HNN
post, William Marina, The Dubai Ports Issue is Really Wal-Mart and
Toyota All Over Again!
02/23/2006 01:50 PM
REf:
http://hnn.us/articles/22085.html
(comments
formerly at http://hnn.us/board.php?id=22085)
List of comments in original order, comments not
recoverable:
https://web.archive.org/web/20060303063407/http://hnn.us/board.php?id=22085
My comments:
A Mass of Technological Errors
William Marina and Oscar Chamberlain have both got their facts
wrong, and this fundamentally vitiates their arguments. This is
indicative of a larger problem. Historians tend to be
technologically uninformed, to the point of being Victorian Old
Maids about it. This carefully cultivated ignorance means
that they cannot understand the real choices and trade-offs of an
immensely technological society. The most such historians can
understand is the office routine of the White House and Congress.
The Marlon Brando movie which Mr. Marina relies upon, "On the
Waterfront" is technologically obsolete, just as obsolete as
"Stoop Down and Pick a Bale of Cotton." Modern longshoremen carry
and use hand-held computers, and operate massive specialized
cranes which look like traveling bridges. The state of
the art is to use a giant gantry crane to lift a twenty-ton
container directly from a ship and set it on a railroad car, which
gets hauled fifty or a hundred miles to a hump yard to be sorted.
The crane operator picks up the container the computer tells him
to pick up, and sets it down where the computer tells him to set
it down. He doesn't know what is in the container, or where
it is going. In a very real sense, the operator is ordered around
by the computer. At the hump yard, things are even more automatic.
The computer reads the magnetic labels on the railroad cars, and
throws the proper switches to steer the cars into the desired
sorting tracks. There is no such thing as casual labor in
this environment. The equipment costs many millions of dollars.
Junky operations persist on the sea, of course, but their dominant
characteristic is the use of obsolete equipment, for example, a
rusting old ship (originally built for trading on the English
Channel or the Baltic, but rendered obsolete by
tunnel/bridge projects) captained by a sometime officer of the
Soviet Navy, trying to salvage a pension somewhere. The
technological conditions for the Mob are simply gone.
Suppose that the ports were taken over by the United States
government. What would happen? The Navy and the Coast Guard would
probably scrap about which was entitled to run the ports.
It's hard to say who would win. There would probably be a
good bit of uneconomic modernization. Admirals tend to like
spiffy new equipment. I would not be surprised if the "FastShips"
(*) project got restarted under Naval patronage. Corruption would
take the form of Dick Cheney, um, "influencing" the purchase
of a fifty-million-dollar traveling crane, or something like that,
from Haliburton. To take another example, Amtrak does not
have any identifiable Mob involvement. It does have esprit de
corps.
(*) FastShips -- a proposal for a new kind of cargo ship, put
forward by Thorneycrofts, the noted British maker of naval
torpedo boats. A FastShip is essentially a very large torpedo
boat, of 20,000 tons, which goes at eighty knots by planing over
the water instead of going through the water. FastShips
were to be fitted as rail ferries, using a hovertrain
system, so that they could load and unload cargoes with a speed
commensurate with their running speed. At a very rough
estimate, one FastShip might have replaced about four
containerships, with corresponding reductions in the size of the
port establishment. If desired, a FastShip could be
nuclear-powered, since it would probably need engines comparable
to those of an aircraft carrier. Alternatively, it could be a very
large hovercraft, running at two hundred knots.
(Parenthetically, if a FastShip were under control of hostile
parties, it could be used for something like the St. Nazaire
raid, so FastShips would probably have to be naval ships.
Also, a FastShip could definitively outrun a submarine, the way
the Cunard Queens could during the Second World War).
Practically, the Mob turns up in industries which specialize in
physical labor, because that is where the Mob's comparative
advantage lies. Guys who do that kind of work tend to be free with
their fists (see William Pilcher, The Portland Longshoremen).
Nowadays, the Mob is in garbage hauling. The Mob also turns up in
low-wage unskilled "secondary sector" manufacturing,
where something approximating slave-driving is wanted (see William
M. Adler, Mollie's Job).
Speaking of Amtrak, this raises another point.
Government-owned corporations are not the same as
stock-market-owned corporations. Stock-market-owned corporations
behave as they do because the ultimate owner is willing to sell
for a five-percent-premium, without asking who is buying.
