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Ports in a Storm
by david   February 23, 2006

dubia ports world It's not like the US government is right now suddenly turning over the management of these ports in New York, Pennsylvania, Florida and elsewhere to a corporation based out of a foreign country -- that was already done. Years ago. No one even noticed. In fact, all of those ports have been run for years by the same company which will continue, through a long-term contract, to run them: Peninsular and Oriental Steam Navigation Co. The issue everyone is focused on is that P&O used to be based in Great Britain. Now, it has been bought by another corporation based in the UAE (United Arab Emirates), Dubai Ports International. It's the same corporation, just owned by different people. And DPI's executive management includes as many Americans, Australians and Britons as it does natives of the UAE. Yes, two of the 9/11 hijackers were from the UAE, and reportedly used a secret base in that country to plot their attack. But Richard Reid, the thwarted "shoe bomber," was a born and raised in Great Britain, and formulated his plot there. Much of the support and planning for 9/11 took place in terrorist cells in Germany. And, let us not forget, if we are going to exclude all countries from doing sensitive business in the US whose citizens have attacked us, even if we only exclude those whose attacks have been successful and have cost a great many lives, we have to stop doing business even with ourselves -- the second most damaging terrorist attack on US soil was committed by two (or more) Americans: Terry Nichols and Timothy McVeigh. Surely the government and all the corporations in America cannot be held responsible for the actions of these two depraved individuals, any more than UAE corporations can be held responsible for the actions of the 9/11 highjackers. No, the recent purchase of British company P&O by UAE company DPI is not the real problem here, whatever the indignation of Congress or the media might tell us.

The real problem here is one which plagues many social-infrastructure industries across the United States -- transportation, health care, insurance, security, energy production, etc. -- namely, privatization of important societal infrastructure has historically been, and continues to be, a failure. Corporations do not have the best interests of society, including security, as their first priority. Handing the ports over to an Arab corporation isn't the problem; handing the ports over to any corporation is the problem.

Corporations, love 'em or hate 'em, are in business to make money. That is their purpose. Money for their CEOs, money for their workers, and especially money for their shareholders. Money, money, money. That doesn't mean they are doing something wrong. On the contrary, they are doing exactly what they are designed to do. Problem is, the desire to make as much money possible for as little money as possible (or, the desire to make gigantic, ever-increasing profit) will always be in conflict with the desire to build the best social infrastructure possible. You see, infrastructure in a society, be it health care or transportation or security, is expensive. If you are providing, say, better health care, which costs more, but you are still trying to make strong profits, you have to charge even more for that care. This makes quality health care too expensive for many people. So, if you want to offer health care to poor people, but still maintain your profit, you have to offer crappy, cheap health care at a lower cost. People who can't afford even that health care? They can't help increase profits, so the corporation doesn't care about them at all. And why should it? Corporations are created to make money, and poor people don't have any.

The same principle applies to port management and security. Good, comprehensive, state-of-the-art security is expensive. Very expensive. For a corporation, Arab or otherwise, to make our ports really, truly secure, beyond the bare minimum required by our aenemic regulation and the skeleton Coast Guard presence at every major port, would require vast amounts of money. But that cost cannot be entirely passed onto the folks who want to use that port. Why? Because the corporation has to keep the cost of using the port competitive with other corporations who are not providing such great security at their ports. If they pass on the cost of great security to their customers, the customers will go elsewhere. So, instead of providing great security and either charging for it or taking less profit (or a loss), corporations will gauge what they can charge to use their port and still remain competitive, subtract the large amount of profit they want to maintain to satisfy shareholders, boards and executives, and the provide only as much security as can be bought with whatever money is left over.

In the 1970s and 1980s, American corporations (who ran the vast majority of our ports) faced a downturn in port revenue, which meant that those corporations could not get the profits from port operation their shareholders expected, and those corporations sold off their port assets. Most of those corporations were replaced with companies from other countries. There is not a single American corporation which is competitive in the world port management market, because American corporations do not find the profit upside of port management to be large enough. If we want corporations to run our ports, we have no choice but to look beyond our own shores. But why on earth do we want corporations to run such an important part of our national infrastructure?

It's simple logic. By allowing for-profit corporations to run the health care industry, we will never have the best health-care system in the world, because for-profit heath care corporations care about profit first, and health care second. By allowing for-profit corporations to run the transportation industries (such as the airlines), we will never have the best transportation system in the world, because for-profit transportation corporations care about profit first, and transportation second. By allowing for-profit corporations to run the energy industries, we will never have the most stable, productive energy system in the world, because for-profit energy corporations care about profit first, and inexpensive, renewable, reliable energy for everyone second. And by allowing for-profit corporations to run our ports, we will never have the most secure ports in the world, because for-profit port management corporations care about profit first, and port security second.

It's the dirty little secret that our increasingly blindly capitalistic society has forgotten, thanks to the brainwashing we've undergone since the beginning of the Reagan era (and slightly before), when the privatization battlecry began its feverish wailing: not every industry is the same as selling shoes. Maintaining high-quality infrastructure, whether energy or health or transportation or security, is extremely and continuously expensive, and, unless corners are cut and quality is sacrificed, over the short and/or long-term, there's just not a lot of money in it. We wonder why the United States of America, the richest country in the world, ranks 36th in infant mortality (behind even Cuba), or why our high speed internet backbone provides 1 megabit per second to 2.5 megabits per second (DSL vs. cable, respectively) as an average speed, as opposed to Japan's blistering average speed of 30 to 50 megabits per second, for the same cost (between $20 and $30). But we shouldn't wonder. The money that could be used to keep our babies alive or speed up our data networks is instead busy providing, according to the latest economic reports, record corporate profits.

Only through regulation and management that reports to the people -- that is, management by democratically elected government or by regional cooperative -- can we achieve a social infrastructure in step with our economic ranking in the world. Only the people of America can demand that important infrastructure be managed (and paid for) by the people who use it. Only the people of America can decide that port security, and our infrastructure in general, is more important than corporate profit. Corporations are never going to do that for us.


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