Eight Teachings for Business Leaders from the Battle of Midway

This June marks the 80th anniversary of the Battle of Midway—a battle that proved the turning point in the Pacific during World War II.  Over the past eight decades, historians have analyzed the decision making of the Japanese and American admirals while navies have studied the tactics of both carrier fleets. The consensus is that a few crucial decisions and a couple of vital hours in the four-day event swung the Pacific War’s momentum from Japan to the U.S., despite the Japanese enjoying superiority in carrier numbers and crew experience.

The Battle of Midway’s influence even impacted pop culture.  Hollywood produced two feature films depicting the events. The 1976 original boasts an all-star cast of Charlton Heston, Henry Fonda, Robert Mitchum, James Coburn, Glenn Ford, Pat Morita, Hal Holbrooke, Robert Wagner, and Eric Estrada (pre-CHIPs).  The 2019 remake, unfortunately, was more of an animated action video game than a film.

The Battle of Midway rightly captured the attention of those beyond war college instructors and military history academics.

Interestingly, one segment that may not have grasped the key takeaways of the battle is the business community. That’s a shame. Analyzing the Battle of Midway provides wisdom and insight for the modern business leader.

A closer look at Midway’s key teachings in the context of competitive commerce:

Midway Teaching #1: Sound Strategy is Required for Success, But Doesn’t Guarantee It

Japan’s Admiral Yamamoto took a broad, strategic view of the Pacific War.  Yamamoto knew Japan’s best chance at victory was to gain advantage over the U.S. Navy early and compel America to lose its desire to fight a protracted war across thousands of miles of ocean.  That strategy drove the planning for the Midway precursors—the surprise attack on Pearl Harbor and the Battle of the Coral Sea.

Yamamoto’s strategic vision also drove the planning for the Battle of Midway; he wanted to instigate a naval battle where the remaining U.S. aircraft carriers would be knocked out by the vaunted Kido Butai carrier fleet, hopefully resulting in the U.S. seeking peace or withdrawal from the western Pacific.  It was in many ways a perfect strategy.

Japan’s approach leading up to Midway provides two insights to business leaders.  First, strategy matters, and a rational, well-thought strategy should drive tactics.  Second, you may have a perfectly laid out strategy but fail miserably in the ultimate objective; good strategy is a prerequisite to success but does not guarantee it.

Both insights held true for Japan in the Battle of Midway and hold true in business.  Sound strategy is a must for business success, but it is far from a guarantee.

Teaching #2: Technology Can Both Eliminate and Provide “Edge”

Those familiar with the battle know the U.S. enjoyed advance warning of Japan’s target being Midway Atoll.  That’s because U.S. Navy cryptanalysts were breaking Japanese communication codes and knew weeks in advance that Japan was planning an attack in the Pacific, which the U.S. ultimately verified as Midway.  Admirals Nimitz and Spruance knew what the Imperial Navy planned before combat events unfolded.

Technology not only neutralized Japan’s strategic battle plans by eliminating the element of surprise, but it also flipped the advantage of surprise to the U.S.  The battle was not won solely by pilots and sailors in combat, but also by math majors working on codes at desks.

In business, technology can rapidly make the weak dominant and the strong obsolete. That holds true for companies, industries, and economies.  Taking the long view and investing the talent and resources into technology development and deployment can reap massive returns.

Just ask Amazon, Google, and Apple.  As well as their vanquished competitors such as Kmart, Lycos, and Blackberry.

Teaching #3: Disruptive Innovation Changes Outcomes

One of the American unsung heroes of the Battle of Midway is Lieutenant Commander John Thach, a fighter pilot behind the stick of a Grumman Wildcat.

Thach created and applied a new dogfight defensive technique, dubbed the Thach Weave. During the Battle of Midway the move proved highly effective against the until-then dominant Japanese Zero fighters.

The Thach Weave, which neither side’s commanders saw coming, had a multiplier effect on the battle’s outcome and reached far beyond the win-loss tally of Zeroes and Wildcats. It influenced precious timetables, the number of torpedo and dive bombers breaking through to attack carriers, and decision making.  Without the Thach Weave, the Battle of Midway may have ended with a very different outcome.

