lengthening supply lines

Any military commander will tell you that long supply lines are a bad idea. Long supply lines played a major role in Germany's defeat in Russia during world war II. They also figured prominently in many other unsuccessful military campaigns throughout history. While we are not at war -unless you figure the war on terror, the war on drugs, the war on cancer, and other phony wars-, there are lessons to be learned here.

These lessons are more important because we are under stress right now. In the present case the enemy is not another fighting force. Rather it is droughts, diseases, hurricanes, rising sea levels, and other climate change and pollution events. By the way, take a close look at military history and you will see that environmental factors often played a bigger role in the outcome than any strategy or tactics. I would venture that the role of the environment in the demise of societies is the most underestimated cause of all. In the West we like to attribute success and failure to individual choices. We have built a personal cult around this notion and re-written our history accordingly. Our history is one of great leaders and evil villains, whereas the reality is far less sexy but a lot more compelling. It is a story for another day.

Let's focus on supply lines. Here is a typical example of what we are doing. I will use the example of a story that was on NPR recently. It is about a French village where farmers grew gherkins (cornichons) used as a condiment. Originally the village and its environs had about 30 farmers growing the delicacy and supplying a nearby packing plant with goodies. Then the people at the packing plant figured out they could buy gherkins -actually a related species that some say does not taste as good- from India for less money. You can probably guess what happened next. The plant started buying its gherkins from India and nearly all the farmers went out of business and joined the "service economy."

No doubt economists would think this is a good example of progress. Free traders rejoice when hearing such an uplifting story. They will argue that it is good for the consumer. The plant can now save money, get a better return for its investors, and pass some savings along to consumers. You and I can eat cheaper gherkins. So where is the catch ? Why should we not do this ?

If this story sounds like magic to you, it is because there is a trick here. A trick not unlike the ones magicians on stage use all the time. The "trick" is cheap oil. And oil is cheap because nobody pays the true cost of oil. We only pay for exploration and retrieval. Nobody pays for pollution and environmental damage, at least not yet. This hidden credit makes it possible to do something that is very stupid indeed. Shipping gherkins all the way from India to France, when local goods are available that not only taste better, but cause less damage to the environment, and provide local jobs, is idiotic beyond belief. Yet we do it all the time. And all major civilizations before us have done it too. Does that mean it is right ? Just take a look at what happened to those civilizations. There is a reason they perished.

Lengthening supply lines is always a dumb thing to do. It adds costs and vulnerabilities. First there is the cost of oil. As we depend on it more, we use more and prices will go up. Then there is the hidden cost of oil that resides in environmental destruction and ultimately less productivity. That cost is about to hit us big time as pollution is now on a global scale. But there are many other hidden costs that cause us to pay for our savings many times over. And these costs have nothing to do with pollution -although they do result in more pollution.

We have to protect our supplies. That means we have to sign agreements with the suppliers. We have to offer goodies in return. In many cases we need to offer military support. All that adds up and it eventually wrecks our economy. Sure, we get cheaper gherkins. But we pay more taxes elsewhere. Taxes to support our military in Iraq so we can guarantee oil supplies. Trade agreements that put more of our people out of business in return for more short-term -read short-sighted- savings.

If you read this and feel despair, remember this. You can help stop these idiotic behaviors. Buy local, especially when it comes to food. Join the locavores. And while you are at it, resist the temptation to buy cheap widgets made in Asia and other far away countries. Pay more for local goodies. It keeps the jobs at home, restores the true economy -one of essential goods and services instead of discretionary spending-, and it may ultimately save our living environment and the future of mankind.