The Symphony of the Seas, the USS Ford, and a Tale of Political Piracy.

by Pitt Griffin on November 29, 2018 · 0 comments

in Economics, Military

The Symphony of the Seas is the world’s largest cruise ship. It is 1,188 ft long, 215 wide and has a gross tonnage of 228,081. It can carry almost 9,000 passengers and crew. It cost $1.35 billion. But it is not the world’s most expensive ship.

The most expensive is the aircraft carrier, USS Gerald Ford. This largest-ever naval ship is 1,106 ft long, 256 ft wide and has a gross tonnage of c.100,000. It carries a crew of c.2,600. It was initially scheduled to cost $10.5 billion. And that was on top of R&D charges of $4.7 billion.

Unsurprisingly, the cost is now up to $13.1 billion. And there are still ‘operational deficiencies’ that need sorting out at God only knows what additional cost.

All of this raises a question: How can two ships of virtually the same size have construction costs that are different by almost $12 billion? Put another way how can the Ford cost nearly ten times what the Symphony did? And note, the USS Ford’s cost does not include aircraft.

Defenders of military contractors will point to all of Ford’s sophisticated self-defense systems, state of the art computing, launch capabilities and other leading-edge technologies. Not the least of which are two nuclear propulsion plants. I agree there is a lot of expensive stuff in the Ford. But then the Symphony isn’t exactly an empty box.

Cruise passengers demand luxury, the sort that a naval ship doesn’t have to worry about. They have entertainments – restaurants, swimming pools, theatres, bars. Passengers are housed in staterooms, not dormitories. There are high-end woods and other luxury materials used throughout. 

I grant you that it is reasonable that an aircraft carrier should cost more than a cruise ship, but what makes it so much more expensive? The answer lies in ‘cost justification’.

The Symphony of the Seas was built for a publicly traded company, Royal Carribean Cruises (RCC). Like any for-profit business, it is run by slaves to the bottom line, who will not sit idly by if the builders inflate costs. And RCC isn’t the world’s second-largest cruise company because it doesn’t know how to negotiate. And not least, it has to justify costs to the stockholders.

The USS Gerald Ford, on the other hand, was built under different financial pressures. Politicians sign off on military expenditure with no stockholders to satisfy. So they have little incentive to keep costs down. Quite the contrary, their job security often depends on military spending going up.

The Ford’s $13 billion cost is a welcome revenue stream in many congressional districts. And it is a secret in plain sight that military procurement is as much a jobs program as it is supplying the military.

Think not? Just try closing an unneeded military base.

What’s worse is that not only does this blinkered thinking lead to massive cost overruns it also forces the Pentagon to buy a bunch of hardware it doesn’t want or need. No one is tackling the US Navy by trying to outmuscle it. My bet is our enemies are developing missile technologies that will render large, slow-moving ships obsolete.

Modern warfare relies on special forces and cyber attacks. But neither of those flood dollars into local economies the way ship and aircraft building do. And should a politician have some remaining sense of responsibility, military contractors’ political expenditures (bribes) will excise any lingering doubts. Ultimately politicians don’t do what is right; they do what gets them reelected.

As Ike said in his farewell address in 1961: 

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

But what he didn’t anticipate for was a military-industrial complex that would be actively enabled by those same ‘councils of government’. 

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