I love my conversations with EM Burlingame. I find them provocative, philosophical and profound. The man is a deep thinker, a great writer, and usually provides a perspective that opens up new pathways for making sense of what is going on in the world.
EM pointed out how for the last four centuries the world has been organised around sea power. Portugal and Spain started it in the 1500s, then the Dutch, the French and then later the English. Goods were moved by sea, with the sea lanes patrolled by navies and the entire banking and financial system being built up around that arrangement. Insurance, bills of lading, factoring, credit, etc. – it all developed out of Venice, and was designed to serve maritime trade, with the result that the port cities became the seats of power.
EM looked at Britain’s contract with Qatar to buy LNG. He went through the complexity of what on the surface appears to be a fairly simple transaction. Who finances the ships, he asked? Who insures the hulls? Who insures the cargo before it leaves port? Who collects the flagging fees, the port fees? Who bankrolls the port itself, its cranes, its security? Who processes payroll for the workers, and who takes a cut when they wire money home? What services, products and businesses are in the supply chain for the supplier, the transporter and the receiving port?
I worked on the Ras Laffan gas refinery in Qatar when it was being built. There were eighty to a hundred thousand construction workers from India, Nepal, Egypt, the Philippines and the Middle East. There were a thousand cranes on site. It was a mini-city in the desert; an incredibly complex project with millions of financial transactions every day between the construction workers, their families back home, and the intermediaries who moved the money and took a cut as they did so.
EM referred to this system that evolved out of the movement of water as hydraulic despotism, starting with controlling river flows and charging everyone downstream. This expanded to controlling the movement of goods over the oceans by controlling the chokepoints.
EM asserted that sea power is finished, partly due to hypersonic missiles that have invalidated the effectiveness of navies. An aircraft carrier group costs tens of billions of dollars to build and billions a year to run. Hypersonic missiles that cost a few million dollars each travel too fast for air defences to stop and can easily put paid to aircraft carriers. There is no technological answer to this yet. Lasers and directed energy weapons can’t stop them and do nothing against them; therefore every seaport and chokepoint is vulnerable.
Modern warfare is shifting power back to the land, disabling the financial architecture that was built as an overlay to the naval trade routes that dominated for hundreds of years. The world is being broken into fragments, into regional spheres that will sustain themselves, primarily over land, but also via regional sea routes. America is retreating to its own hemisphere. It doesn’t need the old world to survive.
Who are the biggest losers of the dismantling of sea power? The old imperial powers of Europe and Britain.
Mind-bending conversation. Well worth your time.