The Supply Chain Collapse is Hypercapitalism's Fault (Script & Sources)

Good morning, bad news: The crisis behind the global supply chain collapse is so much worse than you would expect, and is going to last longer than you think. Worst of all, absolutely nothing will change once it’s over. The supply chain crisis is purely a symptom of late stage hyper-capitalism, and even though the covid-19 pandemic triggered the crisis, is has almost nothing to do with the pandemic, and everything to do with decades of companies cutting corners, and deregulation focused on exploiting workers, paying them less, and saving a few cents on shipping.

Every single person who has ever worked in shipping and logistics has predicted exactly the situation that we’re in now, and they’ve been completely ignored by the people who build corporate policy.

Right now, Hundreds of cargo ships around the world have been waiting weeks to unload their cargo at totally full ports, when normally, the number of ships parked like this is zero. There is absolutely no infrastructure prepared for a collapse of this magnitude. This isn’t a case of “more than usual” this is a case of “something is seriously broken”.

The cost of an average Asia to North America shipping container jumped from $4,500 last year to $20,000 today, meaning that everything being shipped is going to be significantly more expensive - and since we import nearly 2 trillion dollars worth of goods from Asia every year, those costs have been spiraling out of control. Analysts expect the crisis to continue well into next year, but even when shipping production catches up and things start to go back to normal, your products will still be more expensive than they were pre-pandemic.

But it’s not the pandemic’s fault. All of this stretches back to the 1950s with a Japanese businessman named Taiichi Ohno. In the 50s, it used to be the case that a company would create a product, manufacture a number of units, store them, list them for sale, and sell them. But Ohno, inspired by Henry Ford, invented a production system known as “lean” or “just-in-time” manufacturing, and it turned out to be a hyper-capitalism dream.

The entire purpose of ”just-in-time” is to manufacture as few products as possible and get them to the customer as fast as possible, as cheaply as possible - and that requires 3 big priorities. The first is to never store a supply - warehouses used to be used for storage, now they’re used for shipping fulfillment. Amazon’s giant warehouses are mostly full of people and machines, not stored products; those go out as fast as they come in. The second is to create an unbroken and extremely efficient supply chain, meaning, work the fewest number of people as much as possible and reduce redundancies wherever one person can do two jobs, or where a person can be replaced by an automated system. And the third is to have an extremely accurate understanding of consumer buying habits so that you can plan exactly how much stuff you’re shipping at what time of the year using what kind of transportation - and in the last decade companies like google and Facebook have perfect surveillance capitalism to work overtime to get that answer, and to make sure you buy the things you do when you do.

So what you’re left with is an absurdly efficient production chain that knows exactly what you want and when you want it, employs the fewest number of people humanely possible, and has absolutely no stockpiles of products or backups in production or shipping. And all of that comes together to fulfill the highest goal of hypercapitalism: sell as much stuff as possible for as cheaply as possible to make the most money possible at any cost.

But there’s one big problem. It only works if absolutely nothing goes wrong, and betting an entire global supply chain on pure luck, just to make a few extra dollars in the meantime, is a very bad bet. There is absolutely nothing to keep the entire system from collapsing, it only survives on its own momentum, and is held together by a thread. People have been ringing alarm bells about this for years, and they’ve been proven 100% right - this was EASILY avoidable by keeping in place basic redundancies. Making something safer or more stable invariably costs money and requires people, two things that are always getting cut by businesses competing for the lowest price - which is why we have business regulations. Except the last 40 years have seen a deliberate deregulation of businesses, specifically around redundancy in the name of “efficiency”. If you get into a car accident and aren’t wearing your seatbelt, people tend to agree that you got hurt because you weren’t wearing your seatbelt, not because you got into an accident. Accidents are harder to avoid than basic preventative safety measures.

But we have no safety system in our supply chain, when the goal of a business is to cut costs by any means necessary, and when every single business does that, we’re left with an extremely fragile system just waiting to collapse. And now it has, and we’re dealing with the consequences, while the people who built that system are blaming everyone and everything but themselves. It’s not your fault, it’s not Biden’s fault, it’s not the pandemic’s fault - it’s the result of pure hyper capitalist greed, and nothing else.