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The political economy of international shipping: Europe versus America

Published online by Cambridge University Press:  22 May 2009

Alan W. Cafruny
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The political challenge to the post-World War II order in shipping has been issued in the context of the North-South debate, but American power and interest are central to current developments. In the bulk and tanker sector the United States retains a strong interest in stability and successfully defends the existing order. In the liner sector, on the other hand, the United States has participated in recent assaults on the postwar order, producing great tension between Europe and America. There is a strong correlation between this growing maritime conflict and the political processes anticipated by the general theory of hegemonic stability. But “hegemony” and “power” are distinct concepts. Instability in international shipping arises neither from America's loss of power in shipping nor from challenges from Europe and the Third World. Rather, instability reflects American attempts to establish a closer identity between the existing regime and short-term national interest.

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International Organization , Volume 39 , Issue 1 , Winter 1985 , pp. 79 - 119
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Copyright © The IO Foundation 1985

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References

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4. Gramsci, Antonio, Selections from the Prison Notebooks (London: Lawrence & Wishart, 1971), p. 161Google Scholar. It should be emphasized that although formal models and empirical studies have not generally distinguished between power and hegemony (implicit in Gramsci's definition), explications of the theory have certainly done so. Bergsten, Keohane, and Nye use the phrase “hegemonic equilibrium” and note that the “systemic orientation natural to hegemonic power, which identifies its interests with those of the system it manages, is challenged by a more nationalistic perspective.” Bergsten, C. Fred, Keohane, Robert O., and Nye, Joseph S. Jr., “International Economics and International Politics: A Framework for Analysis,” International Organization 24 (Winter 1975), p. 16Google Scholar; see also Keohane, , “The Theory,” pp. 136–37Google Scholar. Stephen Krasner emphasizes the tendency of the former hegemon to realize short-term “consumption” goals rather than systemic or “investment” objectives, in “American Policy and Global Economic Stability,” in Avery, William P. and Rapkin, David P., eds., America in a Changing World Political Economy (New York: Longman, 1982), p. 33.Google Scholar

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8. See especially Keohane, , “The Theory,” p. 136Google Scholar, and also his “Hegemonic Leadership and U.S. Foreign Economic Policy,” in Avery, and Rapkin, , America in a Changing World Political Economy.Google Scholar

9. Keohane, , “The Theory,” p. 151Google Scholar. Peter Cowhey and Edward Long similarly propose that “the strongest version of the hegemony hypothesis would predict a tight linkage between the decline of American power in the [automobile] sector … and regime change.” See their “Testing Theories of Regime Change: Hegemonic Decline or Surplus Capacity?” International Organization 37 (Spring 1983), p. 171.Google Scholar

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11. Data from OECD, Maritime Transport, 1982 (Paris, 1983), p. 11Google Scholar, and previous editions. Ironically, protectionism in shipping since 1974 has created a more “open” international trading order: the shipping industry has “subsidized” foreign trade. Data provided by the International Trade Commission indicate that 27% of the real growth in U.S. imports over the last 6 years is due to the decline of ocean freight rates. See Journal of Commerce, 12 October 1983, p. C1.Google Scholar

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13. While the military is also an important actor, the military requirement is one constant motive for a sizable merchant fleet. The military does not generally determine how the fleet should be expanded or to what extent.

14. In the mid-to-late 1970s British shipping was contributing approximately £1 billion per annum to the balance of payments in net direct foreign exchange. See General Council of British Shipping, Facts and Figures, 1980 (London, 1980)Google Scholar. In Scandinavia shipping is the most important source of foreign exchange; even in industrially diverse Sweden the shipping industry accounts for 15 to 20% of foreign earnings. See OECD, Review of Maritime Transport, 1973 (Paris, 1973), pp. 93–94Google Scholar. For a general assessment of the role of shipping in France, Britain, and West Germany see Cafruny, Alan W., “Ruling the Waves: The Structure of Conflict in the International Shipping Regime” (Ph.D. diss., Cornell University, 1983), chap. 6Google Scholar. In Norway and Greece shipowners can be considered the “hegemonic” economic grouping in the national economy. On Greece see Serafetinidis, M., Serafetinidis, G., Lambrinides, M., and Demathas, Z., “The Development of Greek Shipping Capital and Its Implications for the Political Economy of Greece,” Cambridge Journal of Economics 5 (1981)CrossRefGoogle Scholar; on Norway see Norman, V. D., Norwegian Shipping in the National Economy (Bergen: Institute for Shipping Research, 1971).Google Scholar