In business, disruptive innovation often appears unannounced and is the result of both trial and error as well as necessity.  One must be constantly on the lookout for its arrival as a potential threat that must be quickly acknowledged, and also willing to continually tinker under a sense of urgency to be the disruptor and innovator.

Teaching #4: “Target Fixation” Is a Killer

When the battle was still going relatively well for the Japanese, the Imperial Navy made a fatal error.  The Thach Weave not only proved highly effective in Wildcat dogfights with Zeroes, but it also allowed U.S. torpedo bombers to break through the initial Zero patrols to try to sink Japanese carriers.

The Japanese responded by committing all their patrolling fighters above the carrier fleet to engaging the U.S. Wildcats and torpedo bombers.  The Japanese became fixated on the visible threat developing to the northeast; to the point where they were willing to completely expose their carrier fleet to other threats.

After three hours of intense air combat, the Japanese downed over fifty American planes and lost only eleven of their own.  Even better for the Imperial Navy, there was not even a scratch on the four carriers (Hiryu, Akagi, Soryu, and Kaga).  Target fixation seemed to work quite well.

Yet the Japanese carriers were left with no overhead fighter protection at the worst possible time. Fifty U.S. dive bombers suddenly appeared from two different directions, catching the Japanese by surprise.  The battle-arriving expert pilots proceeded to mortally wound the carriers Kaga, Soryu, and flagship Akagi in quick succession.  In less than five minutes, target fixation helped turn pending Japanese victory and numerical superiority into looming defeat.

Target fixation in business can be lethal.  Pouring all your resources into a single threat, whether real or imagined, runs the risk of ignoring mortal dangers or squandering epic opportunity.  Some of those may make or break a business.

Teaching #5: The Fog of War is the Ultimate Known-Unknown

A military proverb says, “no plan survives contact with the enemy.”  Part of that adage’s wisdom reflects the reality of the fog of war.  The Battle of Midway had its share of fog of war, with the outcome influenced by which side managed their known-unknowns better.

Under the shroud of the fog of war, the Japanese had to contend with: their picket submarines arrived too late off the coast of Hawaii to detect American carriers sailing out to sea; they didn’t know where the American carriers were for much of the battle; they did not correctly identify a carrier once they located part of the U.S. fleet; the shocking appearance of the battle-ready carrier Yorktown after its mauling at Coral Sea ; and, they squandered an opportunity later in the battle when they mistakenly went after an already crippled Yorktown instead of the Hornet or Enterprise.

There is no doubt both sides were acting through the fog of war.  But the Americans did a much more effective job exploring and adjusting as the known-unknowns manifested, as evidenced by their location of the Japanese fleet early on (despite U.S. reconnaissance reporting only two carriers).  That made a huge difference in a carrier battle, where aerial reconnaissance is crucial.

In business, it’s not certain what competitors will do, how regulations may change, or what pending calamities are about to appear.  But recognizing such factors as known-unknowns and developing a team and processes to manage them puts you in a better position to succeed.  Ignoring the known-unknowns invites disaster.

If Yamamoto devised a sound strategy, why did the Japanese lose the Battle of Midway and ultimately the war?  One reason is poor execution; despite the Imperial Navy’s reputation up until then for excellent execution—Vice Admiral Nagumo launched over one hundred carrier planes in ten minutes early in the battle.

Consider a few of the Japanese Navy’s execution blunders during the Battle of Midway:

  • Failure to locate the U.S. fleet early and then not identifying carriers once spotted,
  • Sailing closer to the U.S. carriers, eliminating Japanese range advantage,
  • Switching carrier plane armaments back and forth between bombs and torpedoes, wasting valuable time and creating explosion risk below deck,
  • Fixating on the torpedo squadron threat to the northeast, leaving the carriers without fighter cover and exposed to dive bomb attack; and,
  • Mistakenly attacking the already-crippled Yorktown, squandering an opportunity to take out the Hornet or Enterprise.

Certainly the U.S. had its share of execution missteps, as evidenced by the near slaughter of its torpedo squadrons and the infamous “flight to nowhere.”  But Japanese missteps in execution of battle tactics and decision making proved a decisive differentiator.  Strategically, Japan achieved the tactical battle they wanted, but it lost in part due to poor execution.

