Searching for Signs of Clever Symbolism in the Suez Canal

The hardworking staff at Spoiler Alerts will touch on the real effects of this blocking in a few paragraphs, but first we all need to acknowledge the tremendous amount of work that went into memorizing this incident:

It is the latter that deserves a little attention, because I admit that the point of view of the taking industry on the Ever Given leaves me grumpy.

Why? Because everyone and their mother is desperate to read it as a sign of… something. According to the New York Times, the stuck ship is a “warning about excessive globalization”. The specific warning? “The perils of its heavy reliance on global supply chains…international trade has faced a monumental bottleneck with potentially serious consequences.”

The Financial Times tells a similar story: “The Suez accident… drew attention to the inherent fragility of tightly stretched global supply chains just as they are already rocked by a pandemic and at a time when the philosophical underpinnings of global trade are being questioned. »

The global economy is a lot in 2021, but fragility isn’t one of them. Over the past decade, global value chains have faced a slow recovery from the 2008 financial crisis, a subsequent Eurozone crisis, Fukushima, the Arab Spring, Brexit, rising from levels of economic and political migration, to a wave of populist nationalism stretching from the United States to the Philippines, a Sino-American trade war and a global coronavirus pandemic. Many of these were predicted to mark the end of global supply chains, and yet those damned networks persist.

So are we now supposed to believe that a ship stuck in the Suez is the symbol of the end of all symbols of the state of the global economy? I understand that there has been a decade of disasters, but that might catastrophize the state of globalization a bit.

To be clear, this is not a good thing for the global economy. Joshua Keating from Slate notes that around 9% of all world trade goes through Suez. Time’s Joseph Hincks points out that the obstruction will cost the global economy several billion dollars a day if the ship is stuck there. The longer the ship remains stuck, the higher the shipping rates will increase and the shipping volume will increase. shrink.

Yet one of the reasons so many commentators are warning of short-term effects is that global (or, at least, US) demand has recovered from the covid-19 slump. And it’s also worth remembering that in modern history the Suez Canal was closed for well over a week – it was closed between 1967 and 1975. This also had adverse effects on economies that depended on the Suez trade, but these effects should not be exaggerated either.

The Suez Canal allows the global economy to operate more efficiently. But there are other ways to get goods from Asia to Europe and vice versa. They are less productive than using the Suez, but that doesn’t mean they lack viability. This is not an all-or-nothing crisis, but rather one in which prices react to real-world shocks and private sector actors react to changing incentives.

If commentators want to use the 21st century Suez crisis as another warning about just-in-time manufacturing and the dangers of running out of inventory, hey, go to town. But that warning has been sounding for some time now, and I doubt the Suez traffic jam is the tipping point that the pandemic or the Sino-US trade war was not.

The Ever Given is not a symbol of failing globalization – rather the opposite is true. It serves as a refresher course on the value that globalization still brings to the global economy. If even the likes of Tucker Carlson seem worried about the blockage of shipping lanes, perhaps economic globalization shouldn’t be seen as a bygone relic of a previous generation.

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