On Mathematics, The Language

Josiah Willard Gibbs is a name likely to be unfamiliar to many people today. I must be honest and tell you that I myself wasn’t too familiar with it, and needed a couple of searches on Google to help me out.

I was familiar, though, with a quote that he is responsible for. It is a quote that appears in a book that I am not particularly fond of, and we will get into my reasons for my dislike in a bit. Here is the quote though, in all of its four word glory:

“Mathematics is a language” 

I was reminded of the quote when I read Dilip D’Souza’s lovely little rumination on just this question: whether mathematics ought to be considered a language or not. Dilip, in his essay, focuses on whether mathematics was invented or discovered, and says it is perhaps a bit of both. As an amateur student of mathematics, I cannot answer the question definitively one way or the other, and I’m happy to go along with his best guess.

But to go back to Dilip’s original question: is mathematics a language? Well, if it is one, it certainly isn’t one of the easier ones. Back in college, if you had given me the choice to study irregular verb conjugations in French or learn mathematics better, I would undoubtedly have chosen the former.

But over time, my attitude towards mathematics has changed, and I think for the better. The older I get, the more I am inclined to agree with Gibbs: it really is a language, and a beautiful one at that.

It is a language with beauty, as Euler’s identity makes abundantly clear. It is a language pregnant with mystery. And not just the kind of mystery that one associates with school-time tribulations! Try finding out what the sum of all natural numbers is, for example. And then wonder how Ramanujan thought the answer to be self-evident. If that doesn’t strike you as a mystery, nothing will.

And as with all things mysterious and beautiful, the more time you spend with mathematics, the more mysterious and beautiful it becomes. Dilip hints at the wonder that is Bolyai and Reimann geometry in his essay, and both are worth learning more about. But why stop there? Once you find yourself going down the rabbit-hole of discovering mathematics for its own sake, you find yourself in a wonderland that makes Alice’s look positively quotidian.

But as with all languages, so also with mathematics. Your love and affinity for it is very much a function of the way you were introduced to it. If your introduction to it was through dull and dreary classroom exercises, carefully designed to suck every single trace of fun out of the experience, then you are unlikely to have fallen in love with it.

And that, I suspect, is the case with most of us. Myself included, to be clear. But I was lucky. I was reintroduced to the subject by a professor of mine, who introduced to me the beauty that lies in wait beneath the seemingly impenetrable surface of the subject. And over the years, I have fallen in love with the language.

Noam Chomsky is famous for hypothesizing that we are all born with an innate ability to understand language – any language. Now, some languages may well be more difficult than others, but the more time I’ve spent with the subject, the more I have come to believe that Chomsky may well have a point. Mathematicians such as Steven Strogatz, Edward Frenkel and Grant Sanderson have helped me appreciate the language more.

And while I may never be able to compose even a limerick in this language, let alone author a magnum opus, the more I learn about it, the more I am able to appreciate the works of those who have gained some mastery over it.

A brief coda:

Gibbs’s quote, with which I started this essay, comes as an epigraph in a book that I don’t particularly like. As any economist of a certain age will tell you, that book is The Foundations of Economic Analysis, written by Paul Samuelson.

The reason I do not like it is because I think the book helped push the study of economics a little bit too far in the direction of mathematical analysis for its own sake. Mathematics helps make economic analysis more tractable, and more amenable to logical analysis, but it is the dose that makes the poison. The study of economics may have become more tractable because of mathematics, but in my opinion, the mathematical formalism has been taken too far.

As the wise Kenneth Boulding put it: “”Mathematics brought rigor to economics. Unfortunately, it also brought mortis.”

But make no mistake, this is at best a criticism of how economics as a field has developed over the years, if that. Samuelson himself admitted as much, and it is a sign of the greatness of the man that he did it in 1952(!). 1

For mathematics, today, I have nothing but gentle love and affection, and above all, a sense of awe and wonder. 

And I wish and hope for more of the same for you!

  1. Economic Theory and Mathematics–An Appraisal Paul A. Samuelson The American Economic Review Vol. 42, No. 2, Papers and Proceedings of the Sixty-fourth Annual Meeting of the American Economic Association (May, 1952), pp. 56-66 (11 pages). []

Why Studying Economics is Worth Your Time

My way of unwinding at the end of the day is to watch YouTube videos. I suspect I’m not the only one, and yes, I’m well aware of how it’s not the best thing to do before one falls asleep, but it’s a habit that has, well, stuck.

