The free market is not the cause of supply chain problems

See ‘How the World Ran Out of Everything’ Review: Supply Chain Scramble: With the onset of Covid, transport of goods ground to a halt and retail shelves went bare. The problems were accelerated as governments worked to spur demand. by Marc Levinson. Excerpts:

"But there’s a lot missing from this story. Mr. Goodman focuses entirely on how long-distance supply chains affected the U.S.; you wouldn’t know that those supply chains were tangled in other places, notably in Europe, or that they also helped bring billions of people out of poverty in countries like China, Vietnam and Bangladesh. His claim that supply chains were designed to help the big at the expense of the small doesn’t stand up. Amazon was an unpromising startup in the 1990s before it figured out how to outdistance established retailers, in part by mastering supply-chain management. Apple was no corporate giant at the start of this century; it became one precisely because it outsourced much of its manufacturing to a Taiwanese company that operates in China. Glo has been able to build a business making light-up cubes only because an international supply chain delivered its goods.

The book’s most serious omission, though, is one that doesn’t lend itself to on-the-scene reporting: macroeconomic policy. The world didn’t run out of everything because of tangled supply chains. The cause was the coordinated effort of governments and central banks around the globe to stimulate consumer spending in the summer of 2020 in order to steady a world economy in freefall. Many types of services were unavailable, so consumers everywhere spent their windfalls on physical products. Even if U.S. supply chains had been entirely domestic, they would have been hard-pressed to handle the massive increase in purchases of goods between spring 2020 and spring 2021. That ships, trains and trucks could not meet the spike in demand is no surprise.

In the end, Mr. Goodman is less concerned with supply chains than with the inordinate influence of large corporations and wealthy individuals over public policy. “When parents cannot locate crucially needed infant formula, we justifiably surrender faith in the workings of the modern marketplace,” he writes eloquently [but import restrictions made the problem worse]. He calls for stricter antitrust enforcement and “a return to the mode of governance that prevailed in the United States from the end of World War II through the late 1970s.” There’s something to be said for that. But those postwar years were also a time when import protection kept hopelessly inefficient industries afloat and a driver could not start his own delivery company without proving that public convenience and necessity required its services. We need to be careful what we wish for."