Things that make you go HMM
trying to constellate some kind of intelligibility out of the smell of the now
In a podcast conversation that’s oriented a lot of my posting over the past several months, Chris and I did some work trying to name the signature of the political present. This appears all the more difficult, insofar as the geist of the zeit now is marked by complexity, ambiguity, indeterminacy.
https://www.podbean.com/ew/pb-si6k2-132b626
Chris’ way of getting at this has been by exploring apt metaphorics of twilight. This also tends to appear in a lot of Germanophone thinking around eras: I think of Hegel, Nietzsche, Broch, Spengler, Adorno, and Nicholaus Geyrhalter, whose amazing visual essay, Abendland, on ‘deadened Europe at dusk’ marries a slow, panoramic hi res modernism (like Andreas Gursky) to the attuned sense of the estrangement that occurs when one can achieve enough slowness for the viewer (or it’s just he has tripods and patience enough) to accurately film social processes unfolding – in a way that activates the usually unseen role of time in space.
For me, the nose is also a helpful way of steering ourselves round. Like taste, smell is viscerally connected to what our intuitive sense ‘nose’ without having to discursively explicate its reasons and whatabout its counterfactuals and maybes and so on. As Bubbles was wont to say in The Wire, ‘this shit ain’t right’. The nose knows.
For me right now, my nose goes ‘hmmmmmmmmmmm’ – with a little help from my mouth, and the C&C Music Factory immediately suggested to me by my echolalic cultural memory (and scroll for a dance).
What I’m trying to pinpoint is the nasal intuition that something smells really off right now, and that it might be different this time.
Let me allow this intuition, then stoke it by giving the following few fragments from some corners of my reading, the better to induce some kind of cogent intelligibility.
~
‘You may not remember this’, but in 2020-1 there was a supply shock. There haven’t been supply shocks like this in the OECD-Anglosphere (the rich world) since the 70s.
What was different about this one was that it was a demand-driven supply shock. As Mims pinpoints:
“Basically, Americans went on a shopping spree as soon as lockdown started, and we haven't really stopped since," he says. "We are ordering so much stuff and we have transferred so much of our spending from services — like hospitality, going on vacations, eating out — to goods that it has really jammed up the works of the global supply chain. It’s totally a demand issue”.
This is truly fascinating in and of itself.
But if we look a little ‘back’ and follow Levinson, the enabling condition of this style of shock ( different to the dynamics giving rise to a Soviet-era bread queue) ultimately stems from the US military’s decision, during the Vietnam war, to switch to a demand-driven model for provisioning troops.
Until the 70s, GHQ (are they actually called that?) used a ‘push’ based model that sent in containers worth of stuff that ‘central command’ planned-knew the troops ‘needed’. This was an HQ-emanating deeming of ‘the boots on the ground needed by boots on the ground’. It usually turned out to be a poor fit, with deadly consequences. Say you needed antiseptic and bandages, but you got boots; say you needed ammo and very specific helicopter spare parts, but you got boots. Say you then had containers full of boots left over, all in size US 13 and 6, &c &c
In switching to a ‘pull’ based model, us.mil let local knowledge do its work, ‘proving’ a point (grimace) we have to concede Hayek popularised: the person on the spot knows their needs better than any distant bureaucracy possibly can1.
(In a very complex sense, Amazon now emphatically ‘disproves’ this, but this is another post for another week soon.)
Effectuating demand-driven responsive logistics required a re-think in how stuff was actually moved around, and this is one of the concrete origins of containerisation – both as proof of concept, and as empirical origin. Without delving too much into this (please read Levinson), containerisation was a step change in efficiency, and arguably the greatest world transformative socio-technical change that has transpired over the past half century. Yes, that’s right, ICT is overrated and reified by ‘data worshippers’, to quote Smil from a couple of recent posts. Or, at least: no worshippers without shippers. First shippers, then worshippers.
Logistics, distribution, is actually what has primacy in the contemporary world.
