Outside the Box: How Globalization Changed from Moving Stuff to Spreading Ideas

by Marc Levinson

From the acclaimed author of The Box , a new history of globalization that shows us how to navigate its future

Globalization has profoundly shaped the world we live in, yet its rise was neither inevitable nor planned. It is also one of the most contentious issues of our time. While it may have made goods less expensive, it has also sent massive flows of money across borders and shaken the global balance of power. Outside the Box offers a fresh and lively history of globalization, showing how it has evolved over two centuries in response to changes in demographics, technology, and consumer tastes.

Marc Levinson, the acclaimed author of The Box , tells the story of globalization through the people who eliminated barriers and pursued new ways of doing business. He shows how the nature of globalization changed dramatically in the 1980s with the creation of long-distance value chains. This new type of economic relationship shifted manufacturing to Asia, destroying millions of jobs and devastating industrial centers in North America, Europe, and Japan. Levinson describes how improvements in transportation, communications, and computing made international value chains possible, but how globalization was taken too far because of large government subsidies and the systematic misjudgment of risk by businesses. As companies began to account properly for the risks of globalization, cross-border investment fell sharply and foreign trade lagged long before Donald Trump became president and the coronavirus disrupted business around the world.

In Outside the Box , Levinson explains that globalization is entering a new era in which moving stuff will matter much less than moving services, information, and ideas.

Genres: Economics, Business, History, Nonfiction, Audiobook, Technology, China

288 pages, Hardcover

Published September 15, 2020

About the author

Marc Levinson is an independent historian, economist, and author. He spent many years as a journalist, including a stint as finance and economics editor of The Economist. He later worked as an economist at JP Morgan Chase, managed a staff advising Congress on transportation and industry issues at the Congressional Research Service, and served as senior fellow for international business at the Council on Foreign Relations.

Reviews

[Paul Whitla · Rating 5 out of 5]

In 2006 Mark Levinson wrote ‘the box’ one of the best and most important books explaining the factors that led to the development of the global economy, he has followed it up with another superb piece of work that looks at globalisation up to the present day and how and why it has developed in the way that it has. As a student and then a teacher of globalisation issues for the past 35 years I can say this is one of the finest books that I have read on the subject. A comprehensive yet concise history of the phenomenon, looking back through four phases of globalisation namely;

1. From the late 1800’s to the First World War, when trade flourished due to changing understanding of the benefits of trade and improvements in shipping and communications (one of the few notable omissions from the book though is Adam Smith’s work not mentioned with all credit going to David Ricardo)
2. From post WWII through to the 1980’s when containerisation and falling trade barriers led to significant multinational firms expanding their operations worldwide.
3. From the late 1980’s to the financial crisis when supply chains were extended, the internet enabled complex webs of component Transhipments and national ownership of production became difficult to assess.
4. Post financial crisis where the role of globalized services has become significantly more important as value embedded in manufacturing has decreased and political and logistical limitations of mass movement of manufactured products have emerged (compounded by Covid).

Levinson is a pre-eminent business historian and the work represents the best of that tradition, avoiding unnecessary hyperbole (so common in many other globalisation literature) and not pushing any prejudicial slant on the material. One of the things that did come through to me on reading the book is just how much government actions have been effective in determining the course of globalisation, the idea that what has been achieved is due to the unrelenting and unstoppable certitude of free markets is patently demonstrated as untrue.

If I had one quibble with the book it would lie with publishers and marketers who, as they have a tendency to do, are not completely open with respect to the focus of the book. The British reviewer Mark Kermode likes to describe one of his favorite movies as ‘having a lot of Shawshank before the redemption’, similarly here there is a lot of ‘box’ before we get outside of it. In fact only the final ten pages of the book deal with stage 4 globalisation (a process still ongoing and with a degree of uncertainty as to how it will develop) yet this is what has been most prevalent in the book’s promotion.

This book is an important indeed necessary contribution to anyone interested in understanding the history of globalisation and how we got to where we are today. I I’ll strongly recommend it to my own undergraduate and postgraduate students of international business.

[Charles · Rating 3 out of 5]

The global history of globalization from the first wave to the present third, with a prediction on the impending fourth wave.


Custom, turnkey, reprogrammable, automated assembly lines built for all types of industrial processes are available for all stages of the manufacturing process, eliminating once-high-paid manufacturing labor and limiting the use of imported components.

