Brief Thought on Arrow's The Limits of Organization

tap, tap...cloud of dust...feeeeeeeedback whiiiiiiine, VU meters peg

Still works, so at least that much is right with the world. 

The world turns apace even in a COVID-19 shutdown. As part of my research (into interfirm collaboration in relatively complex B2B markets) I'm reading Arrow's The Limits of Organization (1974, ISBN10 0393055078). I wish to post some early-draft impressions here.

Arrow takes an economist's perspective on organization (the "why do organizations form?" question, for one example). On page 22 he makes the following assertion: "The price system (emphasis mine) then does not provide within itself any defensible income distribution, and this is a key drawback."

At first blush I'm not sure the price system per se is supposed to perform the function Arrow seems to wish it to do. Rather than reject the assertion out of hand, though, let us try to unpack it (bounded by the limits imposed by the angle of my forehead).

The price system provides information about underlying supply, demand, and preference/utility. The factors acting on supply, demand, and preference/utility (enduring or ephemeral circumstances in the external environment, including the presence or absence of coercion) are not part of or a product of the price system.

It is arguable that the price system cannot distinguish easily among what we might call undistorted and distorted supply, demand, and utility/preference information. Further, it may well be fair to characterize that condition as a drawback. The next question is: what would constitute distortion? We may argue that coercion is the chief -- perhaps the sole -- source of distortion in the price system. Absent coercion actors are free to transact or not.

When I teach pricing in my marketing courses, I offer the following to my students in the early going (following Wroe Alderson, more or less): We don't truly know what the price of a thing is until both parties say "okay, you got a deal." Until then we have competing opinions about what the price of the thing under consideration is. If the parties can't come to a satisfactory agreement they walk away and the market doesn't clear.

If the thing is more scarce or less scarce or one or both parties have more or less utility/preference for the thing, the agreed-upon price will be different than it would be at another time, place, and situation. Each of these might be amplified or attenuated by conditions in the external environment which may be ephemeral (temporary) or enduring (permanent). Coercion distorts price system information by changing supply (quotas, for example) or demand. Coercion can mandate or prohibit consumption (and therefore exchange), or it can incentivize (via subsidy) or disincentivize (via tax or penalty) consumption.

To explain all this better, I'll have to read more Mises and reread Hayek. More soon.

Another season, another helmet

Just a practice helmet for my new UFL team, the Daytona 500s. I'll do a better helmet soon.

A few (more) brief thoughts on Tolstoy

I finally read War and Peace back in 2010 (and previously posted brief thoughts in this space), and am presently reading Anna Karenina. Both works feature Russian aristocrats beset by debts and the need to raise money to support their accustomed lifestyles (and if I remember my Dostoevsky, there was something of the same sort in The Brothers Karamazov). As Anna Karenina opens, Stepan Arkadyevitch Oblonsky is contemplating the sale of a forest on his wife's property in order to pay his debts.

In other words, he seeks to mortgage tomorrow, by disposing of a productive asset, for the comfort and amusement of today. Has a...familiar ring, doesn't it?

Another holiday, another battle

General E____ claimed victory this afternoon, as he turned General G____'s right flank, occupied a key hill in the left center of the field, and blunted General G____'s attempt to turn his right. The hill in the left center was the real key to the action, and General E____'s deft use of his light infantry (the Rafiki Rangers) helped him hold his position while General G____'s aggressively handled cavalry wore itself out.

Figures were 1:72/20mm Crimean-era (mostly), rules based on Joe Morschauser's How to Play War Games in Miniature. As the young gentlemen return to the whirl of skating lessons and online schooling on the morrow, a miniatures game seemed a good way to close the holiday season. Time permitting, we'll do some painting this weekend on their next regiments (and Dad's army of 19th-century Scandalusia).

General E____ insists the next clash of the armies to be recreated will be the Battle of Schrute Farm. Perhaps I ought to set about getting the hedgerows and farmhouse done.

...and what may come next

"The village had its one poor street, with its poor brewery, poor tannery, poor tavern, poor stable-yard for relays of post-horses, poor fountain, all usual poor appointments. It had its poor people too. All its people were very poor, and many of them were sitting at their doors, shredding spare onions and the like for supper, while many were at the fountain, washing leaves, and grasses, and any such small yieldings of the earth that could be eaten. Expressive sips of what made them poor, were not wanting: the tax for the state, the tax for the church, the tax for the lord, tax local and tax general, were to be paid here and to be paid there, according to solemn inscription in the little village, until the wonder was, that there was any village left unswallowed."

