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On health and shipping

It is mid-November, the autumn has been unusually mild, and the NHS has just declared its first crisis of the 2021-22 winter season.  Across the UK, emergency ambulance services are failing because ambulances which should be on station waiting to respond to emergencies like heart attacks, strokes and road traffic accidents, are actually parked up in long queues outside hospital accident and emergency departments waiting to hand over their patients.

The fact that this is happening throughout the UK means that we can rule out the usual managerial incompetence, because entirely different ambulance services are operated in each of the countries within the United Kingdom.  Rather, what we are witnessing is a spill over effect of the Covid lockdowns.  First, and most obviously, there has been a build up of bed-blocking as it has become harder to find residential or community care to allow frail patients to be discharged.  This means that – for want of a better term – the internal hospital supply chain has broken down:

  • Hospital departments cannot shift recovered patients back into the community because of a shortage of social care services
  • Accident and emergency departments can stabilise patients, but can’t move them to the appropriate speciality department because beds are blocked
  • Ambulances cannot move patients into accident and emergency departments because there is no more capacity
  • People who have heart attacks, strokes and other life-threatening emergencies cannot get an ambulance because the ambulances are queued up at the hospital.

At the other end of this slow-motion collapse of the UK’s health systems is a growing backlog of untreated illness.  In part this is due to the difficulties of accessing general practice doctors, or the difficulties in trying to diagnose conditions via Skype or Zoom.  In part it is because patients – either through coronaphobia or genuinely not wanting to be a burden on an over-stretched system – have failed to seek early treatment for conditions like heart disease and cancer.  As a result, more than 18 months after the first lockdown, severely ill people who waited too long are now presenting at accident and emergency departments with conditions which ought, ideally, to have been treated in the spring of 2020.

It is worth noting at this point that while the UK government had two scientific committees to advise on the Covid virus and on the public health responses to it, no such committees existed to advise on the likely long-term impacts of the covid-restrictions on Britain’s critical infrastructure or upon the wider economy.  It didn’t help that the opposition parties in parliament were even more enthusiastic about imposing lockdowns than the government itself.  With this in mind, we can consider the government response to the ambulance crisis – because my more alert readers will notice that we have seen it before:

“A total of 110 personnel will be deployed across Wales from the Army, Navy and RAF.

“They will work as non-emergency drivers to attend lower priority calls to free up ambulance resources for emergency calls where there is an immediate risk to life.”

This is, of course, exactly the same as the response to the faux fuel shortages in September.  When you don’t know what to do, but you’ve got to do something, send in the army!  But it isn’t going to solve the problem because the crisis is systemic.  It is a consequence of decades spent creating a hyper-efficient system where we should have been building a resilient one.

Notice that sending in the troops doesn’t solve the problem.  Sure, it means that qualified paramedics do not have to waste their skills picking up Mrs Jones to take her to her non-urgent appointment with the chiropodist.  But the heart attacks, strokes and accidents aren’t going to stop happening.  And if the accident and emergency departments are still full, then the ambulance queues outside are going to keep growing.  Sending a few squaddies to drive vehicles little different – when it comes to driving them – to transit vans is though, the easiest part of the collapsing system to fix.  Expanding social care capacity is a different matter entirely, because it has been run on the cheap for decades.  With better-paid vacancies across the post-covid economy, why would anyone subject themselves to the low-pay and poor conditions in the care system?… a problem compounded by the fact that experienced care workers went unprotected, became severely ill, and sometimes died during the pandemic.

Frontline health workers fared little better.  Insofar as they were given protective equipment – at least in the early weeks of the pandemic – it was the wrong kind, and wholly inadequate for preventing transmission of the virus.  Many became ill and developed long-covid.  And again, far too many died… not a legacy likely to attract retired health workers back into the service, and not one likely to encourage the brightest and best of our youth to seek careers in healthcare.

In any case, even with the recent National Insurance (tax) increase, neither central nor local government is going to invest anything like the amount required to expand the capacity of the entire health and social care service to the point at which it can clear the pandemic backlog, cope with ordinary pressure, and return to a situation in which ambulances arrived within ten minutes and patients could get elective surgery within six months of being diagnosed… those days have gone forever.  Instead – by default if not cynical political calculation – we will have Plan B, in which far larger numbers of old and infirm people than pre-covid will simply die prematurely until the remainder of the baby boomer generation has shuffled off this mortal coil, and what is left of the NHS will have a much smaller population to cater to.

