If you can’t fathom Britain’s supply-chain woes, consider a famous 1958 essay by economist Leonard Read about the pencil, says Tim Harford in the Financial Times. “Pick me up and look me over,” wrote Read in I, Pencil. “Not much meets the eye.” But look at the pencil’s “family tree”: collecting its cedar wood requires axes, saws and a railway; its graphite comes from Sri Lanka, mixed with Mississippi clay, sulphuric acid and other ingredients. Then there’s the rubber and its “magnificent six (six!) coats of lacquer”. The pencil’s autobiography is a vivid account of the complexities of a market economy, says Harford. It shows why the current supply crisis is potentially so serious.
Most “supply-chain geeks” think we will weather the crisis, which stems from a post-lockdown surge in demand coinciding with ports hampered by Covid restrictions, manufacturing in Vietnam being held back by an outbreak of the Delta variant and truck drivers wondering if the job is worth the hassle. Britain, however, is a special case: until recently it was home to tens of thousands of truck drivers from the EU. Thanks to Covid, more than a third went home; thanks to post-Brexit curbs on immigration, they “are unlikely to return”. Boris Johnson is betting that if he gives the UK economy a shock, something will turn up. “But in this case, I am suffering from an acute shortage of optimism.”