A company must not only devise the proper strategy and employ the correct tactics, but it must also execute efficiently.  Execution is the necessary converter of potential value into tangible value.

Teaching #7: Don’t Let Emotions Dictate Decisions

After the Kaga, Soryu, and flagship Akagi were devastated by American dive bombers, Vice Admiral Nagumo had a decision to make: withdraw to fight another day, or continue fighting to even the score?  The decision would need to be made with only one carrier still intact, the Hiryu, and with exhausted crews depleted from battle.

While a calm assessment of the situation would dictate ending the engagement, Nagumo chose to fight on. His decision was made largely on emotion, pride, and optics.  The thought of limping back to friendly waters down three carriers and with only one American carrier out of commission was unacceptable.

Allowing emotion to dictate decision making took a bad Japanese outcome and made it a disastrous one.  Further engagements resulted in the sinking of the Hiryu, while the Hornet and Enterprise remained intact.  Nagumo’s pride had a serious consequence for Japan.

In business, the prudent leaders play the long game, remain above the daily fray, and clinically follow the math.  Avoid the emotion when assessing things like acquisitions and growth.  It’s just sound business.

Teaching #8: Luck is Overrated

Following the battle and to this day, so many, from military experts to run-of-the-mill history buffs, commonly attribute Midway’s outcome to Lady Luck; Japanese reconnaissance planes missing U.S. carriers because of fortuitous cloud cover, U.S. reconnaissance planes going the extra mile and being rewarded with locating the Japanese fleet, American dive bombers appearing at just the moment when the carriers were left unprotected, and so on.

Attributing outcomes to luck is typically a sign of rash judgment and lazy analysis.  That’s because in war, business and life, to a great extent, one makes their own luck.  Midway’s outcome was certainly impacted by fortunate timing and close calls.  But both were the cumulative derivatives of the prior teachings discussed above.

You need to first perform the tough groundwork to ultimately place yourself in a position to be lucky.

Closing Thoughts

The profit and loss stakes of business pale in comparison to the life and death stakes of military combat.  Yet there is much to be gleaned from studying battles and applying it to leadership, business, and strategy.

Perhaps an enterprising professor will find a way to bring the lessons of Midway into the minds of tomorrow’s executives.

 

Plagues and Pandemics – Then and Now

The great Mark Twain quipped that history never repeats itself, but it rhymes.  Sometimes the rhyming can span thousands of years.  Such is the case with plague during the apex of the Roman Empire and pandemic in the U.S. today. 

A bit of background. Antonine Plague hit Rome around 165 AD, during the reign of the great Emperor Marcus Aurelius.  The entire empire was struck with the disease, which killed up to a third of the population over two outbreaks.  Aurelius eventually succumbed to the affliction, and Rome lost its great leader and the world lost one of its great Stoics (Aurelius’ Meditations in one of mankind’s great books).

Now for the rhyming.  Start with what should be simple naming convention; both diseases are labeled under various names.



The Antonine Plague, which takes its name from the family tree of the Five Good Emperors (including Aurelius), is sometimes called the Plague of Galen.  Galen was a Greek physician who diagnosed and documented the plague.  Covid-19 is the name widely used for today’s pandemic (perhaps as an accommodation to the Chinese Communist Party by the global elite more than anything else), but Wuhan Virus was utilized by some early on and followed traditional naming convention for pandemics that correlates to geographic origin (Ebola, Zika, Hong Kong, West Nile, MERS, Legionnaire, Spanish, etc.).     

By sheer coincidence, both Antonine Plague and Covid-19 emanated from the same region of China.  The Antonine Plague is believed to have come from what was then the Han Empire, which included a city named Wuhan on its peripheral edge.  Although we don’t know for certain how Covid-19 started, we do know it began in Wuhan.       

Both pandemics utilized the advanced societies and technologies of their times to rapidly spread. 

