can do is make function, multi-function, reuse and repair fashionable.
The designer who takes a blanket and makes it suit a variety of clothing needs
has my vote. We have to design our way out of fashion.