You Can't Push a Rope, but You Can Pull It

Push starting an entire economy is an impossible task.

You can't push a rope, you have to pull it.

Reviving an entire supply chain from a dead stop is something that I’m not sure has ever been done.

Perhaps the post WWII era is the closest thing - but it took the entire productive capacity of America to do it.

It is a tough task, because it isn’t just a few links that are broken, it is that all links are broken, and that means all of them must start, in balance, simultaneously. It is a lot like bringing a nuclear power plant back online, all systems must come up at once, at the same levels and at the same timing.

Now, think about how a nation under communism is like that global supply chain.

Something we in manufacturing have dealt with since the implementation of the “pull” system inventory system, rather than a “push” system.

Push systems work on the production capacity of the producer – they run until the warehouse is full regardless of the consumption of the inventory. They are designed to maximize the efficiency of the producer, not the efficiency of the entire production system. In the bad old days, it was not uncommon to see piles of inventory stacked up between operations in a factory or racks full of pallets of product that sit for long periods of time before being used, then the faster operations have to stop and wait on the slower ones.

Pull systems set inventory levels based on the consumption of the next downstream operation. As product is depleted from storage, that is the amount of signal sent to the preceding operation to produce to refill the inventory queue. Pull systems are designed to maximize the efficiency of the entire system or production process by keeping product moving through the production process and avoiding investment in materials that just sit around collecting dust. Adding value is the name of the game, sitting product is dead money, something to be avoided.

Push systems are analogous to communist systems, where the plan determines inventory and balances (it never does) supply and demand.

Pull systems are analogous to capitalist systems where price is the signal to pull inventory to balance supply and demand.

It is not a perfect analogy but pretty close.

The point being is that Biden can’t issue a bunch of executive orders to restart an entire economy because there is no plan for this. Pushing by focusing on links in the chain guarantees imbalances and bottlenecks because there is simply not enough brain or computing power in concentration to foresee every single variable of an infinitely variable entity the size of a national economy.

The economy must restart itself and the best thing government can do is to get out of the way and let the market work to pull inventory through the system at the most efficient rate.

As the Special Operations community says, “Slow is smooth. Smooth is fast.”