11 November 2012

An economist at sea

Christopher Joye is an outstanding economic commentator. His pieces for The Australian Financial Review on economics reveal deep understanding and broad reading on economic matters, like this one; he's not afraid to irritate those who need to be irritated. His writing is generally courteous to the point of being old-fashioned. His pieces on matters other than economics are, unfortunately, not of the same standard - and worse, they are becoming increasingly frequent.

Take this piece for example. It's stupid. It looks sensational and got a lot of attention on Twitter, particularly from people who like Joye's economics stuff and who assume - wrongly - that he can turn his hand to reporting any old thing. A closer reading reveals Joye basically interviewed one superannuated rear-admiral and simply transcribed what he said, Latika Bourke-style, without really thinking about it but padding out the word-count.

Joye got this story, drilling into the inner reserve of substantive thought on the part of the Coalition, through his connections with the Coalition. His parents were mates with Malcolm Turnbull and Joye recently wrote a puff-piece on Hockey that make him seem safe to a bunch of people every bit as paranoid about the media as the government.

It would be stupid for the Royal Australian Navy to adopt nuclear submarines. It's not even a new idea. Joye has no excuse to take this crap on face value.

He's an economist. Building a nuclear enrichment and processing capability for military purposes would take vast amounts of money and considerable amounts of human resources at all levels of skill and training; more than are available at present to a short-staffed navy either as crew or on-shore maintenance.

He's a resident of Sydney's eastern suburbs. Not even the sort of government led by Abbott, careening between the inadequate and the insane, would install nuclear maintenance facilities at Garden Island (which is in the eastern suburbs) or at the submarine base at HMAS Platypus (which is just across the harbour from the eastern suburbs, in Hockey's electorate) Stirling, in Perth. There would have to be a new nuclear submarine facility set up somewhere far from Sydney Harbour or Perth - but not so far that it would be taken out by a first strike like northern Australian port cities were by the Japanese in 1942, or so unpleasant that nobody but pusser die-hards would want to work there.

He shouldn't have to wait for the Premier of South Australia, of all people, to put out a press release to examine the sorts of issues raised in this.

And so it falls to me, a blogger with meagre qualifications in history and IT, to do the economic analysis work on this proposal that Joye (a professional, highly-regarded economist with a PhD in economics) has neglected to do:
  • First, the next government is going to spend billions of dollars building and securing military nuclear facilities; and then
  • Secondly, they are going to recruit, train and equip a workforce to operate these bad boys; and
  • Thirdly, junk their whole cautious budget approach (fewer tax receipts and additional spending commitments notwithstanding), because the whole country will appreciate this bit of infrastructure just as much as some old rear-admiral does; and
  • The Treasurer who will do this will be the one whose constituents (and indeed whose family) live not far from the sub base; and finally
  • Only if we write off the enormous start-up costs and wildly underestimate operating costs will nuclear-powered submarines make any sort of economic sense.
Yeah, that will work. Put it out there Chris, the punters will love that. The very sort of thing to send AFR circulation and credibility skyrocketing. We can bash Gillard for failing to implement a not-very-good idea from fifty years ago, because that's how we make the Fin relevant in today's competitive market.

There are a whole lot of concerns about nuclear proliferation here too - but I don't care about those, Joye and the people he quotes don't either, and there is no evidence that the government or opposition do. Still, maybe there's a story in it, maybe not.

I can understand Joye being taken in by a retired rear-admiral, and lacking the skill to question him on military matters (in his time as a journalist, Turnbull would have done a bit of a swot and would have been less afraid to put tough questions to the old man). I cannot understand Joye suspending his economic judgment over whether such a proposal was even a good idea. This is how smart people make dumb decisions, not only Joye but his misled readers.
Privately, some defence ministers in Asia support Australia obtaining nuclear-powered submarines because of mounting tensions with China, which has territorial disputes with India, Japan, South Korea, Vietnam and the Philippines, sources said ...

“Australia would be much better served with nuclear rather than conventional submarines based on our strategic requirements and my experience commanding both,” [Rear-Admiral Clarke] said. “Provided the right questions are asked at the right level, I’d be very surprised if the US did not favourably consider this.”
In that case, they can fucking well pay for them.
Former submariner Rex Patrick, who trains the Australian, Malaysian and Singaporean navies in undersea warfare, says, “Australia’s annual submarine cost is approaching $1 billion. This has given us a pedestrian capability that usually delivers only two deployable boats. For $2 billion, we could build four Type 214s, which would supply navy with a dependable, high-end platform that meets 90 per cent of our requirements.”
The "Type 214s" refers to a German design that is designed for the cold, deep waters of the North Atlantic rather than the warmer and relatively shallower waters to Australia's north. That 10% requirements gap is a worry - to use a journo-cliche, the devil is in the details - and the doubling of expenditure is almost certainly not on.

