HOW THE WORLD RAN OUT OF EVERYTHING

The Covid-19 pandemic exposed the fragility of supply chains, but this well-documented study shows how the problem has deep roots.

In this follow-up to Davos Man and Past Due, Goodman, a global economics correspondent for the New York Times, delves into the complex webs of technology, finance, production, and transport that underpin the global economy. He explains how the internet transformed the way that trade was organized, and it happened at about the same time that China started its explosive economic growth. The Chinese leadership became adept at gaming the rules of the World Trade Organization, but Goodman is also unforgiving of the thousands of American companies that rushed headlong into China looking for lower costs and higher profits. Another ingredient, pushed along by a class of ruthless consultants, was the move toward just-in-time inventory systems, which emphasized continual flow and limited stockpiling. The system was adequate, if not entirely smooth—until the pandemic hit and everything came to a shuddering halt. Shipping turned into a traffic jam, supermarket shelves emptied, and suddenly the drive for efficiency looked like a recipe for disaster. Even factories in Vietnam, Thailand, Mexico, Turkey, and other nations turned out to be dependent on inputs from China. Goodman systematically tracks his way through the issues, mixing economic analysis with interviews from the hardscrabble tiers of the infrastructure network. At the end of the book, the author advocates for a thorough rethinking of policy, calling for “a return to the mode of governance that prevailed in the United States from the end of World War II through the late 1970s.” Even though that shift is unlikely, this book should be in the hands of policymakers and economists before the next crisis emerges.

Goodman is willing to ask difficult questions, and he amply demonstrates that low prices can come with high costs.