In the 70s, switching to ‘pull’ was a huge logistical improvement in meeting deployed troops’ needs, but it was an efficiency that also raised its own question mark. Containerisation is always decontainment, this is hugely important. Please sit with this paradox for all that follows.
Having sent containerised stuff to Indochina, the shipping companies then had to sail back with empty containers – but that wasn’t efficient. But what if, say, they stopped in Hong Kong and Yokohama? Well, if you’ve ever wondered by US consumers embraced Sony radios, Panasonic TVs, and Casio watches from around this time, this is actually what happened. It was an incredible win-win synergy that powered US consumption, Japanese manufacturing, and spreading Japanese engineering know how to Hong Kong and Taiwan, while squaring the circle of provisioning imperialist aggression ‘nearby’.
As a decontainment of desire, as well as a world-transformative step change in efficiency, containerisation also unleashed a number of other changes. Among the following that Levinson details, the most important is that it lengthened supply chains to potentially any length.
Then, as shipping and handling costs approached nil (a few dollars for a t-shirt all the way to K Mart), it became possible to of separate design and administration from manufacturing and warehousing, and to conduct manufacturing ‘nearly anywhere’.
This was one of the structural factors engendering the offshoring that destroyed (or just ‘finished off’) the dialectic between capital and labour in the early industralised ‘winner’ countries of the North Atlantic.
It also shifted the balance of incentives toward capital and the exploitation of labour (and any financialisation that could take advantage of that substantive dynamic) for the following four decades to the time of writing.
Corporations could now shop around for ‘wherever’ had the ‘best’ externalities (lowest taxes, fewest ecological regulations, least unionisation) as well as the largest pool of low cost, disciplined labour: people who would work the line and not go on strike, would keep showing up, day after day, and even hope for an expected future better than that of their parents, for wages low enough to allow the new global industrial proletariat to eke out some life, enough sleep to dream of the good life in the future.
By some Rhonda Byrne-ian ‘law of attraction’, the above also meshed with the ‘causal coincidence’ of Deng Xiao Ping and his era (wow, imagine having one’s own ‘era’), meaning that, from 1978 – so for the decades of ‘globalisation’ we’ve been unevenly living through together – the Anglophone OECD has been the ‘beneficiary’ of cheap stuff we can buy on a whim (K Mart and Walmart and Amazon and on and on), while (with all due irony) the Communist Party of China has been able to exploit its peasantry and proletariat as a stonking great Promethean engine of manufacturing-driven prosperity. It’s the people’s liberation; let’s Party.
Returning to Mims, with early 70s Vietnam in mind, what’s fascinating-terrifying about this dynamic of debt and reification-driven consumption and exploitation and ecodevastation-driven manufacturing between the two behemoths is that it only took a relatively minor2 global pandemic to nudge the whole system into crisis. Just a tiny 'dink' in the patterns of consumption at one end, just a few % points, sent the global supply chain into shock – for a couple of years. Since then, look at prices and cost of living, and look at labour markets; different economy, sometimes subtly, sometimes significantly.
Let’s chuck a few TEU on top of this.
China is still by any measure the global manufacturing ‘superpower’ (a dubious honour for all the young people from the country whose lives amount to having been fed into it). The levels of interdependence here are fascinating, staggering, mindbending, surprising. Peter Hessler’s great ‘New Yorker long’ feature covers some aspects of these subtle, reflexive interdependencies. But China is declining, in relative terms (as Vietnam is on the up… but Vietnam alone has no scope for replacing China’s scale), and this decline accelerated significantly because and after covid.
Moreover, ‘we’ have already had four decades of the low-hanging fruit from China, as it moved from being the dirty back end for the roughest processes (that would then be refined in Hong Kong and Japan) to a place conducting the highest high-end precision manufacturing as good as any in South Korea, Japan or Taiwan. China, like Flava Flav, also got problems of his own, including:
significant middle-class consumer expectations,
a shrinking, ageing population with (rightly) higher wages and life expectations than 40 years ago,
an unaffordable and unstable urban real estate market in the ‘top ten’ cities, tied to a shaky real-estate industrial complex whose reckoning has yet to be reckoned with
spiralling externalities from throttling people and ecologies so hard for so long, and
the profound (and unaddressed) issue of a still massive peasantry that’s ‘not gonna make it’ into the urban middle class, who won’t be soaked up by factory jobs, urban real estate, and end up as good enough consumers in a surveillance capitalist Party state service economy (hot noodles, vapes, and facial recognition).
