ADDRESS AT THE BANQUET OF THE 2001 ANNUAL MEETING OF
THE SOCIETY
OF NAVAL ARCHITECTS AND MARINE ENGINNEERS
By Dr. Charles
R. Cushing, LF ‘54
I have attended the SNAME Annual Banquet practically
every year for nearly 50 years and have listened to as many banquet
speeches. When our president, Joe Cuneo
asked me to speak, I thought he was just giving me a chance to get even. I checked the past Transactions and found
that nearly 80 percent of those past speakers were admirals or government
officials. Some of the speeches were
great. Some were otherwise. In considering the subject for tonight, I
know how the eighth husband of a famous, beautiful movie star felt on their
honeymoon night. I know what to do, but
I’m not sure I know how to make it interesting. I remember one very forgettable speech that went on for nearly
two hours. Therefore, tonight, I will
break with tradition and follow, what Elizabeth Dole calls the three precepts
of a good speaker:
“Be brief, be sincere, and
be seated”.
I also remember what Lord Brabazon said:
“If you can’t say what you
have to say in 20 minutes, you should go and
write a book.”
What I would like to talk to you about, very
briefly, is the future and its relevance of our profession and our
industry. Yogi Berra is purported to
have said “I didn’t say everything I said.”
One of the things he didn’t say was “the future ain’t what it used to
be”. But let’s be serious for a few
minutes.
Some say that predicting the future is a fool’s
game, so let me go where angels fear to tread.
Many futurists miss the mark widely.
H.G. Wells said, in 1939, that “after WWII, there will remain only a
patch work of staggering governments ruling over a welter of steadily
increasing social disintegration. It
will be the Dark Ages all over again.”
How wrong he was.
We can put aside less scientific methods for
predicting the future, such as casting bones, crystal balls, ouija boards and
astrology (which a surprisingly large number of world leaders seem to rely
on). A more usual method is to
extrapolate well defined trends.
Another technique is to take the fundamentalist approach and consider
the interaction of a myriad of conflicting and interacting influences and see
how they reshape our extrapolations and projections. In this world of mind-numbing complexities and glut of global
information, we face difficulties and sometimes reach misleading results
because of the strong linkages within the systems that determine the otherwise
unpredictable. It is sometimes more
effective to follow Nobel laureate Murray Gell-Mann’s suggestion to take “a
crude look at the whole”.
These would include economic, social, political,
technological, cultural, environmental, demographic and other issues.
Obviously, in the few short minutes we have this evening;
we can but mention only a few.
Dickens wrote:
“It was the best of times, it was the worst of times” – that was 141
years ago, but it could be today.
Let us start with
some of the pessimists concerns and the linkages, which fuel their
fears.
Psalm 107 tells us:
“They that go down to the
sea in ships,
That do business on great waters;
These see the works of the Lord,
And his wonders in the deep.”
Most people are very familiar with this gratifying
passage of scripture and are content to stop there. However, the horrific events of the last weeks demand that we go
a little further in this passage, which instructs us:
“For he commandeth, and
raiseth the stormy wind,
Which lifteth up the waves thereof.
They mount up to the heaven, they go down again to the depths,
Their soul is melted because of trouble.
They reel to and fro, and stagger like drunken men,
And are at their wits’ end.”
The pessimists are concerned about:
12.
Environmental
nightmares including
13.
Political
and economic instability
a.
Ethnic
and tribal genocide.
b.
Disintegration
of stable governments and the emergence of rogue nations.
c.
Currency
panics and the fragility and interdependence of the world stock markets and
absences of basic safe guarding mechanisms.
d.
The
proliferation of ABC weapons and missiles capable of delivering them anywhere
in the world.
e.
The
rise of radical Islam.
The list goes on.
Certainly the pessimists have a lot with which to occupy
themselves. Equally simplistic, on the
other hand, is the optimist’s fantasy that there is nothing but a bright road
ahead to Utopia. There are many events
to lead them to be encouraged about the future.
Obviously, the real future will not satisfy either
the optimist or the pessimist and it will be an admixture of both. Futurists are more cautious in their
approach and often start by creating alternative scenarios. They then try to analyze the ways in which
they interact. Alan Hammond, in his Which
World? Scenarios for the 21st Century describes two.
First, a very bleak view the world is that of the
pessimist, called a Fortress World. In
this scenario the market-led forces are unable to correct environmental
catastrophes, nor are they able to put right the social and societal
inequities; that large portions of the world will be left without benefits that
would otherwise flow from a healthy global economy. Economic stagnation and fragmentation, social order breaks down
and resources are used to maintain security and stability in the face of local
and regional, if not world-wide conflicts.
This is what Hammond describes as the “dark side of global capitalism”,
where islands of prosperity and wealth co-exist with the oceans of misery and
violence. I, for one, do not subscribe
to this pessimistic future, which Thomas Hobbe’s describes as “nasty, brutish,
and short”.
