rthur C. Clarke once wrote that “any sufficiently advanced technology is indistinguishable from magic.” That aphorism is just as true for the modern global supply chain as it is for technology writ large. You open an app, add a product or two to your cart, and often within 24 hours it is in your hands. A truly astounding modern marvel that Goodman does well to demystify.
“How the World Ran Out of Everything” explores the modern global supply chain and how COVID–19 disrupted the free flow of goods across borders, exposing the complexity of this modern network. Goodman’s exploration of the global supply chain is deeply illuminating, exposing the innumerable steps and processes that sees goods from China end up on our doorsteps, but it is ultimately better in aggregate than in detail.
Goodman uses the trials and travails of Hagan Walker, the co–founder of Glo—a toy that illuminates when it touches water—to illustrate the complexity of the global economy amid the effects of the pandemic. Walker is in a race against time to get his devices from China to the United States to meet a large order from a popular children’s brand ahead of the Christmas season. Walker struggles to find manufacturers in the United States, but quickly finds himself—like many American companies—looking to China.
Having found a manufacturer, Walker struggles to get his devices into containerized shipping units and onto a cargo–ship bound for the United States. With demand skyrocketing and supply limited, the price for shipping his toys rises, almost hourly. Here, Goodman looks at the longshoremen who offload the goods into the United States—something to which America was vividly exposed with the threat (temporarily averted as of this writing) of the International Longshoremen’s Association (ILA) strike in the autumn of 2024.
Getting his toys to an American port is not the end of the story. He struggles to get the toys off the ship, into the port, and to his facilities, illustrating the weaknesses in America’s long–haul trucking sector. Underpaid, overworked, and often subject to predatory practices, trucking is not a desirable career, but one that is instrumental to the American economy. America’s rail infrastructure is undercapitalized, in Goodman’s telling, subject to an automated system that prizes profit, not efficiency.
The global supply chain disruptions that followed COVID–19, for Goodman, “were not an accident, but rather the outgrowth of a concerted strategy.” Globalization led to the concentration of wealth and power in a limited number of companies within critical sectors. The de–regulation of the 1980s paired with the relentless (if misunderstood) push for efficiency and optimization created the systemic fragility that COVID–19 exposed. The vertically integrated supply chains of Ford and Lockheed Martin (which at one point owned its own mines and processing facilities) was broken into constituent parts, creating highly complex networks into which few if any had fully transparency.
As a critique, there is certainly some truth to Goodman’s assertions. Free market competitiveness, enabled by less government intervention, rewarded scale, creating self–reinforcing cycles of accretive complexity. The Amazons and Walmarts of the world won out over the smaller players, who simply could not compete. The cult of management and logistics efficiency (advanced by well–paid consulting firms), which yielded shareholder value, also created brittle networks. The just–in–time delivery system that grew out of these trends was faultless, until the underlying conditions (geopolitical and otherwise) that enabled that system were disrupted. Companies were motivated more by delivering value for shareholders than investing in offsetting upstream gray rhinos—high probability, high impact events.
Goodman’s excessively populist narrative overpowers what is an otherwise interesting journalistic account, and that is a shame. Rather than serving as a dispassionate observer, he is a relentless critic using human interest stories to overly simplify complex macroeconomic and global trends. No good has resulted from globalization in the United States or abroad, he posits. Management is evil; labor is good. The only solution is more government, and a heavier hand of regulation.
Goodman’s version of the story, despite its international basis, looks almost exclusively at failings within the American supply chain. It reads as though globalization were a wholly American invention, driven by American corporations, as opposed to one driven by broader global macroeconomic trends embraced as much in Europe and Asia as in North America. Countries on both continents did not escape the impacts of COVID–19 and the resulting supply chain disruptions.
Even were Congress to address the issues and shortcomings Goodman identifies in shipping, ports, rail, and the meat–packing industry (curiously shoehorned into the story), the systemic weaknesses of the global supply chain would not be resolved. The working conditions of employees in those sectors would improve—a welcome net benefit to be sure—and efficiency and effectiveness may increase, but the underlying structural vulnerabilities would not be resolved. At the same time, ignoring the massive self–interests (personal, financial, and political) that some of the unions involved in the supply chain—such as the ILA—have is to ignore an underlying driver of their resistance to automation and technological innovation.
