The Capitalists Can’t Sustain Supply Chains Through the Crisis

Due to the mind-boggling incompetence of the US government, and the general inability of capitalism to respond meaningfully to the coronavirus pandemic, medical supplies are now in shortage at hospitals around the country. Bottlenecks in both production and distribution drive the massive supply chain crisis as the US tries to resolve the shortage of medical protective equipment.

The emergency is compounded by the challenges inherent in efficiently shipping essential goods in the new conditions of social distancing. However, the means exist to resolve this contradiction—but only by overcoming the limits of capitalism.

On the question of distribution, a huge swathe of supply chain capacity and labor power is aggregated under one corporate umbrella: Amazon. Unlocking this potential in the public interest would require the immediate nationalization of Amazon, to be operated under workers’ control, with no compensation for Bezos or any other capitalist.

Currently, Amazon is notifying customers of shipping delays for non-essential goods, while experiencing shortages of crucial household goods including cleaning supplies. Breakdowns across Amazon supply chains mean that even when essential goods are produced at the necessary levels, they may still fail to get to where they’re needed in a timely way.

Amazon’s profits are derived from legions of low-wage workers working precariously and with few benefits, and the company has grown to enormous predominance on this basis. This has left Amazon’s business—and with it a critical part of American social infrastructure—utterly vulnerable in this period. Amazon workers have walked off job site demanding access to paid sick leave and safe working conditions. Amazon fired one of the organizers of a recent labor action, and a leaked memo showed that Jeff Bezos himself attended a meeting plotting to fight Amazon workers by publically smearing an organizer as “not smart, or articulate.” It is obvious that the capitalists running Amazon are feeling some pressures.

Breakdowns across Amazon supply chains mean that even when essential goods are produced at the necessary levels, they may still fail to get to where they’re needed in a timely way. / Image: SounderBruce via Flickr

The demand side of Amazon’s supply chain is also about to be qualitatively shocked by economic collapse on a historic scale. The crisis beginning now is likely to be the most significant collapse of purchasing power in the US economy since the postwar boom created the consumer base that drove the rise of firms like Amazon in the first place. By the end of the year, the millions of workers who have already been laid off over the last few weeks will have massively less cash to spend on purchases of any kind. There are serious uncertainties as to how key pillars of the economy will continue to function under private ownership, when faced with what will likely be the largest collapse in aggregate demand since World War II.

In addition to the shortage of medical supplies, millions of people are now remaining in their homes and changing their eating habits accordingly. This crisis will significantly affect the patterns of food distribution, and is likely to crash head on with the incoming climate disasters, likely forcing workers everywhere to come to a dramatically new relationship with their food supply.

Food delivery firms like Uber Eats and Grubhub are convenient but expensive. There is a large segment of workers who have had the disposable income to use these services until now, but whose financial circumstances are about to change radically. For many workers with collapsing incomes, a high degree of food insecurity is likely in the short term. In this context, it’s essential that the production and shipment of nutritious food be separated from the profit motive. Under capitalism, supply and demand resolve in intermittent death spirals that bourgeois economists label “the business cycle.”

For the working class, this means periodic collapses in their living standards, combined with the further concentration of wealth in the hands of vulture-capitalists. For the capitalists, it means it may not be in their class interest to effectively fight to prevent human suffering. Recent strike action by workers at grocery delivery and pickup firm InstaCart point the way forward. In another example of the progressive potential of the labor movement at this moment, workers at General Electric took action, demanding the company shift production to supply much-needed medical ventilators. Freed from the profit motive, workers are equipped to play the lead role in meeting the crisis.

For many workers with collapsing incomes, a high degree of food insecurity is likely in the short term. / Image: WalgreensOsorio via Wikicommons

The physical infrastructure exists to move goods across the country very quickly and efficiently, and the labor power exists and is ready to run that infrastructure if properly supported—and protected against the pandemic. All that stands in the way is the continued involvement of the capitalists in this process.

Trump has resisted making use of the Defense Production Act, which theoretically allows him to coordinate production to meet the medical supply crisis, openly admitting to the pressure he is under from private capitalists who insist that their direct control of the economy be untouched. His limited use of his powers reflect an anxiety about even broaching the question of nationalizations. Once again, private profits trump the public good. And once again, it is clear that the profit motive is maladapted to handling problems of this scale. Economic planning for the benefit of society as a whole will require nationalization of the key levers of the economy under democratic workers’ control—not under the continued management of the idiotic and decrepit capitalist class.

The world is now entering a period of disequilibrium that’s likely to continue for years. But rather than succumb to pessimism, socialists should recognize that it is possible that this transformation will result in an amazing leap forward in human history if workers prevail in the class struggle that is now emerging. There is a clear way out of this mess—the socialist revolution.

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