The other view is brighter, a Market World, fueled
by capitalism, with integrated global economies, and increased individual
initiatives leading to expanding prosperity and an elevation in human welfare,
social progress, democracy and freedom.
Is this market world a plausible scenario? We certainly have seen a phenomenal
expansion in world trade. At the
current rate, international trade will represent half of the national output of
industrialized countries and 40% of developing countries, an
interconnectedness, which approaches Canadian philosopher Marshall McLuhan’s
concept of a Global Village. Technology
is contributing its share. The rate of
decrease in energy consumption to accomplish a given task decreases by 1% every
year. Moore’s Law, the doubling of the
number of circuits that can be imbedded in a computer chip every 18 months, had
held steady for the past 30 years and continues to do so. This rate of technical progress is at work
in so many other areas. The expansion
in food production has proven Malthusians wrong. For example, India, in spite of the doubling of her population,
has become a net grain exporter.
Demographically, most regions of the world have their population expansion
under control. Life expectancy, except
in Africa, increases. Literacy rates
and education become more universal.
Despotic governments gradually become democratic forms of
government. Just 15 years ago, there
were only 14 countries in the world that we would say were democratic. That number has doubled. Standards of living increase steadily. The press and media become freer, more open
and trans national in their reach.
Corruption gives way to ethical standards. World powers cooperate more effectively to solve conflicts.
This Market World is what we now call
“Globalization”. Globalization is a
controversial subject. This is partly
so because it is often ill-defined and means different things to different
people.
There are two distinct groups of detractors of
globalization. The first is composed of
the complete spectrum from reasoned environmental activists to the hysterical
ecomaniacs, from strident Luddites to obstructionists. They rail against Franken foods, super bugs,
poisoned water and land, invasion of privacy, cloning and its dangers, designer
babies, a world taken over by robots, the homogenization of world culture.
The second group is composed of people who have
genuine concerns for the poor, or who are poor themselves, and while not
exactly opposed to globalization, are merely concerned that they will be
excluded from the process and the benefits.
This is exactly the position taken by many of the world leaders of
developing countries. This group also
includes people who while not opposed to progress, want to be sure that the
introduction of new technology will have a minimal impact on the environment in
the short term and no impact in the long term.
Opponents of globalization criticize the developed
nations who they claim enrich themselves at the expense of the poor. It exploits workers, they say. It destroys the environment, they say. It homogenizes national cultures, a sort of
Coca-Colaization in a Big Mac World.
They say that lending agencies demand poor nations to adopt capitalistic
ways like trade liberalization, free exchange of capital and institute
government austerity. These efforts
often fail and the poor end up being poorer.
U.N. Secretary-General Kofi Anan, recently said that
“arguing against globalization is like arguing against the laws of gravity, but
that does not mean that we should accept a law that allows only heavy weights
to survive”. I am surprised that my MIT
schoolmate missed the point of the basic Newtonian law, namely that
acceleration due to gravity acts the same on all bodies, both heavy and light
weights alike, and that basically if Alan Greenspan and Robert Mugabe both
jumped off the Leaning Tower of Pisa together, they would both fall flat on
their faces together. It is obvious
that the poorer nations need assistance.
Globalization is here. No one planned it. It
happened. It is a natural result of a
world that is prospering; a world that is growing closer together. Revolutionary information technology is
making it easier for buyers and sellers to communicate with each other than to
walk to the other end of the souk or bazaar.
Modern transportation is swift and adds very little to the selling price
of a product. The global marketplace is
a natural evolutionary phenomenon.
Robert Zoellick, U.S. Trade Representative recently said that “The
global trading system has demonstrated…that it is the pathway out of poverty
and despair”.
The positive aspects of
globalization have been discussed and are obvious. They include an increase in the standard of living, improvement
in health and nutrition, a spread of democracy, more stable government, a
reduction in international conflicts and many other benefits.
You must be sitting there and wondering what does
all of this mean to us, our naval architecture and marine engineering
profession and our marine industry? It
is simply this:
§ Our domestic economy and all
of the benefits we derive from it depend upon the world economy.
§ The world economy is linked,
inextricably, to globalization.
§ The health of the global
economy depends on political and economic stability.
§ The successes of the global
economy will increase as production and consumption spread geographically.
The gross domestic product of the U. S. is over
$10,000,000,000,000 (10 trillion dollars) more than double that of the next
largest in the world, China. We import
a trillion dollars of goods annually, and export about $700 billion.
We rely 100% on such countries as China, India,
South Africa, Brazil and Mexico, as well as others for bauxite, alumina,
manganese, mica, graphite, bismuth, and many other minerals.
