Put another way, are we spending all this time and money to fail at simply building a ship that is functionally identical to one of these ~$300m Finnish ice breakers, or are we claiming we need something more sophisticated?
Yes, they are woefully uncompetitive. They produce single-digit numbers of commercial oceangoing ships annually, at 2-4x the cost of elsewhere. It’s an industry on life support.
The problem with icebreakers capable of dealing with multi-year ice is that they're a very expensive and specialized kind of ship that's hard to construct, but also the sort of ship that has a very long lifetime. Only a few governments in the world have any need of such ships, and they typically only need a few in the span of many decades.
By the time Canada got around to looking for new icebreakers, not a single shipyard in the country had made one in many decades. Ordering a ship from someplace foreign that had actually made one recently would be cheaper than trying to make one domestically. However, then shipyards that haven't made an icebreaker for twenty years would become shipyards that haven't made one for forty years.
It really would make a lot of sense for close allies like Canada and the U.S. to collaborate on building icebreakers.
Is there really much difference?
And it's far harder to get a ship built at a yard that is out of business than one that isn't.
To get good at something, good enough that you're competitive on the world stage, you need to be building lots, iterating, getting feedback and so on.
The US coast guard doesn't have the need to kick-start that sort of scale of development. So it takes a fortune (think 10s of billions) to catch up to the Finns.
But the headline number is somewhat irrelevant. 300m sent to Finland is "gone forever". 1.1 billion spent in the US boosts the economy, and ultimately works its way back to the govt in taxes.
The benefits have little to do with "preserving skillset" and more to do with the economic benefit of circulating another billion in the local economy.
Even with the quotes, as a Finn I find this statement rather tasteless.
Or would you also claim that cross-border trade with more nearby nations is "money gone forever"?
You can make a deal that US buy icebreaker for 300M from Finland and Finns buy weapons from US for 300M. They need it because of Russia and you boosts US economy in other areas.
The US can’t make cheap artillery shells because we don’t have much artillery manufacturing. Our armies just don’t use much artillery. We use mostly guided munitions dropped from planes and rockets fired from the ground, whereas Russian doctrine has always focused on artillery.
Thanks for the specifics. I don't know about guided munitions, but I'd imagine a million dollar a rocket will be quite expensive for a prolonged war. Also, the US debuted a killer zone, Rogue 1, a few months ago, and it cost about $94K. $94K! I'm sure the drone is more advanced than DJI Mavic 3 Pro, but is it really 50 times more advanced even if we take the cost of military-grade into consideration? It looks to me the only explanation is that without a healthy manufacturing sector in the US, the cost of anything would go through the roof because we have lost the economy of scale.
So it’s doable - just depends on priorities (ie, moving chip manufacturing back which seems to have us recent success).
Just recently a US navy tanker ran aground and now they're scrambling to find some way to fuel the carrier group in the middle east because for some reason that's the only one that was available. The navy logistics group is woefully understaffed und under-equipped.
What are the priorities in actuality? Because maintaining a military at adequate readiness doesn't seem to be at the top of the list.
I think Yamamoto Isoroku gave the answer to this challenge: just keep a booming manufacturing industry. When he was trying to convince the Japanese government not to have a war with the US, he said that he saw so many chimneys when flying over Philadelphia. All those factories would turn into a giant war machine if a war ever broke out.
That is, the economy of scale matters. When the US had its entire supply chain domestically, replacing a special screw could cost a few cents. When we were in good terms with China, it would cost a few dollars as we had to order the replacement overseas, but well, it was still cheap. Now that we are trying to cut China off, then what will do if we'd need to get a replacement? Setting up a shop from scratch with little expertise and no supply chain to back it up? Well, such replacement would then cost a few thousand dollars and we would be screwed.
Is it? What is the theory that the US could keep up with China? That would be the US vs the globe's industrial superpower with an arguably larger real economy. It doesn't seem plausible that the US can fight a long sustained war.
The plan as far as I can see it is to make use of a large network of allies and partners as well as aiming to finish the war quickly by cutting off materials like food and industrial inputs to stall the manufacturing engine. If it turns into a slugfest where munition reserves start to matter that seems like it would favour China.
One of the big surprises out of the Ukraine war is that the US isn't in a position where it can easily bully Russia. If that is the case it is hard to see it coming out ahead vs China in any plausible conflict.
I don't think it's unclear at all. It's uncomfortable to call out an obvious truth: We couldn't even compare. The only hope we have is basically economic mutually assured destruction. If it comes to a hot war, it better be over (without going nuclear) within weeks or at most single digit months or it's more or less over. At least from where I'm standing.
It's unclear if the US could even get production ramped up on the scale of a decade. We simply don't have the people to train the people we need. Much less the people with the skills to do the thing.
Why? There is essentially zero chance that China can mount an invasion of the mainland US or even strike at its heartland enough to disrupt an industrial ramp up, even if it takes a decade (which it won't). The US can literally wait out anyone except Canada and Mexico (which... lol) by defending its coasts, with plenty of domestic natural resources - including agriculture, metals, and oil - to supply not just its military but the entire civilian population.
It's not about "home country". The US doesn't need carrier groups to defend home country. It needs them to project power into other parts of the world.
Take Taiwan. If China invades there that represents a significant dilemma for the US. On balance, they'll likely make a token response, then fade away. Places where the US has enjoyed power (like the South China Sea) might be harder to protect.
Does the US have the stomach for wars in Taiwan, Japan or Australia?
Agreed
> It needs them to project power into other parts of the world.
