"When the trucks stop"
This level of concentration of the production of key components in a globalized economy is a new phenomenon. Lynn’s work points to the highly dangerous side of globalization, the flip side of a hyper-efficient global supply chain. When one link in that chain is broken, there is no fallback.
The end game of finance capitalism is eerily similar to the gigantism created by the Soviet "planned economy," where there would be a single humongous factory to manufacture cigarette filters, say, out in the steppes of Nicotinistan, and if it failed, no cigarettes. (Of course, the free market is supposed to be the antithesis of central planning, but what we laughingly call the free market just allocated a ton of capital to MacMansions with styrofoam pediments out in the burbs, now being demolished for cents on the dollar. So the difference between the banksters and the Politburo would be?) Anyhow:
Today, the problem manifests as shortages of videotape or auto parts, but the global supply chain is so tangled and fragile that next time it could be electronics, weaponry, or even food or medicine. ....
According to Lynn’s groundbreaking book End of the Line, the essential problem is a basic shift in the way that American multinationals operate. In the 1980s, the competitive manufacturing threat from Japan led most large companies to eliminate waste in their production facilities. As a result, they stopped keeping spare parts on hand. Eventually, companies began outsourcing production itself, as profits came increasingly from extractive monopolistic power over an economic system. Walmart is an important example; its profits come from the power it can exert on its suppliers, telling them what to make and how to make it, while the company itself functions as a giant autocratic marketplace and trading operation. Increasingly, this is the model of success in our global economy. Boeing, Cisco, Apple—all of them rely on their power over an ecosystem of production facilities halfway around the world. They have become rent extractive profit-machines, which is a relatively new phenomenon.
American infrastructure is not just about public goods, it’s about how the corporations that enforce, inform and organize economic activity are themselves organized. Are they doing productive research? Are they spreading knowledge and know-how to people who will use it responsibly? Are they creating prosperity or extracting wealth using raw power? And most importantly, are they contributing to the robustness of our society, such that we can survive and thrive in the normal course of emergencies?
The answer to all of these questions right now is “no.” And while this may not be hitting the elite segments of the economy right now, there will be no escape from a flu pandemic or significant food shortage. The re-engineering of our global supply chain needs to happen—and it will happen, either through good leadership or through collapse.
Out here at the margins, where Interstate 95 turns into a two-lane road, our short hand for supply chain collapse is "When the trucks stop." We're an older state, and poor. Big Oil, Big Food, Big Money, Big Media -- none of them do a lot of extraction here. Pickings for the corrupt are slim. Would Versailles hesitate for a minute to write us off? Of course not. So we're learning to grow our own food. That should help in a food crisis. About a pandemic, I'm not sure what to do, since we're actually quite cosmopolitan, hence have many potential vectors for infection. Readers?