By COOPER BARD
The world is currently facing many supply chain problems which are backing up the whole system, generating price increases and shortages. Here we will briefly explain the problem itself, and discuss what this says about capitalism as an economic system.
Currently, dozens of cargo ships are backed up at the port of Los Angeles, with as much as 66 massive cargo ships—most of them from Asia—waiting their turn for unloading. These are standard vessels for shipping containers, called either Twenty-Foot Equivalent Units (TEU), or the larger Forty-foot Equivalent Units (FEU). They are the international standard for overseas shipping, each containing tens of thousands of shipping containers. They carry a whole manner of consumer goods, parts, raw materials—almost anything which can be traded internationally. The backup of cargo vessels also exists off the New York coast.
According to shipping experts, this situation is unusual; generally, only one or two TEU or FEU ships would be waiting at any given time [1]. There are just not enough ports or dock workers to unload them all in a timely manner. The immediate effect of this will be delays in several sectors, which we are already seeing, and an increase of prices for consumer goods in the U.S.
This backup affects supply chains in industries and all over the world. The production of books and boxes is delayed by a lack of cardboard and paper [2], which itself affects shipping of all types. Car production and shipping is slowed, as Vietnamese manufactures are lacking in components, and computer manufacturing is also delayed [3]. In China, supply chain issues have led to increased prices in fuel and coal and, subsequently, a rationing of power to lighting and heating in the cities. Russia, while being a growing energy exporter, now has food price increases. Germany and the UK are experiencing rising prices of goods, and both the U.S. and UK are having “labor shortages.” In Australia, price increases of lumber and steel (and much of their lumber comes from China and India via shipping containers) have an adverse effect on their housing market, with rising prices for homes [4].
Part of the explanation for these sudden supply shortages must go to the COVID-19 pandemic. The massive drop in demand created by the pandemic has now rebounded with “the holiday demand” for consumer goods, boosted by stimulus packages and online shopping. Combined with “labor shortages” (read: companies will not pay enough to the workers), the U.S. is finding it difficult to keep up with the logistics of this huge influx of commodities.
Because economy and trade are unavoidably international in character, this clog is symptomatic of problems around the globe, and also a cause of further international problems.
The anarchy of capitalist production
The foundation of these supply-chain issues is the economic system of ceaseless growth and profits for the few—capitalism. In many articles, the COVID-19 pandemic is given a preeminent place as a factor in these problems. While not entirely wrong, this perspective fails to look at the deeper problem.
Take the backup of shipping containers off the Los Angeles coast: due to the anarchy of competition on the market, the sudden influx of post-pandemic orders (for industry and consumer goods) have clogged ports designed for just-in-time shipping. Just-in-time shipping has been perfected over the past few decades as a means for capital to cheaply order and use goods without having to store them for long periods. As a consequence, when there are big disruptions (be they natural disasters, or workers’ strikes) the whole system goes out of whack.
Additionally, because every company in each industry is competing for profits with the other companies, and because individual or family consumers are competitively buying products for themselves, there is no higher-order planning being done to prevent such disruptions. The result is a society that periodically faces enormous and unnecessary difficulties. Similar disasters in capitalism occur, such as the 2008 housing bubble burst, or the problems with pandemic lockdowns.
Labor is also subject to the anarchy of the market. Workers will rightfully stay home (during a pandemic no less!) if they can gain a living from a government stimulus payment that is higher than the wages provided on the labor market by the capitalist boss. The capitalist press of the United States, in particular its conservative wing represented by the Republican Party, has argued that stimulus packages and welfare for the working poor is keeping them from working and hurting the economy. (It should be noted that at this time, all of the welfare and stimulus packages—crumbs really—have expired).
In truth, the capitalist boss isn’t paying high enough wages! If the boss wants the worker to work, then the boss should make it worth labor’s time (literally). But of course, all corporations under the capitalist system must make a profit and must squeeze the wages down to as small as possible to remain profitable. Again, the anarchy of production plays a role. What does this tell us about the “labor shortages” at the Los Angeles shipyards (or indeed, the whole country)?
Of course, we would be foolish to expect a substantial increase in wages without a heightening of the class struggle in the form of unionization, strikes, and popular support for them among the working class.
Capitalist production, waste, and ecology
There is another problem this episode highlights: the ever-growing scale of capitalist production. This involves two related processes. The first is the expansion of existing industries such as mining, drilling and fracking, automobiles, computer hardware, construction, etc. The second is the expansion of consumer goods, often including many redundant products, unnecessary packaging, and products designed to be quickly discarded and replaced.