So it goes.

Yesterday, one of the videos I ended up watching was this one:

I came across Veritasium thanks to a recommendation I received sometime last year, and if you aren’t familiar with this channel, I strongly encourage you to look it up. You might also want to read up about the person behind the channel, Derek Muller.

These waves were detected at the Laser Interferometer Gravitational-Wave Observatory. They have a shorter name, thankfully: LIGO.

The design and construction of LIGO was carried out by a team of scientists, engineers, and staff at the California Institute of Technology (Caltech) and the Massachusetts Institute of Technology (MIT), and collaborators from over 80 scientific institutions world-wide that are members of the LIGO Scientific Collaboration.


Here’s just one of many astounding facts from the LIGO website:

At its most sensitive state, LIGO will be able to detect a change in distance between its mirrors 1/10,000th the width of a proton! This is equivalent to measuring the distance to the nearest star (some 4.2 light years away) to an accuracy smaller than the width of a human hair.


Here’s a photo of the laboratory:


Here’s what I found remarkable, as a student of economics: even if one assumes that there was only one person from each of these 80 scientific institutions that worked on this project, it still means that there were 80 people whose job it was to create really, really long tunnels (four kilometers in length!) that would have one trillionth of the normal atmospheric pressure, so that they could detect almost imperceptible gravitational waves that started their journey 1.3 billion light years away. If all this sounds mind-boggling, well, it is.

But think about those 80 people for a minute. Our civilization has become wealthy enough, over many millennia, that we’re able to say to those eighty people that they can spend a significant chunk of their careers on building long tunnels to try and check on barely detectable phenomena that actually took place a really, really long way away.

Was there a time in our past when humanity could afford to dedicate human labour, money and other resources to a pursuit such as this one? You and I may have different opinions about whether we should or not (and I think we should), but I think we can all agree that it is remarkable that we can.

And on that note, read The Company of Strangers:

Homo sapiens sapiens is the only animal that engages in elaborate task-sharing—the division of labor as it is sometimes known—between genetically unrelated members of the same species. It is a phenomenon as remarkable and uniquely human as language itself. Most human beings now obtain a large share of the provision for their daily lives from others to whom they are not related by blood or marriage.

Pg 4, Introduction, The Company of Strangers, by Paul Seabright

And because most human beings now obtain a large share of the provision for their daily lives from others to whom they’re not related by blood or marriage, they are free to do other things with their time. Some of us write blogs on economics, while others build really, really large tunnels to detect barely perceptible gravitational waves. Others create videos about these really long tunnels. But none of these proposals would have gone down well in earlier times, because there were more urgent and pressing tasks at hand, such as growing enough food for everybody to be able to eat.

And so while the completely amateur fan of modern physics in me appreciated learning more about LIGO, the economist in me was struck by how impressive a fact it was they we have the ability to dedicate so much resources to the development of this laboratory.

Again: you and I may have different opinions about whether or not we should be building these laboratories, or sending people to the moon (or Mars, soon enough!), or everything else that we get up to these days. But the fact that we can is truly remarkable.

And don’t forget Derek Muller! Isn’t it remarkable that I, sitting in the comfort of my living room, can cast a video off of my phone on to my television, and watch an excellent video about the LIGO laboratory without having to pay a cent to Derek?

I only learnt of Derek’s existence last year, and I can guarantee you that he is blissfully unaware of mine. And yet, the society we live in has made it possible for me to learn about his work, and this video in particular. I pay YouTube Rs. 189 every month so that I and five other members of my family can watch YouTube videos without being bombarded by ads, but that money apart, I had to pay nothing more to enjoy this video – and by all accounts, Derek is able to do fairly well for himself by putting videos out there for people to watch and learn from.

How did we get from hunter-gatherer societies to here? How did division of labor help? Was agriculture a wonderful, welcome development, or was it all a big fat mistake? What about the development of kingdoms, the advent of religions, the desire to educate our young, the development of the study of physiology and eventually health and medicine, and so, so many other things? What explains how and why we were able to do all of these things, and so many more? If we could reset the clock and play the movie all over again, would all of these things happen, or not? Could we do an even better job? If so, how?

Economics is about so much more than graphs and diagrams and equations (that stuff is important too, of course, but there is so much more to this field than just that).

Every now and then, economics is also about taking a step back while watching a wonderfully well made video, and just reflecting on how far we’ve come as humanity. Yes, there is a lot that remains to be done, and yes, we’ve often taken one step forward and two steps back. And yes, we’ll probably figure out how to take ten steps back in the near future.

