How refrigeration changed the world trade

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“Crazier than a half dozen opium smoking frogs.” This is how an observer describes the case of Guatemala, the former President of Gen Jorge Ubico.

The general liked to dress as Napoleon Bonaparte, and may even have believed himself to Bonaparte, reincarnate.

Like many of the 20th Century, Latin American dictators, Gen Ubico had an intimate connection with the United Fruit Company, which became known as “el pulpo”, the octopus, because its tentacles reached everywhere.

Ubico has passed a law requiring indigenous Guatemalans working for the owners, that is to say, the United Fruit Company, which owns most of Guatemala’s arable land.

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And most of it was left fallow, in case of future need. The employer stated that the land was worth next to nothing, so it should not have to pay a lot of tax on it. Ubico agreed.

But then Ubico was overthrown in 1944.

A idealistic young soldier, Jacobo Arbenz, took power, and it’s called el pulpo bluff. If the earth was so little, the state would buy it and let the farmers farm.

As Stephen Schlesinger described in Bitter Fruit: the Story of the American Coup in Guatemala, the United Fruit Company didn’t like that idea.

Alamy

It puts pressure on the AMERICAN government, using what he calls “a corps of lobbyists and influential and talented publicists” to portray Arbenz as a dangerous communist. The CIA are involved.

In 1954, Arbenz was ousted in a coup and bundled on a flight of roving exile, where he drank himself into oblivion.

What does this have to do with refrigeration? Bananas.

One of the co-founders of the United Fruit Company was a man called Lorenzo Dow Baker, who began as a sailor.

In 1870, he had just carried some of the gold diggers up to the Orinoco river, and his boat has sprung a leak on the way home from New England, so that it is docked at Jamaica for repairs. Risky business

He had money in his pocket, and he loved to play – so he bought bananas, backing himself to get them home before they spoiled.

He managed, just, sold for a healthy profit, and went back for more.

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On a hot summer day, let’s say – 25C – the fish and the meat will only last a few hours, the fruit will mold in a few days and the carrots can survive for three weeks if you’re lucky.

In the cold chain, the fish will keep for a week, fruit for months, and root vegetables up to a year. Freeze the food, and it lasts even longer.

Refrigeration expanded our choice of food: tropical fruits such as bananas could now reach anywhere. It has improved our diet, and it has led to the rise of the supermarket.

If your home has no way to keep food cold, you have to make frequent trips to the market. With a fridge-freezer at home, you can do a big shop every week or two.

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And that, in turn, transformed the labor market.

Less frequent shopping liberated women to work. As low-income countries get richer, the refrigerators are among the first things that people buy.

In China, it took a decade to get from a quarter of households with refrigerators in almost nine out of 10. The economic logic

Finally, the cold chain is extended to perishable goods, the economic logic of specialization and trade.

Yes, you can grow green beans in France – but perhaps you should fly in from Uganda. Different growing conditions to say this kind of thing can make environmental sense but also economic.

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A study has found that it was more environmentally friendly to grow tomatoes in Spain and transport to Sweden than to grow them in Sweden.

Another claims it emits less carbon to raise a lamb in New Zealand and shipped to England, as to raise a lamb in England.

The economic logic tells us that specialization and trade increase the value of production in the world.

Unfortunately, this does not guarantee that the value will be equally shared.

Consider the Guatemala of today. It still banana exports hundreds of millions of dollars. It pushes a lot of other things, such as sheep, sugar cane, coffee, corn and cardamom.

But it has the fourth highest rate of chronic malnutrition. Half of its children have stunted growth because they don’t have enough to eat.

Economists do not yet fully understand why some countries become richer while others remain poor, but most agree on the importance of institutions that can address corruption and political stability and the rule of law.

According to a recent ranking of the institutions of the country, Guatemala has taken a lowly 110th on 138. There is a name for the poor countries, insane dictators, supported by cynical foreign money: the banana republics.

Obviously, the recovery of a Gen Ubico can take a very long time.

Tim Harford, writing in the Financial Times is covered Economist of the column. 50 Things That have Made the Modern Economy, which is broadcast on the BBC World Service. You can find more information on the program, the sources and listen to them online or subscribe to the programme podcast.