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Liebig’s law writ large

New deliveries of eggs to British supermarkets are being snapped up as quickly as the shelf stackers can get them onto the shelves.  At the same time, tons of eggs are going off in warehouses which currently hold massive stocks of food.  The unexpected reason for this situation, we learn from the BBC’s Farming Today programme on Wednesday, is that the UK is currently in the grip of an unanticipated egg carton shortage.  The entire of Europe is supplied by just three egg carton manufacturers.  None is based in Britain; and the nearest one – in Denmark – is closed for the next fortnight.  And so we have warehouses full of eggs and queues of shoppers asking for eggs, but no means of connecting the two.

The problem stems from something that has plagued the UK government from the very start of the SARS-CoV-2 pandemic – a combination of a weak state and blind faith in the power of the private sector to respond to crises.  When the original British pandemic plan (allowing the population to be infected in order to develop “herd immunity”) collapsed at the end of February (after models showed that it would result in critical infrastructure being overwhelmed) the UK government attempted to do in weeks what should have been done in months.  Responding to public pressure, government was led inexorably down the road to the current lock-down of all but essential activity; including the closure of all non-food retail, restaurants, hotels and schools.  That this was unplanned is born out in the current confusion about who is and who is not a “key worker,” with the result that public transport was jam packed with commuters on Monday morning despite government orders to stay at home.

Half of the food eaten in Britain in the years before the current SARS-CoV-2 World Tour was consumed outside the home.  In effect, we had two parallel food distribution chains – a wholesale chain for catering industries and a domestic chain for food sold directly to the public.  When the order was given to shut down the schools, restaurants and other wholesale consumers, there was no mechanism in place to divert food supplies from that chain into the domestic chain.  As a result, shortages which had already developed, as the public correctly anticipated the current lockdown, were exacerbated as the 50 percent who usually ate out took to the supermarkets in search of alternatives.  Meanwhile, wholesale food supplies are stuck in warehouses because the packaging used for bulk supply to caterers cannot be used by supermarkets.  An increase in supermarket packaging supplies would help… but, as Farming Today reported, the factory is closed for a fortnight.

A shortage of egg cartons is an example of Liebig’s Law of the Minimum, which holds that a complex system fails at its weakest point.  There are plenty of chickens laying plenty of eggs, there are plenty of trucks to deliver them and there is more than enough space on the shelves for them.  But the absence of those small cardboard containers is enough to bring the entire system to a halt.  Taken in isolation, this would be a problem hardly worth mentioning.  In normal circumstances, the private sector is indeed far better than a centralised state at rapidly responding.  But these are anything but normal circumstances.  As Tim Lang, professor of food policy at London’s City University explains in a BBC interview:

“’It is like a web of stretched rubber bands… ‘if one breaks then it knocks on through the system’.”

The danger for an economy which is currently in a supply and demand freefall worse than anything witnessed in 2008 or 1929 is that those tightly stretched elastic bands may begin snapping all over the place.  Whole industries which, prior to the pandemic, claimed to be indispensable currently lie idle – air travel and car manufacturing being the most obvious.  Some are being repurposed to meet shortages in respirators and protective equipment for frontline medical staff.  Now redundant transport fleets are also being diverted to food supply and other urgent supply chains.  Although, as the BBC article points out:

“…the Freight Transport Association is working hard to ensure that, in the face of a shortage of garage mechanics, trucks still get serviced as and when required.”

Once again, it turns out that while the highest-paid people in the UK can sit at home for three months without any noticeable impact on daily life, ordinary workers like truck drivers and garage mechanics are crucial to the life support of the entire civilisation.  But mechanics are only as good as the tools and the spare parts that they are equipped with.  And with most of the spare parts made in China or neighbouring Asian countries, and with most of the Northern hemisphere on lockdown, there is a huge risk of supply shock in the next few weeks.

