a. "Shipping costs no longer offered shelter to high-cost producers whose great advantage was physical proximity to their customers; even with customs duties and time delays, factories in Malaysia could deliver blouses to Macy's in Herald Square more cheaply than could blouse manufacturers in the nearby lofts of New York's garment district." This section really stuck out to me because of the way it related to our class discussions on economic geography. The shipping costs were so decreased that it increased the range of just about everywhere. It also mentioned later in the section that it was not just the cost per mile, but also the cost of transferring the containers to the next section of shipping, such as trucks or trains. These reduced transition costs lead to even greater range for international shippers.
b. He believes that the shipping container is a huge factor contributing to globalization. The container has lowered transportation costs so much that it has had a significant effect on making the law of one price become a reality. It has made costs for many items much more similar around the globe, including that of labor. Obviously there are still extreme differences in parts of the world, but significantly less so than before the shipping container era.
c. Going back to my first point, consumers were helped by the greater competition and supply of goods created by lower shipping costs. The greater competition reduced prices and allowed more people to participate in markets they otherwise could not have. Unfortunately, the same people, this time in the form of job seekers, were hurt by losing bargaining power in the labor market. Although the net effect is clearly positive on the world, the loss of bargaining power by workers in the labor market is certainly an interesting loss.
No comments:
Post a Comment