My audiobook version was about 9 hours long. It had a US 2020 copyright. A dead-tree version would be 288 pages.

Marc Levinson is an economist and business journalist. He has written several books on finance and economics. The last book read by the author was The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger (my review).

This book was an intermediate work. However, the author goes a long way towards making transportation, economic, and financial history into a good read, if that's your idea of a good time. It's recommended to have some exposure to economics and global history before reading this book.

”Any change in technology leads almost inevitably to an improvement in the welfare of some and to a deterioration in that of others.” --Joel Mokyt

TL;DR

The "Fourth Globalization" renders national borders immaterial, mostly. For some countries, the "Third Globalization" has taken them into the First World. However, it has also created new inequalities. Finally, the worldwide supply chains, which have recently become international risk factors, are now being re-crafted into the "Fourth Globalization" Value Chains that invisibly cross borders to reach customers.

Worth reading if you have an interest in the globalized economy, particularly the tension between companies (and now corporations) and governments protecting their constituents and tax bases in the face of technological change spurred by consumer demand for the newest, high-quality, lowest-cost, goods and services.

The Review

Levinson wrote this book to describe the history of trade globalization. It’s a book about goods and services, money, and technology in the global world economy. It's a world history in which the technologies of resource extraction, transportation, and manufacturing collide with politics and taxation and the consumption of goods and services.

The book was organized chronologically. Levinson takes the reader from the early days of "The Dismal Science" (economics) applied to 18th-century world trade to the present.

I ear-read this book, always a mistake when chasing technical details around in my head. In general, the prose was good. Levinson's training as a journalist is apparent. It was more approachable than the great majority of economic histories I've read.

Still, this was not "light" reading listening. The presentation was very even throughout in its level of detail. However, it assumed a basic understanding of macroeconomics, late 20th-century and early 21st-century history, and the effects of trade on the economy. Economic terms are used without definition. Asian geography is frequently referenced. It could be technically dense in places, in a manufacturing, transportation and financial technology sense.

Having ear-read the book, I can’t comment on the Notes, Index, or any use of maps and graphs. From the business/tech nature of the narrative, the book would have benefited from them.

There have been three “waves” of international globalization, with the third winding down and a fourth wave just beginning. Each Wave is a business (companies and now corporations) seeking to make and sell goods and services at a competitive advantage. Governments and their consuming populations have to "catch up" to the somewhat rapid changes. In each Wave of globalization of the world economy, in some countries, companies failed, industries collapsed, the livelihoods of workers disappeared, business and political careers failed, as industries relocated, resulting in local impoverishment, hopefully at least only temporarily. In addition, the modern fortunes of whole regions became victims of their geography and both political and financial crises that they had previously been insulated from arrived unannounced. Still, many, but not all, of the polities receiving the migrating industries were lifted out of poverty. South Korea was a success story. Paraguay a failure.

The 2nd Wave began after World War II, in an attempt to stabilize the severely damaged world economies, excluding North and South America. A drastic reduction in transportation costs fueled the 2nd Wave, which ended around 2000. Manufacturing and assembly of goods migrated to low-wage polities, steeply decreasing the cost of goods worldwide. Many folks confuse this 2nd Wave with the present.

The 3rd Wave was from about 2000 to the present. Digital transformation, financial deregulation, worldwide connectivity, and newly emerging economies fueled the 3rd Wave. "Dirty" (environmentally harmful) industries were exported to polities with less stringent laws. Economic disparities struck both the winning and the losing demographics of the 2nd Wave. For example, Western manufacturing shrank again, while Chinese manufacturing also shrank, while Vietnamese manufacturing grew. Particularly problematic in the 3rd Wave were globalized financial markets. A bank collapse in Asia could easily trigger a recession in Europe or North America.

Any globalization wave includes job insecurity, financial instability, and geopolitical tensions; new intergovernmental treaties; government policy reforms; the need for workforce reskilling; environmental sustainability; and anti-slavery and child labor (Fair Labor) strategies as solutions. Towards the end of the 3rd Wave, workers in the wealthy nations of the West and Asia have led to a revival of nationalism, and the accompanying autocratic leadership around the world as they seek to insulate themselves from the adverse effects, while benefitting from the advantages. (That's hard to do, while maintaining a low cost of goods and services along with full employment.)

