Globalization Contained

The Economic and Strategic Consequences of the Container

L. Hoovestal

• Publisher: Palgrave Macmillan
• Year: 2013
• ISBN:
  9781137315915
• Topic: Economics
• Subtopic: Economic Policy
• Index: Economics

Examining the global significance of the freight container, with particular emphasis on the perspectives of the US and China, Globalization Contained considers the implications of the freight container as an agent of change for the future of the global economy and global security.

Chapter 1

The Postwar World

The Cold War dominated international relations for more than 45 years (1945–91). It radically altered the global map and illustrated the robust nature of the relationship between the strategic and economic dimensions of world affairs. In strategic terms, these changes became apparent with the crumbling of some states and the formation of others. In economic terms, the increasing integration of the global economy signified the victory of economic liberalism over contending economic systems.

Fundamentally, the Cold War was a battle between two hegemons, each of whom sought to achieve world order in terms of opposing strategic and economic blueprints. The realist security paradigm that informed much of the Cold War—particularly in its early years—began to give way to the interconnectedness of the liberalist global economy.

The desire for national security was preeminent for both the United States and the Soviet Union following World War II (WWII). Each nation tended to view the world primarily from a realist perspective, where conflicts of national interest were inevitable and war was always imminent.

These two global superpowers sought to construct international economic systems that suited their particular ideologies. The Allied postwar planners, for example, believed that realist strategic policies could not be separated from liberalist economic policies. In order to achieve security, Allied planners sought to implement a global economic liberalist framework.

At Bretton Woods in July 1944, for example, it was argued that in a more economically open and interconnected world, nations would seek cooperation and avoid conflict. This economic liberalist framework excluded the Soviet Union and its ever expanding group of communist allies.

Despite the liberalist framework, the ensuing Cold War was largely characterized by realist strategics. It was also characterized by the polarization of domestic and international politics; the division of the world into economic spheres; competition and conflict in the third world; a costly and dangerous arms race; and most significantly a liberalist challenge to realist notions of security.

The Postwar Strategic Context

Indeed, without both the state and the market, there could be no political economy. The state’s contribution to economic growth and development is vital, as it establishes and maintains the fundamental framework that varying economic doctrines like economic liberalism and economic nationalism require to function effectively.

In addition, the state possesses the ability to utilize armed force and thus takes the lead as the principal actor for strategic security. The role of the state was unmistakable at the end of WWII. Political insecurity gave rise at that time to the rapid expansion of realism and internationalism. The Cold War era saw the key protagonists strategically maneuver to construct international political economies that suited their interests and their ideologies. Until the end of the Cold War, the world lived as a consequence in relation to the strategic military balance between the two superpowers—the United States and Soviet Union.

The Cold War shaped the foreign policies of the United States and the Soviet Union, deeply affecting their societies and their strategic and economic institutions. By providing a justification for the projection of US power and influence around the globe, the Cold War facilitated the assertion of American global leadership. The early Cold War also helped legitimize Soviet dictator Joseph Stalin (1878–1953) and his successors by providing an external enemy to justify their repressive regime and tighten the grip of the communist party.

After the end of WWII, much apprehension was caused in the United States not by external pressures but by the internal needs of the American economy. The United States emerged from WWII aware of its power and secure in its capacity to guide global restoration in ways compatible with its goals. These objectives—formed during the war—were straightforward. As a consequence, though the United States built a large and sophisticated military, its aim was to restructure the world so that American business could trade and profit without restrictions. The desire for a porous world in which goods and services would be able to flow unimpeded was a core policy objective on the part of American leaders, and it was around this core that they built their programs. They believed that commerce could successfully function in a world made up of politically reliable and secure nations. This was meant to give them access to essential raw materials and a liberalist international economic order.1

The task confronting the United States after WWII was to repair the damage not merely of that war but also of the decade-long depression that preceded it. The Soviet postwar policy was to expand its sphere of influence by geographically advancing and strengthening its security barriers. It was security through expansion. The Soviet sphere of influence was to be broadened via communist beliefs backed by a mighty military machine.

The Soviet objective prompted the doctrine of “containment” on the part of the United States. Containment not only aimed at limiting the expansion of Soviet power and influence; it was also designed to facilitate the expansion of US power and influence. The containment doctrine augmented the expansion of American capitalism according to its new economic needs. While the heavy militarization of the post-WWII environment compromised global security, the key desire of the United States to forge a permeable global environment free of impediments was a key reason for Soviet resistance.2

Numerous other developments framed the international system. Chief among these developments were the rivalry between the great powers, the developments in the technology of warfare, and the reconstruction of the world liberalist system. Events in all these areas affected one another, intensifying anxiety between the United States and the Soviet Union, polarizing domestic and international politics, splitting the world into military and material blocs, while also generating a strategic arms race. These developments helped engender a myriad of significant global developments.

