Cucumber Globalization

People may not take a cucumber crisis very seriously, but they should. It is representative of a wider problem that exists within our globalized economy.

If a cucumber is contaminated in Spain, it has grave consequences for multiple countries. One result is that the lever of the export machine becomes momentarily jammed. Cucumbers from Spain are rejected by other countries. The farmer, the packer, the shift supervisor and the company overseeing the distribution of cucumbers lose out. The free flow of perishable goods is interrupted. Shoppers from Berlin to Brno may become anxious and avoid buying Spanish cucumbers. They might even steer clear of them altogether for a period of time.

OK, not a travesty. But cucumbers are only, if you’ll excuse the salad based pun, the tip of the iceberg.

As we have seen over the past twelve months, nature has the potential to disrupt what many of us take for granted – the ability to travel by air, unimpeded. The consequences of the recent Japanese tsunami were felt all over the world. Car assembly lines were closed in the UK owing to the delay in the delivery of components. Toyota suffered a significant slump in productivity and sales. Similarly, the Icelandic volcano saga of 2010, and to a lesser extent last week, highlighted our sensitivity to air travel disruption.

The grounding or disruption to freight flights also reveals just how reliant some countries are on exporting single commodities. This is a ludicrous situation. Countries that possess the natural conditions or resources to grow a range of crops or produce materials domestically have been restricted in doing so. Instead, they channel most of their resources, time, labour and expertise into exporting a single commodity. The words eggs and basket spring to mind. When things go wrong, as they frequently do, the pain is intensified by the fact that there is nothing to fall back on. No plan B, let alone a Plan C.

The global economy can be dynamic when it works but it is also susceptible to disruption when a small cog in the machine temporarily jams. We cannot predict when such jams will occur or how consequential they will be. It is important, however, that we are aware of their potential and do not think – as many so-called experts did in the pre-recession boom years – that the status quo is infallible. In fact, the one thing we can be sure of is the uncertainty of the future.

With this in mind, I reach for my well-thumbed copy of Keynes’ General Theory.

Update: Spanish farmers have accused Germany of making unfounded allegations about the origin of the E.coli outbreak. The Spanish government is now considering whether to take legal action.