There was a time when companies preferred vertical integration: they wanted to own their supply chain. Then, for a long time, the mantra was to concentrate on one’s core business and let other specialists take care of all the non-core parts of your business.
Well…
The reason vertical farming failed is that if you want to do it you also need to control your power source. In a world where civilization is slowly collapsing, you need vertical integration.https://t.co/jXtY1GOKg5
— Ian Welsh (@iwelsh) December 25, 2022
This is no longer viable business practice. In a period of civilization collapse supply chains become unreliable: you may not be able to get what you want or you may not be able to get it at a price you can afford.
Supply chains will become more unreliable as time goes on. Leaving aside the fact that logistics companies make out like bandits during periods of supply constraints and thus have little incentive to fix the problem, climate change, environmental collapse and the new era of cold and hot war will make supplies more and more unreliable and scarce.
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The more something matters, the more this will be true: many countries couldn’t get vaccines, no matter what, and countries which created them gave them to themselves and their allies first. When water, food, minerals and energy becomes scarce, countries and companies will prioritize themselves first, their allies second and everyone else not at all. Strong countries, faced with famine, will not export food they need, and weak countries will be forced to export resources they need even if it means death and deprivation for their people.
If you need something, you better make it yourself, or be in lockstep with a company or country who needs you as much as you need them.
The smaller you are, the worse this will get. Amid the shortages of the pandemic small and medium enterprises, including stores were largely cut off: the biggest customers got served first and everyone else got the scraps.
A reliable supply chain and predictable politics are necessary for ages where companies and countries specialize. Eras of war and decline and collapse are eres of vertical integration and keeping ones suppliers close. The extreme version of this was feudalism: make or grow everything you have locally, because you can’t count on anything more than a day’s travel.
Most areas of the developed world won’t wind up that bad for some time yet, but that’s the extreme end of the road we’re on. Hopefully we’ll never get there, but wise countries and companies will no longer rely on widespread supply chains they have no control over.
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rangoon78
Hunter-gatherer societies were able to achieve affluence by desiring little and meeting those needs/desires with what was available to them. It all changed come agriculture, where a surplus was created, which was then taxed, plundered or paid as rent to elites, whether they were princes, bandits or landlords. Since then, only “The “Four Horsemen” of leveling –mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues— have decreased inequality.
Future climate change will return planet Earth to the unstable climatic conditions of the Pleistocene and agriculture will be impossible.
Human society will once again be characterized by hunting and gathering.
https://en.wikipedia.org/wiki/Original_affluent_society
http://www.spearswms.com/book-review-great-leveller-violence-history-inequality/
https://www.sciencedirect.com/science/article/pii/S0016328719303507
GlassHammer
Not sure if folks here ever dabbled in some aspects of homesteading (a very demanding vertical integration system) but the first lesson I learned is how much waste and inefficiency you have to muddle through before anything even comes close to breaking even in “time” or “expense.”
This happens because you can’t specialize in much of anything (making learning a slow process) because your time is split into many separate tasks most of which can’t be run in parallel. (And this gets exponentially worse the more technology is subtracted from the process.)
All vertically integrated systems are like this which is why I don’t think most companies will survive the transition Ian mentioned.
VietnamVet
The crux of human fate is that we must work together to survive on earth. In the past, before corporations seized the globe, nations with tariffs, militia, democracy and just laws were vertically integrated. It took care of its citizens, business prospered in good times, and borders defended. Unfortunately, no one nation on earth is Eden with all of god’s given resources. There must be trade. But screwing others increases inequality and violence. Unless there is cooperation, equality restored, the grabbing of wealth by the powerful from everyone else will end western civilization just as it always has in the past. This time, in the nuclear age, cockroaches will be the only survivors if the global nuclear war erupts over the world’s dwindling resources.
different clue
@rangoon78,
Many of the Indiandigenous Nations of North and South Turtle Island did not adopt the self-selected Elite surplus extortion model when they developed their agriculture.
So they showed/show that a non-extortion outcome of agriculture is possible. The way they showed it is/was possible is that they did it.
Can self-selected small groups of us do the same in the ever more unstable weather and climate to come? Maybe. If all the knowledge now existing and yet to be developed can be worked up into habitat-specific permaculture approaches, then the groups of people who do that may survive . . . if they can work out ways to protect themselves from their extortion-model-based neighbors.
About ” Human society will once again be characterized by hunting and gathering.” I think that mostly won’t happen, because there is nothing left to hunt and gather and there will be nothing left to hunt and gather for more than a few thousand people in a future entirely without any agriculture, permaculture or horticulture whatsoever.
Unless we mean ” hunting rats and gathering roaches”. There may be a future for some doing that if we all decay that far down. Lets hope we can halt our decay-path in mid-decay.
About
different clue
@GlassHammer,
Perhaps the “some necessary specialization problem” is why mankind in general invented the village or the band as the next basic level of organization above the most immediate family. So that a bunch of co-village-steaders could keep eachother alive by all specializing in one of the survival-necessary goods-making or service-providing specialities.
So perhaps people who can “village up” will survive where pursuers of the Prepper Doomstead dream won’t.
It was partly this problem which Kurt Saxon , who claims to have invented the word and concept of “survivalism” addressed with his little essay on The Idiocy of Space Capsule Survivalism.
https://www.survivalplus.com/the-idiocy-of-space-capsule-survivalism/
GlassHammer
@different clue
Yes, the more hands you have the more you can focus on specific tasks at the expense of other tasks. Well organized teams are just more effective when it comes to making use of people with average skill sets. The “army of one” strategy is suited for outliers who have an abnormal capacity for the task or fools who have no sense of risk/reward.
This holds true for businesses as well. Under vertical integration the preferred strategy by management will be an “army of one” for any given task resulting in skeleton crews running entire divisions. The better option is larger teams to ensure each task gets the time and workmanship it needs. But that won’t be pursued since the workmanship will be labeled as a “cost with marginal benefit”.
So expect mid to large size businesses to become fragile and more mediocre.
When vertical integration kicks in you want to be in an industry that doesn’t require scale to survive.