Roman roads meticulously laid out as spokes emanating from the center of Rome proved to be efficient pathways for the disease to spread from far-flung corners of the empire, to Rome, and then out to other corners of the empire.  Cheap and prolific global air travel today took a virus from one urban area to every corner of the globe within a handful of days.  Commerce further accelerated the spread of both.  Another pair of examples of how technology giveth and taketh in unintended ways.    

Antonine and Covid-19 pandemics also shared the ability to cut across socio-economic boundaries to strike down the poorest and most elite of Roman and modern society.  We have seen the most powerful world leaders afflicted with the Covid-19 virus while Emperors Marcus Aurelius and Lucius Verus were felled by Antonine Plague.  However, the two most advanced societies of their time, Rome and the U.S., struggled to protect the most vulnerable under their watch.  When it comes to pandemics, power does not equate to success or protection.  

Both plagues took their toll economically. 

The Roman Empire suffered manpower shortages of soldiers, farmers, craftsmen, and merchants.  Prices spiked for food and services due to scarcity.  The citizens demanded more state subsidy and entertainment (in the form of gladiator games) to help ease the hardship.  Tax revenues dropped at a time when the empire was already running deficits due to costly wars in Germania.  Today, special interests clamor the government for bailouts, subsidy, and endless stimulus in the name of pandemic relief.  All of it at a time when government deficits and debt levels were already at frightening heights in developed economies, including the U.S. where our federal debt now exceeds $30 trillion and inflation has just hit a 40-year high.

Let’s hope the rhyming stops, because Antonine Plague was at the highwater mark for the Roman Empire.  Many historians argue the plague catalyzed the Roman Empire’s decline.  That should serve as motivation for Americans to get our act together with rational measures designed to protect the most vulnerable in a way where our free enterprise system and individualistic society not only survive but thrive.

Malta: World War II’s Most Intriguing “What If?”

The Irresistibility of World War II “What Ifs?”

History buffs love to contemplate alternative scenarios. World War II is a particularly rich trove for novices like me to indulge in such debates. Some of the more popular ‘what if?’ scenarios include assessing the war’s outcome if Hitler kept his tanks rolling to the beaches of Dunkirk in mid-1940, if the Japanese found the American aircraft carriers docked at Pearl Harbor on that infamous December 7, if Hitler focused exclusively on taking out Moscow in late summer 1941 instead of shifting forces to focus on Kiev, if the Germans reacted quicker on D-Day to crush the Allies beachhead, and if America did not have the atomic bomb and attempted an invasion of Japan. Through the years I’ve consumed countless hours reading about, mulling over, and debating with others such scenarios.

The Republic of Malta’s Embassy, captured by author during a recent trip to Washington D.C.

Yet my favorite World War II ‘what if?’ scenario is one that does not garner much interest beyond dedicated military history fans and professional historians. It revolves around the tiny Mediterranean island of Malta. The question is a simple one: what if Germany invaded Malta in the spring/summer of 1941 instead of Crete and delayed the decision on invading Russia (Germany’s Operation Barbarossa kicked off in June of that year)? I believe the answer is that World War II would’ve ended up very different, and not in a good way.

Everyone Saw the Obvious (Except for the Chief Decision Maker)

What’s scary about an Axis invasion of Malta is that many of Hitler’s best generals and his Italian ally Benito Mussolini all wanted to do just that. They named the plan Operation Hercules. And the British feared it.

In February 1941 German General Erwin Rommel arrived in Tripoli, taking command of what eventually becomes the Afrika Korps. Britain was sitting on a precarious precipice in Africa, with Sir Winston Churchill calling it, “the peg on which all else hung.” Churchill in April 1941 proclaimed losing Egypt and the Mideast “would be a disaster of the first magnitude to Great Britain, second only to successful invasion and final conquest!”

Rommel’s abilities in the field only intensified the concern of the British in Africa. The Desert Fox shared Churchill’s strategic assessment of Africa: Rommel advocated to ignore Greece, go after Malta, secure supply lines to Africa, and then take Egypt, the Suez Canal, and the Mideast oil beyond. The British Empire would be severed in two. An immediate invasion of Russia in the summer of 1941 was not necessary under this plan of attack, since once Africa and the resource-rich Mideast were secure, Germany could deal with Russia at its own choosing and across several different fronts of attack, including the Caucuses.

