The Global Economic Miracle of
Barbie, and the Resilience of Global
Barbie is a global economic miracle
Saudi Arabia produces oil that is refined into ethylene which is then shipped to Taiwan where the ethylene is used to produce the vinyl plastic pellets that become Barbie's body. Her nylon hair is sourced from Japan. Chinese peasants working in large factories help assemble Barbie from her constituent parts. The United States supplies her cardboard packaging, and managers in Hong Kong oversee the whole process. The popular plastic doll is then shipped to over a hundred countries around the world, and in each case domestic truckers provide the transportation that leads to her final destination on toy store shelves.
This extraordinary global supply chain allows the popular plastic doll, which has been manufactured by Mattel since the late 1950s, to be brought to market at the sort of low price that makes her affordable to grateful children around the world.
She is also representative of a decades-long transformation in the structure of economic life, in which the logic of specialization has been pushed into each of the various stages of production of even a single product, like Barbie. The result is that we live in an economy characterized by long global supply chains, in which each good is produced globally, in different stages in different countries.
Barbie's world travels also highlight concerns that many have about this model. These long, complex, and increasingly global supply chains mean that Barbie is the product of many countries, including both strategic allies and threats, and stable and unstable nations. The concern, in brief, is that disruption in any Barbie's ports of call might prevent her from ever reaching your neighborhood toy store.
Of course this isn't really a concern about plastic dolls. Rather, Barbie is a metaphor for the increasingly complex and global nature of the production of our food, manufactured goods, technology, and increasingly, services.
But Barbie — or at least the global supply chains that she represents — has weathered the worldwide COVID-19 pandemic remarkably well.
The pandemic represents what must be a once-in-a-century disruption to global trade. It disrupted all elements of commerce, and virtually halted the flow of people across borders.
The pandemic's disruptive potential far exceeds any natural disaster, which typically only affects a single region, and it has forced greater isolation than a war, which typically cuts a country off from its rivals but not its allies.
Yet global supply chains have proven to be remarkably robust.
Around the world, an astonishing array of foodstuffs continues to be available at local supermarkets. Global manufacturing has largely continued, albeit with some disruptions as factories had to adjust to find ways to operate safely. And the march of technological progress continued, and round after round of improvements to computers, cellphones and software — especially videoconferencing software — have been released and quickly made available in nearly every country.
Even as COVID-19 transformed our lives, it didn't much change the products that each of us could buy. Moreover, while some prices have risen, others have fallen, and on balance there has not been much of an inflationary surge.
The largest shock to global supply chains in any of our lifetimes appears to have caused remarkably little damage. Partly, this is because those supply chains proved more robust than their critics imagined. And partly, it's because they proved to be more adaptable, changing supplies as bottlenecks arose.
There have been exceptions, of course. The most troubling were the early shortages of personal protective equipment, in the United States and many other countries. Demand for masks shifted to an extraordinary degree, and governments around the world competed fiercely for the available stocks. To me, the lesson here is not so much one of problems in supply chains, but rather that the individual countries need to keep sufficient reserves of protective equipment to ensure that they are prepared for future pandemics.
And while the early distribution of vaccines has been rocky, the production has been remarkable, as large — and globalized — pharmaceutical companies have produced millions of doses of vaccines in remarkably short order.
Of course, we all have our complaints. In many countries, initial lockdowns led to toilet paper shortages. But those shortages weren't due to supply problems, as most manufacturers kept the production lines running. Rather, it reflected an extraordinary shock to demand, due to hoarding. The story, it appears was a self-fulling fear, in which the fear that others would buy the available toilet paper led consumers to each try to beat the other to buying the remaining rolls.
And in the United States and other countries, there were shortages of bicycles, dumbells, and fitness equipment. It is no coincidence that these are large and difficult-to-transport items. More importantly, the dumbbell shortage was an annoyance, rather than a serious threat.
Thus, I'm left to conclude that while there were some disruptions to global commerce, they've been the exception, rather than the rule. And perhaps Barbie — and the supply chains she represents — has a message for us. She's tough, she's resilient, and not even a global pandemic can count her out.
Justin Wolfers, is a Professor of Economics and a Professor of Public Policy at the University of Michigan and a Visiting Professor of Economics at the University of Sydney. He is also a Research Associate with the National Bureau of Economic Research; a Non-Resident Senior Fellow with the Brookings Institution, a Non-Resident Senior Fellow at the Peterson Institute for International Economics, a Research Fellow with the Institute for the Study of Labor (IZA) in Bonn; a Research Affiliate with the Centre for Economic Policy Research in London; an International Research Fellow with the Kiel Institute for the World Economy, and a Fellow of the CESifo, in Munich.
Dr. Wolfers earned his Ph.D. in economics in 2001 from Harvard University, and was a Fulbright, Knox and Menzies Scholar. He was recently named by the IMF as one of the "25 economists under 45 shaping the way we think about the global economy". Beyond research, he is a contributing columnist for the New York Times