15. Delegates agreed that merchant fleet development plans should be based on “sound economic criteria.” UNCTAD, Common Measure of Understanding on Shipping Questions (Geneva: UN, 1964), art. 1.Google Scholar

16. Gorter, Wytze, U.S. Shipping Policy (New York: Harper for the Council on Foreign Relations, 1956), p. 100.Google Scholar

17. For the seminal defense of the American position see Boczek, Boleslaw, Flags of Convenience: An International Legal Study (Cambridge: Harvard University Press, 1962)CrossRefGoogle Scholar; for the “special relationship” between U.S. government and shipping firms see Carlisle, Rodney P., Sovereignty for Sale: The Origins and Evolution of the Panamanian and Liberian Flags of Convenience (Annapolis: Naval Institute Press, 1981).Google Scholar

18. Seatrade, December 1983, p. 15Google Scholar; see also United Kingdom, Dept. of Trade, Casualties to Vessels and Accidents to Men, 1976 (London: HMSO, 1978)Google Scholar. For a general critique see Doganis, R. S. and Metaxas, B. N., The Impact of Flags of Convenience (London: Polytechnic of Central London Transport Studies, 1976)Google Scholar. According to the UNCTAD secretariat, OECD governments apparently do not introduce inspection systems comparable to those in civil aviation because “non-observance of standards on ships is not likely to risk the loss of so many lives as on aircraft and hence does not provide the same political motivation for governments.” UNCTAD, “Action on the Question of Open Registries,” TD/B/C.4/220 (05 1981), p. 15.Google Scholar

19. Boczek, , Flags of Convenience, p. 13.Google Scholar

20. The Federation of American Controlled Shipping (FACS), the foe lobby, includes Alcoa Steamship, Amoco Marine Transportation, ARCO Marine, Bethlehem Steel, Chevron Shipping Co., Conoco, Dow Chemical, Exxon, Getty Oil, Gulf Oil, Marathon Oil, Phillips Petroleum, Reynolds Metals, Sun Transport, Texaco, Union Oil.

21. Sturmey, S. G., British Shipping and World Competition (London: Athlone, 1962), p. 233Google Scholar; see also Naess, Erling D., My Life: Autobiography of a Shipping Man (Colchester: Seatrade, 1977), pp. 215–19.Google Scholar

22. Lucas, N. J. D., Energy and the European Communities (London: Europa, 1977), p. 1.Google Scholar

23. Provisions in the Jones Act of 1920 and Merchant Marine Acts of 1936 and 1970 reserve coastal (cabotage) trades for U.S.-flag shipping. In addition, some U.S. AID and PL 480 grain cargoes are reserved for U.S. ships. “The [U.S.] bulk fleet will soon consist of two converted Liquid Natural Gas carriers, a dozen motor ships between 25,000 and 60,000 dwt., several deep notch ocean barges, and a coal-burning collier.” Seatrade U.S. Yearbook 1983 (Colchester: Seatrade, 1983), p. 33.Google Scholar

24. Organization for European Economic Cooperation (OEEC), “Study on the Expansion of the Flag of Convenience Fleets and on Various Aspects Thereof” (Paris, 1958), p. 8.Google Scholar

25. On the politics of focs see Naess, Erling D., The Great PanLibHon Controversy: The Fight over Flags of Convenience (London: Exeter, 1972)Google Scholar. For an account of official U.S. intervention in Aristotle Onassis' ill-fated attempt to collaborate with Saudi Arabia to establish an independent Saudi tanker fleet in the early 1950s, see Fraser, Nicholas et al., Aristotle Onassis (New York: Lippincott, 1977), esp. pp. 138–44.Google Scholar

