Commentary: Supply chain intermediaries distort global markets and drain revenue


There are many other such examples. Is it any wonder that after decades of a market system controlled by intermediaries focused on lower costs, higher risk-adjusted returns and “efficiency”, we have more financial volatility, a growing number of supply chain disruptions and a warming planet?


The two big questions are how to create system change and who will bear the cost. There is no silver bullet for either, although technology offers new possibilities for connecting buyers and sellers.

The rise of peer-to-peer lending, direct-to-consumer retailers, and 3D printing, which enable shorter supply chains, are all examples, though none are currently delivering on a comparable scale to replace current financing or manufacturing systems.

A better and clearer account of the input costs of our current market system could be helpful.

Just as the now infamous 18th century print of a slave ship showing humans being packed head to head in horrific conditions changed the way average individuals viewed their sugar bowl, so too the growing body of research revealing the correlations between things like cheap food and obesity, or fast fashion and landfill dumping, or complex securitization and predatory lending, could help create demand for a fairer and more sustainable market system today today.

The challenges of inflation (which will push some consumers and policymakers toward low prices as the only measure of well-being) and inertia will be powerful headwinds against system change. Yet, it’s important to remember that this is already happening in some areas, albeit slowly.

As Judge, an expert in financial regulation, points out, we are only just beginning to understand, some 15 years after the 2008 crisis, how reducing the layers of complexity in lending systems has led to more stable banks and less consumers. in debt.

Just as the subprime mortgage crisis caused us to look at the costs of financial intermediaries, today’s supply chain disruptions may require us to calculate the true cost of low prices for other goods and services.


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