Once you add Xina to all this, the complacent and racist assumption that ‘China’ was just gonna keep stitching the West’s Nikes, soldering its phones, and keep pumping out plastic stuff for pup consumers to throw away – after a nice splash play – starts to seem glaringly like the self-serving fantasy it eventually-always was.
Once you get a couple of nudges, eg the failure of an export-led recovery, and the over supply of containers (currently happening), you can already see signs of dis-ease portside – and this leads to the next sectional point.
~
Since the 1970s, the global shipping carriers have been involved in a gigantomachy. This dynamic transpires due to the containerised system’s global eigenvalue: at a systems level, shipping ‘routes’ toward efficiency by way of
lowest total unit cost and
the imperative of circulation.
In other words, everyone looks for the ‘best deal’ (cheapest price per box), carriers compete to offer it, and everyone portside and in shipping works to keep the whole thing moving with smooth, unceasing rapidity – at all costs. Meanwhile, huge buyers like Amazon and Walmart, creating a de facto monopsony in some cases, crack the whip at the other end, accelerating acceleration for everyone labouring in that supply chain, and every business struggling to compete, or go under. From a shipping company’s perspective, only way to compete in such a ruthless field is by having incredibly deep pockets and by seeking ever larger ships. The former is necessary to make payroll and order new ships as you ride the unbelievable roller coaster of supply, demand, and fuel costs (all diesel for the foreseeable future); the latter ‘cos bigger = lower total unit cost.
This has led ‘us’ – because we’re all implicated in this global system, which we never voted for and is beyond the control of any one state, or global finance capital – to a world where we are down to several heavyweights3: scrambling for alliances, duking it out, and ramping up the protein and ‘roids for the next round. In practice, this is less like the glorious ‘quickening’ of Highlander4, and more like the body of Micky Rourke in The Wrestler. To that extent, it leads more to where Ronnie Coleman has ended up (injured and addicted to synthetic opioids, but still lifting heavy and the just having operations) than what Arnie looked like at his peak, in 1970.
We are now in a situation here the latest generation of Ultra Large Container Vessels (ULCVs) are so big that only the biggest ports can ‘contain’ them5, and piloting them into the harbours – potentially deadly and catastrophic, for habour pilots – requires knowledge and skill. Pilots are now handling ships as big as the Empire State Building down to the metre, centimetre, and milimetre. These are the largest mechanical objects yet built by humans, but if many of the frequently used dredged channels were just a metre shallower, or if it was high tide and certain bridges were just a centimetre lower, or if the pilots and tugs failed to attend to docking with less than mm-by-mm attention at key moments, the whole thing would crash.
It’s as if civil aviation blew right past the A380, and we were now all routinely flying around on the Super Guppy.
The key point should by now be obvious: as of 2023, we are at the absolute material limits of how big ships can be, yet since the onset of containerisation, and for the ensuing five decades, shipping companies have had to pursue gargantuanisation, or go out of business. What do they do now?
Back in the States, Japan and Europe, which together absorb the lion’s share of what China does not, how much harder can consumption be rammed, given the material limits and diminishing returns just mentioned, and adding in the ramping ecological costs?
Moreover, if we look closely at the lives of the growing population of ‘losers’ in the ‘winner-takes-all, loser-loses-everything’ of Fulfilment Society, look at the catastrophic mental health data coming out of the US (or anywhere in the ‘winner’ countries), and speculate about comparable rates of alienation and misery in China based on last year’s protests, how much further can this be pushed? Hmm.