China can barely project power in its own backyard while the US has nearly a century of experience projecting around the world, with eleven carrier groups to China's two. Assuming they all get destroyed by hypersonic missiles within the first few months, the US still has military bases all over the world. As far as I know, China has zero military presence in the Western hemisphere except some surveillance balloons.
China may have a short term advantage in production and cost but the US has the advantage in every other area of logistics relevant to a military.
> Take Taiwan. If China invades there that represents a significant dilemma for the US. On balance, they'll likely make a token response, then fade away. Places where the US has enjoyed power (like the South China Sea) might be harder to protect.
Absolutely but it'd be a pyrrhic victory worth little except as domestic propaganda. If the US does help defend Taiwan, the invading Chinese fleet will likely be massacred. There's little room to hide in the 80 mile wide Taiwan strait against modern anti-ship and anti-aircraft weapons. China's only real advantage will likely be air power, which doesn't win wars without lots of boots on the ground.
> Does the US have the stomach for wars in Taiwan, Japan or Australia?
I'm not sure about Taiwan, but I don't think we'd let Japan or Australia slip into war without assistance. (but what do I know? :-))
Defending Japan is a reflex action. We have bases and troops there, as well as a mutual defense treaty.
Actual invasions of Japan and Australia are even harder to imagine. How would that even work? And why?
It is unlikely that China will invade Japan and certainly not Australia. I find it extremely more likely that USA will invade Mexico with some fake pretence like war on drugs.
In the most recent US wargame, China succeeded in occupying parts of Taiwan which would make artillery even more important — as attacks from the mountain regions towards Chinese occupation would keep them from establishing a secure foothold.
Maybe. Or a it’s a sign that workers, the environment, or some other factor is being exploited for gain.
You get smarter/more accurate with the constrained supply of shells, adopt drones etc.
In the 80s, expensive Maverick missiles were the primary airborne tank killer. Now the Ukrainians are dropping mortars into tank hatches from cheap drones.
Read TFA. Faster, yes. Cheaper, no. Even after fully ramping up, Liberty ships cost considerably more to produce in the US than an equivalent ship elsewhere. In wartime that is acceptable. When you're producing for a global market, it's not.
We have prioritized high wages for workers in the US, a phenomenon also driven by the reserve currency status of the dollar. Russians, Chinese, and Indians work for a fraction of the price we do. We have high labor costs and have to import many components due to them being made much cheaper elsewhere.
>We can only keep our expertise by actively doing. If the next war breaks out, how would the US win? By sending armies of lawyers and coders?
You're totally right. This war is coming very fast as well, and by some accounts has already started. I worry we will all soon find out just how bad of a position we are in, the hard way.
I'm not sure if this is the dominating factor. Russia fired around 10,000 shells a day, and each costs about $1000. So for a year, Russia would have fired 3.65M shells that cost $3.6B. Let's say we need 100 workers to produce these shells. Then, he wage of the workers would cost merely $10M a year, if each one earns $100K a year. $10M over 3.65M shells, and that's just $3 a shell, or 0.3% of the cost of a Russian shell, or 0.075% of the cost of a US shell.
What the US lost was not advantage of labor cost, but the economy of scale. By the way, this is also what Tim Cook said. He said that Chinese labor not cheap anymore, but China has so much scale and expertise so that the output from China is still cheap. Again, economy of scale.
>What the US lost was not advantage of labor cost, but the economy of scale.
We've lost a lot of things but the reason things are expensive here is NOT that we didn't have economies of scale. That issue came much later. You get to have scale in the first place by being economically competitive. When things are outsourced due to some other country using slave labor or else their workers surviving on a tenth of what you make in the US, that is when you lose economies of scale.
Literally the only way we could compete in an open market with countries that have cheap labor is to use automation. But even with automation, those machines can be set up anywhere in the world, and they will tend to go wherever it is cheapest to run them.
There may be "Slave Labor" in some places, but the vast majority of people doing out-sourcing for US companies are very well paid (by local standards.) They are not "surviving" they are thriving.
living in the US is expensive. So prices go up to match. So wages go up. So materials go up. "National security" is expensive (and the US is obsessed by it.) 13% of the budget goes to the military. Protectionist tarrifs. Security theater like the TSA. All of this comes at a price.
The US has enjoyed a leadership role in world affairs, economic strength, influence etc for 75+ years. But it turns out that "expensive is the head that wears the crown".
I say this not as a criticism, merely as a statement of reality. Of course, whether it changes, or indeed even discussing if it should change is debatable.
unions and pro union legislation makes US shipbuilding uncompetitive. it also ruins US merchant marine. We could encourage it, but the world market is fairly competitive so we don't really need to, except for defense.
They love including requirements that all but mandates a specific vendor's product because that vendor is a key employer in the district of some rep's who's vote they need or has a good lobbyist or whatever.
It sounds like it is the former.
> If and when the ships are completed (currently 2029 for the first vessel at the earliest), they are expected to cost $1.7-1.9 billion apiece[0], roughly four to five times what a comparable ship would cost to build[1] elsewhere.
0: https://www.cbo.gov/system/files/2024-08/60170-Polar-Securit...
1: https://sixtydegreesnorth.substack.com/p/the-silicon-valley-...
Episode webpage: https://warontherocks.libsyn.com/can-ice-pact-salvage-americ...
Media file: https://traffic.libsyn.com/secure/warontherocks/WOTR_-_Icebr...
This is true. But it’s not the root cause for our shipbuilding problems. Our dockworkers and shipbuilders are uniquely inefficient.