On each side of the Cold War divide, leaders and common citizens saw their countries acting for broader purposes than the advance of state interests. Each state saw itself acting for noble reasons that were designed to help usher humanity into a grand new age of peace, justice, and order. Joined to the staggering might each state possessed at a time when much of the world was vulnerable, these powers’ ideological values provided the basis for conflict in the post-WWII period.

Hegemonic Stability

One of the most important historical forces in international relations is the drive by the most powerful state to establish, maintain, and defend its political dominance over the entire interstate system—a form of authority referred to as hegemony. From this perspective, the preeminent state exercises its capacity to secure the world by diverting war and advancing the economic interests of all concerned. The dominant state is steadfast and consistent in pursuit of its own interests, but it addresses the externalities that serve the whole system as well. This is consistent with the way (throughout history) hegemonic powers have sought to construct interstate political economies that suit their interests and ideologies.

The Cold War confrontation was a struggle to determine which state should rise to the status of sole global hegemon in the post-WWII landscape. There are two basic parts to Robert Keohane’s “hegemonic stability theory.” He says that order in world politics is typically created by a single dominant power. He then submits that the maintenance of order requires continued hegemony.3

It was essential for each Cold War hegemon to possess enough military power to be able to protect the international political economy from incursions by hostile adversaries. This military power was essential, because economic issues—where they are crucial to state values—become security issues. The military issues are dealt with if the hegemon maintains sufficient military power to prevent others undermining and denying its access to major areas of its material activity.

The Grand Alliance

If we return to June 1941, we find Nazi Germany launching a massive attack on the Soviet Union and the United States and the Soviet Union quickly succumbing to their need for mutual cooperation. From enemies they became allies. Along with Great Britain, the United States offered material support, and—following its entry into the war in December 1941—the wartime Grand Alliance was formed. For the next four years these three nations, known as “The Big Three,” cooperated in defeating the Axis powers. The Grand Alliance in the eyes of Soviet leaders ushered in a new era in international relations—one where the Soviet Union was accepted as a great power and a partner in managing the world. This equality was fully manifest (the Soviets believed) when they participated in outlining the postwar world.

Wartime cooperation included massive US military assistance, several wartime conferences, and the coordination of military strategies to bring about the unconditional surrender of Germany in May 1945 and Japan in September 1945. The Grand Alliance was far from cordial, however, and was characterized by the Big Three’s constant mistrust of one another’s motives. The Soviets—who had borne the brunt of the German onslaught—continuously complained about the delays in the opening of a second front in Europe. Moreover, as the allies began to contemplate the structure of postwar settlement, their different approaches began to erode the facade of wartime comradeship. The British and the Americans agreed on characterizing the Soviet stand on Europe’s future as being menacing and uncompromising. This led the Soviets to question the formers’ acceptance in administering world affairs.4

Peaceful coexistence and cooperation remained the aim of “The Big Three,” but it was ultimately to be superseded by the characteristics of the Cold War: diplomatic confrontation, ideological struggle, and military competition. This was because the assumptions of the three major Cold War protagonists were radically at odds. The Soviet Union saw capitalism as exploitative and the United States and Britain saw Soviet intentions as revolutionary. Neither side found it easy to accept that peaceful coexistence was possible or even desirable.

David Reynolds suggests that even if the wartime allies “had been willing to limit their geopolitical and ideological aspirations . . . the aftermath of Hitler’s war was too profound, too unsettling.”5 For the United States, the strategic disruption of Eurasia and the spread of communism were unacceptable. For the Soviet Union, any attempt to restore its nemesis, Germany, and the further spread of the liberal economy was equally unacceptable.

The Bretton Woods Conference and the Marshall Plan laid the foundations for postwar internationalism. Realist strategic militarism, however, continued to play a significant role in the early postwar years. This can be demonstrated in many ways, including such security alliances as the North Atlantic Treaty Organization (NATO) and the Warsaw Pact. By 1949, the Soviet Union had imposed tight control over the countries of Eastern Europe (with the exception of Yugoslavia). The security dilemma began when the United States formed NATO in April 1949 to display the US commitment to a continued military presence in Europe. The formation of NATO solidified the division of the European continent. On May 14, 1955, the Soviets furthered the security dilemma by formalizing their security ties to their Eastern European allies: the German Democratic Republic, Poland, Hungary, Czechoslovakia, Romania, Bulgaria, and Albania. This was the formation of the Warsaw Pact, which was a military response to the West’s formation of NATO and further hardened the continent’s lines of division.6

Cold War Conflict

The Cold War landscape exhibited significant realist armed conflicts. These included the Korean War (June 25, 1950–July 27, 1953) and the Vietnam War (November 1, 1955–April 30, 1975). The era also featured an arms race between the two superpowers and their allies.

