Over at Vox, Rebecca Heilweil takes a look at our global supply chains and is skeptical that their problems are behind us:
The structural problems that enabled many of the delays, price hikes, and shortages over the past few years haven’t gone away....More broadly, the capitalist system responsible for manufacturing and delivering goods throughout the world has not been “fixed.” In fact, it remains as vulnerable to disruption as ever.
Where do these brain farts come from? I see this particular one with surprising frequency, as if capitalism were somehow responsible for the fact that condoms and aluminum cans were in short supply during an unprecedented global pandemic.
This is dumb enough as it is, but to toss it off as a casual aside? It's bizarre. After all, it was the most socialist part of our economy—the emergency supplies stockpiled by centralized command and control—that were in the shortest supply during the first year of the pandemic. The fact that this shortage lasted only a few months is largely thanks to the remarkable ability of the free market to adapt to an emergency in practically the blink of an eye.
People are weird. The COVID-19 pandemic was, if anything, a triumph for the robustness of our global supply chains. Considering how big and how deadly the pandemic was, it's nothing short of a miracle that we did as well as we did. Cars and video game consoles were probably the most visible items in short supply, and it's hardly the end of the world if you have to wait a year to buy a new Jeep or Playstation.¹
So just stop it. Capitalism worked fine. Supply chains were astonishingly resilient and shortages were mostly temporary and limited. What's more, after the big Omicron surge passed, it's taken only about six months for supply chain pressure to drop back to 2018 levels, on its way to zero within a few more weeks. Life is pretty good, and it would be better still if everyone—*cough* Jerome Powell *cough*—would quit panicking about things.
¹Baby formula was perhaps more serious, but that had nothing to do with supply chains crippled by the pandemic. It was due to good old fashioned corporate idiocy and greed.
So, I assume you're onboard with eliminating all tariffs.
We never will do this. But we should do this. I've yet to see an example of where it wouldn't be cheaper to just take care of those hurt by imports.
Well that's one of the prescriptives of the free trade argument, innit? Recall that back in the day one of the most penetrating criticisms of NAFTA was that it only hewed to half of the argument for free trade and made _no_ provisions for the other half, namely discplaced workers. Also recall that those pushing for NAFTA were also claiming that the deal had to be sealed _now_ and that pesky details about remedies for those adversly affected would be worked out later, after it was signed into law.
So -- as we knew all along -- it was never about 'Free Trade'. It was about labour and environmental arbitrage, pure and simple. No, I'm afra id it's very much a principle with these pirates that those hurt by imports not be taken care of.
I don't know, Kevin, substitute "internationalized system of production and distribution" for "capitalist system etc" and there does seem to be substance to the different kinds of comments Heilweil quotes or summarizes. First-world firms had become way too reliant on one region of the world for final production, particularly China, and the systems to move these goods to final markets were very strained and perilously dependent on just-in-time delivery and smooth uninterrupted throughput, all well before the pandemic. People in the industries had been worried about those trends for a long time.
Overall I don't disagree that improvisation and quick reaction in many sectors allowed the system to be pretty resilient, and vaccine development, production, and distribution have been great triumphs. But it's worth remembering how some of this needed production and traffic were able to be maintained. Meat production in the US, for example, was maintained and increased-- in the case of pork exports to China-- by declaring packing houses to be essential and forcing people on the lines to run at normal pace-- sometimes accelerated pace-- with only minimal protections; sickness and mortality there were very high. Similar things happened in some other sectors.
So unless it's all about one short phrase, I don't really get how this is a brain fart. Global economic efficiency is a good thing, to be weighed against other good things like spreading out sourcing risks and responding productively to the long-term trends in this country toward corporate consolidation and population concentration that have made big urban areas more productive and stripped other areas of productive capacity and income prospects beyond the holy duo of eds and meds.
This article strikes me as being mostly about the longer term, and I agree with many of the people quoted in it that there are long-term problems in the way we do production and distribution.
I agree with everything you said, but substituting "internationalized system of production and distribution" for "capitalist system" does significantly change the meaning of the article significantly in my mind. Calling it the "capitalist system" implies that this is a failure of capitalism in particular, instead of, as you say, a generalized problem of balancing efficiency against risk mitigation and redundancy in an unbelievable large and complex global economic system.