It’s more likely that US workers (in this sector) expect to get paid $100k to produce $20k of value (relative to other countries)
Even ignoring nuclear weaponry and mutually assured destruction, ships are expensive and fragile. They are easily destroyed from above or below, which makes them only useful against nations that don’t have modern military technology. If you need a floating platform to fight Houthi rebels they’re useful, if we’re facing an actual invasion they’ll be worse than useless.
As a result there’s not much pressure to get it right. If breaking ice were an activity that our national security relied upon I have no doubt we would be building them quickly.
How about we let Finland build the icebreakers, and we build something we're good at, like fighter planes? Then everyone gets the best and most efficiently built icebreakers and fighter planes, and all for much less money.
There is no [edit: economic] logic to economic nationalism, other than as wealth transfer from taxpayers to a few wealthy people.
It doesn’t have to be that way, and phrased a little more benevolent, economic sovereignty is a good thing. It’s for that reason the EU has invested a lot of money into Galileo instead of just using GPS. Or look at the Ariane rocket program. It mandates an absurdly complex manufacturing schedule with thousands of European companies, effectively costing a lot more than just relying on SpaceX. At the same time, though, it creates a lot of jobs and distributes wealth throughout the union.
Embezzling is a problem, and politicians funneling money to their cronies too. But it can be done differently.
you need your own industrial base to manufacture and develop the machinery you need to defend and project hard and soft power across the globe. Globalisation was supposed to "solve this issue" by making economies so interconnected that this would be no longer needed.
Sadly, we have learned that that simply does not hold up.
We've learned that the world now is more divided and violent than we had hoped, with the revisionist Chinese and Russians on one side and the US Republicans on the other (or sometimes on the same side as Russia!) So we depend more on the military, and also we can't depend on China's manufacturing to supply military goods.
But can the US depend on Europe's, South Korea's, Japan's, Canada's, Australia's? I think so.
Also, efficiency is everything in the competition with China: China, with ~ 4x the population of the US, can outproduce the US with just over 1/4 of the US's productivity. The US must maximize not only volume but productivity. Adding the countries listed above greatly increases volume, and the US can't afford the productivity cost of spending on inefficient manufacturers - the US needs to maximize output per dollar.
I do think the US can depend on Europe, Canada and Mexico. South Korea, Japan, and Australia are far from the USA and close to China. They have high incentive stay friendly with China.
I do think China can easily outproduce the US. But I don't know that the US needs to maximize output per dollar. The USA can print dollars, and already creates a whole bunch of dollars out of thin air every year. The inflationary effect of printing a few more billion, specifically to maintain local shipbuilding capabilities, might be worth it. Just going for dollar efficiency has led the USA to de-industrialize, perhaps too much.
The status quo can't be maintained, that's for sure.
While that was to some degree a concern years ago, before Biden took office, those countries have decisively and openly taken sides with the US and are members of a network of alliances that also includes The Philipines and, to a degree, India. The US has been building and improving bases, military training, etc. in and with those countries and all over the region For example, there is AUKUS, a major agreement between the US, Australia, and also the UK, for Australia to become the only country outside the UK to receive one of the US crown jewels, nuclear submarine technology. Australia also is hosting an expanding number of US bases.
> I don't know that the US needs to maximize output per dollar. The USA can print dollars, and already creates a whole bunch of dollars out of thin air every year. The inflationary effect of printing a few more billion, specifically to maintain local shipbuilding capabilities, might be worth it.
The economics is trickier than that: Production is real economic value; printing money is just a statistic. Productivity = output/dollars. If you increase the dollars in that equation, you don't change the output and you reduce the nominal productivity number (though usually it's measured using inflation-adjusted dollars, so it's really unchanged).
The US can increase output by borrowing more dollars, increasing the volume of investment in shipyards without increasing productivity. But borrowing does cost something - IIRC the debt payments will soon exceed the military budget - and can cause inflation, which eventually negatively impacts output. In the end, China may be able to invest far more.
> Just going for dollar efficiency has led the USA to de-industrialize, perhaps too much.
What connection is there?
Or perhaps "revanchist", meaning that they want to conquer some territory they believe (or at least pretend) used to be theirs.
Taking Europe as an example, if Trump or someone like him decides to leave Europe to its own devices while facing an aggressive Russia, we could see massive re-militarization. Who can say where a shift like this would lead? It's easy to view these countries as permanent allies when they depend on us for security, but they might not be so cooperative once they can stand up for themselves militarily.
This applies to Japan and South Korea as well vis a vis China/NK.
Anything can happen, but that's not rational. Rationally, we need to anticipate what is likely and not treat risk as if it's all random, coin-flip, unpredictable chaos.
And not only plan, as if we are passive victims of history, but make it happen - invest in NATO, etc.
So in terms of long term planning, I think hedging our bets make sense. It might be a good idea to invest in NATO, but we also don't want to be left in a highly vulnerable position in 10-20 years if NATO falls apart and our current allies stop giving us free trade agreements, because that's a real possibility.
> Sure, but assuming we remain a democracy, or some approximation of one, we're always going to be a bit schizophrenic in our policies. Any particular administration can try to go in one direction or the other, but they have to be aware that their successor (or the one after) could very well undo all their actions and take the exact opposite course.
The idea that democracies are less stable and predictable doesn't bear out in reality. They are the most stable and predictable forms of government, because they have many checks on their power: Free press, legislatures, competitive elections, etc. expose fraud and incompetence to their disinfectent, sunlight. The rule of law means that officials serve the law and the people, not a person. Putin is not someone you trust to keep their word in a deal with you.
Government by dictators is less stable: They lack the essential things above, and are subject to one person's whim - a person inevitably corrupted by their power. They change power through violence, which makes them even more unstable.