Each camp sought advances in the quality as well as the quantity of its weapons. The preeminent areas of research and development were in the design of more diminutive nuclear warheads for tactical purposes; the improvement of delivery systems for longer range and more precise missiles; and more destructive nuclear bombs. Both Cold War powers could not risk scaling down weapons development for fear that the other would succeed in obtaining a technological or military breakthrough. This led to a security dilemma in which every strategic maneuver brought a countermaneuver.7

The most dramatic and dangerous confrontation of the nuclear age came in the Cuban Missile Crisis of October 1962. By 1963, however, both the Soviets and the Americans realized that an offensive strike from the other side would lead to mutually assured destruction. It was clear that starting a nuclear war was tantamount to committing suicide. This realization brought steps toward arms control treaties. While these treaties were acts of good faith, both American and Soviet leaders believed that if the adversary realized a dramatic leap in missile defense technology, the Cold War environment would be profoundly altered. This belief was later realized with the implementation of Reagan’s Strategic Defense Initiative, which highlighted the fundamental shift from realist strategic preponderance to liberal economic preponderance.

The Contemporary Strategic Picture

Since the collapse of the Soviet Union, it is evident that global security threats go further than states conducting wars against other states. Contemporary security threats change rapidly, unpredictably, and without warning. They extend to the proliferation of poverty and infectious diseases; environmental deterioration; the proliferation and potential use of nuclear, radiological, chemical, and biological weapons; and the spread of nonstate illicit actors and their activities.

It is globalization that lies at the heart of the transformational post–Cold War world. Globalization is a familiar catchphrase that describes the spread and connectedness of production, communication and transport, and technologies across the world. In this interconnected world, a security threat to one is a security threat to all. That is, the security of the most prosperous can be held captive by the abilities of the most impoverished to level security threats. Destitution, disease, environmental degradation, and conflict bolster one another in a destructive sequence. For example, diseases like HIV/AIDS continue to result in high mortality rates and further poverty. Environmental ruin intensifies the incidence of diseases like malaria and dengue fever and can trigger civil unrest due to the scarcity of land and natural resources in overpopulated areas.

Expansive systems brought by globalization add to global insecurity. The global financial crisis (GFC) of 2008–9, for example, was triggered by reduced interest rates, easy credit, subprime lending, and other shortfalls in the US banking system. This led to sharp declines in world trade, private capital flows, and foreign assistance to needy countries. These declines resulted in slower economic growth, drops in production and income, higher global unemployment, and social unrest. In a globalized world these are all threats that can proliferate at unprecedented speed.

As noted, “Offensive Realism” theory describes the contemporary struggle for power between various actors, particularly states and nonstate actors. It argues that because the interstate system is “anarchic,” the common goal for all actors is to maximize their “power” and increase their chances of “survival.”8 Both states and nonstate actors seek an interstate system that best enables them to maximize “power.”

Today, the People’s Republic of China (PRC) increasingly exhibits “offensive realist” behavior. Its actions in the South China Sea and Hong Kong have become more aggressive and have led many to believe China is seeking hegemony in its region. China’s activities have intensified fears about whether it truly plans a “peaceful rise.”

The contemporary world is characterized by tremendous mobility and volatility, in which issues such as transnational crime, piracy, and international terrorism have come to the forefront of security apprehensions.

Transnational criminal syndicates foster significant security threats by inhibiting economic expansion, challenging democracy, and undermining the rule of law. They maintain vast financial resources by engaging in corruption, money laundering, and the transport of contraband that ranges from narcotics to...

Table of contents

• Title Page
• Copyright Page
• Contents
• Foreword
• Preface
• Acknowledgments
• Introduction
• Chapter 1: The Postwar World
• Chapter 2: The Advent of the Container
• Chapter 3: The Economic Consequences of Containerization
• Chapter 4: The Strategic Consequences of Containerization
• Chapter 5: The United States
• Chapter 6: The People’s Republic of China and the Hong Kong Special Administrative Region
• Conclusion
• Notes