I didn't read "capitalist system" to be the central explanatory device the author used, but an offhand reference to an idea that only pops up one more time, where she writes "Companies aren’t necessarily financially incentivized to change their long-term approach" without following up on the observation.
I read this piece as being about vulnerabilities in the systems of supply chains. Many, like the weather-related and pandemic-caused ones, would affect any system, whether market-based or command-based, and some, like business incentives, seem to be built into what we have. If there's an indictment of capitalism as such in this article, I just don't see it.
Other than cars, home construction equipment, overseas shipping, medical supplies, petroleum and petro products, etc...but everything is mostly fine 2 1/2 years later. Mostly. So stop your complaining and get off my lawn!
Can you imagine the food fight at the Vox editorial meeting if someone said something positive about capitalism? There would be much rendered garments followed by denunciation of the heretics via mean tweets and Google docs.
No kidding! Considering all the complaints about CDC vaccine distribution during the monkeypox epidemic (remember that?), do they really think total government control is the solution?
Using "capitalism" with no describing adjective leads usually to gibberish like the alternative is "total government control." And, in this corporate controlled world, "free enterprise" is just some kind of sick joke. The real argument is between conservative "laissez faire capitalism" and liberal "managed capitalism." The adjectives are critical to an intelligent discussion.
I suspect comments in favor of capitalism, in certain circles, would be vociferously condemned by horrified employees (or students) as a form of “violence” against their ever-so-sensitive selves. Not that I’m cynical or anything…
On the issue of Inflation, the Fed is missing a huge reason their interest rate increases are pissing in the wind. I'm retired from working for a major beverage packaging supply company. We supplied carton packaging worldwide and almost every large supply contact had clauses for price increases. the amount prices could increase was usually tied to inflation overall or tied to specific materials like liquid paperboard and aluminum. In previous years. these contract clauses held supplier prices in check and reliably limited price increases, sometimes even below the inflation rate.
Now the script has flipped. These clauses are allowing huge price increases which are even more than what would be negotiated if they were not in effect. Also, the increases are baked into a full year. So B to B pricing won't respond to interest rate pressure unless the sky falls which it looks like the Fed is barreling toward.
I can't resist responding to a post with the word "capitalism" in the title.
Capitalism worked fine during the pandemic because capitalism works fine all the time in every context. The thing that doesn't work is CAPINO (Capitalism in name only), which is the fundamentalist ideology that capitalism = unfettered free market ... promoted by many, but most famously by Milton Friedman.
CAPINO is closer to communism than it is to real capitalism in that they both fundamentally misunderstand the very purpose of capitalism. Adam Smith defined capitalism's real purpose in his book, The Theory of Moral Sentiments (1759). Would an originalist want to know this?
The inconvenient truth is that real capitalism is fundamentally a moral practice, and only works to the extent that it is used for that purpose. People like Friedman recognize how inconvenient it is to be moral, so they attach themselves to the much more convenient idea that capitalism has nothing to do with morality. Anyone that gets attached to that idea will be watching reality disappear off in the distance, but only if they happen to take a glance at their rearview mirror.
I see some real problems with capitalism in general, but I agree, I don't see another system that would have handled the supply chain issues better. (Some things might have been delivered more equitably, but that's a whole different conversation.)
I think you have to accept that any system will have imperfections, and most systems will struggle to deal with rare or unprecedentedly large events. And given the scope of the pandemic, I thought the disruptions were more mild than I would have expected.
The pandemic pointed out some of the problems not so much with capitalism as with profit-driven international trade. The US shouldn't have to depend on other countries for so many things. Even California, let alone the US, is big enough that it should be fairly self-sufficient in pandemics, not to mention wars (the US no longer makes new steel - China makes about half the world's steel).
There has never been true laissez-faire capitalism - government has always been involved. Private enterprise has not only been regulated, it has been subsidized in many ways. National interests have usually come before profits until recently.
Capitalism is not even considered in a major war, for example. The government tells industry what to make, what people can buy, etc. Capitalism is not going to solve global warming - this also is going to take direct intervention (if it ever gets done at all). And some things are just done best by government, such as most infrastructure, police and fire, etc. with private contracting as necessary. It is evident by now that free-market health care is just inferior to state-run or heavily regulated health care.
Don't go to Vox looking for facts. I learned that a long time ago. It's just a place for progressives to peddle their latest brainwaves.
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