Malcom McLean, Containerization and Entrepreneurship

The Review of Austrian Economics, forthcoming

35 Pages Posted: 29 May 2020 Last revised: 1 Oct 2020

See all articles by Rosolino Candela

Rosolino Candela

George Mason University - Mercatus Center

Peter Jacobsen

Ottawa University; Ottawa University - Gwartney Institute at Ottawa 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). The Review of Austrian Economics, forthcoming, Available at SSRN: https://ssrn.com/abstract=3577383 or http://dx.doi.org/10.2139/ssrn.3577383

Rosolino Candela (Contact Author)

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

Peter Jacobsen

Ottawa University ( email )

1001 S Cedar St
Ottawa, KS 66067
United States

Ottawa University - Gwartney Institute at Ottawa University ( email )

Ottawa, KS 66067
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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