Government-owned corporations tend to behave as if they were
branches of the government service. For example, as Anthony
Sampson pointed out, a family of army officers regards it as
respectable to work for a government corporation or a
quasi-government corporation. Working for such a firm does not
constitute being "in trade." That said, it is effectively being
proposed that the American ports should be managed by the
government service of the United Arab Emirates.
Bear in mind, also, that we are talking about very highly
automated operations, especially the gas and oil
terminals. Government money, from whichever government,
would probably mean even more automation, to the point of becoming
uneconomic.Government-owned plants tend to be
showpieces. Additional automation tends to give top
management more control, and this control can be exercised
remotely, say from Dubai. Would an American employee necessarily
become a whistleblower when he was ordered to install a piece of
software which would enable someone at a desk in Dubai to pump oil
around in Baltimore with the click of a mouse? If you can pump oil
around, you can spill it. If you can spill it, you can start a
fire. In practice, there is such a close interlinking of safety
and security interests with managerial prerogative that the United
States Government cannot in the last analysis settle for
anything less than effective ownership, the right to say that
United Arab Emirates' property in America shall lose large sums of
money and eventually go bankrupt. The United States Government has
to have the right to appoint the manager of the U.S. ports
operation, and determine what he shall be paid, and forbid
the United Arab Emirates from firing him.
The situation at Los Angeles is not comparable. The single largest
bulk of our imports from China consists of a) clothing and kindred
household goods and b) auto parts and similar machinery. East Asia
is simply too densely populated to be an economic producer of raw
materials. The kinds of goods imported into the western
ports have much less fire/hazmat potential than the kinds of
things which are imported to the eastern ports. Oil refineries,
etc. do explode when their operators become careless.
Introduce malice, and who knows what can happen?
Instead of this kind of hard-headed thinking, we have President
Bush insisting that the United Arab Emirates is just as much
of an ally as Britain. Now, I trust the governments of Japan,
France, and Germany quite a lot more than I trust the United Arab
Emirates. Come to that, I think I even trust the Chinese a
bit more than I trust the United Arab Emirates.
[Oscar Chamberlain apparently took umbrage at my statement that
hevdid not really understand the issues, and I replied (02/24/2006
12:20 PM):]
To Oscar Chamberlain:
Well, perhaps I should clarify. I did not intend to speak so
much about you personally, as about the whole institutionalized
tendency of the historical profession, especially as expressed
in academic regulations. You are, of course, a product of your
education, but it is unfair to expect you to swim against
the current to the extent required to break free of this
institutionalized tendency. However, have you thought,
seriously, what it means when, upon being told that X is a
professional historian, one can then more or less automatically
assume that X knows quite a lot less about technology than
the average schoolboy?
Practically, I don't think you can really understand technology
unless you do technology. Doing technology gives you an
informing sense of realism, even when you don't have specific
knowledge. Specific knowledge is easy enough to find, especially
via Google. The catch is that you have to know enough to
ask for it. That's where the informing sense of realism comes
in. This will of course be tagged as an "elitist" statement by
people who would regard it as self-evident that, in order to
speak French well, you have to go and spend some
time in France. There is this kind of double standard.
Every so often, I write a thousand-line computer program. In
terms of work, I should say that is the equivalent of writing at
least a hundred pages of prose. My most recent program is a tool
designed to assist in web-publishing books, though it is pitched
to the special requirements of the novel, as distinct from those
of the monograph. The typical attitude of liberal-arts
academics to this kind of work seems to be that of the Victorian
lady who despised cooking because it could be done by an Irish
servant girl. The Irish servant girl could not play the piano,
so playing the piano was what was important. Liberal Arts
academics seem to be painting themselves into the same kind of
corsets-and-crinolines-and-fainting-spells gilded cage as the
Victorian lady.
To: Peter K. Clarke
At this point, you can usually transform the performance of a
machine by adding computers and electronics, with only minimal
hardware modifications. To take an example, China's signature
export is cheap clothing, but China is not renowned for its
cotton fields, nor its herds of sheep. What China provides is
cheap sewing labor. If you can modify a sewing machine in such a
way as to make it more automatic, this may have drastic
economic implications. If you can carry labor-saving far enough,
the benefits of cheap labor become less important than those of
being close to the customer, and a class of goods ceases to be
imported.
Now, if you look at a logistic facility, such as a dock, a rail
yard, a post office, or a Wal-Mart, size is usually a sign of
congestion. Goods are just sitting around, instead of being
moved to their ultimate destination. The residual hand labor
usually turns out to be the main source of this
congestion. Automate it, and the whole plant speeds up, and can
be made smaller. Far from filling in New York Harbor, a really
progressive port administration would probably be giving up land
for redevelopment. In fact, that seems to be happening, only not
very fast.
