A Supply of Uncertainty Demands Change

The law of supply and demand applies in uncertain times

The Course of Empire - The Destruction of Empire by Thomas Cole, 1835 (public domain - Wikipedia)

“Life is divided into three periods: past, present, and future. Of these, the present is short, the future is doubtful, the past is certain.” — Seneca, 49

We spend an inordinate amount of time wondering about the future: prognosticating, forecasting, and predicting, then changing those estimations based on observing daily occurrences.

CEOs look for futurists—those modern-day versions of Pythia, the high priestess at the Temple of Apollo, known to successive generations as the Oracle at Delphi. It is the futurist, they portend, who will cure their organization of its present ills and prepare it for what awaits.

For as long as there have been remote mountain plateaus and belief in higher powers, we’ve sought the advice of those who inhabit them. Whether granted by isolation, meditation, or a closer commune with the gods, humans have bestowed upon these individuals powers of sight. Their prophecies were taken as fact, their visions accepted as a certainty.

The reality is much more mundane: the only certainty is the past, and Pythia was enjoying the effects of hallucinogenic vapors emitted by the springs underneath Delphi.

How many futurists seem as if they’ve inhaled a few too many hallucinogens?

No, where we ought to look—especially amid chaos and uncertainty—is to the past, where we have the benefit of hindsight as well as the ability to witness human nature at work. Indeed, one could argue that it is precisely because we constantly look to the future that we forget about the lessons of the past.

Related — Wednesday’s free edition:

Inflation Nation

All it takes is a look at the global supply chain to realize that we’re in one of those indeterminate eras.

From the shortages of microchips to toilet paper and warnings about holiday gift purchases that may go unfulfilled, the supply chain is behind it. The workers who keep the global supply chains in motion are warning of a system collapse.

Just a look at global shipping costs since the beginning of the pandemic gives us a sense as to the rising prices consumers are in store for:

• Until 2020, the cost of shipping a 40-foot container along the world’s major trade routes never exceeded $2,000.

• Then Covid hit, and shipping firms reduced their fleets in expectation of low consumer demand. Instead, demand went up. 

• This has upended the global supply chain. Shipping costs are now up 5x to a record high: $10,000.

Rising prices are what happens when supply cannot meet demand.

Think Globally

When you consider how globally interconnected we are and how complex the global supply chain is, it’s little wonder that a pebble in the pond—whether it’s a massive barge with shipping containers stuck in the Suez Canal, or a series of factory delays in China—has ripple effects that are felt worldwide.

Sahil Bloom @SahilBloom

By now, you’ve probably heard that global supply chains are in a state of disarray. Here's a simple breakdown of what’s causing it:

But this kind of reliance on other nationalities to supply us with goods we do not or cannot produce ourselves, is nothing new.

Indeed, it is exactly what gave rise to the Bronze Age, from about 3000 to 1150 BC. But by the time the early 12th century BC arrived, the then-known world (largely centered around the Mediterranean and east), suffered a series of droughts, famines, and invasions.

The highly interconnected society—a society that relied on the combination of tin and copper to make bronze—meant that if the supply chain was disrupted even in one area, the effects would be felt throughout. With one disaster on top of another, the effects were devastating, and for a couple of hundred years, the world regressed before the Iron Age was born from the ashes of the Bronze Age.

This doesn’t mean that the global economy vanished. If anything, society found new ways to rely on each other. In Politics, Aristotle acknowledged the need for international commerce and the rise of money:

“When the inhabitants of one country became more dependent on those of another, and they imported what they needed and exported the surplus, money necessarily came into use. For the various necessaries of life are not easily carried about. Hence, men agreed to employ in their dealings with each other something that was intrinsically useful and easily applicable to the purposes of life, for example, iron, silver, and the like.”

Humanization Beats Inflation

The challenge is that along the way, we’ve lost the script. The pursuit has not been in simply supplying our needs, but in fulfilling desires that are well beyond needs. Call it greed, call it the pursuit of wealth, the result is the same: we tend to forget about why we’re doing it in the first place.

Lewis H. Lapham has some thoughts on the lack of humanity in globalization:

“…globalization is dehumanization, and the rule of money is the rule of nobody. The great, good, and glorious machine that generates the world’s wealth and directs the world’s trade (aka “creatively destructive capitalism,” “the unfettered free market”) doesn’t come equipped with the freedoms of human thought, conscience, or speech. Admittedly, a design flaw, but not one that troubles the upper servants of American oligarchy. They enjoy first-class accommodations on the bridge deck of Leviathan and make no complaint of its brutality—name of the game, nature of the beast. What disturbs them is the insult to their vanity. The bewildered policy-speak in the winter issue of Foreign Affairs is the voice of merchants who would be kings reduced in function to engine-room sweat labor heaving steel mills and shopping malls, movie studios and migrants, into a remorseless furnace.”

