Best Of Peter S. Goodman's "How the World Ran Out Of Everything"
Here is a selection of memorable quotes from How the World Ran Out of Everything: Inside the Global Supply Chain by Peter S. Goodman
There was some truth to this analysis. Supply and demand nearly always had something to say about prices. But another element tended to get short shrift in the inflation explanation: the consequences of extreme market concentration.
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Companies with dominant positions in their industries were positioned to exploit the pandemic as an opportunity to lift prices-and far in excess of what they needed to recover their own increased costs for the parts, energy, and labor that went into their production. In short, they fattened their profit margins.
By April 2022, according to one analysis, more than half of the increase in American prices for goods reflected enhanced profits for corporations, while higher pay for workers was responsible for less than 8 percent of rising prices.
Other research revealed that American companies had used the pandemic to mark up their prices vastly beyond their increased costs, to levels that represented the highest on record, with this trend especially discernible in industries in which a few huge companies dominated the market.
p. 266
By contrast, tens of millions of American workers today earn so little that they cannot afford childcare or medical expenses, to say nothing of a new car. And their corporate employers justify their meager pay as the means of keeping prices low for their customers— a wholly separate group of people.
So long as normalcy continues to depend on the desperation of working people, the supply chain is perpetually at risk of descending into chaos. The ultimate security depends on stable pay and working conditions for the people tasked with keeping the gears turning.
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These are false bargains. They rest on the assumption that corporate executives must gain the largess to amass private islands or the whole system breaks down. We can operate the supply chain, producing and delivering the wares of the modern world, and still protect and justly compensate ordinary workers. The tragic trade-offs make sense only so long as we continue to be guided by the fatuous assumption that shareholders and consumers are fundamentally conjoined in their interests, with workers posing a threat to both.
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But the relationship between worker distress and stock market happiness was also telling a deeper story. Here was a clear sign that the people in control of money craved the low wages that came from a permanent state of insecurity among working people. The economy was still ruled by the idea that if employees took home too much, employers could not prosper, which meant that the supply chain and the broader economy remained at risk
The reconfiguration of the global supply chain that is underway may be able to adjust to the geopolitical alterations, but it will not reckon with this fundamental vulnerability-the permanent fragility arising from dependence on exploited labor.
We cannot count on a transportation system staffed by people who must perpetually choose between protecting their health or their jobs. When we downgrade work to the point that sacrificing one's basic needs becomes a job requirement, we confront the eternal risk that some will withhold their labor. When we allow monopolies to capture our markets, scarcity and rising prices are the inevitable result.
p. 360
Technology that brings together now-disparate pieces of the supply chain is full of possibilities for improvement. Surely, some of these creations will prove useful, but none can relieve the global economy from its exposure to the vulnerabilities arising from the ultimate threat to the supply chain: unregulated greed.
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We need real and transparent marketplaces that are fair to all participants while maximizing the powers of supply and demand-for commodities, for rail and shipping services, for labor.
This is not a utopian vision, but rather a return to the mode of governance that prevailed in the United States from the end of World War II through the late 1970s. We do not want a time machine back to that era. We can hang on to our technological gains and our social progress while still resurrecting crucial policies that were dismantled over decades by monopolists in pursuit of fatter profits.
Antitrust enforcement is required to ensure real efficiency, the kind that flows from a truly competitive marketplace. Transparency in markets, from transportation to agriculture to labor, is needed to prevent the largest players from abusing their dominance to the detriment of everyone else.
p. 352