There is also no escaping the simple reality that there is no world in which the United States could have on–shored or “friend–shored” (shifting production away from China and to friendlier countries e.g. Mexico) enough production capacity or supply chains to offset exposure to global economic disruptions, or done so at a political or economic price acceptable to the American public or domestic innovation. The desire to build a high fence around a large yard, to paraphrase the idea some advocates suggest, is perhaps well–meaning but entirely unrealistic outside of a narrow band of select industries e.g. advanced semiconductors.
Goodman’s call for “a return to the mode of governance that prevailed in the United States from the end of World War II through the late 1970s” is perhaps well–meaning but entirely misguided and woefully out of date. Greater government intervention through anti–trust legislation and strengthening the hand of labor is not the solution, or at least is not a solution in the way that Goodman presents. Few would want to return to the era of economic stagflation, low investment, and low innovation that would almost surely follow such policies, effectively cutting off American economic growth at the knees.
What is needed is smarter intervention, not just more of it—if such a thing is possible. The Biden Administration’s CHIPS and Science Act is illustrative of this new thinking. Rather than having the government own and operate a semiconductor foundry, it offers significant incentives to attract the private sector to invest in the United States and establish a domestic foundry. The government should not pick winners or losers, but it should offer incentives to attract and stimulate investment. The Resilient Resource Reserve for critical minerals and rare earth elements, currently under discussion, is another example that would insulate markets from illegal Chinese practices like dumping.
These changes are almost exclusively driven by strategic competition with China and the market’s response to those geopolitical pressures. What COVID–19 should have prompted in terms of supply chain diversification is being driven by tensions between Washington and Beijing. Companies are fearful of exposure to China–related disruptions and seeking to re–shore or friend–shore businesses and supply chains. The government is leveraging trade controls to restrict the free flow of sensitive technologies, such as semiconductors, to retain an American competitive edge and offset Chinese intellectual property theft. A modern iteration of industrial policy is emerging that could well lead to stronger, more independent American supply chains.
“How the World Ran Out of Everything” is a valuable read undercut by its political myopia. Had Goodman dispensed with his advocacy (or at least toned down its intensity) and integrated a broader, more nuanced view as to the causes of and solutions to global supply chain fragility, his book would have been more well–rounded and, thus, more insightful. As it stands, looking at only one half of the equation leads to incomplete conclusions.
a global affairs media network
Exposing the lasting fragility of the global supply chain
Photo by Klaus via Pexels.
October 12, 2024
A deeply illuminating exploration of the global supply chain crisis suffers from an ideological bent and a too–narrow focus, writes Joshua Huminski.
A
rthur C. Clarke once wrote that “any sufficiently advanced technology is indistinguishable from magic.” That aphorism is just as true for the modern global supply chain as it is for technology writ large. You open an app, add a product or two to your cart, and often within 24 hours it is in your hands. A truly astounding modern marvel that Goodman does well to demystify.
“How the World Ran Out of Everything” explores the modern global supply chain and how COVID–19 disrupted the free flow of goods across borders, exposing the complexity of this modern network. Goodman’s exploration of the global supply chain is deeply illuminating, exposing the innumerable steps and processes that sees goods from China end up on our doorsteps, but it is ultimately better in aggregate than in detail.
Goodman uses the trials and travails of Hagan Walker, the co–founder of Glo—a toy that illuminates when it touches water—to illustrate the complexity of the global economy amid the effects of the pandemic. Walker is in a race against time to get his devices from China to the United States to meet a large order from a popular children’s brand ahead of the Christmas season. Walker struggles to find manufacturers in the United States, but quickly finds himself—like many American companies—looking to China.
Having found a manufacturer, Walker struggles to get his devices into containerized shipping units and onto a cargo–ship bound for the United States. With demand skyrocketing and supply limited, the price for shipping his toys rises, almost hourly. Here, Goodman looks at the longshoremen who offload the goods into the United States—something to which America was vividly exposed with the threat (temporarily averted as of this writing) of the International Longshoremen’s Association (ILA) strike in the autumn of 2024.
Getting his toys to an American port is not the end of the story. He struggles to get the toys off the ship, into the port, and to his facilities, illustrating the weaknesses in America’s long–haul trucking sector. Underpaid, overworked, and often subject to predatory practices, trucking is not a desirable career, but one that is instrumental to the American economy. America’s rail infrastructure is undercapitalized, in Goodman’s telling, subject to an automated system that prizes profit, not efficiency.