And to circle back after all to the evidence right in front of us: NATO has lasted 90 years so far. The US has greatly expanded and deepened its alliances in East Asia over the last 4 years. Now name an ally China or Russia has. They don't - dictators don't have allies on that level; nobody actually likes their values and wants them to succeed. China and Russia's current relationship is nothing like the US's with NATO;
When you do stupid and unpredictable things? Certainly. But that seems like an internal US problem. Of choice rebuilding local manufacturing might be easier than fixing that in theory. OTH the longterm cost would like be much higher due to lower global stability.
If our goal is to be robust against the risks of a great power conflict, we can't necessarily depend on manufacturing from these countries because a great power conflict might either overrun or cut off our supply lines to these countries. In fact, control over East Asian shipping lanes is the central point of the current cold war with China.
Still, it's a risk, not a deal killer. China could bomb US production too.
Anyway, I was thinking of missiles, which China has many of, and which can reach the US (including from submarines and other ships that can maneuver closer to the US).
You haven't established that it's a 'good thing', but it does exist. I don't suppose Galileo is about economic sovereignty as much as strategic military independence. Modern militaries require satellite PNT systems - they are necessary to precision munitions, without which your military operates on a 1980s level. As close as the EU-US military relationship is, they perhaps don't want to give the POTUS a button to shut down, e.g., a French military operation. The POTUS might like Galileo too - they might not want the pressure to use that power. (I'll skip having another HN SpaceX discussion!)
> it creates a lot of jobs and distributes wealth throughout the union
Or it just shifts money and jobs from all people - the taxpayers (including businesses) - to a few, the ones that get those jobs and especially the business owners. It's arguably better to just give people the money and have them do something they can do efficiently. It's make-work welfare, in a way.
Given the close economic and cultural ties of these countries, surely some kind of knowledge transfer could happen, if not actual nearshoring the construction. Could NAFTA (or whatever it's called now) be used to get around the Jones Act somehow?
Perhaps that's what you meant, but Ally makes it sound like they're friendly with NATO rather than an actual member.
I agree with your economic nationalism comments. But Canada is in a special position here: the US Arctic is contiguous with Canada's much larger Arctic region and a US/Canada icebreaking partnership seems to make sense. The US nationalists might be okay with it because of NAFTA, generally close economic ties and the whole "fortress North America" thing. Canada has at least two shipyards capable of building icebreakers and the US has money.
Another example of this close, almost ambiguous economic relationship: the US Department of Defense is funding Canadian mining juniors. I have never heard of this happening before: https://www.defense.gov/News/Releases/Release/Article/377704...
That's got to be a factor here
That was a complaint many years go, but things have changed dramatically: The US now is 'decoupling' its economy from China, and moving production to friendlier countries, and the US encourages and arranges for allies to do the same. The US and its Pacific allies are also intensely preparing for possible warfare with China.
Just because China is not a reliable partner doesn't mean the US should throw out all other partners. Should the US not buy icebreakers from Canada and Finland because of China? That would be greatly hamstrining the US. China's government would love it, I think.
“Nationalism is an infantile disease, it’s the measles of mankind.”
-Albert Einstein
I mean, ideally we could try to not suck at building ships economically, though. But that’s a lot harder to figure out given how it’s a political problem.
We can't. Jones Act.
[0] https://sixtydegreesnorth.substack.com/p/yes-the-us-coast-gu...
"In practice Congress would need to support such a plan by appropriating funds for the project."
This is the meat of the article in my mind. The US has globalized away its maritime industry in general and we now lack the institutional knowledge, infrastructure, and labor force needed to operate even semi-independently on the maritime front. Just look at our domestic shipbuilding capacity vs. China: https://www.americanmanufacturing.org/blog/chinas-shipbuildi...
WA state has the same problem trying to get ferries built for the Puget sound. Every decade the fleet gets more dilapidated and the replacements get more expensive and farther behind schedule. The legislature has ditched the requirements that the boats be built at a WA shipyard and they still can't find builders.
It hasn't. Jones Act _protects_ the US maritime industry, so it stagnated and died. Nobody wants the US ships unless they have to use them, they're crap compared to ships from other countries.
> and they still can't find builders.
That's because shipyards are basically a defense industry subsidiary. So they receive a fixed amount of orders, and it's known for years in advance. The shipyards are also unionized to hell and back, with VERY cushy contracts. So shipyards can't hire temporary workforce for a given project.
The problem here isn't the unions, it's the fact that we privatized building ships. It's yet another example that privatizing all parts of the government is a fundamentally bad idea. Government goals do not align with private industry goals and private industry, particularly in a well captured market like defense and ship building, gets to command insane prices because they know the US will pony up.
The reason the US was able to make advanced navy ships right up until the 80s is because shipbuilding was done by public industry. Insanely, Clinton and Reagan started the process of privatizing our fleet capabilities and it's landed us exactly where you think it would.
The reason we don't have ice breaker ships being built is because it's a niche market and ship builders are all too happy to say "no" or to charge an exorbitant price so the US military will go away.
But on the other hand, the same stats show a steady decline in the number of companies from 1950 that was only stabilised after the collapse in output, so it is probably arguable that the high-production situation was unsustainable. Economics can be complex.
"A federal grand jury in Kansas returned an indictment yesterday charging seven defendants, including five current and former high-level officers of the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmith, Forgers and Helpers (Boilermakers Union) for their alleged roles in a 15-year, $20 million embezzlement scheme."
https://www.justice.gov/opa/pr/two-former-presidents-boilerm...
