Dispatches

Hub Dialogue: Why the future of commerce and geopolitics will flow through oceans

In this June 30, 2021 file photo a container ship leaves the Port of New York and New Jersey in Elizabeth, N.J. Seth Wenig/AP Photo.

In this Hub Dialogue, The Hub’s editor-at-large Sean Speer speaks to Bruce Jones, the director and senior fellow in the Project on International Order and Strategy of the Foreign Policy program at the Brookings Institution.

This conversation has been revised and edited for length and clarity.

Sean Speer

Today’s Hub Dialogue is with Bruce Jones from the Brookings Institution who has recently published a new book, To Rule the Waves: How Control of the World’s Oceans Shapes the Fate of the Superpowers.

The book, which has already earned considerable praise from people like General David Petreaus and noted writer Daniel Yergin, outlines the case for why the future of commerce and geopolitics will be rooted in oceans. It’s compelling read that has tremendous relevance for Canada as an export country surrounded by oceans – including the Arctic, where Jones starts his story.

Thanks for joining us, Bruce.

Bruce Jones

My pleasure. Thanks, Sean.

Sean Speer

As a starting point, why did the importance of oceans diminish as a commercial and geopolitical arena? And what factors are causing it to grow once again in the 21st century?

Bruce Jones

I would say that it diminished during the Cold War simply because given the geographical position of the Soviet Union relative to the United States, and as an onshore land power in Europe. It meant that the front lines of geopolitics was necessarily the European landmass. Then, with nuclear weapons, the core threat was in the missile domain. While there was obviously an important US-Soviet naval competition throughout the Cold War, and in particular, nuclear submarine technology and a nuclear ballistic missile submarines as the most survivable part of the nuclear triad, I think it’d be fair to say that the Navy was the third service during the Cold War.

What’s changed in recent decades is the dramatic revolution in bulk shipping, and in particular, containerized shipping, from the 1970s onwards. It began as a trade primarily across the Atlantic, between American and European markets, and eventually expanded to Japan, Korea, Singapore and Hong Kong, and then effectively enabled the rise of China. The dramatic expanse in global trade volumes that has since followed is closely linked to the increasing scale and capacity of containerized shipping. Shipping innovation in effect transformed the globalization. And now in turn, globalization is transforming geopolitics.

Sean Speer

As you just said, to understand the rise of China is to understand oceans as a foundation of a globalized commerce, and the book indeed makes a persuasive case that oceans have been foundational to this modern era of globalization. Yet in so many other analyses of the rise of globalization in the post-Cold War there’s an emphasis on ideas, institutions or other factors. Why do you think there has been a tendency on the part of scholars to neglect the role that oceans and oceanic commerce have played as a driver of globalization?

Bruce Jones

It’s a good question. One I’m not sure I have an answer to other than something that I hinted at the book, which is this irony: while containerization hugely increased the scope of trade, it boosted trade flows so much that it forced a move of ports away from downtowns to suburban locations. That may have reduced their visibility in the minds of opinion leaders and average citizens.

In the heyday of post-World War Two American power, the Port of New York was in Manhattan, and it was present as a visible, daily part of life in Manhattan. Containerization caused that port to start to crumble away. Meanwhile, container traffic increasingly went to Newark, New Jersey. That’s happened in every major city. In downtown hubs, you’ve seen ports shrink while in less densely-populated suburban locations ports have grown to massive scale. The result is that maritime commerce is expanded and yet may be less present in people’s lives.

I suspect that it’s also the case that, in the end, it’s a very quotidian thing. The container boxes are bigger and the ships are bigger, and then they’re a little bit bigger than that, and then they’re a little bit bigger than that, and then they’re a little bit bigger than that. It’s not a major new idea or an institution, but over time, it was, in fact, a revolution.

It seems to me that there are two ways to describe this. Let me make a point about the enormous economic gains from innovation in shipping. I calculate that between the end of the Second World War and today, the change in containerized shipping produce something in the order of a 17,000 percent efficiency increase in transportation by sea. You can’t imagine any other part of the economy where we’ve recorded those kinds of efficiency gains. It effectively meant that by the late 1980s and early 1990s, it had taken the cost of transportation as a factor in competition and reduced it to zero. It is cheaper to send a container full of flat screen TVs from Singapore to New York than it is to drive a van full of flat screen TVs from lower Manhattan to Upper Manhattan on a per unit basis.

Distance stopped to exist as a factor in competition. And that essentially is what enabled China’s economic rise. It is striking when you look back. It’s a quotidian reality that had these dramatic effects. I describe it in the book as a Tsunami—an earthquake in one domain slowly ripples across an ocean and then breaks on a distant shore with dramatic effects.

Here’s another way for your readers to visualize this. The founder of Maersk, Peter Maersk, in the very early 1900s was sailing a cargo ship around the Baltic Sea. His ship could hold the equivalent of around 20 containers worth of goods, and it had a crew of 26. I sailed the world’s largest container ship, the Madrid Maersk, from Shanghai to Singapore in 2019. It had 20,500 containers worth of goods and had a crew of 23. This helps illustrate the phenomenal increase in productivity and efficiency. (And, of course, of labour losses associated with those changes.)

Sean Speer

Let’s talk about the interrelationship between economics and some of these bigger geopolitical trends. The book outlines how the safety and reliability of maritime infrastructure and trade flows actually shapes naval and national security policy. So, when we think of oceans, we shouldn’t think about economics and security issues as separate issues but instead as being inextricably linked. Do you want to just expand on this interrelationship between commerce and security?

