We All Fall Down

Susie posted this on Facebook earlier today. I hope I’m not stealing a post: How America Could Collapse. It’s really too big to excerpt, but here’s the gist: we don’t make anything anymore, and our supply chains are so long that when something goes wrong at the manufacturing end you get a major impact on the consuming end. Think about the japanese tsunami, which negatively impacted car manufacturers, or the 1999 earthquake in Taiwan that crashed the computer industry. Then imagine exponentially worse:

It was in the 1990s that American multinationals, spurred by government policy, began outsourcing operations to China. At the same time, the Clinton administration steadily relaxed antitrust enforcement, leading to massive corporate consolidation and the creation of the virtual firm. By the early parts of the last decade, the ideal American multinational made its profits by using its market power to gut labor and supply prices and by using its political power to eliminate taxation. All of this turned giant American institutions against making things. This is why we rely on a British factory to make our flu vaccine, why global videotape production was knocked offline by a tsunami and why that same event slowed the gigantic auto industry. US corporate leaders now see the idea of making things as a cost of doing business, one best left to others. What has happened as a result is that much of the production for critical products and services that make our economy run is constructed by a patchwork global network of suppliers all over the world in unstable regions, over which we have very little control. An accident or political problem in any number of countries may deny us not just iPhones but food, medicine or critical machinery.

Read the whole thing, and hen read Dimitri Orlov’s “Social Collapse Best Practices”. While I don’t encourage panicking, it’s always wise to have a lot of dried beans and water in your pantry. Dehydrate those tomatoes in the backyard. Stockpile some propane tanks if you have a grill. Make friends with your neighbors. And yeah, maybe buy a gun and learn how to use it, just in case.

7 thoughts on “We All Fall Down

  1. Doesn’t “a patchwork global network of suppliers” make us less susceptible to crises, not more, compared to a centralized, consolidated network?

  2. not when those suppliers are on the other side of the world, as the examples I included illustrate.

    Another example from the article was when we ran out of flu vaccine because the one british company that made it closed its factory.

  3. Deregulation and government stupidity are key reasons for this global supply problem, but they’re not the only reasons. Much responsibility has to go to the “Just-in-Time” business model which has been all the rage since the 80s. This model saves businesses a ton because they don’t have to waste money on excess inventory; parts or supplies or labor or whatever else a business needs arrives at the precise moment and in the precise numbers necessary for the need.

    It’s a bunch of crap and I said so at the time. In fact, I’ve been railing against it for close to thirty years now. This is why. But as with everything else, I’m a dirty fucking hippie (and a woman to boot) so what the hell do I know.

  4. The “other side of the world” does indeed sound like a dark, spooky place where tsunamis and earthquakes happen with alarming regularity.

    But bad things can happen anywhere. Most of US chip manufacturing happens within 50 miles of one of the most active and dangerous fault lines in the world. Is it good or bad that we outsource some chip manufacturing to southeast Asia?

    On the other hand, I agree with merciless that just-in-time inventory management has made supply chains much more brittle, not just in spooky, far-off places that we can’t see, but also right here.

  5. @merciless: I agree wholeheartedly on the just-in-time thing. Orlov writes a lot about that too, including when it comes to food.
    when clinton became president, both he and GHWB were pushing globalization and NAFTA, talking about how we needed to transition to a service economy.

    My dad used to laugh at that. “How does a country thrive without making anything?”
    Good question…

  6. Thanks, Brendan (and a-b-a). Your old dad was right, of course, but we do make a few things still, like movies, corn, and aircraft carriers. I’m just not sure it’s enough.

  7. a big problem is fuel. that is the critical link in the supply chain.
    if we get a 1970s style shock -and I am just old enough to remember that- there is the potential for big problems.
    that’s one of the reasons I say “stock up”. It’s a fairly conservative philosophy if you think about it: personal responsibility, saving for the future, and making sure you can take care of yourself in the absence of government.

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