Rommel’s boss and rival, Field Marshal Albert Kesselring, agreed with him (the two did not care for one another; Rommel had more charisma but Kesselring was probably the better commander). So too did Grand Admiral Erich Raeder, who advised Hitler in May 1941 for a decisive Egypt-Suez offensive in autumn 1941. And Italian dictator Mussolini was fully supportive of focusing on Malta.

All understood that Malta posed a constant threat to Axis supply lines in the Mediterranean. Supply limited what Rommel could do. If the convoys had a bad week, Rommel halted; if supplies made it through, Rommel was virtually unstoppable.

In May 1941, if Germany dropped paratroopers onto Malta instead of Crete (which was strategically and tactically irrelevant) and the Italian navy kept the British Mediterranean fleet at bay for a short period of time, the exhausted and depleted island would likely fall. Malta in Axis hands would provide air superiority over the Med, which would allow Rommel better reinforcements, turning the tide of Africa to the advantage of the Axis. Egypt would fall, the Suez Canal would be seized, access to Mideast oilfields would be open, and perhaps it would’ve brought down Churchill and his government, incentivizing the British to press for peace.

Best yet for Germany under this scenario, a Malta invasion would’ve delayed or canceled the disastrous June 1941 invasion of Russia. Ironically, the reason Hitler decided to not invade Malta, so he would not need to delay Operation Barbarossa, ended up being his biggest strategic blunder of the war and led to his demise. Few decisions were as decisive as Malta in World War II: one decision has Germany likely victorious and the opposite decision leads to inevitable, crushing defeat.

What Happened Instead: Hitler’s Epic Barbarossa Blunder

Despite the chorus of voices from his leadership circle, Hitler would have none of the Malta invasion talk. Instead, in 1941 Germany went after Crete in May and invaded Russia in June with Operation Barbarossa. Hitler decided to attempt to render Malta useless by relying on constant air assaults. Once a Malta invasion was off the table, Rommel hoped he could get to Cairo without the island secured.

It’s hard to overestimate how massive of an effort Barbarossa demanded on Germany and the Axis. Over three and a half million Axis troops attacked along an 1,800-mile front. Eighty percent of the German army was assigned to the Russian front. Think about what Rommel may have accomplished if he had something even close to Barbarossa forces in Africa, and the resulting secure supply lines, that Axis control of Malta would’ve provided.

Sure to his word, Hitler had the Luftwaffe and Italian air forces pound Malta relentlessly in 1941 and early 1942 (by December 1941 the island sustained over 1,000 bombing raids). The first half of 1942 saw German and Italian air raids ruin Malta’s capacity to function, and Rommel received 90% of his reinforcements during this time. But in late April 1942, Kesselring lost many of his squadrons in the Med to reassignment on the Russian front.

Churchill saw his opening and did not hesitate to act decisively to supply Malta. The Allies put together a massive convoy destined for Malta and named the effort Operation Pedestal. Statistically, the Axis won the battle of Pedestal, and the convoy took a brutal beating in the summer of 1942. But enough of the Pedestal supply made it to the island to buy her valuable time until the late 1942 Allied victories of the invasion of North Africa (Operation Torch) and Field Marshal Bernard Law Montgomery at El Alamein. Churchill knew what Pedestal meant when he said, “when this war is a misty memory in the minds of old men, they will still talk of the convoy for Malta which entered the Mediterranean in August 1942.”

Four Lessons the Malta Decision Teaches Us

The events surrounding Malta in World War II inform us of four vital lessons that are applicable today.

Lesson #1: Know Thy Opposition

First, although Hitler made strategic blunders (perhaps the biggest being Malta/Barbarossa), often refused to listen to his generals, and was a monster, there was one arena where he was unrivaled in his ability: reading and understanding the politics of his allies, rivals, and enemies.

Hitler understood the Allies’ weakness wasn’t in technology, industry, weaponry, or strategic positioning. Instead, he knew the weakness lay in the democracies’ longing for peace, leaders who were idealists, and populations desiring to be left alone. Hitler saw this and used those traits against his rivals and ultimate enemies to grow his power to the point where it altered the course of history and ruined millions of lives.