26. OEEC, “Study,” p. 8.Google Scholar

27. On this convention see Boczek, , Flags of Convenience, chap. 5.Google Scholar

28. OEEC, “Study,” p. 8Google Scholar. “Their [Western European] propaganda and conspiracies against U.S-controlled ships under Panamanian and Liberian flags are unfriendly acts against the United States, and it should be made clear to them that they are so regarded by the U.S. Government, business community, and public. A country like Norway is too dependent on the good will of the U.S. to afford to persist in unfriendly agitation and one-sided propaganda against important U.S. interest. The reservoir of good will enjoyed by Norway is great, but not inexhaustible.” Statement of the American Merchant Marine Institute, 17 March 1958. See also “A Serious Warning by the Oslo Shipowners Association,” Norwegian Shipping News 14 (1958), pp. 137–40.Google Scholar

29. See Tables 5 and 7 below.

30. As recognized with great clarity by the authors of the U.S. Shipping Act of 1916: “The entire history of steamship agreements shows that in ocean commerce there is no happy medium between war and peace when several lines engage in the same trade. Most of the numerous agreements and conference arrangements discussed in the foregoing report were the outcome of rate wars and represent a truce between contending lines” (sec. 15).

31. Committee of Inquiry into Shipping, Report (Rochdale Report), Cmnd. 4337 (London: HMSO, 1970), p. 116Google Scholar. General works on the conference system include Marx, Daniel, International Shipping Cartels (Princeton: Princeton University Press, 1953)Google Scholar; Deakin, B. M., Shipping Conferences: A Study of Their Origins, and Development and Economic Practices (Cambridge: Cambridge University Press, 1973)Google Scholar; and UNCTAD, “The Liner Conference System,” TD/B/C.4/62/Rev. 1 (New York, 1970).Google Scholar

32. Report of the Royal Commission on Shipping Rings, Cmnd. 4668 (London: HMSO, 1909)Google Scholar; U.S. Congress, House, Committee on Marine, Merchant and Fisheries, , Report on Steamship Agreements and Affiliations in the American Foreign and Domestic Trades, 63d Cong., 2d sess. (Washington, 1914).Google Scholar

33. See, for example, Marx, , International Shipping Cartels, p. 21Google Scholar. For a defense of conferences see University of Wales, Dept. of Maritime Studies, Liner Shipping in the U.S. Trades: A UWIST Study for CENSA (Cardiff, 1978)Google Scholar, and Fasbender, Karl and Wagner, Wolfgang, Shipping Conferences, Rate Policy and Developing Countries: The Argument of Rate Discrimination (Hamburg: Weltarchiv, 1973).Google Scholar

34. For critiques of conference practices see especially U.S. Congress, House, Anti-Trust Committee, The Ocean Freight Industry (Celler Report), 87th Cong., 2d sess. (Washington, 1962)Google Scholar, and U.S. Dept. of Justice, The Regulated Ocean Shipping Industry (Washington, 1978).Google Scholar

35. Celler Report, p. 396.

36. Ibid., p. 330.

37. Lawrence, Samuel A., U.S. Merchant Shipping Policies and Politics (Washington: Brookinga, 1966), p. 179.Google Scholar

38. The seminal work is Rajwar, L. M. S. et al., Shipping and Developing Countries (New York: Carnegie Endowment for International Peace, 1971)Google Scholar. See also Yeats, Alexander, Trade Barriers Facing Developing Countries (New York: St. Martin's, 1979), esp. chap. 7CrossRefGoogle Scholar; UNCTAD, “Establishment or Expansion of Merchant Marines in Developing Countries,” TD/26/Supp. 1 (Geneva, 1967)Google Scholar; and Frank, André Gunder, “Services Rendered,” Monthly Review 13 (02 1965).Google Scholar

