The pandemic has exposed the weak link in the theory of globalization. The theory states that those nations which can easily produce certain products should produce them, while those countries which find it difficult to produce products should produce other things. Tom Walkom writes:
The theory behind globalization (or the liberal world order as Deputy Prime Minister Chrystia Freeland prefers to call it) sounds good. It is based on two principles.
First, nations should concentrate on producing goods and services for which they have a comparative advantage. Second, they should agree on a set of rules that allow them to freely trade these goods and services with one another.
At a basic level, this seems to make sense. It is more logical for Canada to buy bananas from abroad rather than try to grow them at home.
But times like these blow a hole in that theory:
Consider the crucial question of medical supplies. As Health Minister Patty Hajdu confirmed this week, Canada does not have enough personal protective equipment, such as masks and ventilators, on hand.
The federal government is scrambling to find as much as it can. It is hampered by the fact that, thanks to the logic of free trade, Canada does not manufacture such materials here. They must be imported from abroad.
Yet that is not easy. As a result of the pandemic, more than 50 nations, including all members of the European Union, have imposed restrictions on the export of medical supplies — to Canada or anywhere else.
China remains the world’s biggest producer of medical masks. But some recent purchasers, most notably the Dutch government, have questioned their quality.
A recent New York Times article paints the international medical mask market as a kind of Wild West, dominated by hustlers and profiteers determined to wring as much as they can from the pandemic.
The obvious answer is to produce what we need here. There is a vacant auto plant in Oshawa which could be retooled to do just that. But, so far, it remains empty.
Image: Fabulously Made
18 comments:
In theory, producing goods where it is cheapest wouldn't be a problem if sufficient inventories were kept for emergencies. But we are obsessed with ruining government like a business, and businesses today all run just-in-time production systems. JIT systems are a marvel when things are running smoothly. Inventory is kept to a minimum and in motion. No need for expensive warehouses and idle goods - parts and finished goods are delivered when and where needed.
But governments are not businesses and they shouldn't be run as though they are. Governments are our backstop in emergencies and should be keeping emergency supplies. That means storing medical supplies and replacing them as they expire. The problem is that these supplies become the target of cost-cutting by politicians who know the cost of everything but the value of nothing. When emergencies strike the cupboard is bare.
Cap
Precisely, Cap. Government isn't a business and it shouldn't be run like one.
It's not just medical supplies that need to be protected. We are highly vulnerable to food shortages for a variety of reasons. Free trade for food is idiotic. We need locally grown food to be the backbone of our supply. There is no good reason to allow foreign ownership of farms in Canada. There is also no good reason to allow our food processing plants to move to the US.
Such is life in a world of "everyday low taxes" run by petit fonctionnaires. For 15 years we've been repeatedly warned by the climate science types that the future would bring a succession of epidemics. This was borne out by SARS and then the Middle East respiratory virus, MERS. Those two events, coupled with these repeated warnings, were not well heeded.
Pandemics are like wars, they're "come as you are" parties. When an enemy arrives overhead to bomb your cities it's a bloody poor time to start looking to buy jet fighters. I know this is "piling on" but how is it we can lavish subsidies, grants and benefits on the fossil energy producers that our governments lowball at around $3 billion a year (the IMF pegs the real costs at more than $46 billion per annum) but we won't maintain equipment and supplies needed for fast response to an obvious and probable threat?
This failure to foresee is inexcusable. The past couple of days I've been pondering another warning we've been given in recent years, the very real prospect of multiple catastrophes hitting simultaneously. For example a pandemic landing atop a global crop failure. There are several other scenarios. What do we do then? There's a powerful synergy that emerges in these scenarios in which each saps your ability to respond to the other. What then? How would we possibly maintain order at levels necessary for civil society? As we're told this will probably occur shouldn't we be implementing strategies to at least diminish these threats?
If there ever was an argument against so-called "free trade," Toby, it's Donald Trump.