However, from the point of view of a businessman, forced-draft
modernization is often a no-win proposition. It simply gluts the
market, and drives prices down to salvage levels, as in the case
of the 1990's telecomm bubble. A government agency, not
dependent on trading revenues, can often push modernization
further and faster than any business could do. The growth of the
American airline industry in the latter half of the twentieth
century was extensively subsidized by the Air Force.
[Here, I sought to "refocus" the discussion (02/25/2006 11:20
AM):]
A True Historical
Analogy
We have been discussing the question of the ports in a
rather unhistorical way. I am an engineer as well as a
historian. That means I have the choice of two very different
methods of reasoning. To my way of thinking, historical
thought is good for dealing with extremely complex problems
with a strong human dimension, which do not lend themselves to
being reduced to numbers. Historical reasoning is not a very
good way of determining technical facts, however. I think the
thing to do is to use engineering analysis to bring out
the essential properties of a technological situation,
and then go looking for analogous historical situations. For
example, souped up cars, motorcycles, etc. are a mean to
the end of danger, thrills, etc. You are not necessarily going
to find useful referents in the history of
transportation, but you may very well find such referents in
the history of dueling. So, trying to figure out what a
motorcycle means, you look at authors such as V. G. Kiernan
and Francois Billacois, and the curious case of a French
nobleman who was tried and executed for public dueling in, I
believe, the year 1627. You understand the Comte de
Montmorency-Bouteville, and you are in a fair way to
understanding the Hell's Angels.
Now, as applied to the port situation, certain modern
industrial plants have reached a level of automation such that
they are effectively computers with peripheral devices
attached. These peripherals happen to be robots, rather
than, say, printers, but that is not critical. What we can
look at, therefore, is the history of computers which were
used for moving money instead of moving containers.
I should like to introduce into the record, the
following book:
Thomas Whiteside, _Computer Capers: Tales of Electronic
Thievery, Embezzlement, and Fraud (1978).
Reduced to essentials, the introduction of computers for
accounting caused traditional systems of auditing to break
down, because the traditional systems were based on pen and
ink, and paper ledgers. There was a period of crisis until the
auditors eventually learned to use computers to audit
computers. During this "window of opportunity," there were
spectacular swindles straight out of the works of the Russian
satirical novelist Nicolai Gogol (Dead Souls, The
Inspector General, etc.). One technique was the "salami
slice," ie. program the computer to embezzle ten cents from
every account in a bank. Then there were a number of
"dead souls" cases, involving the creation of large numbers of
fictitious accounts and fictitious customers. Gogol's premise
was of course that nearly everyone was venal, and that the
swindler could go his merry way by appealing to the
venality of everyone he met. The computer swindles, however,
relied on the fact that, with computers, very few people
needed to know anything about the accounts.
See also: Elise G. Jancura, _Computers: Auditing and Control_,
2nd ed. (1977). This is a festschrift, edited by an academic
accountant and computer scientist, and reflects the first
stage of grappling with the problem.
There are obvious similar possibilities involving "dead
containers."
HNN post, Sheldon
Richman (writing as Liberty and Power), Silver Lining? Feb 28,
2006
https://web.archive.org/web/20230622071350/https://www.hnn.us/blog/22335
cross-reference to his site, though not to the article:
https://web.archive.org/web/20230704113342/http://www.sheldonrichman.com/
My comments
(02/28/2006. 08:20 PM;03/01/2006 06:59 AM,12:24 PM; 04:13
PM):
Two words: Halifax Explosion. There's Chernobyl, there's
Bhopal, and there's Halifax Explosion. [affects rural New
England drawl] Wasn't even a very big ship, neither, only
'bout 3100 tons. Ships carry huge quantities of material.
Likewise, ports store huge quantities of material to load
onto the ships. Even if this material is not nominally
explosive, it can become so under the right conditions.
Anything which will burn will also explode if it can be
sufficiently finely mixed with air. A sufficiently large
explosion will itself do some vigorous mixing, promoting a
still larger explosion. Grain elevators sometimes explode
(wheat dust in air). Anytime you have a large pile of
combustible dust lying around-- beware! Disaster is kept at
bay only by the expert application of rigorous safety
precautions. If you put a Bad Guy in charge, he may
very well be able to subvert the safety precautions.
