From Aeon:
A new form of trade is reshaping our world, and it’s driven by the movement of bits and bytes, not goods, around the globe
If globalisation were to have a meme, the maritime shipping container would be a likely choice. Piled high on the decks of vast oceangoing ships and stacked deep in their holds, these simple steel boxes, typically 40 feet long and eight feet high, emblemise an era in which massive quantities of stuff move around the world at negligible cost. Shoppers everywhere can choose among merchandise in unprecedented variety. Whether they sip a Californian chardonnay or an Australian one, or lace up Indonesian-made running shoes rather than footwear imported from India, the cost of transporting the goods over thousands of miles barely figures into consumers’ decisions about what to buy.
More than 5,000 containerships sail the oceans today, and they are in no danger of vanishing from the scene. But the temporary COVID-19 pandemic-driven boom in trade in goods notwithstanding, the cargo these giant vessels carry is becoming steadily less important as the world economy is reshaped by a new form of globalisation. Over time, globalisation will gradually have less to do with exporting material goods across borders and much more to do with trading services and ideas. This will have important consequences for workers, communities and the health of national economies.
Globalisation itself is not a new phenomenon. Its roots are to be found in an intellectual transformation that began in 1817, when the British financier David Ricardo explained how a country could benefit by importing as well as by exporting. Ricardo dismantled centuries of economic orthodoxy by showing the mercantilist belief that wealth came from importing only raw materials and exporting finished goods to be a fallacy.
As industrial capitalism emerged around 1830, Ricardo’s ideas provided the justification for countries to reduce barriers to imports. With inventions such as the telegraph and the oceangoing steamship providing better information and more reliable connections, foreign trade flourished. So did foreign investment, as European money funded US steel mills, Argentine railroads and South African gold mines. Unprecedented numbers of people moved across borders as well.
In a certain sense, this represented globalisation, although the term was not then in use. But the economic integration of the 19th and early 20th centuries was nothing at all like globalisation as we know it today. For one thing, it was very much centred on Europe, which was responsible for about three-quarters of cross-border commerce and almost all the foreign investment. For another, the vast bulk of international trade involved bulk commodities – coffee, copper, coal – with manufactured goods playing only a minor role.
This first globalisation crashed to a halt with the outbreak of the First World War in 1914. Two world wars and the Great Depression put a damper on international exchange for the next three decades.
In the late 1940s, the victorious Second World War allies sought to restart the global economy by reducing trade barriers and stabilising exchange rates. This second stage of globalisation was driven by round after round of tariff reductions. In addition to the General Agreement on Tariffs and Trade, which was originally signed by 23 countries in 1947 and would later be accepted by dozens more, there were important arrangements to promote trade and investment among small groups of countries, such as the six-country Treaty of Rome that created the European Economic Community in 1957, the seven-country treaty in 1960 establishing the European Free Trade Association, and the 1965 pact that eliminated tariffs on automotive trade between the US and Canada. Freer trade stimulated exports of factory products: in 1957, the world’s exports of manufactured goods equalled, and by 1960 exceeded, those of commodities and raw materials for the first time ever, despite the burgeoning trade in petroleum.
The broad pattern of trade, though, was much like it had been in earlier decades. Manufactured goods, as well as foreign investment, flowed mainly among western Europe, North America and Japan, which had been the wealthiest economies before the Second World War. In the language of the time, these were known as the ‘North’, the ‘centre’ or the ‘developed’ economies, depending upon the political leanings of the speaker. International trade was generally popular in the North through the 1960s, as manufacturers added well-paid factory jobs by the millions.
Exports of raw materials no longer generated sufficient hard currency to service their debts
At the same time, many countries in Asia, Africa and Latin America were barely connected to the world economy. The developing nations of Asia, by one estimate, provided less than 1 per cent of the world’s exports of dry cargo in 1967. Latin American and African countries – the ‘South’ or ‘the periphery’, as they were often called – participated in globalisation from the late 1940s into the 1980s mainly by supplying raw materials to the ‘advanced’ countries, importing their manufactured goods and borrowing their money. Understandably, their governments and their citizens often felt that they were on the losing end of an exploitative relationship. Many countries tried to use foreign borrowings to expand their own manufacturing sectors in hopes of improving productivity and escaping the low-income trap. With very few exceptions, notably South Korea, these efforts did not go well, leaving massive debt burdens and inefficient factories that could not stand up to foreign competition.....
....MUCH MORE
The outro from November 2020's Shipping: "Containers are ‘the new gold’ amid ‘black swan’ box squeeze":"The Box" is an interesting read, highly recommended. Levinson does a good job describing what the introduction of containers did to old-school shipping and the societies living off it
https://ftalphaville.ft.com/2020/07/01/1593587289000/Further-reading/
