SOLD OUT

The supply chain is broken—and it’s not likely to get fixed, at least not as we know it.

It may comfort gun control advocates to know that, in the words of one industry spokesperson, “5.56 ammunition for an AR-15 used to be about 33 cents a round. Now you’re looking at closer to almost a dollar a round.” Blame it on a failed supply chain, and blame that failure on the Trump administration since things began to unravel with the trade war with China. Granted, writes Rickards, it was a mistake to admit China into the World Trade Organization in the first place, and in any event, “stretching supply chains to reach cheap labor in China exponentially increases the risk of adverse outcomes on the way.” The author argues persuasively that the supply chain suffers other weak points. Though it has always been with us, its so-called scientific management has not, and innovations such as just-in-time inventory invite disaster when they run off track. Combine such disasters with stacked-up shipping containers, truckers not moving loads because they’re busy protesting pandemic restrictions, and hoarding behavior, and your local Costco begins to look like East Berlin. What’s more, writes Rickards, our current bout of inflation is a direct result of supply chain disruption, and it’s likely to get worse before it gets better—and might even become deflationary in the end. Given that “Apple works with suppliers in forty-three countries on six continents to source the materials and parts that go into an iPhone,” it’s essential to get things right. Rickards offers an eminently sensible (though costly and surely difficult) solution. Remove regimes such as China and Iran from the global “College of Nations,” establish a “Supply Chain 2.0” that “involves bringing commodity inputs and manufacturing back to the United States and allied countries,” limit trade to “trusted partners,” and rebuild the economy from scratch.

An alarming but not alarmist book that deserves serious attention from economists and policymakers.