A key switch between the 3rd and 4th Waves is the corporations' segueing from supporting Supply Chains to Value Chains. A 3rd Wave Supply Chain was built for efficiency and cost-effectiveness. It was the processes for taking a product from raw materials to a customer sale. It was dependent on geography. A Value Chain optimizes operations to achieve a competitive advantage. It's independent of geography. There is a difference in focus. A value chain focuses on creating value at each stage of a product’s lifecycle. Insurance, Entertainment Media, and software like that enabling Smart Phones and their latest features are examples of products in the Value Chain, including goods and services. A Supply Chain ensures efficient movement of goods while minimizing costs. Soybeans, petroleum, engine blocks, solar panels, and Smart Phone handsets are examples of Supply Chain goods.

The 4th Wave is a largely corporate response to regionalism (closing borders, tariffs, and cost-cutting) resorted to by governments in the terminal stages of the 3rd Wave. Services and Intellectual Property (IP) that leverage value chains are globalized. Highly automated, regional fabrication processes manufacture goods with minimal imports, and many high-value goods include the Value Chain's software as a significant component of their final cost to ensure corporate profits. The 4th Wave will still be disruptive; it’s just that manufacturing will no longer be affected, because it will require only a small fraction of current labor. Economies that have not reached Western standards will be relegated to resource extraction, such as farming and mining, with the option of some horticultural or metallurgical processing.

I noted that Levenson didn't mention the use of Artificial Intelligence in the book. He mentions the international aspect of software, and its originating "coders". This book, written in 2020, should mention AI-generated IP as a form of disenfranchisement affecting folks working in the entertainment and software industries.

Levenson, also dwells too long on the transportation technology described in his earlier book The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. While the introduction of containerization was important to the 2nd and 3rd waves, less of the book could have been dedicated to it. More explanation should have gone into the gnarly problem of globalized financial markets. Their problems were less predictable, much quicker to manifest themselves, and can quickly reverberate around the globe

This book was a story of companies, corporations, governments, labor, and consumer contention. Its global historical focus showed the evolution of supply chains from their primitive beginnings to their modern incarnation. Technology that reduced the cost of imports and exports lifted the fortunes of whole populations through trial and error over 250 years. However, it is also depressing that the fortunes of some populations, at least temporarily, that were affected by changes in traditional trading patterns and the industries that supported them, which had existed for decades. The effects of globalization have been mixed for governments, particularly the body politic. However, globalization has generally benefited the more affluent members of countries in the global North. In the 21st century, without radical political intervention, some populations in the global South will be left behind.

This is a worthwhile read for someone with a background in modern global history and an interest in international trade. Note that the book is 5 years old. Its narrative ends during the first Trump administration in the US. A lot has changed since then. However, you can see your way to the present through this book. Despite being somewhat technical, the book clearly describes the long-term changes in global trade driven by technological advances.

By reading it, familiarity with supply chains, value chains, and globalization, and how your national politicians are looking backward and not forwards shall ensue. You'll also pull your child out of university, where they're studying Business Administration, and apprentice them to a plumber or an electrician.

[Marks54 · Rating 4 out of 5]

This is a follow up on the history of globalization by the author of “The Box” - a history of containerized shipping. The book is well written and researched. The book is most valuable in breaking out and explaining the multiple phases of globalization that have occurred since the 1970s showing what each phase entailed and who benefitted from it. The differences across the history are informative and not obvious. Why did China benefit in later phases but not in earlier one? Why did globalization return so differently after the 2008 global recession? These events have been well covered and do not offer a lot of surprises, although there are some.

In his earlier work, “The Box” Levinson provided details on the rise of containerized and intermodal shipping that were more surprising - at least to me. The current book continues this story and shows the rise of the current more concentrated container shipping industry, with lots of detail on the growth of giants such as the Danish firm Maersk. This was one of the highlights of the book.

This is a nice follow-up to “The Box” and well worth reading if one is interested in the business.

[Soumaya Keynes · Rating 5 out of 5]

A clear history of globalisation, with a lot of emphasis on shipping. A great intro for those interested in global trade.

[Lars E. · Rating 3 out of 5]

Enjoyable read, but mostly stuff I already knew about globalization. More of a refinement of insights then a source of new information. The stories about Maresk were interesting at least.

[Samuel · Rating 3 out of 5]

Nothing as novel as his earlier books, but really good summary of past sixty years of globalization and related policies.

[Myles · Rating 4 out of 5]

Increasing friction between trading nations makes Outside the Box required reading for policymakers, business executives, and investors alike.