I'd bet that's just scratching the surface. The only way any country has been able to develop their productive capacities is through public grants and subsidies. The history of US industry shows the same thing, research in materials, electronics, the internet, etc were all accomplished through publicly funded research.
US domestic market is much larger. Uncompetitive industries can survive on domestic demand. Especially with some regulations that help. It doesn't even have to be explicitly protectionist regulation. Just regulate things the way Americans consider the best, instead of adopting international standards. That can create sufficient barriers to entry to allow uncompetitive industries and uncooperative unions survive.
Somehow the magical thinking here is that, if you allowed everyone to buy ships from anywhere they would buy more American made ships but because it is mandated that you buy American made ships for certain tasks, suddenly the industry is noncompetitive.
The reality of the situation is that the Jones Act is the only thing keeping the last vestigial of the shipbuilding industry alive. There are some inefficiencies in the industry it's self but for the most part, the primary drivers for the increased costs were related to the regulatory environment of the US(environmental, worker protection, etc), now there are even greater costs due to network effects of related industries having shrunk or died out.
Similar to posts about machine tools or electronic design, everyone talks about how in China its so much easier to get stuff done because the Fab shops are all next door and nothing like that exists in the US, you used to have more steel mills, fabricators and machine shops. Now there are fewer and further apart.
Network effects matter.
With these unions ("Boilermakers")? No chance. They can officially give their jobs to their _children_ upon retiring.
There is a waiting list for apprenticeships. You have to complete 8000 hours of apprenticeship, even if you are already qualified.
> By cushy contracts this means that the amount of wealth extraction from workers is not as great as it is in other American industries.
WA is ordering ferries at $1.5B per item. They cost 20 _times_ less if ordered from Turkey. This is not "wealth extraction from workers", this is "sucking on the teat of taxpayers".
It's about 7x.
> 20x discrepancy in salaries
Not salaries. The end-product costs.
[1]: https://www.usatoday.com/money/blueprint/business/hr-payroll...
And cushy contracts mean products that are considerably more expensive. Pretty much the only unionized industries left are those where they are somehow protected from competition. That's because union products cost enough more to drive them out of the market.
Similar with Boeing too.
Every country who isn't just getting exploited for their natural resources or labor has built their industry by protecting it.
The most recent classes seem riddled with various problems - see Zumwalt, LCS, Constellation. I suppose the Ford is relatively ok.
But let’s be real, as other countries rise up and we start losing our grip as the top dog, we're gonna feel the pain. It could be a slow burn or maybe a faster crash, but either way, it's gonna suck. We’re gonna have to go through some serious hardship to get back to where we think we should be. Not based on what we think we deserve, but what we actually do.
And it’s kinda mixed messaging too, right? We somehow believe our labor is more valuable than others, but at the end of the day, it’s gonna come down to working harder. Longer hours, more back-breaking labor, real work, not just sitting in an office chair all day. We’re not entitled to cushy jobs forever, and things are gonna get a lot harder before they get better.
They've created a market in which a US based company cannot compete economically, because the cost of production elsewhere will be less. There is no margin by which any competition can take place, whether or not the government throws a ton of money and stopgap incentives into the mix.
You can't manufacture chips, small household goods, general purpose clothing, electronics, or a whole slew of other things in the US because our legal regime fundamentally disallows any American participation in those markets through economic disincentivization. If you can't make any profit because you have to pay higher wages or taxes if you manufacture in the US, then you're not going to manufacture in the US, even if you're a patriot.
The US doesn't have a rational system designed to maximize value to citizens, it's a hodgepodge of conflicting regulatory grifts designed to maximally benefit the corporations who paid for the lobby.
> they're crap compared to ships from other countries.
That's exactly what "globalizing" is. You literally cannot, under the current regulatory regime, create a ship building company that can compete with other established interests and competition from other countries. You'd have to relax the arbitrary labor and wage constraints, fix taxes and tariffs for sufficiently long term outlooks that anyone would bother investing. To achieve that, you'd need good faith operators throughout the government willing to rock the boat, and if you think that will ever happen, I've got a bridge in Brooklyn for ya - I'll sell it cheap.
Why? Because efficiency is a tradeoff where you give up security and resiliency.
The US imports steel, and the protectionist regime almost killed the US steel: https://reason.com/2024/01/02/protectionism-ruined-u-s-steel...
> Batteries? Protectionism. Solar? Protectionism.
That's relatively new, and it _will_ lead to disaster. The US is already falling behind in battery tech compared to China and South Korea.
> Autos? Protectionism. Aircraft? Protectionism.
Need I remind you of Detroit and its handling of cheap Japanese imports in 70-s and 80-s?
Aircraft are only slightly protectionist, the US companies can (and do) buy foreign aircraft (Airbuses and Embraers are commonplace).
If the Pharoah wants a fleet of aircraft carriers, the Pharoah will have a fleet of aircraft carriers.
The West plays nice as much as possible. China is playing to win.
I'm not seeing it. Chinese economic power and tech capacity might exceed US capacity in time, but I give it only p = .25 or so. China's descending into some sort of political chaos seems more likely.
> Our research reveals that China has built the foundations to position itself as the world’s leading science and technology superpower, by establishing a sometimes stunning lead in high-impact research across the majority of critical and emerging technology domains.
