Liveblogging _Out of Stock_
Jun. 28th, 2022 06:07 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
walkitoutI’m in a weird head space with this book. I was expecting a history of warehouses. The foreword/intro told me to expect foreign trade zones. The first chapter does appear to be a history of warehousing. So I no longer know what to think of any of this.
I read _Oceans of Grain_ recently. It did an amazing job explaining about the ABCD grain brokers, and how during the Civil War, in an effort to actually get grain to supply soldiers, a particularly creative person invented what we now know of as the futures exchange at CBOT. My summary might be somewhat wrong, but not significantly wrong. That book was written by Scott Reynolds Nelson.
Orenstein talks about grain elevators, warehouse receipts, the trade in warehouse receipts (which is old), and how that evolved with the expansion of railroads.
“Here the farm family contributed each sack of grain to a common stock (a quasi stock exchange) and in return received a general warehouse receipt, for a specific share of the common stock rather than a specific lot of grain. The grain was now fungible.”
There are problems here. But we’re going to ignore those, because they are minor.
“The general warehouse receipt was an epochal invention. (Vladimir Lenin once commented, “Grain is the currency of currencies.”) In the late 1860s, thanks to groundbreaking grain elevators in the US heartland, brokers in the pit of the Chicago Board of Trade stopped hawking warehouse receipts and started gambling on their worth. In these inaugural futures markets nothing changed hands: brokers “contemplated elivery” while betting on prices.”
In the footnote, she actually references a _different_ book by Scott Reynolds Nelson.
It’s hard to tell if this is technically wrong or not. Certainly, she has skipped _entirely_ over _why_ the futures markets were invented (see _Oceans of Grain_). Which, why?!?!
The next many sentences are about the importance of the connection between the physical presence in the warehouses (grain elevators) of the physical item being traded, even while the trading was occurring in the pit in the form of paper receipts. And that’s great. That’s actually a really important thing that everyone who thinks they can make a killing in commodities needs to have reiterated to them over and over and over again. Because every fucking time someone gets into that trade without thinking about the physical commodity underpinning their gambling, they run up against storage limits, or accidentally wind up taking delivery of tons of pork bellies or crude oil or whatever. People do need to be reminded of this. Still. In 2022.
But then! We get weird sentencies like this. “All that was solid did not melt into air.” We get an entire fucking long paragraph quoting Oliver Wendell Holmes Sr on the topic of the _stereograph_.
Honestly — a little digression here — you might be wondering about stereographs. They are mentioned in WDW’s “Carousel of Progress”, when dad is bugging junior about getting into his stereographs of “Little Egypt”. But to most of us, a stereograph is a View Master. Why is Orenstein quoting Holmes Sr on the topic of View Masters? I have not a single clue.
Anyway. Here’s the quote:
“”Form is henceforth divorced from matter,” declared Oliver Wendell Holmes Sr. In 1859 as he praised the stereograph, another medium of “universal currency” fabricated in the mid-nineteenth century: “Matter in large masses must always be fixed and dear; form is cheap and transportable.” Quite literally, following Holmes, the immobility of the “matter” locked inside the warehouse enabled the mobility of the “form” of the warehouse receipt. The warehouse receipt was like a photograph of the warehouse interior… and as it bounced from ledger to ledger it materialized the dematerialization of the pit.”
Take a moment. You are not going to successfully absorb that, because _it makes no sense whatsoever_. But it is _abundantly_ clear that this is how Orenstein _literally_ views the world. It’s _all_ about surface and appearance. And for someone who has spent way too much time reading books about bills and exchange of bills and real bills and flying bills and all the shenanigans involved in that, having a warehouse receipt treated like a fucking photograph is goddamn offensive.
WRONG METAPHOR.
Let us continue!
The next long paragraph is about kernels of grain flowing through elevators, and how that is like boxes of Argentine beef being trucked in and out of a foreign trade zone, and Marx talking about passengers at a railway station.
Really. I am not making any of this up.
Fortunately, in the following paragraph, we are back to the actual process.
“Safe passage, in turn, was ensured by those pieces of paper.” OK, not literally — that is synecdoche. “As the AWA well knew, the warehousemen needed to be trustworthy for the warehouse receipt to be bankable.”
The rest of that paragraph is about standardization of warehouse receipts, and working with congress to pass the Warehouse Act of 1916 and a licensing program for warehouses. Look, I freaking _hate_ commoditization of agriculture products. I cut my political teeth on getting a definition of organic codified into law. From _my_ perspective, from the 1990s on, the history of grading of agricultural commodities led to a gamification of farming that strip mined deep soils and destroyed ecosystems. However, I also do recognize that this process of commodification was an important component of ending starvation globally.
Next up: a nice, compact description of “field warehousing”. I’m sure this will be followed with a description of abuse, and then auditing procedures to deal with abuse. However, my daughter is asking for a mug cake, and I just drank a Jack’s Abbey Samoa on an empty stomach so I’ll be back later.
