Left Coast / Right Coast: Infrastructure and Productivity

Mike Gold living the dream in the Pacific Northwest. Photo credit: Nancy Gold.
Mike Gold living the dream in the Pacific Northwest. Photo credit: Nancy Gold.

By Mike Gold, A retired entrepreneur living the dream in the Pacific Northwest.

From time to time as I drive around Puget Sound I am always amazed at how our civilization evolved and why it is that things developed as they did.

I’m sure you’ve all read about President Trump’s plan to invest in our country’s infrastructure. About $1 trillion worth. What is this all about?

Let’s start with the very obvious. The modern world, with our “shrunken” times (for communication) as well as transportation, has allowed the standard of living for the human race to evolve to simply amazing levels of productivity. For example, look at something very simple, our daily newspaper. I take it for granted that each morning, no later than about 7:00 am our copy of “The Seattle Times” is in our mailbox. Now look at what’s necessary for that to take place:

a. The Seattle Times needs to have a printing and distribution plant in which they can print hundreds of thousands of copies in a very short time. There is a great deal of automation required such that a reporter can write a story about a sports event that finishes, say, at 10:00 pm the night before, and still have that story appear in the next morning’s paper. I made my living most of my working life by supplying a lot of that computer automation equipment to newspaper companies.

b. The delivery person has to have a car capable of, at reasonable cost, driving to the distribution point of the next day’s paper (usually at about 3:00 am or so), then driving his route to deliver a paper to each subscriber.

c. Our region requires an infrastructure of roads, bridges, tunnels, ferries, etc. with which the delivery person can drive to each subscriber’s destination.

It is the latter item (c ) to which Trump was referring. Many of our bridges are at the end of their structural lives. So one of the items Trump wants to “fix” is these bridges, tunnels and roads. We certainly don’t want more examples of Galloping Gertie, The Tacoma Narrows Bridge. (Note, this bridge didn’t collapse because it was at the end of its structural life, rather it collapsed because the design guaranteed that its structural life would be very short.) Most of the interstate system is way past its paving life. So one constantly finds areas of that system under repair, putting down a new surface.

If you look at how infrastructure improves our standard of living, then look at the supply chain of any modern manufacturing company.

Boeing’s newest plane the 787, has components delivered by a gigantic enhanced 747 (nicknamed The DreamLifter). See Boeing, in order to reduce the risk of developing a new plane, contracted some of the development costs to its subcontractors. Then, large sections of the plane (tail wings and other parts) are delivered to Boeing Everett via the speediest method possible, jet aircraft.

Imagine doing this before the modern jet age. Those components would have to be delivered via ship, then over-the-road to Everett. In fact, Airbus, in order to build the giant A380 (much larger than a 747), constructs very large parts of the plane in England, Germany as well as Toulouse France where the final plane comes together. Some of these parts cannot be air lifted to Toulouse, so they arrive on the coast of France, where they are over-land driven to the final assembly plant. These giant parts have to go through ancient villages – where Airbus had to take down utility wires and other impediments to these giant trucks getting through the old narrow streets.

A modern infrastructure improvement is the rebuilding of the 1000 year old Silk Road. China expects to help it become the leading economic power in the world (replacing the U.S.) via this project.

All of these decisions are made based on competitive methods of commerce. So while Boeing can fly major sub-assemblies of the 787 from Japan and elsewhere to Paine Field, Airbus cannot do the same. (Note, besides the fact that few 380’s have been ordered – due to the economics of modern air travel, Boeing and others have long complained that Airbus would not be in business if it was not for the subsidies the U.K, Germany and France make to the company. In other words, the planes are “subsidized” by the countries which own a significant part of the company.)

So, starting with semaphores, then the telegraph, then more modern electronic communications, combined with the most modern shipping channels (air, ground, rail and other emerging technologies), has improved our standard of living by allowing suppliers to operate in the most efficient way possible.


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