But for the moment, I find it remarkable that at least eighty people got together and built a pair of really, really large tunnels to detect Very Small Movements.

That’s division of labor, that’s economics, and it is a truly remarkable thing to think about.

And it’s just one of many, many reasons to study economics.

3Blue1Brown and Wordle

As they say, self-recommending!

Nails, Pins and Light-Bulbs

The real price of nails fell by a factor of about 10 from the late 1700s to the middle of the 20th century, averaging a decline of about 1½ percent per year.

Sichel, D. E. (2021). The Price of Nails since 1695: A Window into Economic Change. NBER Working Paper, (w29617).

It’s not just a working paper now, of course, and the paper is also available on the JEP website, but this is a paper that is a must-read if you are a young student beginning your journey in the world of academic econ.

  • Economic progress is real, under-rated, and these days, vastly under-appreciated. I’m willing to argue for each of these three points, and this paper helps us understand why I say that economic progress is real.
  • Of course, this point has been made before, as the very first page in this paper points out. “These declines are paltry compared with more dramatic examples: for example, Nordhaus (2007) calculated that the real cost of computing dropped by a factor of at least 2 trillion times from 1850 to the early 2000s, while Nordhaus (1997) showed that the real cost of lighting fell by a factor of about 3400 times from 1800 to 1992.”
  • But still, this paper is worth reading, for at least the following reasons:
    • It puts technological progress into perspective. Consider this: “Over the same span of 300 plus years during which these transformations occurred, the place of nails in the economy (and in popular accounts) also underwent a huge shift. In 1810 (the earliest year for which I could assemble necessary data), the use of nails in the US economy (measured as production plus imports minus exports) was 0.4 percent of nominal GDP, as shown in Figure 1. To put this share into perspective, in 2019 household purchases of personal computers and peripheral equipment amounted to roughly 0.3 percent of GDP and household purchases of air travel amounted to about 0.5 percent. That is, back in the 1700s and early 1800s, nails were about as important in the economy as computers or air travel purchased by consumers are today. (Emphasis added)
    • The author has included a pun on nails (who could have resisted in his place), but restricted himself to just the one, which shows Michelin chef level restraint.
    • Rare is the academic paper that is able to give literary references (and I have duly added Little House on the Prairie to my reading list)
    • One gets to see the application of basic economic concepts in an econ paper in easily understandable form. For example:
      • Substitutes and complements (run a CTRL-F for nail guns, for example)
      • Production functions and multi-factor productivity, including a very nice applications of the KLEMS growth accounting framework. And if you are from India, have you taken a look at KLEMS database yet?
      • The construction (and the difficulty involved in constructing one) of a price series for nails that incorporates technological progress, quality improvements, and shipping costs.
        “Shipping costs are another characteristic that would be important to some buyers. For example, the 1897 Sears catalog indicates that shipping costs for a 100-pound keg of nails from Chicago to Boston amounted to about 20 percent of the price of the nails. Given the greater number of wire nails that would be in a keg compared with the number of cut nails, shipping costs per nail would have been considerably lower for wire nails than for cut nails”
        On a related note, did you know that it is much more expensive to buy (illegal) beer in Bihar than it is to buy “hard liquor”? Can you figure out why this might be so?
      • Estimating factor shares (probably my personal favorite section in this paper)
      • The last paragraph on pp 146 is positively delightful, and deserves multiple re-reads. How often does an economist get to say this: “Finally, I assume (based on personal experimentation with a hammer and nail gun) that a worker with a hammer can install six nails per minute and that worker with a nail gun can install 20 nails per minute”?
    • And for a useful pairing, read about Baumol’s Cost disease next.

Read the JEP, and Follow The Conversable Economist

And if you are an undergrad student of economics but haven’t gotten around to doing both of these things just yet, well then, drop everything else and get on to this right away.

The Journal of Economic Perspectives is a journal that has been around since 1987, and I can attest to it being an excellent read, especially if you are an undergraduate student. The papers are accessible, almost always interesting, and the coverage is broad-based by definition. If you’re looking for a good place to start, here’s a personal favorite.

The Conversable Economist is a blog run by Timothy Taylor, who also happens to be the managing editor of the JEP (and has been so from its inception!). All of his posts are well worth your time (here are some I’ve blogged about on EFE before).