The global supply chain disruptions that followed COVID–19, for Goodman, “were not an accident, but rather the outgrowth of a concerted strategy.” Globalization led to the concentration of wealth and power in a limited number of companies within critical sectors. The de–regulation of the 1980s paired with the relentless (if misunderstood) push for efficiency and optimization created the systemic fragility that COVID–19 exposed. The vertically integrated supply chains of Ford and Lockheed Martin (which at one point owned its own mines and processing facilities) was broken into constituent parts, creating highly complex networks into which few if any had fully transparency.
As a critique, there is certainly some truth to Goodman’s assertions. Free market competitiveness, enabled by less government intervention, rewarded scale, creating self–reinforcing cycles of accretive complexity. The Amazons and Walmarts of the world won out over the smaller players, who simply could not compete. The cult of management and logistics efficiency (advanced by well–paid consulting firms), which yielded shareholder value, also created brittle networks. The just–in–time delivery system that grew out of these trends was faultless, until the underlying conditions (geopolitical and otherwise) that enabled that system were disrupted. Companies were motivated more by delivering value for shareholders than investing in offsetting upstream gray rhinos—high probability, high impact events.
Goodman’s excessively populist narrative overpowers what is an otherwise interesting journalistic account, and that is a shame. Rather than serving as a dispassionate observer, he is a relentless critic using human interest stories to overly simplify complex macroeconomic and global trends. No good has resulted from globalization in the United States or abroad, he posits. Management is evil; labor is good. The only solution is more government, and a heavier hand of regulation.
Goodman’s version of the story, despite its international basis, looks almost exclusively at failings within the American supply chain. It reads as though globalization were a wholly American invention, driven by American corporations, as opposed to one driven by broader global macroeconomic trends embraced as much in Europe and Asia as in North America. Countries on both continents did not escape the impacts of COVID–19 and the resulting supply chain disruptions.
Even were Congress to address the issues and shortcomings Goodman identifies in shipping, ports, rail, and the meat–packing industry (curiously shoehorned into the story), the systemic weaknesses of the global supply chain would not be resolved. The working conditions of employees in those sectors would improve—a welcome net benefit to be sure—and efficiency and effectiveness may increase, but the underlying structural vulnerabilities would not be resolved. At the same time, ignoring the massive self–interests (personal, financial, and political) that some of the unions involved in the supply chain—such as the ILA—have is to ignore an underlying driver of their resistance to automation and technological innovation.
There is also no escaping the simple reality that there is no world in which the United States could have on–shored or “friend–shored” (shifting production away from China and to friendlier countries e.g. Mexico) enough production capacity or supply chains to offset exposure to global economic disruptions, or done so at a political or economic price acceptable to the American public or domestic innovation. The desire to build a high fence around a large yard, to paraphrase the idea some advocates suggest, is perhaps well–meaning but entirely unrealistic outside of a narrow band of select industries e.g. advanced semiconductors.
Goodman’s call for “a return to the mode of governance that prevailed in the United States from the end of World War II through the late 1970s” is perhaps well–meaning but entirely misguided and woefully out of date. Greater government intervention through anti–trust legislation and strengthening the hand of labor is not the solution, or at least is not a solution in the way that Goodman presents. Few would want to return to the era of economic stagflation, low investment, and low innovation that would almost surely follow such policies, effectively cutting off American economic growth at the knees.
What is needed is smarter intervention, not just more of it—if such a thing is possible. The Biden Administration’s CHIPS and Science Act is illustrative of this new thinking. Rather than having the government own and operate a semiconductor foundry, it offers significant incentives to attract the private sector to invest in the United States and establish a domestic foundry. The government should not pick winners or losers, but it should offer incentives to attract and stimulate investment. The Resilient Resource Reserve for critical minerals and rare earth elements, currently under discussion, is another example that would insulate markets from illegal Chinese practices like dumping.
These changes are almost exclusively driven by strategic competition with China and the market’s response to those geopolitical pressures. What COVID–19 should have prompted in terms of supply chain diversification is being driven by tensions between Washington and Beijing. Companies are fearful of exposure to China–related disruptions and seeking to re–shore or friend–shore businesses and supply chains. The government is leveraging trade controls to restrict the free flow of sensitive technologies, such as semiconductors, to retain an American competitive edge and offset Chinese intellectual property theft. A modern iteration of industrial policy is emerging that could well lead to stronger, more independent American supply chains.
“How the World Ran Out of Everything” is a valuable read undercut by its political myopia. Had Goodman dispensed with his advocacy (or at least toned down its intensity) and integrated a broader, more nuanced view as to the causes of and solutions to global supply chain fragility, his book would have been more well–rounded and, thus, more insightful. As it stands, looking at only one half of the equation leads to incomplete conclusions.