ETA:
The scandal was “The Great Salad Oil Swindle” of 1963.
I read _Oceans of Grain_ recently. It did an amazing job explaining about the ABCD grain brokers, and how during the Civil War, in an effort to actually get grain to supply soldiers, a particularly creative person invented what we now know of as the futures exchange at CBOT. My summary might be somewhat wrong, but not significantly wrong. That book was written by Scott Reynolds Nelson.
Orenstein talks about grain elevators, warehouse receipts, the trade in warehouse receipts (which is old), and how that evolved with the expansion of railroads.
“Here the farm family contributed each sack of grain to a common stock (a quasi stock exchange) and in return received a general warehouse receipt, for a specific share of the common stock rather than a specific lot of grain. The grain was now fungible.”
There are problems here. But we’re going to ignore those, because they are minor.
“The general warehouse receipt was an epochal invention. (Vladimir Lenin once commented, “Grain is the currency of currencies.”) In the late 1860s, thanks to groundbreaking grain elevators in the US heartland, brokers in the pit of the Chicago Board of Trade stopped hawking warehouse receipts and started gambling on their worth. In these inaugural futures markets nothing changed hands: brokers “contemplated elivery” while betting on prices.”
In the footnote, she actually references a _different_ book by Scott Reynolds Nelson.
It’s hard to tell if this is technically wrong or not. Certainly, she has skipped _entirely_ over _why_ the futures markets were invented (see _Oceans of Grain_). Which, why?!?!
The next many sentences are about the importance of the connection between the physical presence in the warehouses (grain elevators) of the physical item being traded, even while the trading was occurring in the pit in the form of paper receipts. And that’s great. That’s actually a really important thing that everyone who thinks they can make a killing in commodities needs to have reiterated to them over and over and over again. Because every fucking time someone gets into that trade without thinking about the physical commodity underpinning their gambling, they run up against storage limits, or accidentally wind up taking delivery of tons of pork bellies or crude oil or whatever. People do need to be reminded of this. Still. In 2022.
But then! We get weird sentencies like this. “All that was solid did not melt into air.” We get an entire fucking long paragraph quoting Oliver Wendell Holmes Sr on the topic of the _stereograph_.
Honestly — a little digression here — you might be wondering about stereographs. They are mentioned in WDW’s “Carousel of Progress”, when dad is bugging junior about getting into his stereographs of “Little Egypt”. But to most of us, a stereograph is a View Master. Why is Orenstein quoting Holmes Sr on the topic of View Masters? I have not a single clue.
Anyway. Here’s the quote:
“”Form is henceforth divorced from matter,” declared Oliver Wendell Holmes Sr. In 1859 as he praised the stereograph, another medium of “universal currency” fabricated in the mid-nineteenth century: “Matter in large masses must always be fixed and dear; form is cheap and transportable.” Quite literally, following Holmes, the immobility of the “matter” locked inside the warehouse enabled the mobility of the “form” of the warehouse receipt. The warehouse receipt was like a photograph of the warehouse interior… and as it bounced from ledger to ledger it materialized the dematerialization of the pit.”
Take a moment. You are not going to successfully absorb that, because _it makes no sense whatsoever_. But it is _abundantly_ clear that this is how Orenstein _literally_ views the world. It’s _all_ about surface and appearance. And for someone who has spent way too much time reading books about bills and exchange of bills and real bills and flying bills and all the shenanigans involved in that, having a warehouse receipt treated like a fucking photograph is goddamn offensive.
WRONG METAPHOR.
Let us continue!
The next long paragraph is about kernels of grain flowing through elevators, and how that is like boxes of Argentine beef being trucked in and out of a foreign trade zone, and Marx talking about passengers at a railway station.
Really. I am not making any of this up.
Fortunately, in the following paragraph, we are back to the actual process.
“Safe passage, in turn, was ensured by those pieces of paper.” OK, not literally — that is synecdoche. “As the AWA well knew, the warehousemen needed to be trustworthy for the warehouse receipt to be bankable.”
The rest of that paragraph is about standardization of warehouse receipts, and working with congress to pass the Warehouse Act of 1916 and a licensing program for warehouses. Look, I freaking _hate_ commoditization of agriculture products. I cut my political teeth on getting a definition of organic codified into law. From _my_ perspective, from the 1990s on, the history of grading of agricultural commodities led to a gamification of farming that strip mined deep soils and destroyed ecosystems. However, I also do recognize that this process of commodification was an important component of ending starvation globally.
Next up: a nice, compact description of “field warehousing”. I’m sure this will be followed with a description of abuse, and then auditing procedures to deal with abuse. However, my daughter is asking for a mug cake, and I just drank a Jack’s Abbey Samoa on an empty stomach so I’ll be back later.
ETA:
The scandal was “The Great Salad Oil Swindle” of 1963.