Opinion | What’s causing the chaos at CrowdStrike? Our drive for efficiency.

It’s natural to wonder how on earth this could have happened, and how we can ensure it never happens again. But there’s another question that needs to be asked first: how much would we be willing to sacrifice to protect ourselves from the risk?

This may seem absurd at the moment. For people stranded by cancelled flights or missed doctor’s appointments, it’s worth spending almost anything to avoid the chaos that has bedeviled airlines, hospitals, emergency workers and other vital services. But this is like saying it’s worth insuring your car to the absolute max — after you have been involved in a major accident. Many car owners decide not to buy the most generous coverage possible, because that coverage also entails higher premiums.

So too with insuring ourselves to the max against meltdowns like the CrowdStrike mess, because that would require a price in economic efficiency. So we have to decide what trade-offs we are willing to make.

Averting this particular disaster may not have cost much money, to be clear. But CrowdStrike is just one of about a trillion possible failures in our deeply networked, globalized economy. Over the past fifty years, the market’s relentless drive for efficiency and reach has made such mass failure nodes more numerous, more potentially catastrophic, and harder to spot before they fail — all the while giving us instant access to all the world’s culture and most of its information, plus more, cheaper, better goods and services, and a global economy that lifts tens of millions more people every year out of poverty.

I came of age in the 1990s, when this transformation was still in its relatively early days. The Internet was just beginning, and global trade was shifting manufacturing from the United States to countries with cost advantages (such as China and Mexico) and countries with special technical expertise (such as Germany and Japan).

At the same time, Americans imported foreign technologies like “just-in-time” manufacturing, which replaced inefficient local suppliers and mountains of spare parts with remote but streamlined supply chains that delivered inputs exactly when they were needed. This was often tough on people working for local industries. But it was a boon to workers in poor countries and to American consumers. Compare any consumer product today with its 1990 equivalent and you will often find that either the quality has increased dramatically (cars) or the price has fallen dramatically (clothing). In the case of televisions and many other products, it is both.

The Internet has exacerbated this trend, as network effects and economies of scale often drive markets to a handful of players. This newspaper, for example, was one of thousands of local papers, all competing for readers within a geographically limited market. Now we’re competing to be one of a handful of daily news publications that serve the entire country, perhaps even the entire English-speaking world.

Expanding markets and putting more eggs in fewer baskets has real benefits: a few large news outlets can cover more topics in greater depth than many small ones. But it also has real downsides, such as a greater risk that those few players will all miss some stories — particularly local news — or get one completely wrong. As the pandemic has made clear, cost-efficient, just-in-time global supply chains can leave companies and their customers vulnerable as borders close and governments hoard critical resources for their own citizens.

In the case of software companies, it’s quite efficient for a single company to serve a large number of key customers, as CrowdStrike does — or even virtually all customers, as is the case with online search. In some ways, these concentrated players can offer greater reliability, because they develop a lot of expertise by serving a large number of users, and they can invest more in R&D and security than Bob’s Friendly Local Software Co. can. But when outages happen, they seemingly happen to everyone, everywhere, all at once, leaving users with no alternatives.

How best to manage the trade-off between efficiency and redundancy is a difficult question for another day. For now, it’s important to acknowledge that it exists and that there’s no easy way around it. We probably should have thought more about such trade-offs when the Great Efficiency Drive was underway. We’ll have to think about them even harder now.