This first lesson has parallels today. A new axis aligned against the western democracies is taking shape with China, Russia, and Iran. Instead of Chamberlain willing to appease Germany to secure “peace in our time” to save Europe, we have Climate Czar Kerry willing to appease China to secure nonbinding carbon reduction pledges to save the planet. If leaders like Xi are paying attention and can read rivals, I fear the outcome today might be similar to that in the 1930s.

Lesson #2: Allies Matter

Second, allies can look good on paper or on a map, but they can make situations complicated and end up being a net detriment. Such was the case with Italy and Germany in World War II. These two nations had a complex relationship.

Approaches to Mediterranean sea power differed greatly. Germany was constantly frustrated with Italy’s unwillingness to commit its capital ships in battle. The Italian navy was formidable, but constantly torn between viewing taking on the British navy as a historic opportunity or a mortal threat. The British suffered no such hesitation, and saw the purpose of capital ships to engage in battle.

Mussolini regretted by spring 1942 the alliance with Germany (prior to throwing his full support behind Hitler, Mussolini attempted to forestall the outbreak of war and considered allying Italy with Britain and France) and the empty promises that came with it. Conversely, Hitler viewed Italy as a burden, not an ally, and ultimately preferred Italy had remained neutral. Amazingly, the alliance placed both nations in a worse off position during the war and helped lead to their demise.

The lessons here are to choose allies carefully, think through what you expect to gain from them, and preserve your reputation of living up to your promises once in the alliance. The Italian-German pairing in World War II shares traits with the current debacle in Afghanistan, with the now exposed/fallen Afghan government in exile and the lost credibility of the U.S. through the Biden administration’s broken promises. Like Italy and Germany in World War II, we somehow managed to make each other worse off.

Lesson #3: Don’t Let Ideology Trump the Rational

Third, Hitler should’ve known history better back in 1941. Instead, he played right into Britain’s hands. By invading Russia, and not sticking it out in the Med, Hitler obliged Britain’s historic strategy of how to deal with powerful adversaries on continental Europe: ally yourself with a land locked nation with a large army to open a multi-front war against your enemy. Germany enabled that British strategy into action with Barbarossa.

Germany did so because Hitler allowed ideology to trump practicality in his decision making. He saw Russia and communism as the great evils to vanquish. The sooner he went on the attack against the Soviets the better – the consequences be damned. That cost Germany everything in the end, not just Malta and the Med.

Hitler’s placing ideology over rational decision making when it came to Barbarossa brings to mind the recent U.S. failed experiments in nation building and our current leaders’ obsession with placing climate change objectives over national strategic interests. A democratically elected president in a modern, free society can make as big of a blundering mess as a madman heading a fascist regime in the 1940s when ideology reigns over reality in strategic decision making.

Lesson #4: Energy Security is Vital

Fourth, so much of World War II (and, for that matter, all major global conflicts) was about logistics, supply lines, and energy security. Japan invaded southeast Asia to get oil. The U.S. imposed an oil embargo on Japan to check the Rising Sun’s march. Japan attacked Pearl Harbor in response.

The same held for the European and Mediterranean theatres. Germany had to deliver oil to Rommel from Romania, which was a long and exposed supply chain. The Achilles’ heel of the Italian navy in the Med was lack of reliable oil supply from Germany via Romania, thus the Italian fleet was never able to assume full operational range.

Yes, Barbarossa held the promise of oil in the Caucuses, but also presented existential risk to the invader. But sticking to the Med and not invading Russia would have secured oil in the Mideast and split the British supply lines in two. All of it undertaken with the same risk Germany and Italy already had signed on for.

Today, energy security drives geopolitics more than ever. Russia uses energy, particularly fossil fuels, as a tactical lever and strategic fulcrum. China fully embraces the carbon atom to grow its manufacturing prowess. Meanwhile, both nations laugh as the United States and western Europe erode their strategic positioning and stretch their energy supply lines by pursuing obtuse climate change goals into the distant future, and do so by mandating energy derived from materials, components, and equipment that can only be found and made in places like Russia and China.

