Shortages are coming, according to Christine Lagarde, the head of the European Central Bank, and that means that governments could begin food rations.
The war in Iran is disrupting supply chains in Europe and the domino effect of that can be frightening. The widespread concern about oil and gas is just one piece of the puzzle. The other is fertilizer.
One third of the world’s fertilizers are shipped through the Strait of Hormuz. If farmers can’t get it, they can’t grow what the planet needs, which will drive up prices and create shortages.
“If the price of food increases significantly, it is not going to just be the price of food, it is going to be inflation expectations,” Lagarde said in a speech this week. “The adjustment shifts from prices, which we are putting up with now, to possibly rationing with very different economic consequences.”
Rationing is already happening. Airlines are canceling flights that they can’t run without jet fuel. How long until other businesses have to do this too?
The last time the U.S. saw serious rationing was World War II when access to fuel, food, and basic goods was controlled because supply simply couldn’t meet demand. Each household got a ration book with stamps or coupons that allowed them to buy only a set amount of, say, meat, sugar, gasoline, or coffee. Without the stamp, families simply could not buy those items, even if the shelves were full.
Cars were given windshield stickers to show how much fuel they were allowed to buy.
Families were encouraged to grow “victory gardens” to supplement the food that they could not buy.
This wasn’t like the “I can’t find toilet paper” phase of the Covid pandemic. This was systemic control. It shaped what people could eat, how they could travel, and how they lived.
And it didn’t begin with a government announcement. It began with shortages, constraints, and rising prices, just like we are seeing right now.
By the time it’s called rationing, it’s already here.
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