> China’s global lead extends to 37 out of 44 technologies that ASPI is now tracking, covering a range of crucial technology fields spanning defence, space, robotics, energy, the environment, biotechnology, artificial intelligence (AI), advanced materials and key quantum technology areas. The Critical Technology Tracker shows that, for some technologies, all of the world’s top 10 leading research institutions are based in China and are collectively generating nine times more high-impact research papers than the second-ranked country (most often the US). Notably, the Chinese Academy of Sciences ranks highly (and often first or second) across many of the 44 technologies included in the Critical Technology Tracker. We also see China’s efforts being bolstered through talent and knowledge import: one-fifth of its high-impact papers are being authored by researchers with postgraduate training in a Five-Eyes country. China’s lead is the product of deliberate design and long-term policy planning, as repeatedly outlined by Xi Jinping and his predecessors.
Emphasis mine.
And the West isn’t? I honestly am not sure whether I prefer Xi Jinping over one of the candidates in the upcoming US elections.
There are still thankfully some checks and balances in place, but if the loudest elements of one of the two major US parties has everything their way, I’d honestly prefer to live in the PRC.
Investment can (and often is) different from protectionism. Typically, investment provides time-limited grants or other forms of support. If a company misuses them, a global (or local) competitor will outpace it.
Protectionism ensures that companies are indefinitely protected from global competition, so they don't feel as pressed to improve.
I am not a terribly smart person, and I don’t have all the answers, but I would argue it’s clear what we’ve done so far isn’t working, based on all available evidence.
Cheap labor cost typically is only a fraction of a high-tech product. If anything, China was not the world's biggest factory, but the world's biggest assembler. It's changing right now, and China is producing more of its own high-tech components.
So a small amount of protectionism (like a 10-15% tariff) might be OK, and it will compensate for this labor cost discrepancy. But not tariffs that simply make the local industry complacent.
American movies, however, are still quite popular abroad. Offhand, I'd say it's one of America's biggest exports. "Microcode" is the other one, if you mean things like CPU design: all the biggest CPU makers are in America: Intel, AMD, Apple, Qualcomm, etc. (Many of the CPUs are manufactured elsewhere, usually by TSMC, but all the design work is done in the US.)
That's just not true. As long as you are able to get an original ticket and not a resold one. But ticketmaster and live nation should be regulated because they're a middleman monopoly in all of it.
If you want to be able to build and retain the capability, you have to protect the machine that does the building: people, institutional knowledge and domain expertise, equipment, etc. Otherwise, you forget how to build, the machine evaporates. And here we are.
The American shipbuilding industry has been allowed to atrophy in an idea that protectionism would lead to good commercial the results.
What little gets built in the US is way behind the global peers in terms of economics and quality.
As usual the end results are that the entire shipping industry works around the Jones act, for example cruise ships from Florida docking in the Bahamas, and for the regions that can’t do it they are tough out of luck.
Why can’t the US build offshore wind? Because there are no jones act compliant vessels and the proposed workaround is staging all the materials in Canada and adding an enormous time waste to the projects.
[1]: https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920
We could talk about modify it maybe allowing purchase of specialized ships from overseas friendly countries, like icebreakers from Finland.
What starts with good intentions ends with a bandaid that someday will have to be ripped off at the cost of the people who made a subsidized living based on it.
If you want to be a global power, you require great navy, both civilian and military. That's been true since 1500s and will likely remain true for many years to come.
So question is, do we throw out Jones Act and slowly stop being World Superpower or leave it and pay higher upfront costs in certain places? That's political answer obviously.
It can, however, make us much better off, by for example allowing US companies to buy foreign ships to do tasks that currently are covered by Jones Act, and as a result are not done at all.
For example, we’d be able to ship gas from American oil fields in the South to consumers in the North, where there missing or insufficient pipeline capacity. Right now, Jones Act forces US consumers in the North to buy foreign gas.
Couple years back, before the Russia-Ukraine war, Russian Gazprom was making nice profit on the following run: 1) sail to Northeastern US, sell it Russian LNG 2) sail to Gulf of Mexico to buy American LNG for cheaper than it sold Russian gas to Americans in the North 3) sail elsewhere in the world to sell them American gas, eg to Europe or Africa.
This was only possible because Jones Act makes it impossible to ship LNG from Southern US to North. There are literally no vessels that can do it. It already cripples our ability to move things around.
The entire US Jones act compliant fleet comprises 60 vessels. It is not a great civilian navy.
https://www.maritime.dot.gov/sites/marad.dot.gov/files/2021-...
I'm not super sympathetic to arguments that presuppose the absolute requirement that US hegemony continue indefinitely, but certainly if you are trying to make sure your shipbuilders will be roughly as good as foreign ones or better (a reasonable policy goal, even leaving out military reasoning), cutting them off from competition with those foreign shipyards is not going to result in what you want. If there is a ready market for expensive, poor quality ships that take years longer to build than they do abroad, why would I as a shipbuilding executive invest to improve on any of those metrics? It would be wasted money, because my existing capital and workforce are already 100% utilized in high-margin activities, with orders stretching out years into the future.
You'd instead see all domestic shipping be entirely dependant on third-party international operators paying third-world wages to third-world crews, and you'd have next to zero recourse against them if they, say, run one of their ships into a bridge, or spill a few million litres of oil.
There are a few good reasons to repeal the Jones Act (reduce shipping and trade costs in Hawaii, Alaska, and Puerto Rico) and a lot of really bad ones (the domestic shipping industry will be completely killed, and you're inviting unbounded liability from unregulated, fly-by-night international actors who don't give two craps about our laws.)
The way ocean shipping currently works is entirely incompatible with any national rule of law. Flags of convenience and corporations with non-existent liability mean that nobody in the international industry is actually following any of the rules.
The domestic industry has to follow them, which is the reason why it's not cost competitive.
The problem stemming from flags of convenience is well known and the Port State Control system [1] was created to manage it.
