Yes, we have no bananas

Toyota announced in late August that it would reduce production by 40 percent in September, because of a shortage in semiconductor chips for its cars’ computer systems. This major cutback by the world’s largest carmaker was only the latest consequence of global production disruptions caused by the pandemic. The spread of Covid-19 forced factories worldwide to close, prompting shortages of shoes, steel, lumber, and other goods. The virus has also upended the shipping industry, which underpins international trade. Chinese authorities closed the port of Ningbo, which handles more cargo than any other port in the world, for two weeks in August after a single dockworker tested positive. Climate change and factory fires have also put severe pressure on the supply chain, as did the container ship blocking traffic for nearly two weeks in the Suez Canal, one of the planet’s busiest trade arteries. Low supplies are leading to higher prices for consumers, prompting fears of uncontrolled inflation.

Has the pandemic broken the global production system?

Dean Baker is the co-founder of the Center for Economic and Policy Research in Washington. Baker says the production system has actually held up well to the stresses of a global pandemic. The ongoing shortages are largely spot instances, not structural or lasting problems, with production interrupted only temporarily. He expects most shortages to end early next year, which, if so, should curtail fluctuating prices and calm inflation worries. Still, Baker says, the pandemic has illustrated the need for governments worldwide thoroughly to assess vulnerabilities to their infrastructures, with an eye to making them more resilient to future shocks—especially from climate change …

Michael Bluhm: Beyond cars and semiconductor chips, what other goods are in short supply?

Dean Baker: There are a lot of areas where we’ve seen supply disruption. The price of lumber exploded in late 2020. Other building materials have gone up, as well. Now, lumber prices are back down. You’ve had shortages of food items—fruits and vegetables. Beef prices have gone up. There was a toilet-paper shortage at the start of the pandemic. Spot shortages are continuing to spring up.