{"id":50778,"date":"2020-01-28T19:52:08","date_gmt":"2020-01-29T00:52:08","guid":{"rendered":"https:\/\/olduvai.ca\/?p=50778"},"modified":"2020-01-28T19:52:11","modified_gmt":"2020-01-29T00:52:11","slug":"could-the-coronavirus-epidemic-be-the-tipping-point-in-the-supply-chain-leaving-china","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=50778","title":{"rendered":"Could the Coronavirus Epidemic Be the Tipping Point in the Supply Chain Leaving China?"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"http:\/\/charleshughsmith.blogspot.com\/2020\/01\/could-coronavirus-epidemic-be-tipping.html\">Could the Coronavirus Epidemic Be the Tipping Point in the Supply Chain Leaving China?<\/a><\/h3>\n\n\n\n<p><em>Everyone expecting a quick resolution to the epidemic and a rapid return to pre-epidemic conditions would be well-served by looking beyond\u00a0first-order effects.<\/em><\/p>\n\n\n\n<p><strong>While the media naturally focuses on the immediate effects of the coronavirus epidemic, the possible\u00a0<em>second-order effects<\/em>\u00a0receive little attention:<\/strong><\/p>\n\n\n\n<p><em>first order, every action has a consequence. Second order, every consequence has its own consequence.<\/em><\/p>\n\n\n\n<p>So the media&#8217;s focus is the first-order consequences: the number of infected people and fatalities, government responses such as quarantines, and so on. The general expectation is these first-order consequences will dissipate shortly and life will return to its pre-epidemic status with virtually no significant changes.<\/p>\n\n\n\n<p><strong>Second-order effects caution: not so fast.<\/strong>\u00a0Second-order consequences may play out for months or even years even if the epidemic ends as quickly as the consensus expects.<\/p>\n\n\n\n<p><strong>The under-appreciated dynamic here is the\u00a0<em>tipping point<\/em><\/strong>, the imprecise point at which a decision to make fundamental changes tips from &#8220;maybe&#8221; to &#8220;yes.<\/p>\n\n\n\n<p>&#8220;<strong>These tipping points are often influenced by exhaustion or frustration.<\/strong>\u00a0Take a small business that&#8217;s been hit with tax increases, additional fees, more regulatory compliance requirements, etc. When the next fee increase arrives, the onlooker might declare that the sum is relatively modest and the business owner can afford to pay it, but the onlooker is only considering\u00a0<em>first-order effects:<\/em>\u00a0the size of the fee and and the owner&#8217;s ability to pay it.<\/p>\n\n\n\n<p><strong>To the surprise of the onlooker focusing only on\u00a0<em>first-order effects<\/em>, the\u00a0<em>second-order effect<\/em>\u00a0is the owner closes the business and moves away.<\/strong>\u00a0Invisible to everyone focusing solely on\u00a0<em>first-order effects<\/em>, the owner&#8217;s sense of powerlessness and weakening resolve to continue despite soaring costs and declining profits has slowly been moving up to a tipping point.<\/p>\n\n\n\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Could the Coronavirus Epidemic Be the Tipping Point in the Supply Chain Leaving China? Everyone expecting a quick resolution to the epidemic and a rapid return to pre-epidemic conditions would be well-served by looking beyond\u00a0first-order effects. While the media naturally focuses on the immediate effects of the coronavirus epidemic, the possible\u00a0second-order effects\u00a0receive little attention: first [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,4],"tags":[127,130,28817,587,3237,28849],"class_list":["post-50778","post","type-post","status-publish","format-standard","hentry","category-economics","category-environment","tag-charles-hugh-smith","tag-china","tag-coronavirus","tag-of-two-minds","tag-supply-chains","tag-wuhan-virus"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50778","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50778"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50778\/revisions"}],"predecessor-version":[{"id":50780,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/50778\/revisions\/50780"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}