Yesterday, officials in the Bay Area issued an order for those of us who live here to “shelter in place.” Meaning, we’re to stay inside our homes and only go out for essential reasons, such as buying groceries. (Most businesses are closed anyway.) This order is in place for three weeks.
I went to Costco to buy some staples (coffee!) before the order took effect. I found shelves stocked with a mix of some goods (there was plenty of coffee) and not much of others (no toilet paper, very little bread.) Hoarding behavior + supply chain disruptions = empty shelves. As I perused the gaps in the store’s inventory, one word kept coming to mind: resiliency. We’re learning the degree to which our systems can keep us fed, clothed, connected, etc.
Markets are great mechanisms for reducing costs. But in times of crisis, cost is only one variable among many. There may come a time when people are willing to pay more for a roll of toilet paper. But if there are no machines turning out more rolls, or trucks to transport them, or fuel to power them, or raw materials to produce them, or stores to sell them, then cost won’t matter much. A month ago, this observation would’ve been hypothetical. Now, it feels very real.
A generative question for the world we create after this crisis: how might markets better balance efficiency and redundancy?