39. “U.N. Conference of Plenipotentiaries on a Code of Conduct for Liner Conferences–Final Act and Annexes,” TD/Code/11 Rev. 1 (Geneva, 1974)Google Scholar. On the code generally see Juda, Lawrence, “World Shipping, UNCTAD, and the NIEO,” International Organization 35 (Summer 1981)CrossRefGoogle Scholar, and his The UNCTAD Liner Code: United States Maritime Policy at the Crossroads (Boulder: Westview, 1983).Google Scholar

40. CENSA, “Code of Practices for Conferences” (London and The Hague: CENSA, 1971).Google Scholar

41. On EEC shipping policy see Bredimas, Anna E. and Tzoannis, John G., “In Search of a Common Shipping Policy for the European Community,” Journal of Common Market Studies 20 (12 1981)CrossRefGoogle Scholar, and Larson, Paul and Vetternich, Valerie, “The EEC and the UNCTAD Liner Code,” Law and Policy in International Business 11 (03 1979).Google Scholar

42. For one militant but not atypical view see Otterson, J. E., Foreign Trade and Shipping (New York: McGraw-Hill, 1945)Google Scholar. For general works on U.S. shipping policy see Lawrence, Samuel, U.S. Maritime Policy, History, and Prospects (New York: Praeger, 1981)Google Scholar; Barker, James C. and Brandwein, Robert, The U.S. Merchant Marine in National Perspective (Lexington, Mass.: Heath, 1971)Google Scholar; Frankel, Ernest, Regulation and Policies of American Shipping (Boston: Auburn House, 1982)Google Scholar; and Ellsworth, Robert A., “Liner Conferences: Evolution of U.S. Policy,” Marine Policy 7 (10 1983).CrossRefGoogle Scholar

43. Testimony of Edgar A. Vierengel in U.S. Congress, House, Committee on Merchant Marine and Fisheries, Subcommittee on Marine, Merchant, Omnibus Maritime Bill, Hearings, Part 1, 96th Cong., 1st sess. (1979).Google Scholar

44. Throughout the 1960s the antitrust provisions of the 1916 Shipping Act were tightened. In 1961 Congress established “public interest” criteria to be used by the FMC in the regulation of conferences. In the Svenska and Carnation cases the Supreme Court ruled that the burden of proof of appropriate conference activity lay with the conferences and that shipping firms were liable for “triple damages” under antitrust legislation.

45. Celler Report, p. 124. For more documentation see U.S. Congress, Joint Economic Committee, Discriminatory Ocean Freight Rates and the Balance of Payments, 89th Cong., 1st sess. (Washington, 1963)Google Scholar. CENSA noted the greater demand for shipping on the outbound leg, leading to higher rates. Shippers and governments increasingly viewed such differentials as unacceptable. See esp. pp. 238–41 and 333–39.

46. British Shippers Council, Annual Report (London, 1965).Google Scholar

47. In 1976 the Soviet merchant marine transported 84% of Soviet-British trade, 75% of Soviet–West German trade, and 97% of Soviet-Japanese trade. In 1977 the Soviet Union had acquired 13% of carryings between the United States and Northern Europe, including 25% of U.S.–West German trade. FESCO of Vladivostok carried 23% of cargoes in the trans-Pacific trade route. Economist, 18 June 1977, p. 85Google Scholar. The main threat to Western European shipowners is the Siberian Landbridge, offering containerized services between Europe and Asia. On Soviet merchant shipping see Atlantic Council, The Soviet Merchant Marine: Economic and Strategic Challenge to the West (Washington, 1978)Google Scholar; German Transport Interests, “Competition from the TSCL and Its Overall Implications for the FRG” (Hamburg: Hapag-Lloyd, 1978)Google Scholar; General Council of British Shipping, “Red Flag vs. the Red Ensign” (London, 1975)Google Scholar; and Chrzanowski, Ignacy et al. , Shipping Economics and Policy: A Socialist View (London: Fairplay, 1979).Google Scholar

48. Chrzanowski, Ignacy, Concentration and Centralization of Capital in Shipping (London: Saxon House, 1975), esp. pp. 105–10Google Scholar. See also Figure 1, below.