The thing to add to this is ‘extrinsic shock factors’.
Covid is a case in point. By way of SARS and MERS ‘we’ had a heads up and some dry-to-moist runs, as well as arguably enough time and resources to effectuate some degree of preparedness and multilateral understandings and co-ordination. In both cases, ‘we’ were unable to be a ‘we’ with any level of co-ordinated effectiveness when the ‘novel’ corona virus hit, and what transpired was a highly unevenly distributed example of ‘building the plane while flying’.
We were also very surprised by surprise, thrown by the world – and global supply chains took years to recover (and I’m not sure if ‘we’ have6).
I’m thinking of all of this with VaporSpace and Gorzworld in my mental foreground, as I work in the CBD a few days a week and am privileged enough to have books delivered to me (sometimes). But in the background, niggling away at me, there are three things that are unfolding in Japan, and any or many of them may-or-may not really go bad.
I profess no macro or financial competence here, so this is very much not a normie substack ‘hot take from bro making strong assertions like he has Subject Matter Expertise, or has had a bump’, but the smell of the following factors, especially as they might brew up together, makes me go hmmmmmmmm.
~
First of all, the huge implications of a probable rising cost of debt for Japanese investors coaxed by rising interest rates, tied to the brain-breaking amount of international assets these investors are holding. What happens at a global-systemic level if they sell off, and then/or are not good for the moolah? Tooze comments that this
‘may or may not be a historic moment. That basic uncertainty about the direction of travel, the sense that policy may be forced to move very large pieces of the global financial puzzle is what suggests to me that what we are seeing, is not just business as usual, but something closer to a conjunctural sea change’.
Hmmmmm.
Secondly and relatedly, let’s note the surreal social fact that the Bank of Japan currently owns ‘more than 100 per cent of all on-the-run 10-year Japanese government bonds. In fact it owns almost 140 per cent of the most recent issue’.
We are at the point of raising philosophical issues from this issue.
If ‘one’ owns one’s own debt, to whom does one owe it, and how does one ‘pay it off’?
What is the relation of oweing and owning here, and is this the sound of one hand clapping, or the smell of one system crapping itself?
Moreover, what does this have to do with the heavy materiality of Japan being quietly allowed to break embargo to buy fuel to keep the lights on, and how will Japan keep paying for this if/when (if the above transpires turbulently) its economy implodes in relative terms, and it’s big buyers are really not good for the moolah?
This isn’t the late 70s. Exporting more TVs, microwaves and cameras to the US isn’t gonna fix this, like it did for a few decades from the onset of containerisation. The ‘fix’, if there is one, is much harder, more delicate, and less palatable – can Japan’s institutions, staffed with its actors, be said to be likely to pull this off?
Thirdly, and sticking with Japan in order to transition back to real estate. We really need to think about the social fact implied by the following:
In a country hostile to high levels of skilled migration implying any kind of multicultural future of the kind relatively easy for Canada or Australia, what would a policy capable of tackling this even look like? I have no idea.
Once you add to this existing policy settings (including inheritance tax and a number of provisions making ‘let’s go buy an old house in rural Japan and live our Totoro dream!’ extremely fraught, in practice, and especially so for foreigners), alongside a set of local-political and cultural preferences that tend toward conservatism and insularity, this doesn’t seem solvable. What then?
(Sidebar: what happens to China when it goes through its comparable rural-urban and demographic shift…. which it will do… at China scale? Japan, as often, is just 10-20 years ‘ahead’ of many of us, with Japanese Characteristics)
~
Back in the ‘winner’ regions of the Anglosphere (wealthy urban areas), we need to look closely at real estate markets, now almost entirely owned by banks (meaning, in a sense, they own the market they ‘are’). Sydney and Melbourne real estate prices are now at a level of unaffordability verging on the nonrelational: a ‘median’ house in Sydney now costs 11-12x the ‘median’ annual income, and there are very few median houses, and fewer and fewer median income earners.