Author Marc Levinson breaks down the history of globalization into four periods, including a third period where labour advantages in China and Southeast Asia are waning and a fourth period where the internationalization of services is picking up steam.

Today’s trading environment is characterized by older consumers who want less “stuff” and greater services, and heightened automation less subject to the risks and rewards of global value chains.

Can Apple assemble iPhones in the United States? Probably, but it’s unlikely to do America much good if the valuable components for those smartphones need to be imported from Taiwan, South Korea, and elsewhere.

For me the most shocking revelations in this book were the hidden subsidies to the global transportation systems and global value chains which made freight appear much cheaper than it actually was.

Jurisdictions across the world fought to save jobs in shipyards building newer and bigger freighters to carry fewer and fewer goods across the seas over the past 15 years. And build out more expensive deep ports, shipping terminals, and trucking hubs.

China, South Korea, Malaysia, and other ports of call spent billions making their ports big enough and deep enough to receive the super-freighters and buildup of way over-capacity in global shipping.

Today, many of those ports have been licensed to private operators, and the shipping industry itself has gone through a painful consolidation. The S. Korean government was forced to convert huge loans into equity stakes of no real value as ships ride the high seas half empty.

With the advent of artificial intelligence and 3D printing we are looking at an era where more of the things we actually desire can be produced if not locally, then regionally.

[Casey · Rating 5 out of 5]

A great book, providing an overview of globalization and a prediction of its future. The author, economist and journalist Marc Levinson, gives a detailed history of the globalized economy and provides recommendations on the way ahead. Taking an approach similar to history’s division of the Industrial Revolution, Levinson divides up globalization into unique phases. The first was the European led Globalization up until WWI, the second was the U.S. led post-WWII global ‘boom,’ while the third was the early 21st century expansion of China. Levinson explains the themes of each of these phases, pulling out the common trends and the constants unique to each economic situation. He doesn’t make a case for the positive or negative nature of globalization (treating it more as an “is”). But he does point out that detractors of globalization vary, again depending on the contemporary economic conditions. He ends with a prediction for the just started fourth globalization, seeing it as more service and ideas based rather than dominated by the goods and manufacturing of previous periods. Highly recommended for anyone interested in globalization and its implications for domestic prosperity.

[Kes · Rating 5 out of 5]

Very easy to read book. Goes through a history of globalisation with an emphasis on trade in physical goods. He says there are three globalisations, marked by different things. The third is trade in physical goods. The fourth (current) is in services/ideas - and to support that needs governments to enact a strong education policy with social safety nets. (On this point, I wondered if he’s looked at East Asian countries and their emphasis on education.)

I liked the focus on government policy - “no country has ever climbed from poverty to prosperity by leaving it to market forces.” And then he talks about the protectionist measures that helped make Britain a global superpower in the Industrial Revolution; and how US did the same thing.

One other point that struck me is that “as value chains spread, global corporations became powerful enough to create comparative advantage where none was obvious.” He mentions the case of Intel in Costa Rica, which helped create engineers. I googled and here’s an ILO link: https://www.ilo.org/media/422016/down...

It’s a good book; the ideas aren’t new but I appreciated the evidence / new nuances that he provided.

[J · Rating 3 out of 5]

Review of the history of globalization, starting from Daniel Ricardo (Doughnut Economics has a more thorough review of early free trade/comparative advantage economists), 1970s oil crisis leading to inflation but also the globalization of banking as oil rich nations sought an outlet for their sudden stash of US currency and then subsequent mass unemployment from inflation, impact of WWII and Vietnam war on the growth of trucking, containerization and eventually shipping containerization, how government incentives for ship manufacturers created moral hazards for investors and a drastic oversupply in tonnage of shipping capacity, why return shipping to China is so cheap (near free). The idea of the value chain vs the supply chain, how regionalisation has increasingly broken this chain in recent years. Short on specific detail and future predictions. Argues that balance of goods is no longer an accurate measure due to the value chain + the number of local components used in assembled goods vs intermediate goods from developed countries then being assembled in developing countries.

[John Kaye · Rating 3 out of 5]

A nicely written review of the progress of globalisation over the years: sufficiently synoptic, and makes lots of good points that might often get lost. But it desperately nnded tables and charts: trying to cram lots of good data into sentences means that the impact is lost: you plough on without the opportunity to stop and think, and make comparisons. It's a sthough the author doesn't have any confidence in his analysis and doesn't want you to question stuff. But the thesis is not hard, and better data hndling and presentation would have much improved the book. Also it felt a bit rushed at the end: great job in getting it out so fast with references to the pandemic, but proabably not a good idea for the book's longevity: we have no idea what the world of trade and services will look like in a couple of years.

