Transportation: Response to Marc Levinson's Chapter 1 from The Box

1. 

The cost of loading freights and transporting freights today is a very costly process: crane maintenance, employers, fuel, etc. Yet The Box suggest that moving goods is essentially priceless.

"It is better to assume that moving goods is essentially costless than to assume that moving goods is an important component of the production process."

Even economists now do not use the transportation component when figuring out the basic cost of the production process of a good according to the article. The reason behind why the price of movie goods is now considered "costless" is prior to the container the cost of transportation was extremely pricey. In fact the price was about 25% of production price. Personally, the large impact on transportation was interesting.

2. 

This new form of transportation, the container, reshaped the economics of production. The container increased the level of global competition because goods were easily transported in bulk. For example, relatively cheaper clothes made by companies in Burma were competing to costly companies in New York. The increase in competition moved the oligopoly economy towards a pure competition economy. As a result, the increase in suppliers would have decreased the prices of local sellers. Not only was there an increase in sellers, but poor-country companies were now able to improve sales and improve economic development. 

Secondly, the cost of transportation decreased by the container invention because goods could be sold in bulk and less workers were involved in the transportation industry. The cost of transportation decreased so much that economists did not use the cost of production when figuring out revenue for a company's production.

Finally, the container decreased the amount of work hours per week as well as the retirement age. 

3. 

The container had an impact on many sellers and consumers. The local companies that sold for relatively high prices lost revenue by the invention of the container. On the flip side of the coin, manufacturers from poor countries gained because the number of the buyers increased exponentially. As a result of the increase of buyers for cheaper good, the poor companies had a demand for workers: the demand improved the economy. To meet levels of competition, the companies from richer countries began to outsource to poorer countries; outsourcing also improved economies.

Besides the poor countries from gaining, disabled people as well as laborers also gained. According to the chapter, disability pay was generous after the invention of the container and work hours decrease. 

On the other hand, many people were left jobless since transportation became fast, easy and cheap. Even though new jobs were made (such as maintaining the machines like cranes), there was a surplus of jobless from the invention. Overall, globalization occurred to a new degree. Technology, culture, and other goods spread and were easily accessible.