Wednesday, March 15, 2023

Hendrix's View from an Island Nation

Regular readers know the importance of the United States being the world’s premier sea power, but that is inside the lifelines of our corner of the national conversation. 

For a whole host of reasons we have discussed here over the years and on Midrats – in spite of our nation surrounded by the fruits of the open seas – the larger American public does not see it. We suffer, in essence, from our success.

The time when the free flow of goods across the globe was not a given has slipped well out of living memory. Except for older cohort GenX and older, no one even remembers the regional threat the Soviet Red Banner Fleet aspired to be right before the empire she served collapsed and disaggregated.

Not just the United States, but the developed and developing nations throughout the globe who benefit from the post-WWII maritime environment suffer from seablindness. There are other powers - resentful, bitter, and grasping – who even though they benefit from the global agreement – wish to break it down and create something new. Not so much that they want something better – they just don’t like a system they had no role in creating – one defined by the assumed ever-presence of the United States Navy and her friends.

As fish are not aware of the water they swim in, so the global economy does not fully understand the world it exists in … and the fact that it is under threat of disappearing. 

Our friend Jerry Hendrix has been an integral and valuable part of the public conversation for well over two decades – longer inside the lifelines of the US military. 

This month he has an exceptional article over at The Atlantic titled, “America’s Future is at Sea” or in the more flashy online version, "The Age of American Naval Dominance is Over" that you need to take time to read. He weaves together not just the history, but the economic, diplomatic, and civilizational threads that all connect to American seapower. 

What adds additional importance to his article is the venue. 

As I mentioned in the opener to this post, “we” know this story – or at least most of it. The problem is too many others do not. 

The Atlantic has a certain readership segment which includes many people of influence and proximity to the levers of power, or a degree or two separated from someone who does. The vast majority of its readers who are not soaked in the details involving the maritime domain.

These people need to understand the issues as much as readers here do. You really need to read it in full, but here are a few pull quotes I’d like to share. He starts out strong;

Very few Americans—or, for that matter, very few people on the planet—can remember a time when freedom of the seas was in question. But for most of human history, there was no such guarantee. Pirates, predatory states, and the fleets of great powers did as they pleased. The current reality, which dates only to the end of World War II, makes possible the commercial shipping that handles more than 80 percent of all global trade by volume—oil and natural gas, grain and raw ores, manufactured goods of every kind. Because freedom of the seas, in our lifetime, has seemed like a default condition, it is easy to think of it—if we think of it at all—as akin to Earth’s rotation or the force of gravity: as just the way things are, rather than as a man-made construct that needs to be maintained and enforced.

But what if the safe transit of ships could no longer be assumed? What if the oceans were no longer free?

Nothing is guaranteed ... or as Papa Salamander would often tell me, "No one owes you a living."

Imagine, though, a more permanent breakdown. A humiliated Russia could declare a large portion of the Arctic Ocean to be its own territorial waters, twisting the United Nations Convention on the Law of the Sea to support its claim. Russia would then allow its allies access to this route while denying it to those who dared to oppose its wishes. Neither the U.S. Navy, which has not built an Arctic-rated surface warship since the 1950s, nor any other NATO nation is currently equipped to resist such a gambit.

Or maybe the first to move would be Xi Jinping, shoring up his domestic standing by attempting to seize Taiwan and using China’s anti-ship ballistic missiles and other weapons to keep Western navies at bay. An emboldened China might then seek to cement its claim over large portions of the East China Sea and the entirety of the South China Sea as territorial waters. It could impose large tariffs and transfer fees on the bulk carriers that transit the region. Local officials might demand bribes to speed their passage.

"Gentlemen's agreements" only work if both parties act as gentlemen and keep their word. What happens when one party decides not to be? What is the enforcement mechanism ... or is there one at all?

If oceanic trade declines, markets would turn inward, perhaps setting off a second Great Depression. Nations would be reduced to living off their own natural resources, or those they could buy—or take—from their immediate neighbors. The world’s oceans, for 70 years assumed to be a global commons, would become a no-man’s-land. This is the state of affairs that, without a moment’s thought, we have invited.

This is not alarmism. A discordant and ill-timed blending of demography, debt, economics, and politics are driving the global system of crisis - what we warned of starting 13-yrs ago as "The Terrible 20s."

—a “free sea”—first enunciated by the Dutch philosopher Hugo Grotius in 1609. The United States and Great Britain, the two traditional proponents of a free sea, had emerged not only triumphant but also in a position of overwhelming naval dominance. Their navies were together larger than all of the other navies of the world combined. A free sea was no longer an idea. It was now a reality.

In this secure environment, trade flourished. The globalizing economy, which allowed easier and cheaper access to food, energy, labor, and commodities of every kind, grew from nearly $8 trillion in 1940 to more than $100 trillion 75 years later, adjusted for inflation. With prosperity, other improvements followed. During roughly this same period, from the war to the present, the share of the world’s population in extreme poverty, getting by on less than $1.90 a day, dropped from more than 60 percent to about 10 percent. Global literacy doubled, to more than 85 percent. Global life expectancy in 1950 was 46 years. By 2019, it had risen to 73 years. 

What happens if global trade retrogrades to a prior, less safe, less predictable (hurting insurance carriers ability to properly set rates) and vibrant time? Well, you look at the positive effects of growth in the past to see an inverse of what a return to the multipolar ocean might bring the future. That is what Jerry just did. Re-read the above and ponder even a fraction of that headwind;

It is important as we look at today's challenge to accept that we are not a passive victim of a changing world. No. We are here mostly as a result of our own actions. Decline is a choice.

As a side note, if you are not already thinking of another article in The Atlantic from 16 year's ago, Robert D. Kaplan's "America's Elegant Decline," go ahead and read it now.

It is never to a nation’s advantage to depend on others for crucial links in its supply chain. But that is where we are. In 1977, American shipbuilders produced more than 1 million gross tons of merchant ships. By 2005, that number had fallen to 300,000.

Today, most commercial ships built in the United States are constructed for government customers such as the Maritime Administration or for private entities that are required to ship their goods between U.S. ports in U.S.-flagged vessels, under the provisions of the 1920 Jones Act.

The U.S. Navy, too, has been shrinking. After the Second World War, the Navy scrapped many of its ships and sent many more into a ready-reserve “mothball” fleet. For the next two decades, the active naval fleet hovered at about 1,000 ships. But beginning in 1969, the total began to fall. By 1971, the fleet had been reduced to 750 ships. Ten years later, it was down to 521. Reagan, who had campaigned in 1980 on a promise to rebuild the Navy to 600 ships, nearly did so under the able leadership of his secretary of the Navy, John Lehman. During Reagan’s eight years in office, the size of the Navy’s fleet climbed to just over 590 ships.

Then the Cold War ended. The administrations of Presidents George H. W. Bush and Bill Clinton slashed troops, ships, aircraft, and shore-based infrastructure. During the Obama administration, the Navy’s battle force bottomed out at 271 ships. Meanwhile, both China and Russia, in different ways, began to develop systems that would challenge the U.S.-led regime of global free trade on the high seas. 

Read it all.

If this isn’t enough Hendrix, and there is never enough, Jerry will join us this upcoming Sunday for Midrats. Don’t miss it!

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