Posted by: Michael Mandel on April 10
Marc Levinson, whom I like, has written a new book called “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.”
I must admit, however, to a bias against shipping containers. For one thing, there are huge and ugly piles of containers next to the New Jersey Turnpike and the commuter rail line that I take to work.
More important, I have bad associations of shipping containers from the mid-1990s, when Paul Krugman used them as an example of “good” technology compared to the “evil” technology of the Internet. In his 1997 Harvard Business Review article attacking the New Economy, Krugman wrote:
Techno-skeptics like to point out that although digital technology is flashy and glamorous, it arguably does less for the actual productivity of workers than many less photogenic innovations of the past. (My own favorite example of an utterly unglamorous technology that had a profound effect on the economy was freight containerization, which was introduced in the 1960s and eliminated the need for literally hundreds of thousands of longshoremen and other freight handlers).*
Krugman then went on to make some underlying ridiculous statements in that same article. For example:
The popularity of the new paradigm poses something of a puzzle. The two key arguments of that paradigm are that high productivity growth justifies higher growth targets, and that global competition prevents inflation. As we have seen, however, both arguments collapse - indeed, look quite silly - when given even a cursory critical examination.
In any case, in his book Levinson dances around the question of how much the shipping container really added to global growth:
How much the container matters to the world economy is impossible to quantify. In the ideal world, we would like to know how much it cost to send one thousand men’s shirts from Bangkok to Geneva in 1955, and track how that cost changed as containerization came into use. Such data do not exist, but it seems clear that the container brought sweeping reductions in the cost of moving freight
Such data do not exist….
Anybody want to speak up in favor of shipping containers as major force for global growth? I can’t see it.
Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.