Malcom McLean, Containerization and Entrepreneurship

35 Pages Posted: 29 May 2020

See all articles by Rosolino Candela

Rosolino Candela

Mercatus Center at George Mason University

Peter Jacobsen

George Mason University; George Mason University, Department of Economics, Students

Kacey Reeves

George Mason University, Department of Economics, Students

Date Written: April 16, 2020

Abstract

Does the entrepreneurial market process reflect an equilibrating or disequilibrating tendency in the allocation of resources? We address this question by utilizing the case of Malcom McLean, who pioneered and introduced container shipping to international trade. We argue that Schumpeterian and Kirznerian entrepreneurship are distinct, yet complementary activities that drive the market process towards an equilibrating tendency. By realizing containerization as a lower cost method of shipping goods internationally, we argue that McLean acted simultaneously as a Schumpeterian and Kirznerian entrepreneur, illustrating that these two notions of entrepreneurship are different segments of the same equilibrating market process. Containerization had a disruptive effect on previous methods of ocean shipping, but its adoption was introduced through an act of arbitrage, namely by redeploying existing resources, such as cranes, ships, ports, and storage facilities from lower-valued uses to perceived higher-valued uses. In the process, McLean was able to realize previously unnoticed profit opportunities by correcting previously existing inefficiencies in intermodal transport.

Keywords: Containerization; Entrepreneurship; Malcom McLean

JEL Classification: B53, N70, O31, R40

Suggested Citation

Candela, Rosolino and Jacobsen, Peter and Reeves, Kacey, Malcom McLean, Containerization and Entrepreneurship (April 16, 2020). Available at SSRN: https://ssrn.com/abstract=3577383 or http://dx.doi.org/10.2139/ssrn.3577383

Rosolino Candela (Contact Author)

Mercatus Center at George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

Peter Jacobsen

George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

George Mason University, Department of Economics, Students ( email )

Fairfax, VA
United States

Kacey Reeves

George Mason University, Department of Economics, Students ( email )

Fairfax, VA
United States

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