Growing numbers of renters in Sydney are paying 600/week for rooms in apartment-based sharehouses, if they can find one (as supply is approaching 0%). And Sydney, though hardly cheap, is not as expensive as Auckland or Vancouver. The fact is that most people accessing housing in Australia’s urban areas – ie, in one of the wealthiest and most advantaged countries in the world – are faced with the ‘choice’ between two landlords7, unaffordable housing of very poor quality, and the prospect of this ‘getting worse’ each year, with no way out (and no politico-electorally palatable, easy or simple six by way of policy, fiscal, or monetary solution).
At the inequality ‘ends’ of this urban market we see two things: on the one hand, trophy houses for the very very rich, and ultra-rich are fetching bonkers prices. On the other, more than one of the real estate developers specialising in low-cost urban fringe suburban ‘Australian dream’ real estate has imploded, perhaps showing that larger developments focusing on low margins (low-quality and high-volume) are no longer viable (or were always poorly run or poorly capitalised, I’m not sure).
Remember, in Australia, this is happening even in an economy where, unlike Japan, Canberra can temporarily solve nearly all its urban-suburban socio-economico-demographic problems with skilled migration, as it has done since the late 70s.
Implicitly, everything in this post has stretched across a global supply chain, and for the reasons I’ve galloped through here, this supply chain is right at its limits now, and incredibly vulnerable to any combination of the non-trivial possibilities just mentioned.
But given the above, it smells clear to me that the current moment is incredibly fragile and unsustainable in the mid-term.
The dynamic of containerisation has unleashed something that cannot be contained. We have no control over this involution.
And in relation to the now, this speaks to the smell. The world smells bad-weird ‘cos we know it it’s off already. It can’t last, not for ten years, not even for five, probably not for three; it’s already gone off, perhaps. I could be wrong. But my intuition tells me: strap yourselves in.
hmmmmmmmm.
In social theory we could then also look at Ferenc Feher and Agnes Heller’s analysis of society society, Dictatorship Over Needs. As a bit of a troll, here’s the Amazon link to that. https://www.amazon.com/Dictatorship-over-Needs-Analysis-Societies/dp/0631138129 One might also look closely at Maslow (obvi) and early 50s Fromm, as well as 40s Adorno.
Insofar as it’s ‘nothing’ compared to what bird or swine flu would be like. See Mike Davis’ (RIP) *2005* book on avian flu, The Monster at Our Door.
Maersk, MSC, CMA-CGM, Cosco, Hapag-Lloyd
For those unfamiliar with this Christopher Lambert b movie masterpiece, each Godlike swordfighter ‘takes the power’ of their opponent when they vanquish them. This feels good, hence it’s called ‘the quickening’.
There’s a very strange analogous direction between global shipping and hardcore porn in the era of video here, insofar as there’s a demiurge toward the biggest dicks penetrating the most holes in the most intense ways… to the point where it has nothing to do with sex or pleasure (of course porn is the inverse of intimacy), and everything to do with improbable physiological endowments and tolerances and gymnastic contortions (how could his penis be so big and fat and remain erect? How could a woman that small ‘take’ n+2 of those [and with what long-term consequences, given most of the women I know who are mothers]? Why is it deemed ‘hot’ by certain guys to masturbate to this strange spectacle? [What does it mean to have an erection in wanting to se *that* enacted for you by actors who just met?]). David Foster Wallace’s ‘Big Red Son’ is one of his truly great pieces here, and makes the argument for a co-metaphorics of American capitalism and porno.
I don’t know about you, but people in my extended networks still have a lot of repressed low-level trauma from lockdown, while more broadly, the ripple effects continue to ripple across my workplace at an interpersonal and organisational level… burnout is one place you see it, I also see it in the struggles of some of my colleagues’ lives, and the toll it’s taken on marriages.
If you’re on a mortgage but never paying down the principal, the bank is the de facto owner for ever, except that, in Australia, the occupant is on the hook if they go bankrupt, unlike the US ‘leaving the keys in the letterbox’ thing that, as I recall, was possible in some jurisdictions.