The Box - Marc Levinson [2]
How innovation really works is certainly one of the lessons of The Box, but for me there is another that looms even larger: the role of unintended consequences. Economists, myself included, are in the business of predicting events; we like to think that we can analyze what has happened and draw insight into what will occur in the days to come. Business school students take a similar approach, learning to apply quantitative analysis to historical data in order to draw conclusions about the future. In the business world, this way of looking at the world through a spreadsheet is treated as modern management thinking. It’s the bread and butter of some of the world’s most famous, and expensive, consulting firms.
The story of containerization attests to the limits of this sort of rational analysis, for the developments recounted in The Box turned out not at all as expected. Containerization, after all, began as a means of shaving a few dollars off the cost of sending Malcom McLean’s trucks between New York and North Carolina. At best, it was regarded as a minor innovation, “an expedient,” as one leading naval architect opined in 1958. Perhaps, the experts thought, containers might capture a small share of America’s declining coastal shipping business. They were deemed impractical for most types of cargo and for shipments to distant places, such as Asia.
Absolutely no one anticipated that containerization would open the way to vast changes in where and how goods are manufactured, that it would provide a major impetus to transport deregulation, or that it would help integrate East Asia into a world economy that previously had centered on the North Atlantic. That containerization would eliminate the jobs of dockworkers was clear from the start, but no one imagined that it would cause massive job loss among workers in manufacturing and wholesaling whose employment had long been tied to the presence of nearby docks. Political leaders, trade unionists, and corporate executives made costly mistakes because they failed to apprehend the container’s influence. U.S. railroads fought containerization tooth and nail in the 1960s and 1970s, convinced that it would destroy their traditional boxcar business, never imagining that early in the twenty-first century they would be carrying 12 million containers every year. Many shipping magnates—including, eventually, McLean himself—led their ship lines to failure by misjudging how the container business would develop. And certainly, no one in the early days of container shipping foresaw that this American-born industry would come to be dominated by European and Asian firms, as the U.S.-flag ship lines, burdened by a legacy of protected markets and heavy regulation, proved unable to compete in a fast-changing world.
And, of course, no one involved with the container’s development imagined that metal boxes would come to be regarded as a major security threat. Improved security, ironically, was originally one of the container’s big selling points: cargo packed inside a locked container was far less susceptible to theft and damage than cargo handled loose. Ship lines and border-control officials were taken by surprise in the 1980s, when smugglers figured out that the relative secrecy, anonymity, and reliability of container shipping made it ideal for transporting drugs and undocumented migrants as well. In those days, enclosing container yards with fences and locked gates was thought adequate to solve the problem.
Two decades later, evaluating potential threats after a series of devastating attacks, antiterrorism experts hit upon the possibility that terrorists might cripple world trade by exploding radioactive weapons secreted in containers. The seriousness of that threat was impossible to evaluate, although experience has made clear that terrorists bent on wreaking large-scale devastation can do so with