Everything grows

After a brief summer hiatus for the past week or two, I’m back with a meditation on the interconnectedness of the world, especially in the realm of trade. In the process, I’ll be recommending 2 books: A Splendid Exchange which deals with the history of trade, and Beneath the United States which examines US-Latin American relations throughout history. They are both excellent books in their entirety – in fact, I used to read sections of Beneath the United States for fun, until I lent it to a student who never returned it. But for this post I am going to focus on their discussion of the history and use of the Panama Canal, mostly because this tiny isthmus is in the news right now, causing effects far beyond its borders.


First, some history from Beneath the United States. Building a canal across the Isthmus of Panama was a concern of the US as early as 1787 (Beneath the United States, 6). Several presidential administrations had investigated canal routes through Central America, with Panama being the first choice due to its narrowness and therefore ease of construction. Running a close second was a route through Nicaragua, which had the benefit of having a navigable river and lake bisecting most of the country already (152-153). Still, several treaties to purchase land from either Central American country and begin building a canal had been proposed and rejected (153).

It wasn’t until 1879 that a land grant to begin construction on a canal in Panama was given to a French naval officer, who sold the concession to a French company – the same company that had recently built the crucially important Suez Canal in the Middle East (91). The grant was given by Colombia, since Panama was a province of that country. Digging began to much fanfare, and then the company went bankrupt in 1889 (159). After financial ruin and a lawsuit by former investors, the Panama Canal Company tried to recover its losses by lobbying the US government to purchase what was left of their assets: “a partially dug canal, the Panama railway, some rusting machinery, and, most important, a concession from the Colombian government” (159). The sale finally occurred in 1902 (162), but Colombia dug in their heels on the transfer of the commission to the United States. What to do? The US had everything they needed except for permission to continue digging, so they turned to those who would give them that permission, and with American help, Panama declared independence from Colombia at the end of 1904 (167). Construction began again the following year (170).


What does this have to do with current affairs? I think a lot of people (and I know I was one of them before I read A Splendid Exchange) tend to think of trade by ship as something from Columbus’ time, sending spices and cloth and exotic foods from Asia to Europe and between the Old and New Worlds. I guess I thought – we’ve moved past ocean transport! We have airplanes, for crying out loud! But despite all our technological advances, seaborne commerce is still the most effective way to transport goods – especially oil (A Splendid Exchange, 367). And among the seven maritime “chokepoints” in the world – where ships and therefore goods pass through very narrow passages which are crucial to control to ensure smooth transport – is, you guessed it, the Panama Canal (368). Interestingly enough, the Panama Canal is a man-made chokepoint, and the only other one in existence is the Suez Canal, built by the original designers of the Panama Canal. 400,000 barrels of oil pass through the Panama Canal every DAY (368), so it’s important that the Canal continue functioning, and functioning well, which includes keeping up with current maritime technology. Which includes expanding the Canal to accommodate larger ships.


The drive towards larger and larger ships began in the 1950s and was spurred by the advent of machine loading/unloading of ships. Since machines can move larger containers than humans can, you need larger ships to carry these larger containers (Progress and Pollution, A471). 16% of the world’s container fleet is now too large to pass through the Panama Canal, so Panama is building a third set of locks that can accommodate larger ships, to be completed by 2015 (A471). West Coast ports think this is awesome, since most already have 50-foot deep harbors in which these large ships can dock, but ports to the east of the Panama Canal don’t, so there is a scramble to enlarge East Coast ports so that they too can benefit from expanded trade (A471).

It isn’t just the ports either. Once these large containers get on land, they have to go somewhere. I don’t gas up my car at a port, after all. So we’re talking railroads that can carry double-stacked containers, for example (Expanded Panama Canal, 36). We’re talking improving and widening roads (37). Effects that go far beyond Panama itself. It just fascinates me that a tiny little waterway built over 100 years ago can still create so much change and growth in the world.


Anyway. Very good books, if you are interested in trade and history, especially as it relates to Latin America. Citations below. Comments welcome!


Bernstein, William J. A Splendid Exchange: How Trade Shaped the World. Atlantic Monthly Press, 2008.
Hricko, Andrea. “PROGRESS & POLLUTION PORT CITIES PREPARE For The PANAMA CANAL EXPANSION.” Environmental Health Perspectives 120.12 (2012): A 470-A 473.Academic Search Complete. Web. 21 July 2013.
Krizner, Ken. “Expanded Panama Canal Puts Northeast Ports In Line For New Business.” World Trade: WT100 25.4 (2012): 34. MasterFILE Complete. Web. 21 July 2013.
Schoultz, Lars. Beneath the United States: A History of US Policy Toward Latin America. Harvard University Press, 1998.

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