The reason I’m writing this post today is two-fold. One, the latest issue of the JEP is out, and Timothy Taylor blogged about it recently. Two, I’d like to expand a little bit on one of the pieces in this issue. There’s at least one other paper that sounds fascinating, but I won’t be able to get to it right away.

The piece that I would like to expand upon is this one: Recommendations for Further Reading

This section will list readings that may be especially useful to teachers of undergraduate economics, as well as other articles that are of broader cultural interest. In general, with occasional exceptions, the articles chosen will be expository or integrative and not focus on original research. If you write or read an appropriate article, please send a copy of the article (and possibly a few sentences describing it) to Timothy Taylor, preferably by e-mail at taylort@macalester.edu, or c/o Journal of Economic Perspectives, Macalester College, 1600 Grand Ave., Saint Paul, MN 55105.


  1. It’s a great collection of articles for you to read if you are, as Timothy Taylor says, involved in undergraduate education.
  2. From the Smorgasbord section, the Nobel Prize in Economics write-up for this year’s awardees is great reading, and I’d strongly encourage you to read it in full. Or hey, watch the video!
  3. The BIS paper on bottlenecks and their macroeconomic implications is also a great read, please do read the whole report. (And here’s some writing on supply chains from EFE as a useful pairing)
  4. This is not to imply that the others aren’t great reading, of course. It is just that these two happen to be favorites of mine.
  5. Although I should point out that this piece continues to puzzle me! NFT’s in general continue to puzzle me, but that’s a story for another day.
  6. Here’s one thing I wish more undergraduate students would do: get into the habit of not just reading these pieces, but also run a Google Scholar search for other works by the same authors – especially by those whose works you have enjoyed reading thus far. Build up a sense of familiarity with their body of work, and this can serve as a great way to learn more about both a particular field of study and also about an author’s body of work.
  7. Discuss these works threadbare! Do it on campus, on a Discord server, host a discussion on Zoom, ask your profs to arrange for a discussion in class, but get in the habit of reading something, and then speak about it. This happens nowhere near the frequency with which it should, and this should change.
  8. And finally, Luigi Zingales is always worth a listen!

The Most Important *Economic* Event of the 20th Century

Before you read any further, I have a question for you: what, according to you, would be the most important economic event of the 20th century?

There is no right or wrong answer, of course. This exercise is, by definition, subjective in nature, and I’m hoping that there will be many different responses.

Here’s how I would set up my framework to answer this question:

  • The event should have affected a significant number of people
  • That effect should persist and preferably spread (positively) over time.
  • The opportunity cost of that event shouldn’t be too high
  • It would be great if positive spillovers from that event could be plausibly identified

Consider, for example, the end of the Cold War. In my view, it ticks almost all of the boxes, with the possible exception of the second, and maybe the third. But it would certainly make my shortlist.

Or what about India’s independence? Again, definitely makes the shortlist, although you could argue that the partition was a very, very high cost to pay.

China moving towards a reform based process? India? The next fifteen years after the second world war, and the slow move away from colonialism and imperialism? The defeat of Japan and Germany in the second world war? Keynes’ magnum opus being published in 1936 (or am I just being a wee bit provocative)?

Chris Blattman points us towards his choice:

We estimate the impact of the Green Revolution in the developing world by exploiting exogenous heterogeneity in the timing and extent of the benefits derived from high-yielding crop varieties (HYVs).
HYVs increased yields of food crops by 44 percent between 1965 and 2010. The total effect on yields is even higher because of substitution towards crops for which HYVs were available, and because of reallocation of land and labor.
Beyond agriculture, our baseline estimates show strong, positive, and robust impacts of the Green Revolution on different measures of economic development. Most striking is the impact on GDP per capita. Our estimates imply that delaying the Green Revolution for ten years would have reduced GDP per capita in 2010 by US$1,273 (PPP adjusted), or 17 percent, across our full sample of countries.

https://chrisblattman.com/2022/02/01/the-most-important-economic-event-of-the-past-century/ (Note that the excerpt is from a paper that he has quoted from)

And well, it’s hard to argue against his pick! It gets an endorsement in one of my favorite books of the past decade:

In the 1970s, when I was in high school, about one out of every four people in the world was hungry—“ undernourished,” to use the term preferred by the United Nations. Today, the U.N. says, the figure is one out of ten. 1 In those four decades, the global average life span has risen by more than eleven years, with most of the increase occurring in poor places. Hundreds of millions of people in Asia, Latin America, and Africa have lifted themselves from destitution into something like the middle class. In the annals of humankind, nothing like this surge of well-being has occurred before. It is the signal accomplishment of this generation, and its predecessor.