49. Maritime Cargo Transportation Conference, Maritime Transportation of Unitized Cargo — A Comparative Economic Analysis of Breakbulk and Unitized Systems (Washington: National Academy of Sciences, 1959), p. 66.Google Scholar

50. Barker, and Brandwein, , U.S. Merchant Marine, p. xv.Google Scholar

51. Data on employment and cargoes derived from U.S. Dept. of Commerce, Maritime Administration, Annual Report (various years); on wage differentials see Kilgour, John, The U.S. Merchant Marine: National Maritime Policy and Industrial Relations (New York: Praeger, 1975), p. 40.Google Scholar

52. UNCTAD, “Unitization of Cargo,” TD/B/C.4/75 (Geneva, 1970), pp. 37–38.Google Scholar

53. The Trans-Siberian Container Link has the potential to carry a high proportion of European-Asian trade. On Soviet intentions see “Russians Steady on New 5-Year Course,” Norwegian Shipping News no. 5 (1982).Google Scholar

54. See U.S. General Accounting Office, Comptroller General, Report to the Chairman, Committee on Merchant Marine and Fisheries, U.S. House of Representatives: Changes in Federal Maritime Regulations Can Increase Efficiency and Reduce Costs in the Ocean Liner Shipping Industry (Washington, 1982), esp. pp. 14–16Google Scholar. On Sea-Land's performance see the testimony of Sea-Land officials in Omnibus Maritime Bill Hearings, p. 490. U.S. Lines' recent acquisitions, including an order of 12 large container vessels from South Korea, suggest its determination to establish “round the world” services.

55. Rochdale Report, p. 409.

56. On the efficiency potential of closed conferences see UWIST, Study, p. 48Google Scholar; Hapag-Lloyd, , “The Organization of Liner Shipping in the Container Age Illustrated by the North Atlantic Trade” (Hamburg, 1975)Google Scholar; and Manalytics Inc. (for the U.S. Maritime Administration), “The Impact of Bilateral Shipping Agreements in the U.S. Liner Trades” (Washington: GPO. 1979)Google Scholar. On the other hand, according to the Dept. of Justice, “A price discriminating cartel will set rates according to the elasticity of demand for its product.” Dept. of Justice, “Analysis of the Booz, Allen, and Hamilton Study of Ocean Freight Rate Discrimination for the House Committee on Merchant Marine and Fisheries,” in Omnibus Maritime Bill, Hearings, p. 202Google Scholar. See also Dept. of Justice, Regulated Ocean Shipping Industry, esp. pp. 209–15 and 240–56. For the views of shippers see “Written Testimony of the Chemical Manufacturers Association Submitted to the Subcommittee on Monopolies and Commercial Law, U.S. House of Representatives,” for the 18 May 1983 Hearing Record on H.R. 1878, Shipping Act of 1983.

57. Directorships link Hong Kong & Shanghai Bank to Anthony Gibb U.K., British Petroleum, Swires, Eastern Asia, Jardine Matheson, and National Westminster Bank U.K. The Hong Kong & Shanghai Bank owns one-half of Y. K. Pao's WorldWide, owner of 16m dwt. registered in Liberia. Interestingly, Hong Kong owners have established a close relationship to British Ship-builders; see “British Yards Tap More Hong Business,” Fairplay, 16 July 1981Google Scholar. Japan is either the primary or leading consumer of iron ore (40% of world production), grain (17%), and coal (48%), and a leading importer of bauxite/alumina. It consumes 11% of world oil production. See UNCTAD, “Maritime Transport of Hydrocarbons,” TD/222/Supp. 3 (Geneva, 1980), pp. 8–11Google Scholar. Through the shikumisen system Japanese shipowners and banks make an agreement with a foreign owner, usually in Hong Kong, to order and purchase a ship built and financed in Japan. The ship is then chartered back to the Japanese owner, allowing the Japanese to tap foreign sources of capital while simultaneously taking advantage of focs. See Seatrade, , Far East Shipping 1980/81 (Colchester: Seatrade, 1981).Google Scholar