Take cell phones. Since the advent of the first iPhone, a dozen distinct iterations have been manufactured and marketed to the public. Each of those millions of discarded phones requires lithium batteries and other rare-earth metals to function, and the recycling process is either inaccessible (in poorer countries) or imperfect.
If society planned things in advance to carefully manage resources, we could provide everyone in society with a cell phone, and make a long lasting, durable product. But phone manufactures need to produce cell phones for a profit. It is necessary, for capitalism, to re-produce redundant products frequently. This means more mining of rare-earth metals, and more environmental harm, than absolutely needed. This also means worse products.
Or take packaging. So many products, everything, from food to computers or even basic building materials, use tons of redundant and wasteful packaging. The packaging itself needs to be manufactured and shipped. Under capitalism, it is actually profitable for some companies to make redundant packaging, and it is easier to market it in a global economy where products are moved around all the time. But rarely is this packaging produced or recycled with a mind to the metabolism of the planet Earth.
However, while there is a lot about basic consumer goods that can be improved, their ecological impact is less then heavy industry, production primarily geared toward, of course, military hardware. Even the military requires the use of shipping lanes to transport parts for manufacture. The oil industry (a major strategic partner of the military) requires steel and lumber (temporarily for construction) to build pipelines. In Canada and the U.S., pipeline construction and fracking, two of the most environmentally harmful practices humans engage in today, will use imported as well as domestic materials for construction. It all depends on the market forces and the whim of the individual manufacturer.
No doubt, that hundreds of millions of dollars worth of commodities in those cargo ships sitting off the California coast are necessary for many people and companies. But it is also a certainty that an equal amount of said commodities are useless, redundant, or wasteful. Under an economy where we planed for human and ecological needs (rather than just hoping the market-gods smile on us today), it can be guaranteed that all international trade would be so much more efficient.
What does this say about resistance?
Can workers confront the bosses with enough social power to extract demands? Yes, and the strained supply chain demonstrates how, and where, workers have even more power than they typically do elsewhere.
The just-in-time supply chain gives logistics workers, delivery drivers, and warehousing workers incredible social weight in extracting demands from the boss, or even to put weight on the government. The current phenomenon of supply-chain woes is an unplanned event related to the anarchy of the market. But this also implies that working people can exert pressure in a planned way. Direct action in the form of road and pipeline blockages, as well as strikes, are capable of hurting capitalist profits in a profound way and demonstrating to the whole class the promise of collective resistance.
Of course, these supply-chain problems, along with major economic downturns such as the 2008 recession, and the havoc of the COVID-19 pandemic, show clearly the necessity of resistance, not just potential tactics. These events show that capitalism as an economic system not only cannot solve its own problems, but that when it does have problems, the majority are hurt while the powerful minority continue to be just fine. Capitalism is a system that has failed on a logistical and moral level. The working class is the force that can hasten its needed demise.
This may come sooner than we expect. Labor militancy in the U.S. has been on an upswing in recent years. The year 2019 saw 48,000 General Motors workers on strike, and also another Chicago teachers’ strike—with the participation of thousands of teachers demanding better compensation and conditions. During the Black Lives Matter upsurge of 2020, tens of thousands of workers either struck or walked off the job in protest. Recently, workers with the International Alliance for Theatrical and Stage Employees authorized a strike of 60,000 employees, with unanimous support. Food service workers have demanded wage increases and have spawned the #FightFor15 movement. As of writing, 1400 Kellogg workers are going on strike across the country, following strikes at Frito-Lay and Nabisco.
In short, the potential for increased labor militancy and the mobilization of the working class is very strong. Given the continued problems that global capitalism is generating right now—problems that will not be the last—it is important now more than ever for the working class to show its muscle in the workplace and in the streets.
Sources
[1] https://www.msn.com/en-us/news/watch/cargo-ships-backed-up-at-ports-are-causing-massive-delays-in-shipping/vp-AAP2jsu MSN report on the jam. Note the recommendation to “get holiday shopping done early this year.”
[2] https://www.npr.org/2021/10/04/1043145212/supply-chain-issues-are-slowing-the-production-of-books-ahead-of-the-holidays NPR report on book shortages.
[3] https://www.theguardian.com/business/2021/oct/02/supply-chain-world-economy-energy-labour-transport-covid The Guardian on global supply chain issues.
[4] https://www.theguardian.com/business/2021/oct/02/how-the-supply-chain-crisis-is-affecting-six-big-economies The Guardian on the effects of supply problems on six nations.