Bruce Jones

Yeah. I’d say it’s more complicated to discuss this in the context of the British Royal Navy, but it’s certainly been core to the American Navy’s conception of itself, from the of the Second World War and the end of the Cold War onwards, that one of its core missions is to guarantee the freedom of the seas. What that means specifically is to guarantee the flow of trade and energy goods by sea. We’ve long played that role, keeping the Strait of Hormuz open, patrolling of the high seas. It gets lost sometimes in discussions of American leadership or American power. Critics of the United States say, “Oh well, you’re abusing this or that” and completely missed the fact that one of the most important features of American power is to provide this global good of freedom in the high seas, and the ability to have this flow of trade in energy and other goods. And when you think about it, it’s actually a remarkable thing. Put it this way: The US Navy deploys considerable quantities of power to keep open the flow of trade goods and energy goods into China. China’s rise is enabled by the US Navy in a very direct sense.

I think the challenge now comes that, maybe two decades ago, while the Chinese were very aware of that fact, they were for a while at least willing to free ride on this fact. By the end of the 1990s, there were the beginnings of a deeper concern in China about the country’s reliance on the US Navy to secure the flow of goods into China’s own markets. It’s admittedly an uncomfortable position when you think about it. You rely on somebody else’s navy to securely the flow of goods to your economy.

So you start to see this interest in China to develop its own capacity to protect the flow of trade, at least in its immediate waters including the coastlines in the South China Seas and in the Arctic. What’s happened since then is that China’s understandable drive for the naval capacity to protect its own trade has kicked off a fairly classic insecurity spiral: they don’t trust us, we don’t trust them, so they start to see our defensive moves as offensive and we do the same, and increasingly we are in a naval arms race with China. By about a decade ago, China shifted to seeking a naval capacity beyond their immediate waters and an ability to project power out into the far seas—the broader reaches to the Pacific, the Arctic, and the Indian Ocean. You can have a debate about Chinese intentions, but we don’t know what those intentions are. So, to see a country like China beginning to develop the capacity to project power globally via a blue water Navy is a very significant change in the balance of power and has deep ramifications for the nature of the international order and for geopolitical rivalry. Especially in Asia, but not limited to Asia.

Sean Speer

So, in light of those observations, how should policymakers in Washington, Ottawa, and elsewhere respond to these trends? What, what should they be doing in a world in which oceans are going to be at the center of the geopolitics of globalization for the foreseeable future?

Bruce Jones

I think it’s incumbent on every major country in the west to recognize that we are now going to be in this zone of competition on the world’s oceans. We have become accustomed and habituated to thinking about the oceans as a kind of global commons, we’ve become habituated to a world of relative calm in great power relations. That’s over. We are now in an era of great power rivalry; we are now in a global naval arms race. Those are realities. They’re not future facts. They’re present facts.

The oceans are a critical zone of competition, on resources, on energy, on fishing, on naval activities, on science, you name it. And this is not a game that’s going to be played as a cooperation game. The Chinese and the Russians are not looking to be in a cooperative game. They are competing and moving into an outright rivalry. I think we’ve past a point of no return on that. The West has to take seriously the notion of responding in a major way to China’s naval rise.

I think that Biden’s decision on this new defense agreement with the UK and Australia to build nuclear submarines and invest in other co-production of high technologies is a critically important first step. In the book, I argue for a new naval and computational alliance that straddles the Pacific and the Atlantic as the necessary endpoint. AUKUS is a good first step and I don’t think it’s going to be the last step. Between that and the Quad, and countries like Canada sailing with the Quad, we’ve got the building blocks. But we have to put the oceans front and center in our defense and scientific strategy, as well as in our climate strategy.

We haven’t really touched on that. The oceans are critically important in climate terms.

Sean Speer

You’ve just unpacked the growing intensity of the competition in commercial and geopolitical terms, on the one hand. But of course, on the other hand, oceans are a major driver in the global issue of climate change, which inherently requires cooperation. Is there a path forward for the US, China and others to compete in some certain dimensions, but then cooperate with respect to the role of oceans in climate change?

Bruce Jones

In the book, I point out that it’s always assumed that because climate change has global impacts, it will drive global cooperation. I’m a little bit more skeptical. When you look at the short to medium term impacts of a changing climate, they’re very varied in geography.

Let’s just take an issue close to Canadians’ heart, which is fishing. What we’re seeing is that the melting of the Arctic Sea ice is hugely increasing the productivity of the Arctic fisheries. That’s a big boom to fishing in the Arctic; and the loss of sea ice is opening up that channel for commercial traffic. That is driving competition. The Chinese want a piece of that action, the Russians are in there and they are moving substantial new naval capacity up there. On the other hand, warming waters are reducing fishing stocks in the South China Sea, so, China is pushed ever farther outwards. It’s just a little illustration of the ways in which the near to medium term impacts of a changing climate are not going to be in the mode of shared interests. I think there’ll be in the mode of competitive interests.

The thing I worried about in the book is a scenario I call “come hell and high water.” The geopolitics pushes us into active conflict with China, and given the nature of that rivalry, the lack of trust undermines the capacity to work on climate change as a global issue where we have long-term shared interests, especially because, as I just described we don’t in the short term.

I’ve spent some time thinking about treating climate change less as an issue of global cooperation and more as an issue of arms control. Think about how we handled nuclear weapons with the Soviets. We didn’t trust them. They didn’t trust us. We had totally different interests in the deployment of those weapons. But we did have a sense of a shared desire to avoid totally catastrophic outcomes. We can think about climate change in the same terms. We all do want to avoid totally catastrophic outcomes, and we do all have to join forces on that. Below that though it may not be an issue of cooperation so much as of competition.

Sean Speer

The book is To Rule the Waves: How Control the World’s Oceans Shapes the Future of the Superpowers and I have no doubt that readers will enjoy the book as much as I’ve enjoyed today’s conversation. Bruce, thank you for sharing your insights and good luck with the book.

Bruce Jones

Thank you for having me.

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