58. West German beneficially owned tanker fleet: 6.9m dwt.; bulk fleet: 4.9m dwt. French tanker fleet: 15.3m dwt.; bulk fleet: 2.7m dwt. These figures (for 1980) include beneficially owned foreign-flag tonnage but omit tonnage owned by U.S. or British oil companies and registered in West Germany or France. See UNCTAD, Review of Maritime Transport, 1980, TD/B/C/4/222 (Geneva, 1981).Google Scholar

59. Between 1965 and 1978 the participation of LDCs in world trade remained approximately the same, but the LDC share of all shipping tonnage increased from 7 to 10.8%, and from 8.7 to 18.4% in liner shipping. UNCTAD, Review, pp. 7, 17.Google Scholar

60. UNCTAD, “Repercussions of Phasing out Open Registries,” TD/B/C/AC. 1.5 (Geneva, 1979), p. 15.Google Scholar

61. See especially UNCTAD, “Action on the Question of Open Registry Fleets,” TD/B/C.4/220 (Geneva, 1981), p. 11.Google Scholar

62. “I would say offhandedly that there is a greater chance that the UNCTAD Shipping Division will be phased out … than the Liberian and Panamanian fleets.” Statement by Philip Loree (Chairman, FACS) in U.S. Congress, House, Subcommittee on Marine, Merchant and Fisheries, , Omnibus Maritime Bill, Part 3: Hearings, 96th Cong., 2d sess., 3–4 03 1980, p. 158.Google Scholar

63. In contrast to liner sector strategy the UNCTAD secretariat calls for joint ventures with developed countries. On the limitations of the Group of 77 see Ramsay, Robert, “UNCTAD's Failures,” International Organization 38 (Spring 1984)CrossRefGoogle Scholar. Since 1983 the United States has participated in discussion at Geneva limited to consideration of “problems” of foc operations.

64. Given the reservations entered by the EEC, estimates run from 10 to 25%. For the low estimate see Federation of American-Controlled Shipping, FACS Forum, June 1983. For the high estimate see Juda, , The UNCTAD Liner Code, pp. 148–89.Google Scholar

65. Often these are public relations exercises, sponsored indirectly or directly by shipping firms in search of government support. For an alternative argument to mine see Juda, , The UNCTAD Liner Code, esp. chap. 2.Google Scholar

66. Japan, actually increased to over 50% if chartered tonnage is included; U.K. imports declined from 31 to 29% and exports from 47 to 37% between 1970 and 1978; West Germany, sharp decline from 26 to 18% of imports and 39 to 27% of exports between 1969 and 1975; France, decline from 48% of total trade by weight to 31% between 1966 and 1978. These figures are taken from the U.S. Dept. of Commerce, Maritime Administration, Office of Policy and Planning, The Maritime Aids of the Six Major Maritime Nations (Washington: GPO, 1977), pp. 1–15Google Scholar; Lloyds List, 18 January 1980; U.S. Dept. of Commerce, Maritime Subsidies (various years) and U.K. Dept. of Trade and Industry, Trade and Industry, 6 July 1979.

67. Between 1969 and 1970 the ratio of goods exported to total sales increased from 9 to 17%. The import ratio increased from 9 to 21%. U.S. Dept. of Commerce, International Economic Indicators (various years).

68. See note 54 above.

69. Seaward, Nick et al. , “The Eternal Debate–Independents Gain Ground,” Seatrade, 10 1980, p. 109Google Scholar. See also Gibney, R. F., “Outsiders Fuel Market Crisis,” Seatrade, 04 1983, pp. 97–103.Google Scholar

70. At the same time the Dept. of Justice and shippers have renewed their opposition to conference practices. See, for example, King, Ralph, “Paul O'Leary Opens an Old Wound,” American Shipper 25 (07 1983), pp. 40–41.Google Scholar

