The story of global trade starts with a box

The Box: How the Shipping Container Made the world Smaller and the World Economy Bigger is a great history of the development of the shipping container. While written in 2006, Marc Levinson's work is a good explanation for why world trade has exploded over the last few decades. The cost of shipping has declined significantly and the time it takes to move any goods from one country to another has fallen like a stone. The coordination of shipping from truck, rail and ship has made manufacturing easier in any part of the world. The movement to just in time inventory management and the use of intermediary manufacturing has all been made possible by the use of container shipping. This is the story of true disruptive innovation which has changed the way trade is conducted.Shipping is a system not just a single mode of transport.

Trade cost reduction has changed the world, but the savings have now plateaued. The next wave of increased trade will have to come from governments that want trade to occur. That is why the Doha trade talks are so important and need to be jump-started.

The Age of Unthinkable - Complexity is upon us

The Age of the Unthinkable: Why the New World Disorder Constantly Surprises Us and What We can Do About It by Joshua Ramo is the Black Swan tome for politics. The Black Swan events is that we will constantly be surprised by the totally unexpected. These changes could have radical impact on markets. In this book, Ramo argues that complexity is upon us and that we will be surprised by the what has not be imagined or anticipated.

The book suffers from the problem of other risk books that talk about Black Swans. We will be surprised and change will come from unexpected places. We should be prepared for change and the world is a complex place, but there is no real road map on how to best be prepared for change and surprise. Look for the unexpected, but by definition we will have a hard time finding it. The approaches of the past will not work and simple truisms are not often useful, but we have known this for centuries. Few expected WWI. No one expected the fall of the USSR or the British Empire. It is true that the idea of nation-states as the foundation for change is outmoded, but our ability to explain the behavior of nation-states was always very poor.

Complexity surrounds us. The unthinkable is possible, but our ability to deal with this change is still in a state of flux.