Out of Stock: The Warehouse in the History of Capitalism by Dara Orenstein (review)

Abstract

Reviewed by: Out of Stock: The Warehouse in the History of Capitalism by Dara Orenstein Patrick Haughey Dara Orenstein. Out of Stock: The Warehouse in the History of Capitalism. Chicago: University of Chicago Press, 2019. Hardcover ISBN: 9780226662879 Paperback ISBN: 9780226662909 Ebook ISBN: 9780226663067 Paperback: 340 pages Illustrations: 93 black-and-white In the United States, manufacturing as a percentage of gross domestic product peaked just after World War II. By the 1980s, cities had emptied out. While many attribute this transformation to white flight, urban renewal, and segregated housing laws, Dara Orenstein’s Out of Stock: The Warehouse in the History of Capitalism adds an important twist to the story. In 1934, under the leadership of President Franklin D. Roosevelt, the United States began creating foreign free trade ports. Since then, entire sections of ports within the nation’s borders have been zoned out of paying taxes and rules governing trade. This legal and territorial tax freedom gave corporate interests a way to outsource jobs while remaining onshore. As Orenstein writes, “Out of Stock describes a global phenomenon, but not in the manner . . . that recounts the quantifiable, immediate effects of Walmart, or guns, butter, and steel. . . . Taking stock of the zone helps us to divine how economic processes are territorialized” (19). Out of Stock chronicles the history of free trade zones in the United States and their role in the history of global capitalism. The title of the book is misleading. Although Orenstein traces the roots of free-trade zones to bonded warehouses, a nineteenth-century innovation that temporarily suspended duties on imported goods, the book is not a history of warehouses as a form of storage or an architectural type. Rather, Orenstein is concerned with warehousing as a system of storing goods in motion—that is, as they move through the economy—for commercial gain. This view matches the definition that developed within the warehousing industry after the Civil War and emphasizes the role of warehousing in the circulation of financial capital. Extended to free-trade zones, it highlights the supposedly frictionless dimensions of extraterritorial spaces freed from barriers to trade imposed by the nation-state. Out of Stock begins its analysis in 1789, the year Congress passed legislation refunding tariffs on imports if manufacturers used those imports to produce exports. The story really picks up after the Civil War, however. As American manufacturing expanded by leaps and bounds, warehousing became central to the circulation of commodities in the marketplace and a highly profitable business. Orenstein traces the history of merchants’ and manufacturers’ efforts to avoid duties and tariffs and to circumvent territorial barriers, introducing readers to free ports, bonded warehouses, customs unions, and a host of technical innovations. All of these measures sought to increase trading efficiency but invariably ran into political wrangling, protectionism, international conflicts, and national governments’ thirst for revenue. In 1934, Congress passed the Foreign-Trade Zones Act. This legislation responded to the economic crisis of the Great Depression by authorizing foreign-trade zones at US ports. In an immediate sense, it sought to stimulate international trade. As Orenstein shows, however, it marked the beginning of what has become the largest zone system in the world. Supervised by the US Department of Commerce, zones allowed for the duty-free circulation of goods provided no manufacturing or exhibiting occurred. Considered experimental at the time, they developed slowly. The first began operating on Staten Island in 1937. Others followed at New Orleans, San Francisco, and Seattle. In 1950, Congress amended the act to create subzones—tariff-free spaces detached from waterfronts that permitted manufacturing and exhibiting. The concept was slow to take [End Page 69] hold; the Department of Commerce did not authorize the first subzone until 1962. Yet, as Orenstein shows, they proliferated in the 1970s and 1980s as corporations sought not only to avoid tariffs but to take advantage of wage differentials and non-union labor. Why did Nissan begin manufacturing pickup trucks and sedans outside of Nashville in the early 1980s? Subzone 78A and the much lower tariffs it offered. In 1965, the United States had eight general-purpose zones and three subzones. By 1989, those numbers had grown to 164 and 181...