Wondering how our marketing turned into a grueling combination of scavenger hunt and Hobbesian war of all against all? Economists have two words for you: demand shock. Those words, along with “supply chain,” might be the most important terms you can learn right now.
In normal times — such as, say, March 6, 2020 — roughly half of American food budgets was devoted to “food away from home,” which is a fancy way of describing the meals we pay someone else to make. As restaurants shut down, people who bought one or all of their daily meals outside the home suddenly needed groceries.
Instantly transferring that much demand from restaurants to grocery stores necessarily results in some bare shelves while retailers work out kinks in the supply chain. That’s the “shock” part. Local bakeries or burger joints buy ingredients in larger packages than most of us need, and from different suppliers. So food can’t be seamlessly reallocated from one sector to another.
Meanwhile, even people who mostly cook at home suddenly want to store more food than usual, to minimize trips outside and insure against the risk of sickness and weeks-long quarantine.
So grocery stores have more customers, and their regular customers are suddenly buying three or four (or more) times what they normally demand. Moreover, they start buying different things: Out with the kale and quinoa, in with sugary treats and shelf-stable mac and cheese. Flour, sugar and other ingredients for unusually elaborate cooking projects have also become hot items.
As people struggled to get their hands on basics, what economists call “dynamic effects” kicked in. If you can find a scarce item, you buy more than you need, to hedge against future shortages. This, of course, makes shortages worse. In this way, Americans are experiencing a little taste of what daily life was like under communism.
Unlike the Soviet model, however, U.S. capitalism will eventually straighten out our grocery supply chains; for one thing, Americans will run out of space to store ever-growing hoards of Charmin and chicken breasts. So it’s tempting to say that everyone should just grin and bear the annoyances by focusing on something else — like the problems in critical medical supply chains for ventilators and masks.
Instead, I want you to focus on all shortages, intently. They are a vivid and unpleasant demonstration of why self-isolation is so urgent.
When you’re wondering whether it’s really necessary for all of us to stay in our homes, remember that the supply chains that seemed invulnerable a few weeks ago can suffer from supply shocks, too, in which producers suddenly can’t make as much as they used to.
Since World War II, those of us in the rich world have taken supply chains for granted. By and large, we don’t plan for sustained periods of hunger or meaningful deprivation. Instead, we plan for local disasters, expecting that a broken local supply chain can be rapidly repaired by a surge of resources from national and global supply chains that are still working smoothly.
Now the supply chains are under threat everywhere, all at once. It has become imperative that we protect every link.
If you aren’t producing or distributing something vital, the best thing you can do is stay home. Each person who does breaks the links in another chain — that of potential viral transmission — and makes it less likely that our most important and vulnerable workers will get sick.
American farmers’ average age is 58; even beginning farmers’ average age is 47. “On the whole,” Modern Farmer reported in 2018, “it’s not a profession populated by young people.” Our self-isolation protects those farmers, upon whom we’ll depend to eat next winter, as well as the truckers who will deliver that food (median age 46), the utility line-workers (average age 48), and oil and gas workers (median 43) who deliver other basic necessities, and the registered nurses (average 50) we’ll need if we do get sick.
Those people are already at high risk. If the rest of us were milling around, passing the coronavirus to each other, even more of them could get sick, and with hospitals overwhelmed, more of them might die. And some of those kinks in our supply of goods and services could tangle into knots, catastrophically.
So while you’re eating your tuna-cranberry surprise, you can comfort yourself with the thought that this situation is temporary. But it might be even more comforting to remember that you’re helping to make it temporary by staying home and giving essential people the distance they need to work.