Charles Dickens, A Tale of Two Cities, p. 87 (tip o'the tricorne: gutenberg.org)

Wait.

It even sounds like a man's team

This brief post is an excuse to post the helmet I designed for the Detroit Dukes, my team in the Playmaker Football online league known as the United Football League. The less said about my performance as a coach the better, though I have managed to put together a pretty talented roster, particularly on defense (star players: DEs John Strickland and Barry Burton, LB DaVondrious Green, and CB Marzelle House) and on the offensive line.

I picture our uniforms being like the Detroit Lions of the 1960s and 1970s, no black trim, just Honolulu blue and silver. The Duke himself there I adapted from the old Duke Beer (Duquesne Brewing Co.) logo.

Done for the heck of it.

Inkblot!

Saw a reference to the passing of Arlen Specter (the reference is not in the linked article; I saw it elsewhere) that mentioned Specter helped "bork" Robert Bork.

Maybe, but I think Judge Inkblot borked himself, for anyone who was paying attention. The Ninth isn't that hard to understand, unless one is not quite bright or is planning mischief against the liberties of the individual. In either case, one ought to be disqualified from the Court (oh, if only).

Had a happy Independence Day...

...not to mention a pretty thoroughly 21st Century one. :)

A good friend and colleague held a luncheon at a vegetarian Indian (southern Indian, specifically) café. The meal was a buffet, and my lovely bride and I tried a little of durn near everything on offer. I liked it all, and even the kids didn't do badly (I think they liked the masala dosa best).

After lunch, one of my other colleagues took us to the Indian market next door to the restaurant, where I got a seven-ounce bag of coriander for $1.99 (I like McCormick, but maaaan that's a good price), plus a couple of different curry mixes to try some things with for another $4.

After that, we went home, changed into shorts, and went to a traditional cookout at another friend's house. Good bratwurst.

Thought experiment

Can the state rightly prohibit the adult owner of a dairy cow from milking the cow and consuming the raw milk?

Can the state rightly prohibit the adult owner of a dairy cow from consuming the raw milk produced by the cow, even when one hires another to care for and milk the cow?

Discuss.

(Edit to add: I have no interest in consuming raw milk myself -- pasteurized is just fine by me.)

Book of Wisdom

No, not me -- the real thing:

Again, one preparing for a voyage and about to traverse the wild waves
cries out to wood more unsound than the boat that bears him.

For the urge for profits devised this latter,
and Wisdom the artificer produced it.

(Wisdom 14:1-2, New American  Bible)

This passage builds on Wisdom 13, which describes a carpenter making an idol of "good-for-nothing" leftover wood and praying to it (verses 17-18):

But when he prays about his goods or marriage or children,
he is not ashamed to address the thing without a soul.
And for vigor he invokes the powerless;

and for life he entreats the dead;
and for aid he beseeches the wholly incompetent,
and about travel, something that cannot even walk.

That's brilliant in itself, but what really caught my attention was the "urge for profits" of Wisdom 14:2. The profit motive, informed by Wisdom (which cometh from the Lord, and guides the builder), serves to ensure that the boat is well made. Lacking Wisdom himself, the voyager prays to a dumb, inert hunk of lumber. There is a profound -- and humbling -- understanding of human nature here.

Casey Chases a Knuckler

Tam posted a couple of stanzas of "Horatius" and linked to "Casey at the Bat" this morning. The latter always puts me in mind of the 1987 Bill James Baseball Abstract, which contained the following (reproduced in this volume):

Rough, tough, Charlie Hough
All eight innings had his stuff
Floating light from Charlie's cuff
Breaking late and just enough
To keep the scoreboard bare.

And yet, the Mudville fans did dare
To hope that foul would soon turn fair.
A single here, an error there,
Casey stood on deck and glared
At rough, tough, Charlie Hough.

Casey snorted, loud and gruff,
"I'll knock that busher on his duff.
Bring him on, I'll call his bluff;
How dare he aim that piece of fluff
At Casey's mighty stick?"

A home run now would tie it quick;
Charlie gave his wrist a flick;
Casey took a mighty lick.

The hearts of Mudville landed sick;
Just three pitches did the trick
From rough, tough, Charlie Hough.