Mann, Charles C.. The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet (Kindle Locations 63-68). Pan Macmillan. Kindle Edition.

Elsewhere in the book, the author (Charles C. Mann) points us towards a Wall Street Journal editorial that praised Norman Borlaug, the ‘Wizard’ in the book for having saved potentially a billion lives because of the Green Revolution.

But that book also contains a warning about the opportunity costs of this signal achievement:

Vogt, born in 1902, laid out the basic ideas for the modern environmental movement. In particular, he founded what the Hampshire College demographer Betsy Hartmann has called “apocalyptic environmentalism”— the belief that unless humankind drastically reduces consumption its growing numbers and appetite will overwhelm the planet’s ecosystems. In best-selling books and powerful speeches, Vogt argued that affluence is not our greatest achievement but our biggest problem. Our prosperity is temporary, he said, because it is based on taking more from Earth than it can give. If we continue, the unavoidable result will be devastation on a global scale, perhaps including our extinction. Cut back! Cut back! was his mantra. Otherwise everyone will lose!

Mann, Charles C.. The Wizard and the Prophet: Two Groundbreaking Scientists and Their Conflicting Visions of the Future of Our Planet (Kindle Locations 89-94). Pan Macmillan. Kindle Edition.

Please do read the book, I cannot recommend it highly enough. One reason I enjoy ed the book as much I did is because it doesn’t take sides, but shows both the pluses and the minuses of the Green Revolution, and that as thoroughly as possible.

But while Mann doesn’t take sides, I do. On balance, it is hard to argue against the Green Revolution having been the most significant economic event of the twentieth century.

Aamdani rupaiya, kharcha atthanni

If you’re not familiar with the Hindi language, the title of this post is a play on a fairly popular phrase: aamdani atthanni, kharcha rupaiya

In effect, your income is less than your expenses. Which, of course, isn’t a desirable state of affairs:

For all of the last decade, the primary metric for evaluating budgets was the fiscal deficit. How much would the government target to bring it down by, and how credible were the numbers? The source of that stress was the massive stimulus set in motion by the government well before the global recession showed up, as it was inundated by taxes in the 2006 to 2008 period. The challenge with that stimulus was that it was hard to roll back, much of it being a large increase in state and central government salaries and pensions.


But we find ourselves in unchartered territory, says Neelkanth Mishra:

Tax collection is surprising positively, and should be more than 1 per cent of GDP higher than before the Covid-19 lockdowns (though assumptions are lower). Further, financial markets appear to be expecting both central and state governments to incur large fiscal deficits for several years, with the anchor shifting higher by 3 per cent of GDP. Let us assume that GDP being below where it was supposed to be if the pandemic had not happened means an extra per cent-and-a-half of costs for the government. Interest costs have risen as governments borrowed to bear a large part of the economic loss during the lockdowns. Further, some government expenses, like salaries and pensions, keep rising irrespective of the level of GDP. This still leaves 2.5 per cent of GDP of space for governments to increase spending.


And as it turns out, it is unchartered territory for everybody, the government itself included. Neelkanth Mishra points out that we’re bringing off-budget items on to the budget, we’re paying off export incentives that were due, and the debt write-off for India has also been accounted for. Even so, he says, cash balances maintained by the government with the RBI are at an all time high.

So what can be done? Well, part of the answer this time around lies in asking the states to step up and spend on building out physical infrastructure:

The sharp increase in capital expenditure from Rs 5.45 trillion to Rs 7.5 trillion shows the intent of the government is to stay away from distributing freebies (commendable, given the upcoming state elections), and focus instead on productive spending, which may be rolled back if necessary. However, half of this increase is an allocation for interest-free loans to state governments for capital expenditure, and some of the rest is the inclusion of off-budget provisions in last year’s budget in the budget numbers this year. There are increases in the allocation for defence (particularly once adjusted for the lower spend on aircraft purchases this year), the Nal se Jal scheme, and for roads and railways, but these are incremental rather than substantial.
Allowing state governments more fiscal space (deficits up to 3.5 per cent of GDP are allowed, with another half a per cent if the state undertakes power sector reforms), and dangling the carrot of more funding if they undertake capital expenditure is the right approach in theory. Much of the necessary investments need to occur at the state level: Like in health, education, urban infrastructure, water supply, sanitation and power distribution. However, the gap between states’ intent to spend and their execution has widened substantially during the pandemic, and their total spending is far lower than budgeted, despite increases in non-discretionary expenses like interest costs, salaries and pensions.


