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Modern warehouses are a critical component of our complex global supply chains

Watching video footage of vials of Covid-19 vaccines encased in dry ice and arriving at hospitals and retirement homes offers me a glimmer of hope for 2021. But having a vaccine does not mean an end to the pandemic — vaccines must be distributed to hospitals and injected into patients to do any good.

Because both the leading vaccines require subjects to receive two shots, humanity needs to figure out how to distribute two times seven billion people’s worth of vaccine to every corner of the world in a matter of months.

Thanks to advances in the art and science of logistics spurred by offshoring and online shopping, such an enormous task as distributing two of something to every human on the planet falls within the realm of the possible.

Certainly, we should all feel grateful for the international network of manufacturers, ports, and transporters working hard to deliver these wonders of modern medical technology.

At the same time, we should recognize that the supply chain that delivers life-saving medicines to us also has dropped a package of socio-economic fragility and environmental degradation on our doorstep.

China entered the World Trade Organization in 2001. Within 10 years, manufacturing employment in huge swaths of what is now known as “flyover country” in the U.S. fell by 75%; within 20 years, nurses were wearing Hefty bags in place of surgical gowns in New York City because no domestic PPE manufacturers survived.

These examples of socio-economic fragility are inextricably linked with environmental degradation.

Look at photographs of industrial areas in the United States during the 1970s. If those scenes look familiar, perhaps it is because you have seen nearly identical images taken in Chinese and Indian industrial areas more recently.

Richard Nixon created the E.P.A. in 1970 in response to a gradual 10- to 15-year build-up of public outcry about increasing levels of environmental damage. American citizens wanted the conveniences of post-War commercialism but, as rivers began to stink and catch fire and as the air filled with choking pollution, the non-economic costs of convenience overwhelmed the benefits.

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A factory near the author’s childhood home in Houston, Texas circa 1973. The factory burned discarded automobile batteries.

In the subsequent 40 years, we hit upon a devastatingly simple solution to our conundrum: we would export the unpleasant ecological costs of convenience and import only the benefits — the time-saving products themselves.

It is not that the ecological damage our Boomer predecessors railed against in the 1960s had disappeared; it had merely moved to a region that was convenient for us to ignore.

The exchange was considered a win-win.

Developing countries were able to rapidly increase their national wealth; developed country consumers were able to boost their standard of living with goods produced at unimaginably low wages.

Economists with fashionable degrees from elite institutions were able to dredge up appropriate 18th century musings of Adam Smith and David Ricardo and sprinkle them with the 20th century free-market libertarian fantasies of Hayek and Friedman.

Where does our complex system of manufacturing offshoring, just-in-time inventory management, and instant gratification leave us now?

As Appalachian State University professor Rajat Panwar’s recent research paper shows, half of humanity’s carbon emissions have occurred in the last 30 years — exactly the period during which the reality of “global warming” became well understood in scientific, industrial, and political circles.

Eight percent of the Amazon rainforest — an area as large as Spain — has been converted to feed crops for beef cattle and pastureland for the same just during the 21st century.

To be competitive in the world economy — to function successfully as the developed world’s productive base, in other words — countries like Panwar’s native India cannot be too restrictive in their environmental laws (e.g., the Indian government opening up ancient forests to coal mining) and cannot afford to enforce the laws that are on their books (e.g., turning a blind eye to the rampant illegal mining occurring even in the hills surround the Indian capital of New Delhi).

One impoverished illegal logger with whom Panwar spoke about the evident destruction of a protected Indian forest had this to say:

“I have five children. I get food for family by selling timber. I love trees and being in the forest, but sustainability always comes after breakfast.”

As we near the end of Hanukkah and with just one more week before Christmas, we in the First World are enjoying some last-minute shopping — scrolling through pages of bright, shiny objects on Amazon’s website — anxious to forget the misery of the great pandemic of 2020.

As you finish up your holiday shopping, please do not forget that the supply chains that bring us our holiday goods and those that will soon distribute 14 billion doses of lifesaving medicine to every living soul also has a major role in degrading the ecological health of the planet we call our home.

Creating an economy that will allow our civilization to survive and thrive into the next century requires us to question our commonsense notions of consumption, trade, and comfort. It requires us to think creatively, act boldly, and adapt flexibly. Intelligent investors take note.