For the whippersnappers who don't remember Charlie Hough, think Tim Wakefield. But Wakefield's tough to fit into the rhyme scheme.

A few brief thoughts on the Old Testament

I like to read over breakfast. I have a habit of reading the daily devotion from Oswald Chambers's My Utmost for His Highest (link goes to an online version, but I bought a hard copy years ago, noticing that my boss at the time -- a heck of a guy, and I owe him a phone call -- had a beat-up, extensively marked-up copy), followed in the last couple of months by selected chapters from the New Jerusalem Bible (my copy is small, and travels well).

(Believe me, the preceding is not intended to be an applause line. Srsly.)

So since late January, I've read all of Isaiah, the first six chapters of Jeremiah, and the first 16 chapters of Acts (always one of my favorite books of the New Testament, for some reason). I think it perilous to use the Bible in a fortune-telling way, or to draw too many parallels with current events or circumstances, but there are a couple of passages from my recent reading that resonate, if they don't exactly rhyme.

The first two I want to share are from Jeremiah:

This is because my people are stupid,
they do not know me,
they are slow-witted children,
they have no understanding,
they are clever enough in doing wrong,
but do not know how to do right.
(Jeremiah 4:22)

(I dare say we all know that guy, and further dare speculate that many of us have been that guy. I know I have.) Next:

And when you ask, "why has Y_hw_h my G_d done all this to us?" you will give them this answer, "As you abandon me to serve alien gods in your own country, so you must serve aliens in a country not your own.
(Jeremiah 5:19)

Finally, and perhaps the most rhymey: the following passage from Isaiah came to mind, in regard to the propensity of politicians (and maybe a lot of us) to kick the can down the road, when we can do it without breaking a toe:

Then Isaiah said to Hezekiah, 'Listen to the word of Yahweh Sabaoth, "The days are coming when everything in your palace, everything that your ancestors have amassed until now, will be carried off to Babylon. Not a thing will be left," Yahweh says. "Sons sprung from you, sons begotten by you, will be abducted to be eunuchs in the palace of the king of Babylon." '    Hezekiah said to Isaiah, 'This word of Yahweh that you announce is reassuring,' for he was thinking, 'There is going to be peace and security during my lifetime.'
(Isaiah 39:5-8)

Further affiant saith not.

Quelle surprise

Sustainability and subsidy may be fairly close together in the dictionary, but out here where performance matters they're worlds apart.

To be fair, it is possible to argue that many businesses of many kinds are directly or indirectly subsidized by the state to a greater or lesser degree.

Why bring this up? The dictionary definition of "sustainable" is here. Of particular interest are the second and third entries:

2. pertaining to a system that maintains its own viability by using techniques that allow for continual reuse: sustainable agriculture. Aquaculture is a sustainable alternative to overfishing.

3. able to be maintained or kept going, as an action or process: a sustainable negotiation between the two countries.

 In business the first rule of sustainability is: "I have to be able to open the doors tomorrow." I know farming the government is a time-honored tradition and all, but at some point the field is no longer fertile, the turnips bled dry.

Better than the real thing

Earlier this afternoon...

The New York Giants carried a 35-14 lead into the fourth quarter against the visiting Cleveland Browns, on the strength of a couple of bombs from Eli Manning to Mario Manningham and a defense that stymied Peyton Hillis and Colt McCoy, limiting the Browns to one score and no sustained drives (the Browns got one score on a pick-six on a flat pass).

But McCoy got the Browns up off the mat and led them on a 78-yard drive to make the score 35-21 with about seven minutes left; after a defensive stop, McCoy ended another drive by finding tight end Ben Watson in the end zone to make it 35-28. A bit later the Browns punted with just under four minutes to play, banking on getting one more stop on defense and one more opportunity on offense. They got it, taking over at their own 32 with 1:30 the clock and two time outs. McCoy moved the Browns to the 49 with 45 seconds left, prompting the Giants' coach to remark, "I've got butterflies in my stomach."

Three deep passes to Mohamed Massaquoi came up empty, though, and the Giants got out with the 35-28 win. The Giants' coach was my elder son (the Browns' coach was your correspondent), and the game was Strat-O-Matic Pro Football (2010 season player cards). I've been playing the game off and on since the 1974 season set, when I played with my dad and my brothers.

Football at its best can be a great game.

