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Logistical Sandpiles
October 15, 2021
At the risk of overusing a favorite metaphor, today we’ll talk about sandpiles. My past sandpile stories focused on financial crises. The same principle holds in any complex system, though. Everything works until suddenly it doesn’t. As Minsky said, stability breeds instability. Then one additional grain of sand triggers a collapse.
Today’s financial system is complex but our logistical systems are, too. The modern economy that brings us so many wonderful goods and services is a breathtakingly complicated web of production, transportation, and storage capacity… and most important, the marvelously complex division of labor among millions of people around the world. When it all works, we (at least in the developed countries) have on-demand access to luxuries unimaginable even a few generations ago, and we regard it as normal.
The problem is complex systems are inherently fragile. The optimization that makes them cost-effective also removes the redundancies that make them resilient. Things can fall apart quickly when some unforeseen event occurs. Or an unforeseen sequence of events, which is what’s happened.
The ongoing, intensifying supply chain problems are raising costs in ways that add broad inflation pressure everyone will feel. And the zeitgeist in the workplace is literally changing before our eyes. Patterns that have held since the Industrial Revolution are changing. If you’re an employer, it is frightening. If you’re a researcher, it is fascinating. And when you are...
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