To depart from Joye - why are submarines so labour-intensive? I accept that submarines are vital elements of Australia's defence, and an area where we - to use the dread phrase - punch above our weight. That said, it is stupid having so many personnel on board each one. Given that there is a dearth of personnel willing to work on submarines, why not turn this into an engineering challenge and have as few people as possible aboard them - or none. Drone submarines! Yes, the ten-year-old I once was smiles at the very idea. Pyow-pyow!

Times probably are tight at the AFR but this is the very point where resources must be put to best use, and no further trashing of the brand must be permitted. Christopher Joye is a fine economics commentator, and options for him to write sensible stories within his scope of competence should not be limited in a so-called financial review. He is the wrong person to allocate to idle non-stories like the submarine thing. Joye will survive as an economic commentator long after desperate and trivial ploys like this (or anything else Mike Stutchbury might do) have played out to nothing, and hopefully Joye will retain the wit and perspective to describe these days of hubris to us all.

Update 12 November: Reader, Joye has blocked me for the above.

He is squirting out articles on how wonderful nuclear submarines are by US academics, where they a) have different maritime priorities to ours and b) their Navy is regularly beaten by ours in tests of best use of submarine technology and c) the US has a mature nuclear power industry and we do not. Still, it exposes an important modus operandi of Joye's: cover up your lack of research by insinuating with People With Impressive Sounding Titles, rather than displaying any scrap of humility and good grace when caught napping.

Joye is out of his depth on journalism covering non-economic matters. He is seduced by all that journo crap of scoops, and of shrugging off/blocking criticism from readers - and even describing his output as a "yarn", giving no confidence as to accuracy. I could use another maritime analogy of rats deserting sinking ships, but Joye is demonstrating the reverse of this: sad, really.


  1. Nuclear submarines are also worse. A diesel-electric submarine running on battery power is impossible to detect- by comparison the Virginia Class are an underwater brass band. Unless we're considering the development of nuclear weapons, presumably Australia wants submarines in order to sink things. If so, short-range conventional submarines are better at that than nuclear-powered submarines.

  2. Why are they essential to our defence? We are using the navy already just to hunt refugees, do we want to nuke them too?

    1. Australia is heavily dependent on maritime trade. Submarines keep ships moving to and from our ports in safety.

  3. Just a quick note for you Andrew, as I know you like to be accurate. HMAS Platypus shut down a number of years ago and there is no submarine capability docked in Sydney (apart from the odd visit at GI.) The Sub fleet is stationed exclusively at HMAS Stirling in the South of Perth.

  4. But didn't that endorsement of Mitt Romney go well for the AFR?

    1. Another clown of an editor sending a once-great masthead to the dogs.

  5. Another quick correction: Mr Joye does NOT have a PhD in economics. He returned back from Oxford (or wherever his rich parents sent him) without completing his thesis.

    He is a self-described "financial" economist who, like most economists, get more things wrong than right.

    1. Hmm ...

      He apparently went to Cambridge and then Chicago, without being awarded by either institution. Worth further investigation methinks.

      He has lucked into Fairfax and launched a career as a bloviator. Not sure how someone like that is significantly different from a blogger, really.

    2. There's in interesting profile and discussion of Chris Joye here, worth a look.....

      Chris Joye - Young Man in a Hurry: Profile (From 2003)

      He may have a few skeletons in the closet!

      But don't we all.

  6. Andrew, I think the idea is that the Yanks would do the refuelling and heavy maintenance, so we don't need to build a multi-billion dollar (and politically highly problematic) uranium enrichment and processing facility.

    Furthermore, the costs of designing, building and maintaining bespoke Australian diesel submarines are utterly outrageous, to the point where American nuclear submarines are not so outrageously more expensive as one might think.

    Robert Merkel

    1. Robert, as I've said elsewhere I doubt the Americans would be willing to shoulder more responsibility for defence costs and think this is the wrong time to even ask them. What did you think of Scot's fuel cell idea (below)?

  7. The type 214 is a crippled type based on the type 212 which is designed for operation in the rather shallow Baltic Sea; Germany's main area of maritime interest. It's a "littoral" submarine. Although, yes to our north our operations tends to be littoral in nature in the Indonesian archipelago and South China Sea, we also require submarines that can operate in open oceans (i.e. the Indian and Pacific Oceans).

    South Korea can use them because their sphere of operation would be entirely in the littoral environment of their own shore and the shore of their enemy Nth Korea.