We export over $60 billion and import over $40
billion in agriculture products. We are
the world’s largest exporter of wheat and corn and third largest of rice. We import as many cars as we manufacture,
over 5 million per year. For the past
60 years our exports have doubled every decade, and imports more than doubled.
Ninety-five percent of this world trade is carried
in ships. In times of strife, the same
statistic applies to war material.
Of the non-bulk cargoes, 90 percent are carried in
containers. Containerization remains as
one of the most important technological developments in the twentieth
century. It has had a huge impact on
the global economy. Why? Because it has dramatically lowered the cost
of transportation and made possible the manufacture of goods in many remote and
developing countries. The result has
been a steady improvement in the standard of living of workers throughout the
world.
Last week, the New York Times in an article on the
impact of September 11th on the shipping industry, said “containers
and the ships that carry them have revolutionized trade”…and… “The standardized
metal boxes have become the chief instrument of globalization.”
Containerization had its origins in America and in
our marine industry. It has grown to
the point where there are well over 12,000,000 containers in existence. The investment in container equipment and
ports now exceeds a trillion dollars.
But containerization and containerships have not yet been
perfected. There is still much to
do. It is the role of our industry to
bring steady improvement and innovation to this segment of transportation.
The world depends on oil, gas and coal. Seventy percent of the oil which is traded
comes from the Middle East. The growth
in tanker size and capacity and resulting reduction in energy transport costs
are again technological developments that had their origins in the American
maritime industry.
Since the day of the clipper ships and packet
steamers, speed has been a preoccupation of our industry. High-speed passenger ships were an American
product or served American travelers on trans-Atlantic and trans-Pacific
routes. The Blue Ribband/Hale’s Trophy
resided here until it was questionably won by some high speed motor boats. The phenomenal growth of the cruise
industry, while not of U.S. construction or ownership, nevertheless is an
American industry. America has a
significant role to play in high speed cargo transport, whether it is of
semi-planning or full-displacement tonnage.
We should be a leader in this segment.
We need to be doing much more in this high-tech segment of marine
transportation.
The offshore oil industry is another example of
American technology and innovation. The
list of other industries is very long, where American ship designers, shipyards
and/or shipowners have made quantum improvements in maritime transportation.
World trade will continue to expand, and America, as
the major world trading partner, the major consumer of energy, the major user
of cruise vessels should be enjoying greater participation in marine
transport. And we can’t depend on
chartering in foreign flag ships in time of global conflict. We can’t keep reflagging and converting
worn-out foreign flag ships for the Navy.
We can’t blame seagoing labor for high labor costs,
since automation and minimally manned ships have dramatically reduced crew
costs as a competitive constraint.
Today’s ships are 50 times more productive (on a manpower basis) than
WWII ships. Similarly, we can’t blame
more stringent safety requirements imposed on U.S. flag ships, since higher,
more uniform class standards, better port and flag state control and a general
improvement in international conventions apply to all ships nowadays.
So what is wrong?
First, our concept of free trade is not yet practiced globally. U.S. shipping companies and shipbuilders are
held strictly accountable by our government, whereas breaking the rules or
applying them unfairly is a common occurrence abroad. We need a level playing field for our industry.
Second, most of the dramatic major American marine
transportation innovations have been the result of daring entrepreneurs, such
as William Webb, Donald McKay, D. K. Ludwig, Malcom McLean, Tom Crowley,
William Francis Gibbs and others. We
need more of these bold dynamos.
The challenges to our industry in the near future
are many. In order to remain in a
leadership position, we will need to deal with
and many similar challenges.
I would be remiss if I did not mention the events of
the last month, when our blissful way of life was shattered by the unspeakable
and outrageous attack on the World Trade Center and the Pentagon, and the grief
and outrage that we all share. While
some see radical Islam as a problem facing globalization, the attack of 11
September was the work of an international gang of thugs. America, and other countries whose citizens
abide by basic rules of law and respect for humanity, will deal with these and
other terrorists who attack innocent people in the name of religion, ecology,
politics, racism, and in some cases, without any reason whatsoever. There is no room for terrorists in a
civilized world.
I mentioned the very familiar first four lines of
Psalm 107, and also the next six. But
this Psalm is not one of despair, because it ends:
Then they cry unto the Lord
in their troubles,
And he bringeth them out of
their distresses
He maketh the storm a calm
So that the waves thereof
are still.
Then they are glad because
they be quiet;
So he bringeth them unto
their desired haven.
And we too should not
despair because of troubles placed in our path; but rather, regard them as
challenges which strengthen our resolve to each do our work to improve our
industry, our country and mankind.
I would like to leave you
with an Irish blessing which seems most appropriate today,
“The globalization wish I have for you.
Plenty of maritime work to do,
A lot of profits about which
to cheer,
And a bottle of aspirins
always near.”