As the global supply chain greets us with the stark realities of our own making, we have some choices ahead of us: struggle for months (or years, according to some experts) and wade through, or develop alternatives to the frictionless supplies on which we came to rely.

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Three Ways to Insulate Yourself from Supply Chain Woes

We know there is potential upheaval on the horizon. Now is the time to prepare.

1. Look for the weakest link and develop alternatives

If you know there is backed up traffic in a particular port, delays from a certain part of the world, or a shortage of specific materials, then determine how to best respond. Bulk buying isn’t necessarily the answer, as it puts stress on the system and signals to other consumers that they should follow suit (which they usually do), and creates more shortages.

If there is a predicted toilet paper shortage, consider buying a bidet attachment for your toilet. Not only will you rely less on supply chain woes, you’ll be helping the environment in the long term.

2. Double down on self-reliance

Manufacturing has been on a decades-long decline in the United States, yet manufacturing is central to our modern lives. Now is the time to take another look at shuttered factories and determine how we might revive them.

Meanwhile, we might take our skills and put them to use for each other. Rather than replacing items that are in a long queue or on backorder, we might find others in our communities or volunteer our own services to make repairs.

3. Shore up relationships

As the strain grows globally, the impacts are felt locally. And these are the stronger ties in your network. Friends, neighbors, family members are all part of your local network and can pitch in together to find solutions, barter, trade, and even source items of need. In times of uncertainty, we need dependable relationships to keep us going.

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We don’t have many Bronze Age experts among us today. But we do have the knowledge that economic cycles are cyclical—and that humans respond consistently.

By taking stock of our past, we can prepare for the future.

And maybe we’ll be called Oracles at Delphi some day.

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Timeless

“The future comes like an unwelcome guest.” — Edmund Gosse, 1873

Go East, Old Man

As one thinks about modern global trade, there is no equal to the East India Company. At one time encompassing half of the world’s trade, Edmund Burke called it “a state in the guise of a merchant.” William Dalrymple takes us on a journey on the relentless rise of the East India Company.

Ice Cold Capitalism

A son of Italian immigrants saw air conditioning and refrigeration about to scuttle his ice block business, so he made the ultimate pivot: After the 1924 Winter Olympics, he noticed a rise in interest in ice skating, so used his refrigeration knowledge to make rinks—rinks that needed resurfacing. So he pivoted again, and what once took an hour and a half to accomplish was shaved down to mere minutes. The Man Who Invented the Zamboni. (The Hustle)

There’s a Reason Bronze is for Third Place

The Bronze Age was a wonder, and bronze became a highly valued substance. The collapse of the Bronze Age has a number of factors, and experts still aren’t exactly certain as to what is to blame. (World History Encyclopedia)

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Timely

“In matters of style, swim with the current; in matters of principle, stand like a rock.” — Proverb

Create This

The newly-named (but not newly-concepted) creator economy has an infrastructure problem. Particularly for the smaller entities. (The Rebooting)

The Short Bus

If you want to understand the labor market, you’ll have to look to buses. Or more specifically, bus drivers. Why America has a school bus driver shortage. (The Hustle)

Where’s the Beef?

Grocery prices are rising. Meat prices are rising more than most other grocery prices. Beef prices are rising more than most other meat prices. But on the ranch, these are not prosperous times. Even as ground chuck costs more than $5 a pound at Walmart, ranchers complain that they are receiving less for their animals than it costs to feed them. (The Atlantic)

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Recommended Listening / Reading

“We’ve got to live, no matter how many lives have fallen.” — D.H. Lawrence, 1928

🎧 What happens after everything falls apart? The end of the Bronze Age was a moment when an entire network of ancient civilizations collapsed, leaving behind only clues to what happened. Today, scholars have pieced together a story where everything from climate change to mass migration to natural disasters played a role. What the end of the Bronze Age can teach us about avoiding catastrophe and what comes after collapse. Throughline: What Happened After Civilization Collapsed?

Related: Jeremiah Owyang talks about how to be adaptable for the future:

📚 In 1177 B.C., marauding groups known only as the “Sea Peoples” invaded Egypt. The pharaoh’s army and navy managed to defeat them, but the victory so weakened Egypt that it soon slid into decline, as did most of the surrounding civilizations. After centuries of brilliance, the civilized world of the Bronze Age came to an abrupt and cataclysmic end. Kingdoms fell like dominoes over the course of just a few decades. No more Minoans or Mycenaeans. No more Trojans, Hittites, or Babylonians. The thriving economy and cultures of the late second millennium B.C., which had stretched from Greece to Egypt and Mesopotamia, suddenly ceased to exist, along with writing systems, technology, and monumental architecture. How did it happen? This is what Eric Cline investigates in 1177 BC: The Year Civilization Collapsed.

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