    Apart from its parent type being wholly unsuitable for many of the missions that we would require it to perform, the Type 214 is additionally crippled without some key technologies of the 212 ... like an anti-magnetic hull. Additionally it's weapons mix is completely different to the weapons systems we use (Mk 48. torpedo; Harpoon ASM) or would like to use (Tomahawk cruise missile). Probably its sensors are totally different too. Ships (and boats) are just weapons and sensor platforms, ultimately.

    However, although their weapons and sensors are very similar to the type of weapons and sensors we already use, I think that nuclear boats are a really stupid idea. The nuclear propulsion technology would have to be maintained in Pearl Harbour or San Diego, for a start (and people please don't confuse "nuclear propulsion" with "nuclear weapons").

    We probably should be looking at fuel cell propulsion, I guess, but I think it would be better to design it into a "Collins plus" next-type boat. For some of our platforms we really do need unique capability because we are in a unique position - middle power maritime nation; no global power projection; no close knit self-defence alliance with multiple partners that means we only need concern ourselves with a single sphere of operations and can use types that are focussed on that.

    Its also why the F111 replacement is fraught with issues. The Americans make shit to use in huge numbers or sophisticated integrated fleets of different equipment. The Europeans can build short-range and focussed role types. We need types that have large ranges and multi-role possibilities that can operate on their own or in only small units.

  8. LancedDendrite12/11/12 12:03 pm

    Funny as it may seem, nuclear subs for Australia is one of the better ideas to come out of the Right for ages. The thing is, the procurement of a new RAN submarine can't be considered in a vacuum - you have to look the options available:

    - Build a slightly improved Collins Class at ASC, which wouldn't actually meet the special forces, cruise missile or Air Independent Propulsion requirements outlined in the White Paper.

    - Get ASC to build an entirely new sub based on the Collins but meets the White Paper requirements, with all of the associated R&D and procurement cost blowouts that come with it.

    - Buy a European sub such as the Scorpene, Type 214 or S-80, all of which don't meet the range and cruise missile requirements.

    - Buy the Japanese Soryu class which meets the range requirements but not the cruise missile requirements. This is probably the best non-nuclear option on the table.

    - Don't build or purchase any subs at all because they're a waste of money etc. etc.

    In contrast, the Virginia class nuclear fast attack submarine is a known quantity. It's already been developed and built and there is an open production line for it in the US. It meets every single requirement outlined in the White Paper, with the obvious exception of the 'no nuclear subs allowed' rule. It has an essentially fixed cost that will have no blow-outs in construction and we can copy the US Navy's maintenance procedures and facilities. In fact, we could send our crews over to the US for nuclear- and class-specific training.

    Nuclear subs are faster and don't need to surface for months at a time. You can get away with procuring 6-8 Virginia SSNs instead of 12 diesel subs quite easily, because they spend less time in transit and more time on station.

    The only counter-argument that sticks is that of the crew requirements - 135 crew members, quite a few of which will need to have nuclear training. This contrasts with the 58 needed by the Collins Class which is comparable with most diesel-propelled subs around the world.

    You've also made a couple of mistakes in your post, Mr. Elder:

    "Building a nuclear enrichment and processing capability for military purposes would take vast amounts of money and considerable amounts of human resources at all levels of skill and training"

    The Virginia class SSN (the most likely candidate if we went for nuclear subs) has a nuclear reactor core that has enough fuel to last the entirety of its operating life (20-25 years). No fuel leaves the reactor until it is decommissioned. It would require no enrichment or processing facilities in Australia at all.
    We can use the USN's heavy maintenance facilities in Guam and Hawaii - I'm sure the Yanks will be more than happy to let us use them if we pay them for the privilege.

    "There are a whole lot of concerns about nuclear proliferation here too - but I don't care about those"

    Nuclear submarines are only powered by nuclear reactors, they don't have to carry nuclear weapons of any sort aboard (and the majority don't).

    So if no fuel leaves the reactor until it is decommissioned, no nuclear weapons are carried aboard, there is a highly-trained volunteer crew aboard and the sub spends its time 180m below the surface in the middle of the bloody Indian Ocean, where is the proliferation risk exactly?

    1. Thanks Lanced,

      See Neapolitan Twist's comment on nuclear subs' noisiness - what do you think? My understanding is that Australian subs are renowned for their ability to evade detection.

      I think crewing and maintaining sufficient highly-trained crew will be an issue. An engineering solution will have to involve as few on board as possible.

      My understanding is that Soryu aren't for sale.

      Guam and Hawaii (and Diego Garcia, perhaps, for Indian Ocean operations) are inconveniently far distant. For me it feeds into C19 arrangements about having Royal Naval ships stationed in Sydney and the prioces exacted for that.

