Every time tensions flare in the Strait of Hormuz, politicians, financial markets and military planners collectively hold their breath. A narrow stretch of water only a few dozen kilometres wide has become one of the world's greatest strategic choke points. Should shipping be disrupted, oil prices surge, inflation rises, economies tremble and governments scramble to reassure anxious populations.
The obvious question is why civilisation has allowed itself to become so dependent upon a single bottleneck?
The answer lies in a philosophy that has dominated economics for decades: maximise efficiency, minimise costs, centralise production and assume that markets will always deliver. Resilience was treated as an unnecessary luxury. Spare capacity was considered wasteful. Duplication was condemned as inefficiency. Diversity of supply was sacrificed in pursuit of lower costs.
For a time, the strategy appeared brilliant. Goods became cheaper, companies became leaner and global trade flourished. But beneath the surface, a dangerous fragility was quietly accumulating.
The Strait of Hormuz is merely the latest reminder.
If a fifth of the world's seaborne oil passes through one narrow waterway, the problem is not simply the existence of the Strait. The problem is the extraordinary concentration of dependence upon it. Existing bypass pipelines in Saudi Arabia and the United Arab Emirates help reduce the risk, but they cannot carry all Gulf exports. A disruption still reverberates through global energy markets because the system has become too centralised.
The same pattern appears almost everywhere.
Western nations outsourced manufacturing to a handful of countries in pursuit of lower labour costs. Semiconductor production became concentrated in Taiwan. Rare earth processing became dominated by China. Pharmaceutical ingredients increasingly came from a small number of overseas suppliers. Even electricity generation in many countries has become dependent upon interconnected systems vulnerable to cascading failures.
Each decision appeared economically rational when viewed in isolation. Together they produced a civilisation increasingly vulnerable to disruption.
COVID-19 exposed the weakness first. Suddenly governments discovered that basic medical equipment, pharmaceuticals and protective gear could not be manufactured quickly at home because production had been concentrated elsewhere. Supply chains that economists had celebrated as marvels of efficiency proved surprisingly brittle when confronted with real-world shocks.
The same lesson now emerges whenever conflict threatens global shipping. It is not merely oil that becomes scarce. Insurance costs rise. Freight prices increase. Businesses delay investment. Consumers pay more for fuel, food and countless manufactured products. A single point of failure propagates throughout the entire economic system.
Nature itself offers a different lesson. Healthy ecosystems are characterised by redundancy and diversity. Multiple species often perform similar ecological functions. If one declines, others compensate. Biological systems have survived for millions of years not because they maximise efficiency, but because they maximise resilience. Evolution has never been obsessed with eliminating every apparent inefficiency. What appears redundant during peaceful times frequently becomes indispensable during crisis.
Human civilisation once understood this principle instinctively. Families stored food. Farmers planted multiple crops. Nations maintained strategic reserves. Communities developed local industries rather than depending entirely upon distant suppliers. There were costs to such arrangements, but those costs purchased security.
Modern economic rationalism inverted the equation. Immediate efficiency became the supreme value. Resilience became an afterthought.
Conservatives have long recognised that not every apparent inefficiency is actually waste. A bridge designed with a generous safety margin is not inefficient simply because it could have been built more cheaply. Insurance is not irrational because the house may never burn down. Military forces are not unnecessary because there happens to be peace today. In each case society deliberately pays a premium for resilience against future uncertainty.
Supply chains should be viewed in exactly the same way.
This does not mean abandoning international trade or attempting complete economic self-sufficiency. Rather, it means recognising that diversification has value in its own right. Multiple suppliers, alternative transport routes, domestic manufacturing capacity and strategic reserves may all appear more expensive during normal times. Yet when disruption inevitably arrives, they prove far cheaper than dependence upon a single vulnerable system.
The Strait of Hormuz therefore represents something much larger than an energy problem. It symbolises a dangerous mindset that has spread throughout modern economics: optimise everything for average conditions while forgetting that history is shaped by exceptional events.
The world will always contain wars, pandemics, natural disasters, financial crises and geopolitical rivalries. Wise societies prepare for such shocks before they occur rather than hoping they never arrive.
Perhaps it is time to rediscover an old piece of practical wisdom that previous generations understood without needing sophisticated economic models. Never put all your eggs in one basket. The slight cost of carrying two baskets is often insignificant compared with the catastrophe that follows when the only basket is dropped.