One recurrent element in the investigation reports of
small-scale disasters is that there was a capitalist, intent
of making money, and he cut corners on safety precautions.
Greed is not always good, Gordon Gecko to the contrary.
DP World is just a front for the United Arab Emirates.
Governments do not usually go into business to make money--
they can do that simply by taxing. Their motives are usually
political. When the Saudi government took over Aramco, the
company's number of employees something like quadrupled,
without any increase in output. P&O is traditionally
almost an extension of the British navy. It has certain
contracts, which not just anyone could get, on that account. A
certain type of third-world foreigner tends to buy private
assets which have the trappings of state power, not realizing
that the state power is not for sale, and that the trappings
will wither away once the assets are sold to foreigners. Here
is a stock chart.
http://today.reuters.com/stocks/overview.aspx?symbol=PO.L
DP World seems to have bid up the price of P&O shares to
round about double what the market thought they
were worth, and it hasn't backed off in the face of evidence
that something like 70% of Americans object, which means that
there will have to be all kinds of costly concessions
before the deal ultimately goes through. DP World has
been behaving as if cost was no object, when trying to
buy a firm with limited growth prospects. That is rather an
odd thing for a businessman to do. The other bidder,
Singapore, makes no bones about doing mercantilist industrial
policy, but Singapore dropped out of the bidding when
the price went too high for industrial policy.
In the nineteenth century, what later became the United
Arab Emirates was a string of pirate's lairs. The same applied
for the whole east coast of Arabia, all the way up to Kuwait.
With a desert behind it, and extremely few sources of fresh
water, about the only thing the area was good for was as
a base for piracy upon the shipping moving through the Persian
Gulf. It was the Middle Eastern equivalent of the Isle
of Tortuga. The British navy moved in to suppress the piracy,
and as a byproduct, eventually created little semi-independent
client states. When the British pulled out, circa 1970,
they left behind four of the most infantile regimes on earth,
even more than the Saudis. With the coming of oil, the
Sheikdoms found themselves rich, but completely without the
skills and population necessary to run a modern country. They
brought in "guest workers," but refused to make a political
accommodation, even when the guest workers came to
outnumber the original population. They are now facing a
political crisis as the younger generation of immigrants grows
up, having lived nowhere else, and yet being "foreigners." Of
course that is a breeding ground for revolutionary ideologies.
There are number of interpretations for the United Arab
Emirates' actions in buying P&O. One possibility is that
they are trying, in effect, "to buy the Royal Navy," expecting
to become the colonial power in eastern North America. This,
besides being entirely unrealistic, would presuppose an
extremely childish mentality, of course. Alternatively, they
might be seeking to intercept and control our foreign
commerce, pretty much the way the British navy did in eastern
seas. The question ultimately becomes one of why does the
Administration want to involve American ports in Arabian
politics.
http://www.cbc.ca/halifaxexplosion/
http://museum.gov.ns.ca/mma/AtoZ/HalExpl.html
http://www.halifaxexplosion.org/
http://en.wikipedia.org/wiki/Halifax_explosion
HNN post,
Robert S. McElvaine ,
Mr. Bush ... Brought to the Bar of Poetic Justice (Finally)
Re:
http://hnn.us/articles/22339.html
https://web.archive.org/web/20060613211455/http://hnn.us/articles/22339.html
List of Comments, comments themselves not retrievavable:
https://web.archive.org/web/20060618142756/http://hnn.us/board.php?id=22339
My comment (03/09/2006 04:34 PM):
News Flash -- The Arabs Blinked-- End of Crisis.
http://www.usatoday.com/news/washington/2006-03-09-ports-deal_x.htm
https://web.archive.org/web/20060313214038/http://www.usatoday.com/news/washington/2006-03-09-ports-deal_x.htm
http://blogs.usatoday.com/ondeadline/2006/03/dubai_firms_sta.html
https://web.archive.org/web/20061214060749/http://blogs.usatoday.com/ondeadline/2006/03/dubai_firms_sta.html
The main safety issue was the "hazmat" stuff sitting
around on the docks waiting for a ship to come and
collect it. That and the possibility that the terminal
operator could "borrow" ten thousand tons or so of the stuff
by entering the right codes into the terminal's computer
system. Incoming containers tend to get hauled away as fast
as they come in. I could not discover if P&O had any
involvement in LPG terminals ("BLEVE" hazard),
but those are presumably covered as well.