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Also I think climate change will be a increasing player in events with global disruptions in food, commodities, and industrial goods. Global capitalism has rele
by dv_dt 6y ago
Also I think climate change will be a increasing player in events with global disruptions in food, commodities, and industrial goods. Global capitalism has relentlessly optimized for lowest cost, but with minimal to no margin for risks or resiliency.
- Retric 6y agoHaving a vast surplus is a very useful form of resiliency. For commodities surplus is equivalent to low prices.
- dv_dt 6y agoHow so? Low prices drive alternate suppliers out of business as well as cutting margin for players in the market from having buffers to deal with mitigations possibly needing capital cost investments to keep bringing commodities to market. e.g. if you have a temporary drought, does the farmer have enough profit such that they have savings or capital lines to buy temporary water supply to get your crop through the dry period, or money to access getting your customs setup for new markets that have had a shortage in the regular markets. Or access to buy or rent new containers in this case possibly.
- Retric 6y agoDemand is price dependent, if the supply drops by say 10% the prices rise aka price X = Supply Y. But, the other way of looking at this if you’re lowering the price below X you need a supply larger than Y. Sure, economies get used to lower prices. However the excess annual food supply is plenty should some country have a 50% drop in agricultural output you don’t end up with famine just noticeably higher prices. That’s the slack inherent in very low prices and it extends to everything from industrial steel to phosphorus.
- dv_dt 6y agoAt stable equilibriums maybe you can follow the curve up and down, but if the system has maximized profit then the equilibrium isn’t stable against variation - especially as climate change increases variations.
- imtringued 6y agoFarms are subsidized, they are supposed to overproduce and throw anything we don't need away. If that excess produce was used for afforestation it could even become positive sum.
- xupybd 6y agoWhat's the better alternative?
- dv_dt 6y agoWell, a much better algorithm for actually considering risk chains in logistics (though I suspect there are many to choose from already). But also likely including financial regulation to formally add risks stemming from supply and climate to accounting sheets - akin goodwill (which has it's problems), but making it a much for formalized first class entry into public company accounting is probably the only way to make a shift meaningful.
- tastyfreeze 6y agoProper use of import/export tariffs to incentivize local production and use of commodities.
- Sabinus 6y agoAlso to account for negative externalities such as worker rights, pollution and carbon emissions. Why encourage capital to move production overseas to escape how the community wants its goods to be produced?