Nor is public transport faring much better.  The initial problem for public transport operators was the severe fall in demand in February as passengers reasoned that trains and buses were incubation chambers for the SARS-CoV-2 virus.  While some took to working from home, others walked or dug that old bicycle out from the back of the shed.  The result was a collapse in demand which obliged operators to cut back the service.  The unfortunate consequence has been that despite the instruction to avoid social contact, the remaining trains and buses are overcrowded at rush hour.  The knock-on problem that this has now caused is that public transport staff are now going sick in large numbers.  As Tom Edwards at the BBC reports:

“Numerous transport workers, critical staff themselves, have direct messaged me via Twitter and they are furious:

“A TfL worker wrote: ‘It’s not just drivers who are sick or isolating. It’s station staff, signallers, admin, back office people, controllers, cleaners, all of us. Please let people know we’re not immune to this virus and we don’t want to be used in political point scoring!’…

“Another Tube driver told me: ‘We have 30 / 80 drivers off and half the managers. We are trying our best. We want to do more but we don’t decide the service levels. We don’t want to be driving packed trains of non-essential workers. [I’m] very upset we are being blamed when we’re putting our families at risk.’”

In a complex system, key workers are as critical as those cardboard egg cartons.  You cannot simply go to the local job centre and find an army of unemployed drivers, signallers and controllers – these are skilled roles which require months and years of training.  The same goes for the truck drivers who are currently keeping Britain’s critical infrastructure working.  There is a reason why they don’t let you drive a 40 ton articulated truck on an ordinary car licence – it would likely result in more deaths than Covid-19.

Second-order problems are also materialising in the health system, as an overloaded NHS is obliged to scale back on the run of the mill procedures and treatments which would ordinarily be taking place.  Now is not a good time to develop toothache because almost all dental care has been suspended for the duration (in Britain’s health system, toothache is not defined as an emergency).  At the other end of the scale, the lives of cancer patients are being put at risk as resources are diverted to managing the pandemic.  In between, the whole range of routine treatments, elective surgery and day clinics have been put on hold; raising the risk that key workers will be incapacitated for reasons other than Covid-19.

The response to the pandemic has brought out the best and the worst in us.  On the one hand, an army of people, many laid off from work but now being reimbursed by the state, has volunteered to help vulnerable people; particularly those instructed to remain in quarantine for at least three months.  On the other hand, the nation’s fuckwits continue to treat social distancing as optional.  Nor should we ignore the role of government – for being ambiguous about the definition of a “key worker” – and non-critical employers – for putting profits ahead of people and insisting on employees turning up for work.  For the most part, people want to do the right thing, but in an economy that is teetering on the edge of a cascading collapse, it is difficult to know what the right thing is.

What we have learned is that the entire system is highly vulnerable to relatively small – and probably impossible to predict – supply shocks.  An egg carton here and a garage mechanic there are all that stand between us and the collapse of the complex network of supply chains which keep us alive.  Whatever else comes out of the ruins left by the SARS-CoV-2 virus, a shift in the balance between efficiency and resilience will be inevitable.  Remember that SARS-CoV-2 is but one of the many zoonotic pathogens waiting on the fringes of global industrial agriculture to cross the species into humans.  And pandemics are but one of the threats facing us in the 2020s.  Energy constraints, resource shortages and the consequences of a changing climate are waiting in the wings to visit crises far worse than this pandemic on a now enfeebled global economy.  And as more and more people wake up to our lack of resilience, change will be unstoppable.

That will come at a huge cost, of course.  The reason that every generation since World War Two has enjoyed access to cheap food, cheap fuel and cheap goods is precisely because we – collectively – generated these fragile global just-in-time supply chains to drive down prices.  Making them more resilient will inevitably involve far more duplication and localisation (continental if not national) together with a greater degree of redundancy (such as return of warehouses and a surplus of key workers paid to be on standby).  Without some degree of redistribution from a corporate class that has grown fat on corporate welfare and currency manipulation to a broader population impoverished by banks and governments alike, the system will be unaffordable; and so some form of redistribution is inevitable (whether through taxation or inflation).  Critical infrastructure is likely to have to be socialised in future too – either run directly by the state or on a not-for-profit basis in the private sector.  But the corollary to this is that many of the things that we currently do are going to go away in the near future (air travel and driving being the most obvious).  Put simply, if it cannot be done locally it won’t be done at all.

As you made it to the end…

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