Conclusion

In early 1941, Hitler had four ways to break Germany out and win the war; two might’ve succeeded, one likely would’ve succeeded, and one would’ve certainly destroyed Germany (and indeed, did). Fortunately, Hitler chose the last.

His first option was to invade Britain. It was risky, but if successful would win the war lock, stock, and barrel. His second option was to strangle Britain by doubling down on waging submarine warfare on shipping. That was already working and, with singular focus, could’ve brought Britain to its knees.

His third option was the best for Germany: win the Mediterranean to get into the Mideast and Asia. That would cut the British in two, link up with Japan, and secure valuable resources. Taking Malta would’ve made the pivotal difference.

His last option was invading Russia and pouring his armies east. A two-front war, with one front against a legendary foe. History showed that decision to be disastrous for prior invaders, and Hitler made sure history repeated itself.

The crucial turning point of World War II? Not the miracle at Dunkirk in summer 1940. Not summer 1942 when Rommel was stopped at El Alamein and the battle of Stalingrad commenced. Not even Japan’s attack on Pearl Harbor in December 1941.

Instead, the crucial turning point was the summer of 1941 when Hitler turned his attention away from the Med, declined to seize a little island named Malta, and instead launched Operation Barbarossa. In that light, Douglas Porch put it best with, “The Med was not the decisive theatre of the war, [but] it was the pivotal theatre, a requirement for allied success.”

For two great reads on the topics of Malta and the Mediterranean theatre in World War II, check out:

Operation Pedestal: The Fleet That Battled to Malta, 1942 by Max Hastings and The Italian Campaign by John Strawson.

Who’s Big Tech’s Daddy? Vanderbilt, Rockefeller, and Carnegie

Over the past 150 years, starting with post-Civil War Reconstruction, America has delivered to the world the largest improvement in quality of life in history. Capitalism, free enterprise, and individual rights were the ideological columns that allowed the edifice of the human condition to rise.

As you sit in your climate controlled home, streaming movies, using Door Dash for dinner, and waiting for your vaccine of choice, you might ascribe all this technological innovation and progress to the behemoths of big tech: Apple, Google, Amazon, and so on. Certainly, these modern-day FAANG titans sit at the fore of the idea economy.

Yet our modern economy of services and ideas consists of tiered levels, with the prior tier serving as a necessary and supporting base to the next tier. No internet, no digital streaming. No electricity, no internet. No carbon, no electricity. And so on, back to the most fundamental building blocks of an economy.

Americans have lost sight of this fundamental economic truth, blinded by the mesmerizing clicks and taps of apps. Add to the mix fabricated mistruths about the demise of the “old economy” spewed by the elite and the Left in academia, government, and monied foundations, and many of us today are transitioned from uninformed to misinformed when it comes to drivers of the economy and our lives.

A historical refresher is in order.

Our modern economy is built upon five successive pillars, each one rests atop predecessor pillars and supports subsequent pillars. Lose one pillar and you lose the pillars above it. Let’s meet the new bosses, same as the old bosses.

Pillar #1: Don’t Call Them Robber Barons

Everything we enjoy in our modern life traces its roots back to, and continues to depend on, the founding fathers of our economy. Most of them rose to prominence in the period of American history after the Civil War and before World War I; a time where industry rebuilt and then drove America to global prominence.

The three faces that sit on this pillar’s Mount Rushmore are Cornelius Vanderbilt, John Rockefeller, and Andrew Carnegie. Vanderbilt built, integrated, and consolidated the transportation network, specifically rail, that allowed a nation to grow and its industry to thrive. Rockefeller took the fragmented and disorganized industries of oil and refineries and brought order that spurred the innovation of new products, including gasoline. Carnegie was the visionary who saw the need for a new product to build our cities and structures: steel.

Innovating from their home bases of New York, Cleveland, and Pittsburgh, these three men along with others fused a backbone of the American economy that we depend upon to this day. They were far from perfect, as incidents like the Homestead Strike painfully illustrated. But they were great, and we owe them a debt of gratitude.

Most importantly, they set the stage for Pillar #2 of our modern economy.

Pillar #2: Finance Powers Innovation

As railroads, steel mills, and refineries grew into industrial titans, finance evolved into a powerful catalyst to accelerate progress and spur more innovation.