      As for proliferation, I take your point; but I like the current arrangement where it is a sheer waste of time even asking us for nuclear technology (except for the raw material).

    2. LancedDendrite15/11/12 12:03 am

      Re: SSN vs SSK/SSG noise

      If you hold all other design factors constant (propeller design, hull shape and size, sound mitigating technologies and so on), the fundamental difference between SSNs and SSGs is that when diesel-electric subs choose to be quiet, they can be very quiet indeed because they can run on batteries or a similar Air-Independent Propulsion solution that uses very little turbo-machinery. However, they can't do this all of the time - they will need to 'snorkel' or 'snort' by popping up for air to run the diesel engine to charge the batteries or to go at any speed much above 12 knots (which is very handy if you're transiting from home base to a patrol area). The Europeans don't care much about transit times because the seas that they mostly operate in are small and close by. When the French and British go play in the Atlantic though, they bring SSNs.

      (As an aside, fuel cells still need either air or a storable liquid oxidiser to work. You're swapping volume-intensive batteries for volume-intensive oxidiser tanks when you operate submerged)

      In contrast, a nuclear submarine's engine is on all the time and has a fair bit of turbo-machinery associated with it, so it will be a bit noisier than when an SSG/SSK is running silent but it doesn't have to go near the surface for months at a time so it's a lot harder to track when it's in transit or patrolling.

      As for the other factors I mentioned at the outset of this comment: the SSGs the RAN is looking at (the ones I outlined in the previous comment) are a lot smaller than a Virginia-class SSN. This means that they're a bit better in shallow water, for obvious reasons.
      On the other hand, SSNs can go a lot faster when submerged (around 3 times as fast), meaning that any pursuer has to cast a much wider net to find them. Another thing to note is that it's pretty widely accepted that the US Navy's noise suppression technology is the best in the world - and so it should be, with all of the money they've invested in it over the years. Mind you, it's hard to quantify a lot of these assertions because the data on submarine noise signatures is pretty much completely classified.

      Re: Crewing

      This is pretty much the Virginia class's Achilles heel. Bigger sub, nuclear crew. There's pretty much nothing we could do about that, although the USN is working on it.

      The RAN itself has a bit of a recruitment problem in general - the RAAF and Army are a lot 'sexier' and when the poor Navy gets in the news, it's either about procurement stuff-ups (Sea-Sprites, Collins and Kanimbla come to mind), crew scandals (HMAS Sirius) or images of sailors on the frontlines of the bipartisan omnishambles that is the Government's immigration policy. There's not much positive press out there for the RAN.

      Re: Maintenance

      Powerplant maintenance will probably need to use Guam and Hawaii, but we can build up smaller maintenance capabilities at home. Essentially, if ASC can do a particular type of maintenance on a Collins, they can do it on a Virginia (with the retraining and retooling). As for needing to go overseas to do maintenance - we're buying Joint Strike Fighters that have so much stuff that only Lockheed Martin and the US Air Force are able to muck around with that it's not even funny. Physically accessing those heavy maintenance facilities though? Well, the US Navy has a vested interest in making sure that Hawaii and Guam are open for business. If we bought or leased Virginias from the US, we'd be part of a much larger fleet, one whose geopolitical interests are very much aligned.

      Re: Proliferation

      I think that a lot of people in Australia (most of them in the media or in public office) need to grow up and stop demonising nuclear technology in general.

    3. One of the requirement for the new submarine is surveillance. The nuclear ones are unable to do this, to noisy.

  9. Initially I felt that this was yet another of the Coalition's ridiculous smokescreen's designed to hide away Abbott's recent poor performances. Then we find out that Fitzgibbon wants nuclear to be reconsidered, so the push wasn't all from the Conservative side of politics.

    Interesting to see Fitzgibbon pop up again around the same time that Rudd has been doing the rounds.

    And speaking of poor performances, how was Piers on Insiders (11/11/12)? Apparently it is "a ridiculous allegation" to suggest that the Tea Party are wreckers (clearly Piers would detest "The Newsroom", especially the final episode), and Alan Jones' comments about Mr Gillard were "grossly inflated". Cory Bernardi's recent remarks about gay marriage were also allegedly "taken totally out of context".

    It was disappointing to see not one of the three men in the room call him out on such madness.

    1. No, I still think the smokescreen argument holds here. It's policy veneer, slapped on by people who aren't deep thinkers but who want to pose as though they were.

  10. You have been VERY generous to Mr Joye, as those with a closer acquaintance would attest

  11. Blocking you for considered criticism probably tells us all we need to know about this guy