Then we need to lower protectionism (i.e. force the unionised shipyards to compete), massively ramp up subsidies or concede we’ll be reliant on foreign shipyards in a war of attrition. Given the first and second are politically unrealistic inasmuch as they require long-term commitments, to not roll back into protectionism or cut subsidies in a budget crunch, we’re left with the third.
Massive subsidies historically only worked in a war footing. Also, because subsidies only won’t produce commercially-competitive vessels, your only natural customer will be the DoD. The only way to sell this is by launching forever wars.
We need to subsidise our production. But unless we want to return to our 2000s, we must marry that to loosened protectionism to force American shipyards to compete internationally.
A model that achieves a desired outcome, but is suboptimal, is superior to a proposed optimal model that cannot or will not be implemented. The latter are simply thought experiments or dreams.
> The only way to sell this is by launching forever wars.
There will always be a need for a standing inventory of military hardware, so long as there are potential nation state adversaries.
> model that achieves a desired outcome, but is suboptimal, is superior to a proposed optimal model that cannot or will not be implemented
I’m arguing the impossible model is the one that relies on American voters writing a blank cheque to sustain above-average lifestyles among a minority of workers doing their jobs in a demonstrably-inefficient way for the purpose of remaining employed (and cashing in those cheques).
It works if we can sell it as blowing up stuff abroad. But not in peacetime. (And as a result, that production does nothing downstream, e.g. in offshore wind farm installation or domestic seaborne shipping, where, as the article notes, our high costs and the Jones Act make many projects uneconomical.)
> will always be a need for a standing inventory of military hardware
You’re underestimating how far behind we are. What will we do with two orders of magnitude more ships standing around every year [1]? Just keeping that many ships maintained and stored would be a challenge. Do you really think the public would support a shipyard-to-scrapyard programme for more than a few years without war?
Strong unions and massive protectionism, in the long term, means we’ll from time to time ramp up subsidies, do a war, and then ramp them down thereby laying everyone off. As the article points out, that’s our strategy. We’ve been doing it for 100 years. It sort of works, even if there is a better way, because we refuse to compromise on either unions or protectionism, leaving subsidies as the only lever that can do any work.
I believe we simply place different value on different socioeconomic and political system components (capital/fiat, labor, defense capability), and have different risk assessments leading to outcome deltas. Good chat regardless, appreciated as always, improves perspective understanding and context/model improvement.
> we simply place different value on different socioeconomic and political system components (capital/fiat, labor, defense capability)
Where I think we agree but I’m having trouble communicating is in labour and defence goals being able to both be achieved, but where instead of labor getting short-term stability and high pay amid long-term instability, shipbuilders get short-term instability amid high pay and long-term stability.
There is no structural reason America cannot have a competitive commercial shipbuilding industry. Including with collective bargaining. High-productivity industries naturally command high pay; we can guarantee that with regulation. Where the problem comes up is in purchase protectionism, which hinders our shipyards’ capabilities and quality (bad for defence) and creates a safe harbour from which our delicate industry can’t venture.
The goal I see is a lot of highly-productive dual-use shipyards that are subsidised for military procurement but must also compete to sell commercial ships. Subsidies are awarded systemically, but never guaranteed in the long run to a specific shipyard. The shipyard may need to grow and shrink as they win and lose business (and subsidies), but that’s better than the entire industry expanding and contracting on generational timescales, systematically training up a naïve workforce before dumping them into a market where their skills are near worthless.
Then we need to lower protectionism (i.e. force the unionised shipyards to compete), massively ramp up subsidies or concede we’ll be reliant on foreign shipyards in a war of attrition. Given the first and second are politically unrealistic inasmuch as they require long-term commitments, to not roll back into protectionism or cut subsidies in a budget crunch, we’re left with the third.