Part 3 - Globalization

In this post I will look at another area of technology which Professor Cowen misses.

THE GLOBALIZATION CLUSTER

In the late 1950s several technologies developed which enabled globalization. In 1955 the first shipping containers were developed. These took a while to catch on, but they would eventually greatly reduce the costs of moving goods worldwide.

In 1956 the first transatlantic telephone cable was laid. It offered a grand total of 36 circuits. When the first fiber optic cable was laid in 1988 it would offer 40,000 circuits. In 1962 the first telecommunications satellite was launched. This made intercontinental TV transmissions possible for the first time, and helped to bring down the cost of intercontinental telephone traffic. These improvements in communications greatly eased the management of global supply chains.

Sometimes, only a face to face meeting will do. In 1958, the 707 jetliner entered service. This made transoceanic travel quicker and  more comfortable.

Although these technologies were first introduced at the end of the 50s, I believe that the impact of these inventions took decades to be fully felt. International trade has grown well into the 2000s.

WAS GLOBALIZATION BENEFICIAL?

If our politicians had insisted on balanced flows of trade, then it most likely would have been. Sending easy, low value manufacturing overseas and bringing the hard, high value work to America would have delivered a big productivity boost. Of course, this didn't happen. What did happen was massive trade deficits. The impact of those is a topic for another post.