71. Shippers are becoming more directly involved in maritime affairs, including legislative activity. Legislation finally passed in early 1984 produced some reforms favorable to conference activities, including permission to establish intermodal freight rates. However, the basis of shipper support has been strong rights of independent action. On the direct involvement of shippers in the legislative process see King, Ralph Jr., “National Industrial Traffic League Forms Maritime Advisory Group,” American Shipper 26 (02 1984).Google Scholar

72. Quoted in Fairplay International Shipping Weekly, 16 July 1981, p. 12.Google Scholar

73. The EEC has been sharply divided over shipping policy. Agreement was reached largely due to the commercial threat from the Soviet Union and the failure of the United States to oppose Third World measures. But in the long run a common policy will have serious consequences for the smaller, liberal shipping nations of the Community. See Cafruny, , “Ruling the Waves,” esp. chaps. 6 and 7.Google Scholar

74. Negotiations are taking place between the EEC and the Consultative Shipping Group (CSG), representing Western Europe, and the United States. After 2 years of negotiation, the impasse remains as I write in August 1984.

75. Figures taken from the Committee of National Shipowners Associations of the EEC, EEC Shipping: Facts and Figures (Brussels, November 1981)Google Scholar. By weight, U.S. trade represents about 12% of world trade (down from 15% in 1950). However, by value, the more relevant measure for liner shipping, the figure is considerably higher, perhaps as high as 66% of world trade. See U.S. Dept. of Commerce, Statistical Summary of Seaborne Commerce to and from the United States, 1977 (Washington: GPO, 1978), p. 4.Google Scholar

76. Cowhey, and Long, , “Testing Theories of Regime Change,”Google Scholar and Keohane, Robert and Nye, Joseph, Power and Interdependence (Boston: Little, Brown, 1977), esp. pp. 38–42.Google Scholar

77. On the shipbuilding crisis generally see Strange, Susan, “The Management of Surplus Capacity or How Does Theory Stand up to Protectionism 1970s Style?” International Organization 33 (Summer 1979)CrossRefGoogle Scholar. I follow Strange's insight, based on analysis of textiles, steel, and shipbuilding, that the role of the United States is crucial to the political economy of various sectors.

78. There is a reciprocal cause-effect relationship between politics and surplus capacity. According to the UNCTAD secretariat, focs are contributing to “one of the most serious world-wide misallocations of capital investment in recent history.” UNCTAD, “Action on the Question,” p. 11Google Scholar. In 1968 British shipowners, taking advantage of substantial government assistance, invested 15% of gross fixed investment by British manufacturing. See Rochdale Report, p. 39.

79. Other significant technological advances include “roll-on–roll-off” carriers. This article has focused on containers, because of their special political importance: they were introduced as a response to political and economic conflicts, and those same conflicts have affected their efficiency. Other “flexible systems” might be equally or more desirable. See Dick, H. W., “Containerization and Liner Conferences: A Polemic,” Maritime Policy and Management 10 (07–09 1983).CrossRefGoogle Scholar

80. Statement of Ian Sproat, U.K. Minister of Trade, quoted in Journal of Commerce, 23 March 1983, p. B1.Google Scholar

81. Interviews conducted in Hamburg and London (during 1980 and 1983). For a detailed description of the combatants in “guerilla warfare among Washington Lobbies” see Beargie, Tony, “Maritime Lobbyists Battle for Tax Dollars,” American Shipper 26 (02 1984).Google Scholar

82. Katzenstein, Peter J., “Introduction: Domestic and International Forces and Strategies of Foreign Economic Policy,” in Katzenstein, , ed., Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States (Madison: University of Wisconsin Press, 1978), p. 11.Google Scholar

83. “Free trade doctrine, in practice, is a more subtle form of mercantilism.” Robinson, Joan, “What Are the Questions?” in What Are the Questions and Other Essays (White Plains, N.Y.: Sharpe, 1980), p. 29.Google Scholar

84. The phrase is borrowed from Gambino, Antonio, “Atlantic vs. Pacific?” L'Expresso, 6 11 1983.Google Scholar