Six! Five! Four! Three! It's the De-on-to-lo-gy!

Dr. Frederick Frankenstein: [dreaming] I am not a Frankenstein. I'm a Fronkensteen. Don't give me that. I don't believe in fate. And I won't say it.
[pauses]
Dr. Frederick Frankenstein: All right, you win. You win. I give. I'll say it. I'll say it. I'll say it. DESTINY! DESTINY! NO ESCAPING THAT FOR ME! DESTINY! DESTINY! NO ESCAPING THAT FOR ME!

Got the preceding from IMDB, quoting one of my favorite movies, Young Frankenstein (many thanks to my parents for turning me on to Mel Brooks in my youth).

Sometimes I find myself in much the same circumstance, having arrived at liberty via deontology. I recognize the consequentialist arguments for liberty, because I think liberty does produce better outcomes for all (including the poor). However...

...the end no more justifies the means in this case than it does in any other. Even if liberty were consequence-independent, I would be obliged to argue for liberty as the only possible moral arrangement.

Here's how it goes: We are, whether one believes (as I do) that one is made in the image of G_d, or at any rate inherent to one's nature as a human being, each of us endowed with the right to our own lives. More to the point, perhaps, there is no reliable or incontrovertible basis (none that I can find, at any rate) for saying, "This one is born to rule, that one born to serve."

I have said before and say here again that temporal authority claims are nothing more than warmed-over Filmer backed by naked force and more or less will to use it. One points to the talisman clenched in one's hand and says, "This thing in my hand, this (pedigree, patent of nobility, warrant/badge, electoral result) affirms that I am G_d's anointed, and you are morally bound to obey (again more to the point, one is bound to render up some portion of one's life, for my benefit, on pain of fine, imprisonment, door-kicking-in-at-3-am-and-dog-shooting-followed by imprisonment, or all of the above followed by death)."

If we each of us are truly endowed with the right to our own lives, then it follows that we are enjoined from aggressing against the life of anyone else. And if we each of us are enjoined from aggression, how do we delegate the right to use aggression to anyone, whatever talisman they might wave at us by way of justification?

The sole alternative to the non-aggression principle is, in the end: might makes right. It can't, in the end, be anything else.

What does this have to do with the title of the post? Because that way lies statelessness, and the unknown but potential consequences occasionally do weigh on me. I don't think statelessness necessarily leads inevitably to Somalia (and I certainly don't claim it will immanentize the Eschaton), but neither can I rule it out.

But neither can I start writing exceptions to non-aggression. All bases for exception are by definition arbitrary.

Brief thoughts on Gordon's Discourses on Tacitus

Thanks to The Liberty Fund and my Sony Reader (thanks again, honey!), I've recently had the privilege to read the following passages:

An absolute Prince is of all others the most insecure; as he proceeds by no rule of Law, he can have no rule of Safety. He acts by violence, and violence is the only remedy against him. (p. 145)

It is indeed apparent from our History, that those of our Princes who thirsted most violently after arbitrary rule, were chiefly those as were remarkable for poor spirit, and small genius, Pedants, Bigots, the timorous and effeminate. (p.148)

When men are once above fear of punishment, they soon grow to be above shame. Besides, the genius and abilities of men are limited, but their passions and vanity boundless; hence so few can be perfectly good, and so many are transcendently evil. They mistake good fortune for good merit, and are apt to rise in their own conceit as high at least as fortune can take them. (p.162)

Would a Prince live in security, ease, and credit? let him live and rule by a standard certain and fixed, that of Laws, nor grasp at more than is given him. Many by seeking too much have lost all, and forfeited their Crown through the wantonness and folly of loading it with false and invidious ornaments. While nothing would serve them but lawless Power, even their legitimate Authority grew odious, and was rent from them. (p.168)

The lessons set forth here apply equally well whether one considers the example of (in the realm of drama) Macbeth, or (in the realm of history) the Cæsars, or...more recent exemplars.