[Mati 'Matimajczyta' · Rating 3 out of 5]

This book is somewhat a continuation of The Box, which I really enjoyed. The first book covered topics that fascinate me, showing how different elements evolved and transformed the transport business. Here, the author moves beyond that format—still tied to the main theme, but broadening the perspective.
Although the book is detailed and rich in historical context, I felt a bit lost at times. Many parts reminded me of other publications, making it less engaging than its predecessor. Perhaps if I hadn’t read The Box, I wouldn’t feel this way, but in comparison, I can’t help but feel disappointed.

[Darren Van Soye · Rating 4 out of 5]

Not what I expected

I was hoping for more. More about services/the future and less about shipping material goods. This was the promise of the book summary. But, it wasn't until the last chapter that the author started to dive into this topics. What I would really like to see is a more speculative book about the the possible scenarios that we are likely to see in the next two or three decades in terms of trade - both physical and digital. Oh well, perhaps the author's next book will cover this...

[Minnie Song · Rating 3 out of 5]

The first book for my summer bookclub😋
Rating is more like a 3.5
The analysis wasn’t like mind-blowing but it was personally v meaningful bc I could get a recap on the ups and downs of the modern economy + could see how impactful policies, IOs, and academic work can be
So made me think widen my career prospects
I had to take breaks after every few chapters. Not a leisurely read…for me

[Kevin Postlewaite · Rating 4 out of 5]

Interesting enough, the most important thing I learned was about the decline in global trade in goods even prior to COVID. A really good history of foreign trade, takes a stab at how developed economies should react that mostly fails.

[Carter · Rating 5 out of 5]

The relationship between money, monetary theory and policy, and international container shipping is discussed briefly in this book. The elements, aren't really tied together, but it supplies some basic intuition.

[John Crippen · Rating 3 out of 5]

Great review of three different waves of globalization, through the lens of shipping and trade. Plus, you learn a lot about containerization! Levinson’s analysis of the current regionalization of trade complements Zeihan’s predictions, FWIW.

[Nate Campbell · Rating 4 out of 5]

Good book about the recent stage of globalization from late 80's & 90's to the present. Pretty comprehensive, with very interesting viewpoint from shipping containers as a measure of global trade. Pretty objective take on world economic events.

[Steven Beningo · Rating 4 out of 5]

A very good look at the history and current state of globalization.

[Kllykl · Rating 3 out of 5]

Rather general discussion of globalisation, supply chains. Nothing mind blowing or shocking.

The first few chapters on the background of containerisation is mildly interesting.

[Iván · Rating 3 out of 5]

Un interesante libro sobre la globalización.

[Viktor · Rating 4 out of 5]

En noggrann genomgång av globalisering i fyra steg.

[Guido · Rating 5 out of 5]

I am willing to bet that if you enjoy the book Sapiens by Yuval Noah Harari, you’ll love this book as well because it explains the history of trade and walks you to the present globalization issues.

[Jack · Rating 3 out of 5]

A decent recent history of globalisation in various countries and cases.

[Flor · Rating 4 out of 5]

Entertaining and knowledgeable. I learned a lot and it wasn't boring.
I hope to reread this in the future.
I will also try other books from this author.

[Justin J. · Rating 4 out of 5]

A much better organized book than his first book The Box. This was a strong effort.

[Saravana Sastha Kumar · Rating 4 out of 5]

A refreshing perspective on globalization and a worthy sequel to the great book 'The Box'

[Sameer · Rating 4 out of 5]

Good economic history, a little weak on the current state and future. Written pre Covid, making it a bit outdated already

[Bill Hall · Rating 4 out of 5]

Outside the Box by Marc Levinson is an excellent history of globalization, particularly recent developments. The theme is that globalization has been driven not so much by "market" dynamics as by decisions taken by various governments- decisions admittedly influenced by the changes in technology that created the permissive space for government intervention. The author concluded that globalization has entered a new phase of limited growth, perhaps even shrinkage. Outside the Box is very well written, and left me feeling that I can't wait for the sequel!

[Peter · Rating 4 out of 5]

A good overview of where we are with globalisation, and where it might be going.