And the limiting factor there, ironically, is limited state capacity.

…many developing countries and organizations within them are mired in a “big stuck,” or what we will call a “capability trap”: they cannot perform the tasks asked of them, and doing the same thing day after day is not improving the situation; indeed, it is usually only making things worse. Even if everyone can agree in broad terms about the truck’s desired destination and the route needed to get there, an inability to actually implement the strategy for doing so means that there is often little to show for it—despite all the time, money, and effort expended, the truck never arrives.

Andrews, M., Pritchett, L., & Woolcock, M. (2017). Building state capability: Evidence, analysis, action (p. 10). Oxford University Press.

In other words, we have more money to spend this year, but our constraint is quite literally our inability to spend it usefully and efficiently.

It would be worth our collective while, then, to learn a little bit more about state capacity!

On Containerization

It is such a horrible sounding word, containerization. But you’d be amazed at the change it has brought about in the world:

The number of goods carried by containers skyrocketed from 102 million metric tons in 1980 to about 1.83 billion metric tons as of 2017.


What is containerization? Well, simply put, it is what has made international trade in goods so much more cheaper than before.

Prior to the standardization of shipping containers between the 1960s and 1970s, most goods were stowed aboard cargo ships in individually counted units known as “break-bulk cargo.” Longshoremen, in crews of up to 25 men at a time, would manually load and unload cargo by hand in a time-consuming and laborious process that would take days. Ships would sit idle at port for far longer than they would be sailing at sea, making ocean shipping impractical, costly, and unreliable. Thus, most consumer goods were manufactured regionally and shipped by truck or rail; imports were rather limited and expensive.
It was not until 1956 that a trucking company owner named Malcolm McLean converted two old World War II oil tankers into the world’s first container ships. McLean, with the assistance of engineer Keith Tantlinger, designed a 33-foot steel intermodal container that could be easily lifted by cranes, placed snugly on the back of trucks and train cars, and locked to reduce theft. It would take only a few hours to unload a ship as opposed to days. Typically, the cost of hand-loading a ship would be about $5.86 per ton. With McLean’s new system, the price dropped to only 16 cents per ton.

https://prospect.org/economy/hidden-costs-of-containerization/ (Emphasis added)

By the way, the Wikipedia article on McLean is fascinating. If you want to understand what “backward integration” means in practice, it is highly recommended.

An excellent place to begin to learn more about containerization is this excellent podcast episode by Tim Harford. That page also points us to a book which serves as an excellent introduction to the subject – the book is simply called “The Box”.

The last chapter in that book helps us understand the inevitable march towards increased efficiency at all costs, culminating in what happened in the Suez Canal last year:

Today, the average ship is capable of carrying over 20,000 containers at any given time. Many ships are absurdly gargantuan, with some as long as the length of the Empire State Building. Between 1980 and 2020, the deadweight tonnage of container ships has grown from about 11 million metric tons to around 275 million metric tons.


The article I’ve been quoting from (I came across it via The Browser) is a good exploration into some of the more problematic aspects of how the shipping industry has evolved over time, and speaks empathetically about the plight of those who work on board these ships. Cost cutting, long wait times, flags of convenience, changes to sea side towns/cities, the impact on local ecology and much else is described therein, and is worth a read.

The part that fascinated me the most was this:

Prior to the 1980s, the Shipping Act of 1916 regulated the relatively modest ocean carrier industry like a public utility. Prices were transparent and there were no exclusive agreements for volume shippers; anyone wanting to ship cargo could access the same rates. The United States Shipping Board, later the Federal Maritime Commission (FMC), regulated prices and practices, and subsidies assisted domestic shipbuilding. The act enabled smaller companies to enter ocean shipping with stable prices to weather downturns.
But the Shipping Act of 1984, and later the Ocean Shipping Reform Act of 1998, took down this architecture. It allowed shipping companies to consolidate, and eliminated price transparency, facilitating secret deals with importers and exporters. The FMC was defanged as a regulator. Almost immediately, containerization took off. The number of goods carried by containers skyrocketed from 102 million metric tons in 1980 to about 1.83 billion metric tons as of 2017.