A few thoughts on Wedgwood's The Thirty Years War

I'm reading C.V. Wedgwood's The Thirty Years War (among other things, as time permits), and I was struck by the (potential, at least) timeliness of the following passages (pages 164 and 165 of the 1961 Doubleday Anchor edition):

"In Prague the gravity of the situation was increased by the necessities of the government. Frederick had begun the trouble by slightly debasing the currency during his year of rule; Ferdinand's nominee, Liechtenstein, continued the process, reduced the amount of silver in the coinage by more than seventy-five percent and attempted to fill the imperial coffers -- and his own -- with the profit which he made on the mint. In January 1622 Ferdinand, in hope of further gain, made a contract with a group of speculators for the establishment of a privately controlled mint in Prague. The currency was drastically debased while prices were forcibly stabilized; the plan failed utterly, for the people became suspicious and hoarded what good money they had, while in spite of the provision of the government, food alone rose to twelve times its normal price. External trade stopped altogether and for the ordinary exchanges of everyday life the people took to barter. To add to the damage done by this crazy scheme, the chief object of the contractors was rather their own enrichment than the payment of Ferdinand's debts.

"At this moment Ferdinand was besieged with demands to buy the confiscated lands. The local nobility and many wealthy merchants offered him what had once been fair prices in the Prague money, prices which he could not now refuse to take without repudiating his own currency. It was one thing to sell the lands and another to make use of the money; Ferdinand had accepted his own coin, but his soldiers threw it back in their officers' faces, because the local peasants would not take it in exchange for the necessities of life. Throughout Bohemia trade came almost to a standstill, the peasants would not provide the towns with food, the army was mutinous, the civil population starving, and certain contractors, of whom Liechtenstein was not least, were among the richest men in Europe. At Christmas 1623, Ferdinand devaluated the money and broke the contract. By that time the greater part of the confiscated land had been sold for an average price of less than a third its normal value. His first move towards financial security had been catastrophic, for nor only had he lost the advantage of the confiscation, but he had completed the economic ruin of Bohemia. Wealth, which had been widely distributed among an industrious peasantry and an active urban population, had become, through political persecution and the disastrous effects of the inflation, concentrated in a few unscrupulous hands. As a source of imperial revenue Bohemia had become useless."

Wedgwood here is writing of the brief tenure of Frederick, the Elector Palatine, as King of Bohemia. Ferdinand was Archduke, erstwhile King of Bohemia himself, and Holy Roman Emperor. The next thing (more or less) that happened -- at least in Wedgwood's recounting -- was Wallenstein. Oh, joy.

Smoke on the breeze

And today, I offer this:

The Concord Hymn
Ralph Waldo Emerson (1837)

By the rude bridge that arched the flood,
     Their flag to April's breeze unfurled;
Here once the embattled farmers stood;
     And fired the shot heard round the world.

The foe long since in silence slept;
     Alike the conqueror silent sleeps,
     And Time the ruined bridge has swept
     Down the dark stream that seaward creeps.

On this green bank, by this soft stream,
     We place with joy a votive stone,
That memory may their deeds redeem,
     When, like our sires, our sons are gone.

O Thou who made those heroes dare
     To die, and leave their children free, --
Bid Time and Nature gently spare
     The shaft we raised to them and Thee.

Found here...which is sort of ironic, don't you think?

Hoofbeats

Sheila is busy these days (and less hidebound a blogger than I am), and so I cheerfully offer this, to honor the day:

Listen my children and you shall hear
Of the midnight ride of Paul Revere,
On the eighteenth of April, in Seventy-five;
Hardly a man is now alive
Who remembers that famous day and year.

He said to his friend, "If the British march
By land or sea from the town to-night,
Hang a lantern aloft in the belfry arch
Of the North Church tower as a signal light,--
One if by land, and two if by sea;
And I on the opposite shore will be,
Ready to ride and spread the alarm
Through every Middlesex village and farm,
For the country folk to be up and to arm."

Then he said "Good-night!" and with muffled oar
Silently rowed to the Charlestown shore,
Just as the moon rose over the bay,
Where swinging wide at her moorings lay
The Somerset, British man-of-war;
A phantom ship, with each mast and spar
Across the moon like a prison bar,
And a huge black hulk, that was magnified
By its own reflection in the tide.

Meanwhile, his friend through alley and street
Wanders and watches, with eager ears,
Till in the silence around him he hears
The muster of men at the barrack door,
The sound of arms, and the tramp of feet,
And the measured tread of the grenadiers,
Marching down to their boats on the shore.

Then he climbed the tower of the Old North Church,
By the wooden stairs, with stealthy tread,
To the belfry chamber overhead,
And startled the pigeons from their perch
On the sombre rafters, that round him made
Masses and moving shapes of shade,--
By the trembling ladder, steep and tall,
To the highest window in the wall,
Where he paused to listen and look down
A moment on the roofs of the town
And the moonlight flowing over all.

