If I asked you what images come to mind in response to the words ‘capitalism’ and ‘global economy’, you would probably reply with skyscrapers, shopping centres and factories. The reflex might be an iconic skyline, like Manhattan or London, or a particular building such as the Shard or Burj Khalifa. Delve a little deeper and your visual mood board could include points of consumption, such as a supermarket, or perhaps your own workplace – most likely in services too. Finally, you might say a manufacturing plant or an assembly line, spaces which, while still crucial, have played a diminishing role in the economic life of wealthier countries for decades.
Likely omitted from this jumble of images and associations, however, would be the cornerstone of the global economy: infrastructure and logistics. While the seemingly dull business of transit is generally neglected in the popular imagination, circulation of goods and services is no less important than their production and consumption. A lone container ship demonstrated this last week by throwing global trade into disarray, with the Ever Given’s seven-day obstruction of the Suez Canal holding up an astounding £67bn (£48.5bn) of goods before it was finally freed on Monday.
Karl Marx was arguably the first thinker to grasp that the arrival of industrial capitalism heralded an era where the canal, road and track mattered as much as the assembly line and mill. “The more production comes to rest on exchange value [production for profit],” he writes in the Grundrisse, “the more important do the physical conditions of exchange – the means of communication and transport – become for the costs of circulation.” He proceeds to describe a phenomenon many of us would recognise as globalisation: “Thus the creation of the physical conditions of exchange – of the means of communication and transport – the annihilation of space by time – becomes an extraordinary necessity”.
The Suez Canal itself was built during the 1860s – the same decade Capital was published. A Promethean piece of engineering, it encapsulated Marx’ description of how the bourgeoisie “has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals.” Titanic pieces of infrastructure, from the new railways of England to the canals of Suez and later Panama, had revealed the true extent of our creative capacities. The passage of time has only seen these places become more, not less, important. How else do you explain the fact that a briefly marooned ship will lead to hundreds of millions of dollars in payouts?
In a world connected like never before by trade, and where more than 90% of all goods are carried over water, places like the Suez Canal constitute infrastructure of global importance. This tiny waterway, measuring just 120 miles long, carries around 12% of all global trade, with the Ever Given obstructing an estimated $9.6bn (£6.9bn) of goods each day – an astonishing $400m (£290m) an hour. Without a free-flowing Suez Canal, and other pieces of infrastructure like it, there is no global economy. This will only become more true over time, with maritime trade volumes expected to triple by 2050.
The canal is far from unique in this regard, with the Strait of Hormuz – measuring 39 kilometres wide at its narrowest point – seeing more than 20 million barrels of oil pass through every day, along with a third of the world’s liquefied natural gas. It has been described as the world’s most important oil chokepoint, which in turn has made its potential obstruction a cornerstone of Tehran’s defence strategy. In the event of a military attack on Iran, senior military officials have said they would close the strait, causing a massive spike in world energy prices. Despite the rhetoric from Washington, this is the single greatest reason an overt attack on Iran remains highly unlikely.
Whether it’s the Suez Canal or the Strait of Hormuz, the point remains the same: we might like to think our economies are insulated from events overseas but with each passing year that becomes less true. A Balkanisation of China, seemingly preferred by certain politicians in the West, would lead to a worldwide depression far greater than 1929, while political decisions in Cairo and Tehran have implications around the world. That is why both Nasser and Mossadegh, leaders of Egypt and Iran respectively, received the opprobrium they did from the West – their crime being to declare that valuable infrastructure and resources belonged to the people of their respective countries rather than foreign business interests. This tension, between public ownership and self-government in the Global South and the interests of the former colonial powers and the United States, is the real dynamic underpinning much foreign policy, rather than ideals of democracy and development.
In this respect, the Suez Canal blockage, and its rapid resolution, offers a microcosm of problem-solving in the 21st century. Europe and North America would never dream of saying the blockage was an issue purely for Egypt to resolve – after all the implications were global in extent. So why are climate change, displaced peoples, pandemics and public health any different? The wealthiest countries will help Egypt release a ship costing their economies millions a day, yet they’ll appeal to sovereignty and self-interest when it comes to ensuring patents remain on Covid-19 vaccines.
The same is true with Iran, with it being deeply ironic that a country subject to the most incredible sanctions, often meaning shortages of important medicines, is not allowed to shut a strait running alongside its own country. This, the United States says, would be an act of war. Perhaps, but then why are the brutal sanctions Iran is facing any different?
Like Covid-19, the brief Suez crisis demonstrated how deeply interconnected our world is. This isn’t a hippyish platitude, but a statement of fact – and one the left must insist upon. The ideology of capitalism, which naturalises an enormous amount of social, technological and often military power, means it can feel like nothing changes and the status quo will permanently amble on. The Ever Given episode demonstrates how wrong such fatalism is, and that even the slightest disruption is liable to cause immense panic. The biggest problem for the rest of this century, at least, is that the challenges we face are on a far larger, existential scale. The reality of our ever-greater interconnectedness, whether it’s with regards to pathogens, energy, trade or ideas, should be instructive however: our planet is a single organism, it’s time our politics started treating it as such.
Aaron Bastani is a Novara Media contributing editor and co-founder.