Whether there will be an NHS, or, indeed, a global economy, or even a civilisation, by the time this all unwinds is a moot point.  Because what is happening to the British health and social care system is only a microcosm of the unfolding collapse of the systems which hold the global economy – and industrial civilisation itself – together.

Consider this, seemingly innocuous, question posed by a seasoned American truck driver:

“Why is there only one crane for every 50–100 trucks at every port in America?”

The answer is exactly the same as the answer to the question, why do we have a shortage of hospital beds?… because we have precisely the number we need to run the system at maximum efficiency.  But God help you if governments lock everything down in the face of a pandemic virus which they failed to prepare for, because then, the whole system begins to unwind.  The long chain of the problem is all too familiar even if different in detail:

  • To unload the ships we need more cranes
  • But cranes can only work harder if there are more container chassis– trailers designed specifically for containers
  • But even if someone built and paid for the new container chassis, we need hundreds more trucks and truck drivers
  • But port facilities and pay and conditions are so poor that few want to work as truck drivers
  • And even if we could recruit more drivers – or draft enough squaddies in – the distribution warehouses have limited capacity
  • And even if we built enough new warehouse space – and filled it with new workforces and equipment – we would need to recruit an army of delivery drivers to move the goods from the warehouses to retailers and customers.

And even if all of that could be achieved, the system would still have to clear the backlog while managing ordinary – very high – throughput.  But the real kicker – both with healthcare and global supply chains – is that there is no immediate incentive for anyone to solve the problem:

“What is going to compel the shippers and carriers to invest in the needed infrastructure? The owners of these companies can theoretically not change anything and their business will still be at full capacity because of the backlog of containers. The backlog of containers doesn’t hurt them. It hurts anyone paying shipping costs — that is, manufacturers selling products and consumers buying products. But it doesn’t hurt the owners of the transportation business — in fact the laws of supply and demand mean that they are actually going to make more money through higher rates, without changing a thing. They don’t have to improve or add infrastructure (because it’s costly), and they don’t have to pay their workers more (warehouse workers, crane operators, truckers).

“The ‘experts’ want to say we can do things like open the ports 24/7, and this problem will be over in a couple weeks. They are blowing smoke, and they know it.”

The received wisdom – which is almost always wrong – is that this is all about to morph into a wage-price spiral which will trigger 1970s-style inflation.  Indeed, some politicians may secretly welcome this as a way of unwinding the massive burden of private and public debt.  There is though, no reason to believe that anything more than short-term inflation is even possible in a debt-based currency system in which states and central banks no longer “print” notes and coins, but merely facilitate commercial banks in creating new debt.  Moreover, while the 1970s was the decade when we exhausted the last of the cheap fuels and mineral resources required to grow the economy, there remained a wealth of more expensive, but still recoverable, alternatives.  Even those resources are depleting now, and we lack the energy and resources which would be needed to bring more than a fraction of what remains into the real economy.

Even if governments did decide to directly issue the nominal currency needed to expand the infrastructure required to reverse the collapsing supply chains – they won’t – there is not enough energy or resources left on planet Earth to achieve the aim… not least because the army of new workers needed to reverse the collapse do not want to be paid for the sake of hoarding bank deposits; they want the material goods and services that those bank deposits are supposed to exchange for.  And again, there is not enough left of planet Earth for that new consumption to happen.

More likely, all of the efficiencies and economies of scale which allowed consumption to continue for half a century after the first oil shock in 1973, will continue to unwind as companies and governments seek self-interested but inefficient alternatives – such as corporations like Walmart chartering its own ships, or states imposing protective tariffs to protect domestic manufacturing.

Most likely, supply chains will simply collapse inward from both ends.  That is, manufacturers will have to shut down once there is nowhere left to store their overproduced goods.  This is already beginning in Asia, where there are insufficient empty containers.  At the other end, consumers who cannot afford the rising prices will further curb their discretionary spending; particularly as essentials like food and energy prices continue to rise.  Far from consumers having to get used to higher prices, business owners and corporate CEOs are going to have to get used to eking out a living on Universal Credit.

The dark cloud overhanging all of this, of course, is the mountain of debt which was run up in the good times, and must be repaid now that times have turned sour.  Governments could – but won’t – inflate it away in a coordinated international currency creation binge.  But more likely, once enough businesses have rolled over and enough workers have been laid off, we will be treated to round two of the Great Financial Accident as it becomes painfully clear that any “asset” which cannot be touched or stood upon is about to be rendered worthless.  And whereas supply chains unravel at the speed of a container ship traveling slowly across an ocean to save on fuel; the global banking and financial system will collapse at the speed of a photon hurtling along a fibre optic cable.

As you made it to the end…

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