J.P. Morgan revolutionized finance as an instrument to optimize commerce, and he was not afraid to get in between Rockefeller and Carnegie where he saw opportunity to create value (for example, Morgan bought out Carnegie and created U.S. Steel). Morgan showed how the purse could be a force to be reckoned with, even for the world’s most powerful industrialists.

J.P. Morgan also funded new innovators and innovations, playing Thomas Edison and George Westinghouse against each other as they demonstrated and commercialized electricity generation. Edison brought us light, he and his competitor Westinghouse established electricity generation at scale, and Morgan provided the capital to enable all of it (Morgan eventually took control of Edison’s company and recast it as General Electric).

But if no rail, oil, or steel, then no modern finance and electricity. Once these two pillars were in place, it set the stage for the next pillar that would fundamentally reshape the world.

Pillar #3: The Societal Impact of the Modern Assembly Line

Thankfully, at about the time politicians and bureaucrats were working to take down the Standard Oils of the world, a new breed of creators appeared on the scene to keep progress moving. Henry Ford took the recipe ingredients of steel, gasoline, finance, and electricity to revolutionize manufacturing with the modern assembly line.

Ford’s assembly line made automobiles affordable. His manufacturing innovations also established an eight-hour workday and a living wage for workers, who would then have both the time and money to purchase and enjoy cars. That drove up the demand for cars, making Ford more profitable. Policy makers have been trying to replicate this virtuous circle ever since.

Others took note of what Ford was doing in autos and looked to copy it for other products. Hershey figured it out for candy while others applied it across a spectrum of industries. The worker and consumer both benefitted, with increasingly worker and consumer being one in the same. In many ways, the American middle class was the most impactful innovation of this pillar.

All of Ford’s necessary ingredients came from predecessor pillars. Without them, there would be no assembly line, all the consumer benefits that derived from it, or a middle class. Nor would there be the benefits of the next pillar that Ford and his peers made possible.

Pillar #4: Rise of the Service Economy

The prior three pillars of the economy provided the feedstocks to efficiently manufacture consumer goods. Workers increasingly were able to enjoy and afford these products, driving up demand. And technology expanded the gameboard of what and when things could be enjoyed.

All of this birthed what we know today as the service sector of the economy. Mechanics were in demand to repair cars. Beauticians were wanted to assist with application of makeup and hair care products. Entertainment became a massive industry as movie theaters and television became ubiquitous.

Before you knew it, the service economy was as big, or perhaps bigger than, the manufacturing sector of the economy. But without a strong manufacturing base, there would be no service economy. If you don’t build it, you won’t service it. If you lose the large number of high paying jobs in manufacturing, people won’t be able to afford services. Obvious to most, but frustratingly foreign to many politicians and policy makers today.

Everything was now in place for the fifth and final pillar.

Pillar #5: The Idea Economy

The prior four pillars set the stage for increased specialization, innovation, and widespread technology diffusion. Suddenly everyone had computers, cell phones, and internet access. Entrepreneurship blossomed and the largest corporations in history were created by thinkers tinkering in garages.

Big tech and the idea economy are awesome innovators and innovations. Yes, at times their power needs to be checked when impeding individual rights such as free speech. And these entities must be constantly reminded that their initial and ongoing success hinge on the underlying pillars they rest upon. But like Rockefeller and Carnegie before them, we are much better off with today’s tech titans than without them.

What’s Next?

Donald Rumsfeld famously referenced “known knowns” (things we know that we know) and “known unknowns” (we know there are some things we do not know). Our 150-year American economic journey of prosperity has definitively proven Rumsfeld’s two axioms true.

Our “known knowns” are that if you sabotage any of the underlying economic pillars, you will unleash the widespread collateral damage of ruining the subsequent pillars. That’s true even when the aspiring destroyers are trumpeting the need to do so under the banner of the public good or saving the planet.

The “known unknowns” are the future pillars to be created and brought to society. We don’t know what they are or when they will appear. But we do know the frequency and timeliness of them will hinge on our ability to protect the current pillars and nurture the ideological columns that made them possible: capitalism, free enterprise, and individual rights.

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