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The ongoing supply-demand imbalance that is contributing to rising inflation worldwide is in my view the most pressing short-term problem that needs to be solve

by cs702 5y ago

The ongoing supply-demand imbalance that is contributing to rising inflation worldwide is in my view the most pressing short-term problem that needs to be solved by hackers, engineers, and entrepreneurs today.[a] We need more people doing what Flexport's Ryan Petersen did with LA ports[a]: Figure out quick, cost-efficient ways to get our current system out of its currently degraded state and back to operating smoothly and normally so we we can go back to growing its global throughput as in the pre-pandemic past. Large, complex, distributed, networked systems, like interconnected cloud datacenters, electric power grids, and global logistics networks, can get "stuck" in a degraded state due to a confluence of highly local bugs that are difficult to diagnose -- especially when no single entity controls the entire network end-to-end. Hoping and waiting for things to get better on their own might not be enough. -- [a] Note: I'm not saying it's the most important problem. I'm saying it's the most pressing, in the near term, because a well-functioning global economy is a prerequisite -- a necessary condition -- for solving all important problems. Please don't attack a straw-man. [b] https://www.inc.com/kevin-j-ryan/flexport-founder-twitter-shipping-logistics-supply-chain.html https://www.inc.com/kevin-j-ryan/flexport-founder-twitter-sh...

dustingetz 5y ago
How does degraded supply chain throughput connect to inflation?
- cs702 5y ago
  When there are supply-demand imbalances, e.g., people in France having to wait three months to get a new boiler versus 24-48 hours before the pandemic[a], the price of newly installed boilers in France tends to increase sharply. For a more general answer, see: https://en.wikipedia.org/wiki/Demand-pull_inflation https://en.wikipedia.org/wiki/Demand-pull_inflation https://en.wikipedia.org/wiki/Cost-push_inflation https://en.wikipedia.org/wiki/Cost-push_inflation -- [a] https://www.connexionfrance.com/French-news/Which-products-are-or-could-be-hit-by-stock-shortages-in-France https://www.connexionfrance.com/French-news/Which-products-a...
- dghlsakjg 5y ago
  Your question using synonyms: How does reduced supply lead to higher prices?
- im3w1l 5y ago
  The market price is set so that demand and supply match. If supply of some good decreases, then the price will keep increasing until a sufficient amount of people can no longer afford it. This can range from something fairly benign, like keeping an old car around a few years longer, to something disastrous like people starving.
wayoutthere 5y ago
I completely agree with you; but it’s because this is what “the collapse” looks like. A long, slow decline into a world that most of us cannot afford. I honestly don’t think there’s much we can do to stop it at this point; it’s the result of 100 years of energy policy keeping prices artificially low by ignoring the externalities that causes. I don’t think we’re ever going back to the pre-pandemic past. Climate change is simply becoming too disruptive to supply chain networks. This probably would have happened anyway, the pandemic just moved it up by 5-10 years.
- alphabettsy 5y ago
  Can you elaborate on why your view of the situation is so bleak?
  - wayoutthere 5y ago
    Climate change, and how brittle the JIT-optimized global logistics system we built over the last 50 years is. We can and will need to adjust to a more flexible system to deal with the increased disruption from climate change, but that system will be more expensive and less efficient. Couple this with the fact that we’re going to eventually have food shortages at least locally in the short-to-medium term, which will destabilize the developing world and raise global food prices as more countries have to import from “bread basket” countries like the US and China and consuming even more global logistics capacity than it does today. This long-term famine is already happening in Central America and is driving more and more migrants north every year.
    - tdfx 5y ago
      Can you elaborate on how you feel climate change has recently affected this issue? It seems more likely to me that the recent pandemic is the major issue. > This long-term famine is already happening in Central America and is driving more and more migrants north every year. This is certainly a problem but not nearly a major reason that migrants are coming north. They're coming north because they can make their monthly salary from northern triangle countries in a few days in the US. These are economic migrants, regardless of what the news tells you, evidenced by the fact that almost none of them are accepting offers of asylum in Mexico and choosing to continue to the US.

by cs702 5y ago

dustingetz 5y ago

How does degraded supply chain throughput connect to inflation?

cs702 5y ago
When there are supply-demand imbalances, e.g., people in France having to wait three months to get a new boiler versus 24-48 hours before the pandemic[a], the price of newly installed boilers in France tends to increase sharply. For a more general answer, see: https://en.wikipedia.org/wiki/Demand-pull_inflation https://en.wikipedia.org/wiki/Demand-pull_inflation https://en.wikipedia.org/wiki/Cost-push_inflation https://en.wikipedia.org/wiki/Cost-push_inflation -- [a] https://www.connexionfrance.com/French-news/Which-products-are-or-could-be-hit-by-stock-shortages-in-France https://www.connexionfrance.com/French-news/Which-products-a...
dghlsakjg 5y ago
Your question using synonyms: How does reduced supply lead to higher prices?
im3w1l 5y ago
The market price is set so that demand and supply match. If supply of some good decreases, then the price will keep increasing until a sufficient amount of people can no longer afford it. This can range from something fairly benign, like keeping an old car around a few years longer, to something disastrous like people starving.

wayoutthere 5y ago

I completely agree with you; but it’s because this is what “the collapse” looks like. A long, slow decline into a world that most of us cannot afford. I honestly don’t think there’s much we can do to stop it at this point; it’s the result of 100 years of energy policy keeping prices artificially low by ignoring the externalities that causes. I don’t think we’re ever going back to the pre-pandemic past. Climate change is simply becoming too disruptive to supply chain networks. This probably would have happened anyway, the pandemic just moved it up by 5-10 years.

alphabettsy 5y ago
Can you elaborate on why your view of the situation is so bleak?
- wayoutthere 5y ago
  Climate change, and how brittle the JIT-optimized global logistics system we built over the last 50 years is. We can and will need to adjust to a more flexible system to deal with the increased disruption from climate change, but that system will be more expensive and less efficient. Couple this with the fact that we’re going to eventually have food shortages at least locally in the short-to-medium term, which will destabilize the developing world and raise global food prices as more countries have to import from “bread basket” countries like the US and China and consuming even more global logistics capacity than it does today. This long-term famine is already happening in Central America and is driving more and more migrants north every year.
  - tdfx 5y ago
    Can you elaborate on how you feel climate change has recently affected this issue? It seems more likely to me that the recent pandemic is the major issue. > This long-term famine is already happening in Central America and is driving more and more migrants north every year. This is certainly a problem but not nearly a major reason that migrants are coming north. They're coming north because they can make their monthly salary from northern triangle countries in a few days in the US. These are economic migrants, regardless of what the news tells you, evidenced by the fact that almost none of them are accepting offers of asylum in Mexico and choosing to continue to the US.