We've ignored past pandemics, Mound. As tragic as the aftermath of this one is going to be, it presents us with an opportunity to learn from our mistakes -- if we're smart enough to do that.
It has annoyed me for decades that our food processing has shifted to the US, which reduces our own food security. Much of our live cattle is shipped to US slaughter houses. Our mixed farming of agricultural products has wound down. At one time produce such as tomatoes, peppers, cucumbers and peas were all grown in south western Ontario. Tomatoes were purchased from local farmers by Libby's and Heinz in the Windsor area, but they decided to concentrate their processing in the US and shut down the Canadian operations. That left farmers to produce mono crops like corn and soy beans which has greatly reduced their flexibility, degraded the soil and contributed to algal blooms in Lake Erie.
Today, CBC has an article regarding N95 protective masks and president Bonespurs wants 3M to supply them solely for the US.
RG
https://www.cbc.ca/news/business/3m-n95-masks-1.5520326
We live in an area that used to be the vegetable canning capital of Canada, RG. American canners moved in and the canneries closed. Now there are no canneries. Everything moves across the border. The lesson? History puts us on the short end more often than it puts us on the winning side.
Three generations of my mother's family farmed the same patch of land outside of Leamington. My grandfather started on 50 acres and, by the time my cousin sold out, that farm had grown to 500 acres. They grew sweetcorn and peas for Green Giant, cucumbers and tomatoes for Heinz, wheat and burley tobacco. They had dairy cattle and a milking barn plus they raised beef cattle, hogs and poultry. That used to be southwestern Ontario farming. It was the blackest, richest soil I've ever seen.
Today that land, all 500 acres of it, is no longer farmed. The barns are leveled, the farmhouse (built of old growth maple) is gone. Atop that beautifully rich soil is an endless array of greenhouses. No livestock, no dairy, no pea vines, no fields of corn or wheat, no cucumbers. I can still remember the flavour of those field tomatoes, beefsteaks. Incredible.
What you describe used to be what farming in Prince Edward County was like, Mound. We still have dairy farms. They are heavily mechanized and operate with heavy debt loads. The vegetables have been replaced by vineyards and wineries. They make a good living.
We used to have industry here. Proctor-Silex used to manufacture appliances here. Bata used to have a shoe factory here. Those operations disappeared with free trade. Now we rely on tourism.
But given the progress of the virus, I suspect we'll have a rough summer.
Owen,
We seem incapable of planning for future needs and calamities but we can drop $4.5B on a 60 year old pipeline without even a grunt.
Someone appropriately compared it to bailing out the struggling typewriter
manufacturing sector.
Priorities, priorities.....
- J.
"[N]ations should concentrate on producing goods and services for which they have a comparative advantage."
Or "what they do better or best".
That's the founding fallacy of the scam. Is anybody still buying that shit? It's the Big One. Can we finally call it just a big fat fucking lie? Can you say "wage arbitrage" and "regulatory avoidance"? Read the business journals. That's all it's ever been about.
In the end, it's always been about doing things on the cheap, John. And you get what you pay for.
The Disaffected Lib said...
Three generations of my mother's family farmed the same patch of land outside of Leamington. My grandfather started on 50 acres and, by the time my cousin sold out, that farm had grown to 500 acres. They grew sweetcorn and peas for Green Giant, cucumbers and tomatoes for Heinz, wheat and burley tobacco.
Thats the tale of vancouver Island.
The quick and profitable returns of real estate soon screwed that; as it does now as farmland is turned to housing.
Itès called GDP.
TB
It's an old story, TB. Big money in the short term. Shutting down the enterprize in the long term.
We look backwards, J. While knowledge of history is essential, it's essential to not repeating the same mistakes in the future.
l, it's essential to not repeating the same mistakes in the future
How do we stack up ignorance vs greed?
TB
I would wager that most of humanity's mistakes can be chalked up to ignorance and greed, TB.
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