In other words: live up to our requirements or we will detain your vessel.
The US is not a signatory to any international port state control scheme but as is usual the US runs its own nearly equivalent scheme through the coast guard. [2]
[1]: https://en.wikipedia.org/wiki/Port_state_control
[2]: https://www.dco.uscg.mil/Our-Organization/Assistant-Commanda...
Of course there have to be considerations to maintain the capability to build warships. But other than that the Jones Act seems to do a lot of damage for very little benefit. Though ripping off the bandaid would be painful in that moment
But isn't it the case that national security concerns are being reached, presently, under the effect of the Jones Act? We just don't have the capacity to build the naval vessels that we need for national security.
It's not being fully met. Likely with elimination of Jones Act, it would disappear entirely. So it's one of those, it's bad now, do you want to eliminate it completely?
Only way I could see Jones Act disappearing but Merchant Marine Fleet to remain intact is announce that US is done playing world Navy Police. If it's not US Flagged, US is done giving a shit. Economic worldwide collapse to follow.
I read "economists and other types" as people who understand basic economics. People oppose the Jones Act because it has devastated the US shipping industry, which is obviously bad for national security. It's not just about cheap shipping.
This is most people? National defense and the domestic shipbuilding industry are important, but the value of cheap shipping should not be underestimated. Plus, giving credit to the Jones Act for the current state of US civilian and military shipbuilding is, in my opinion, perhaps the strongest possible argument for repealing the Jones Act. The current state of American shipbuilding is disgraceful.
So if we haven’t lost capacity but have lost capability doesn’t that imply something about the industries we’ve lost?
I’m not a ship industry expert but the US can make as much stuff as anyone in the world besides China and on a per person basis we are top tier. If ship building is a problem it’s not because of some generalized failing.
if you built and registered a ship in the US, wouldn't taxes be much more than say a ship registered in a small tax-advantageous country? (for a ship that basically wasn't in US 99.9% of the time)
Retirees do this with motorhomes - why register in california and pay all those taxes when you will be out of the state traveling all the time. Register in North Dakota or something and still drive the same route. (note taxes could be state income taxes because of residency, or vehicle registration taxes which are a % of vehicle value)
I’d say the “where to register your ship” question is the category of “complicated” - since obviously if we lowered our taxes to be as low as Panama then we’d get more registrations which sounds good - and “low tax” is better than the “zero” taxes we get from them now, but then the other country would just undercut that, and so on, and now nobody can get any tax revenue anymore.
It’s why the global economy doesn’t lend itself to simple sound bite answers like “just build American ships” or “just raise/lower tariffs” etc.
It’s too bad no one on any ballot seems to do anything but useless grandstanding, when it comes to actual problems like this.
It is a lot of pain for reset of economy for protecting a small industry. If US wants more naval shipyards, then should incentivize building them. I get the impression that there has been much reason for yards to improve protected from competition.
Basically the US wasn’t great at shipbuilding post civil war due to high costs. WWII was an existential threat so cost was no object, and we coasted on that capacity for a long time.
The goal was to have a globally competitive merchant marine based on a home grown ship building industry to call on in case of war. Trying to balance both sides.
The end result is that that home grown ship building industry has all but disappeared together with the educated population required to crew it.
[1]; https://en.m.wikipedia.org/wiki/Merchant_Marine_Act_of_1920
What economists argue that the Jones Act is suppressing is greater use of domestic sea transport, which could be much cheaper than trains and trucks. Without the Jones Act sea transport would grow, but undoubtedly using foreign ships, perhaps relying on a primarily foreign crew. OTOH, a much larger domestic shipping industry would likely spur demand for downstream services, as well as open up opportunities for growth elsewhere in the economy, so overall jobs for Americans might grow. But deregulation grow the ship building industry domestically? Nobody expects that.
Boat building can be solved by spending money to build boats (and perhaps waiting a couple decades for expertise to be built up).
Using eminent domain or changing the view of the public on land rights is a much higher barrier.
I actually don't take it for granted that enough money thrown at a problem can automatically solve it. There's a critical mass of underlying assumptions without which the marginal output of each additional dollar supplied becomes so limited that it just doesn't make sense, even with the government money printer.
According to the article he references that talks about the problems with shipbuilding more generally[0], the US has never been competitive in shipbuilding at any point in the post-wooden ships period, long before globalization was the issue.
[0] https://www.construction-physics.com/p/why-cant-the-us-build...
Globalization would have selected the experts rather than whatever random Germans and inexperienced firms present.
This is all about isolationism.
It's worth flipping the question on it's head. China's ambitions are very clearly best carried-out by a Navy that can harass Taiwan and expand their territorial claims in the waters surrounding Japan and eventually even threatening Australia. This is a smart move on their behalf, but they will be contending with unfriendly airspace and ground-based anti-shipping weapons. If you want to look at it from a purely military materiel perspective, I would argue the US has weighed their options and taken a less Naval-dependent route.
[1] https://en.wikipedia.org/wiki/Constellation-class_frigate
https://spectrumlocalnews.com/nys/central-ny/politics/2024/0...
This seems like a reoccurring story when talking about anything vaguely infrastructure related in the US.
I'm reminded of this article which explains why elevators cost so much more here in the USA than the rest of the world:
There’s a lot of surprising info in that article. This one section that I actually have passing knowledge of is just blatantly false. The majority of US states use and heavily contribute to the international plumbing code which allows for single stack ventilation as described in their linked article. My house from 1958 has single stack ventilation…
Sections like that with easily verifiable falsehoods bring the rest of the facts presented by the article into question for me.