Beneath, in the churchyard, lay the dead,
In their night encampment on the hill,
Wrapped in silence so deep and still
That he could hear, like a sentinel's tread,
The watchful night-wind, as it went
Creeping along from tent to tent,
And seeming to whisper, "All is well!"
A moment only he feels the spell
Of the place and the hour, and the secret dread
Of the lonely belfry and the dead;
For suddenly all his thoughts are bent
On a shadowy something far away,
Where the river widens to meet the bay,--
A line of black that bends and floats
On the rising tide like a bridge of boats.

Meanwhile, impatient to mount and ride,
Booted and spurred, with a heavy stride
On the opposite shore walked Paul Revere.
Now he patted his horse's side,
Now he gazed at the landscape far and near,
Then, impetuous, stamped the earth,
And turned and tightened his saddle girth;
But mostly he watched with eager search
The belfry tower of the Old North Church,
As it rose above the graves on the hill,
Lonely and spectral and sombre and still.
And lo! as he looks, on the belfry's height
A glimmer, and then a gleam of light!
He springs to the saddle, the bridle he turns,
But lingers and gazes, till full on his sight
A second lamp in the belfry burns.

A hurry of hoofs in a village street,
A shape in the moonlight, a bulk in the dark,
And beneath, from the pebbles, in passing, a spark
Struck out by a steed flying fearless and fleet;
That was all! And yet, through the gloom and the light,
The fate of a nation was riding that night;
And the spark struck out by that steed, in his flight,
Kindled the land into flame with its heat.
He has left the village and mounted the steep,
And beneath him, tranquil and broad and deep,
Is the Mystic, meeting the ocean tides;
And under the alders that skirt its edge,
Now soft on the sand, now loud on the ledge,
Is heard the tramp of his steed as he rides.

It was twelve by the village clock
When he crossed the bridge into Medford town.
He heard the crowing of the cock,
And the barking of the farmer's dog,
And felt the damp of the river fog,
That rises after the sun goes down.

It was one by the village clock,
When he galloped into Lexington.
He saw the gilded weathercock
Swim in the moonlight as he passed,
And the meeting-house windows, black and bare,
Gaze at him with a spectral glare,
As if they already stood aghast
At the bloody work they would look upon.
It was two by the village clock,
When he came to the bridge in Concord town.
He heard the bleating of the flock,
And the twitter of birds among the trees,
And felt the breath of the morning breeze
Blowing over the meadow brown.
And one was safe and asleep in his bed
Who at the bridge would be first to fall,
Who that day would be lying dead,
Pierced by a British musket ball.

You know the rest. In the books you have read
How the British Regulars fired and fled,---
How the farmers gave them ball for ball,
From behind each fence and farmyard wall,
Chasing the redcoats down the lane,
Then crossing the fields to emerge again
Under the trees at the turn of the road,
And only pausing to fire and load.

So through the night rode Paul Revere;
And so through the night went his cry of alarm
To every Middlesex village and farm,---
A cry of defiance, and not of fear,
A voice in the darkness, a knock at the door,
And a word that shall echo for evermore!
For, borne on the night-wind of the Past,
Through all our history, to the last,
In the hour of darkness and peril and need,
The people will waken and listen to hear
The hurrying hoof-beats of that steed,
And the midnight message of Paul Revere.

-- Henry Wadsworth Longfellow

Mark me down for a sap if ye maun, but this is still one of my favorite poems.

The weakest link in the supply chain

It appears that Toyota will be forced to shut its U.S. plants this month as they run out of parts. The quake has disrupted (to say the very least) Toyota's ability to deliver parts to supply the U.S. plants.

I mention this because it points up an unintended consequence of just-in-time (JIT) inventory management. In the normal course, and managed well, JIT is highly efficient and allows firms to avoid having lots of capital tied up in (particularly) raw materials or work-in-progress inventory. In the event of a supply shock (earthquake, major storm, Teamsters strike, etc.), however, JIT practices can impose component shortages/stock-outs very quickly.

It's a no-win for companies in the developed world, though: run lean and be vulnerable to the next Black Swan that augers in somewhere along the supply chain, or sink capital into higher levels of raw-material or WIP inventory and have the extra added bonus of paying taxes on it.