British drivers are queuing to refuel: schadenfreude is inappropriate
Photo: Gareth Fuller / dpa
A few days ago people were fighting over a few drops of fuel at British petrol stations. Because more than 100,000 truck drivers have been missing since and through Brexit, petrol stations have been dry for weeks. The military is now helping out. If you could have a lot of fun with it, many also have. The Brexit British are fighting for gasoline, haha. From a historical point of view, one of the reasons why the Americans pursued their aggressive oil policy of the 20th century briefly flashed: 300 million people, 400 million private weapons, a nation of motorists and then a continuing shortage of petrol - that would have been a civil war guarantee.
Schadenfreude is inappropriate, however, as the UK gasoline shortage is just a foretaste of a massive economic shift that is happening right now. And which also causes major problems in Germany and will cause even greater ones. The previously robust, often digitally driven globalization has turned out to be surprisingly prone to failure. At first glance, the corona pandemic seems to be the reason for this. At second and third glance, however, it is a deeper problem.
It has to be mentioned that, despite some downsides, globalization is a unique success story, especially for Germany as an export country. Billions of people have been able to work their way out of extreme poverty through globalization. An impressive example: at the beginning of the 1980s, almost 90 percent of the population in China lived in "extreme poverty" according to World Bank figures. In 2018, that number had fallen below one percent. Many so-called emerging countries, unfortunately often marred by corruption and a lack of the rule of law, have been able to build up a real middle class through globalization.
My thesis is that we are experiencing the first offshoots of a systemic problem: globalization is somehow broken.
And even if everyday life at the end of the pandemic, unlike at English petrol stations in Germany, seems somewhat normal, at least for the majority society - the consequences have long since flashed in many individual corners.
The story of the toggle clamp
A few randomly selected examples: In the first half of 2020, construction timber was suddenly 50 percent more expensive. The price for brewing barley has increased by 60 percent since the beginning of the year. The prices of waste paper by almost 80 percent. The price of durum wheat has tripled, which will make pasta much more expensive. The price of coal has risen by up to 400 percent within a year. And the price of natural gas has increased tenfold. Tenfold! A lack of wood, a lack of paper, a lack of natural gas, a lack of wheat, a lack of coal - but at least there are still products on the market. Expensive but obtainable - that applies to a large number of economically existential raw materials. That can change: The book industry is almost dreading Christmas because the lack of paper can mean that books are scarce. A cultural disaster could arisebecause up to a third of book sales take place in the year before Christmas. Something similar is happening in some industries.
Millions of cars were not delivered this year because they are half-finished in some warehouse. On October 12, Audi stopped production at the plants in Ingolstadt and Neckarsulm - because there are simply no semiconductor chips to buy, and there is no need to talk about prices. They are not on the market. As a result, a Taiwanese semiconductor manufacturer, completely unknown to laypeople, has become one of the top ten most valuable companies in the world by stock market price, with a market capitalization of well over half a trillion dollars. So more than Volkswagen, Daimler, BMW, Porsche, Siemens, BASF and Deutsche Bank combined.
The “Economist”, the most relevant business magazine in the world, has recycled a term from the 20th century for the latest cover: “Shortage Economy”. Influenced by the Hungarian economist János Kornai, this is how the dysfunctional situation in the Eastern Bloc countries was described. From my point of view, the term does not fit the problem situation of the present very well. On the surface, empty shelves are empty shelves. But broken globalization is broken differently today - also because in large parts it still works sensationally well.
We are on the way to unstable capitalism, an economic order that is too easy to get out of sync with one overriding flaw: stability. Mind you, this is not a rumor of doom, not a crash talk and certainly not a swan song for capitalism itself. Because it is doing better than ever before. But unstable capitalism shifts a few standards that previously seemed immovable. The vulnerability of globalized unstable capitalism and its supply chain sensitivity seems to me to have arisen mainly through three changes:
With the fully digitized globalization, an unbelievable complexity has moved into the economy, which can have a huge number of consequences. In August 2020, the business magazine "Capital" explained this beautifully using the toggle clamps. They are needed for automobile production, they hold the body parts in place during processing. There is a special bolt in toggle clamps, which is mainly manufactured in China. Its delivery stalled at the beginning of the pandemic, which in turn triggered a toggle clamp deficiency and subsequently noticeably shook automobile production: a damn special bolt.
The consequences of climate change and the (necessary) countermeasures: The extremely high energy prices, for example, are not least due to decarbonization, i.e. the political pressure to get by with less CO₂. Because this is often anchored in contracts, it is difficult to switch to cheaper but dirtier energy. This is why natural gas, which is considered to be semi-clean, is so ridiculously expensive. At the same time, they failed to develop enough renewable energy sources in good time.
Global political upheavals, such as the new aggressiveness of China or the propensity for protectionism. Since Donald Trump at the latest, economic nationalism has not only been on the political agenda in the USA. Then there is the dark side of globalization: social injustice that fuels hunger, conflict and mass migration. On top of that, there are escalating, religious and cultural extremisms - the new strength of which can surprisingly often be explained by digital, social networking: social media as the infrastructure of radicals worldwide.
Actually, you have to see the pandemic as an occasion and not as a reason - Corona has only revealed the hypersensitivity of unstable capitalism.
If you build a house of cards in the garden, you can of course blame the bad wind for ruining everything.
But one can also wonder how clever the plan was in detail.
Unstable capitalism means that you optimize your business models, markets and logistics so radically that they only work if everything really goes smoothly.
If you take a closer look at the present, this is an extremely bad time to bet that everything will always work out.
Reality shock: ten lessons from the present
Published by Kiepenheuer & Witsch
Number of pages: 400 pages
Published by Kiepenheuer & Witsch
Number of pages: 400 pages
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For Germany and Europe, this results in tasks of great urgency.
The obvious one is to rethink outsourcing so many production needs.
But the most important is the realization that a new, economic awakening is necessary.
A digitally driven transformation that is rediscovering one of the metaphorical virtues of networking: the Internet was originally intended as an indestructible communication infrastructure.
Complexity and interconnectedness are only weaknesses if they are exclusively geared towards cost efficiency - and do not take into account the extremely high price for an uncertain future.
Economic stability can be invested in so that the next crisis is less devastating.
But you also have to want it.