VT Halter Marine, the troubled US contractor, went bust and was sold in 2022.
Instead the issue is shipping point to point usually saves a lot of overhead compared to ports and the distances involved are rarely enough to offset that overhead. You do see a fair amount of traffic via the Mississippi because that’s actually efficient.
Also, people forget about is how much oil, gasoline, and natural gas gets shipped by pipelines. Without that we’d see more ships going from the gulf to east coast cities.
https://en.wikipedia.org/wiki/Project_Habakkuk
Bonus answer: melting it with a flamethrower would be incredibly expensive because of enthalpy.
FYI, people hear icebreaker and they imagine that the ship literally cracks the ice like a wedge. It's very much less graceful. Icebreakers work like a beached whale where they propel themselves onto the ice and smash it under their weight. When they get stuck many of the ships have the ability to roll to try to break it further.
All that said, a projectile system could surely be made to work kinematically if it were effectively a large caliber gun. But carrying enough ammunition to functionally break ice at that scale would be its own challenge. And if you wanted to bomb or nuke ice or something at a much larger scale then I hope you don't need me to respond to the social or environmental considerations.
[1] https://gcaptain.com/us-navy-oiler-usns-big-horn-aground-for...
Now this is a surprise! As soon as I read the headline, I thought "Jones Act."
When I describe the Jones Act to people, the usual response is "That can't be right," or even "I don't believe you," but these days there's usually another person around that can say "Yes, that's actually right!" to back me up.
It's a good example of protectionism, like tariffs, that is completely ineffective. The industrial policy of the IRA and CHIPS acts are in contrast quite effective.
Scaling up shipbuilding in wartime demands skilled labour and construction facilities. To say nothing of the material inputs.
The author never suggested "the USA is a POS" - they gave a very nuanced breakdown of the factors at play.
So it’s not like the Arctic is totally empty - a NATO partner has a bigger presence.
We see this in Boeing, where management with an ideology of profit maximization and a structure dependent on a bunch of suppliers has led to a crisis. On the other side of the Pacific, BYD has vertically integrated critical parts of car manufacturing and now is moving extremely quickly and affordably.
Another example; the Federal Government invested billions on banks in 2008, billions into the auto industry in 2009, is now investing billions into Intel, but refuses to take any shares for some reason. It has this ideology of investing billions in the private sector to save industries key to national interest, but "state owning shares is spooky so we want nothing in return". It seems so backwards to me.
If the industry is that important to the country, maybe at least have a seat at the board of directors? You don't have no nationalize anything, but at least be in the same room. Other countries, from China to France, have demonstrated there's a lot of value in this state-private sector joint ownership.
I don't know what the right answer is, but the current status quo seemingly ain't it— not just in execution, but in ideology. Something fundamental is non-ideal.
You'll find free marketeers everywhere complain about these exact companies, for the same reasons.
China has definitely learned plenty from the world, and fundamentally changed the way it does things from 1970 to today. Deng Xiaoping in the 80s marks a stark ideological change that transformed China to the core. Who is the last US president one can say that of?
Possibly George W. Bush. His disastrous illegal invasion of Iraq marks the point, I think, where America really started going down the tubes.
Ideological change was needed.
By contrast, the US system of capitalism + democracy is not only blowing the rest of the world out of the water, it has shown itself to be remarkably resilient and responsive to change.
China has thus far prospered by being great at manufacturing. Can they innovate and change as needed? We’ll see.
The US has thus far prospered by being great at whatever is currently most profitable. Will they change as needed? Yes. Change is how their system works.
Let me put it this way. Everyone has heard of Maoism [1] of course. There's also Dengism, which does claims to not reject Marxism–Leninism or Maoism, but instead adapt them to the times China was going through [2]. Turns out what Mao believed might or might not be true, but it certainly wasn't working. A change in system of government wasn't needed, but a change in philosophy was.
Now Xi'ism [3] has been taking shape, and rightly so. The world, and China's place in it, are very different from where they were two decades ago. It doesn't seem to far-fetched to re-think what the purpose of that government is, what it believes to be true, and to figure out how to shape policy around it.
To give another example closer to the USA, in 2022 Mexican President Obrador held a rally, where outlined the philosophy of his political movement. Inheriting largely from what people had been calling Obradorism, he defined Mexican Humanism, which takes from the general current of mumanism but adapts it to the moral and ethic values, the needs, and other philosophical currents of Mexican politics [4].
It just seems to be there haven't been fundamental "-isms" in the USA in a while. The philosophy is the same. The USA considers its position in the world the same. The game the country is playing, it's purpose in the world, it's goals all seem the same as they did last century. All we get is "Bidenomics" or "Trumponomics", which are not so much philosophies, but just different ways of spending money within the confines of the same set of beliefs— corporatism, neoliberalism, hegemonism in the exterior, political nationalism in the interior.
IMO presidents and candidates here just seem to have so little substance in ideology. Bernie is the most recent one I can think that really talked ideology, and spoke widely about democratic socialism. He wasn't talking about tearing the constitution, just about thinking of different goals within the same framework of government.
I'm not surprised that "identity politics" takes over instead, and people come to worry about where the grandparents of a candidate were born. If candidates give you little philosophy to relate to, I guess you have to assume their philosophy based on their skin color.
[1]: https://en.wikipedia.org/wiki/Maoism
[2]: https://en.wikipedia.org/wiki/Deng_Xiaoping_Theory
[3]: https://en.wikipedia.org/wiki/Xi_Jinping_Thought
[4]: https://puedjs.unam.mx/revista_tlatelolco/el-concepto-de-hum...