The Summer of Commemoration – Lessons for investors

D-Day took place 25 years before the first moon landing. 25 years after Apollo 11 the “world wide web” burst forth. Investors should join the dots: history is the history of technology and technology is largely driven by the military, writes Victor Hill.

Commemorations

On 28 June we shall remember the 100^th anniversary of the signing of the Treaty of Versailles. With this pact the collapse of the great European empires and their redundant dynasties was formalised and the map of Europe entirely re-drawn. Arguably, the seeds were sown at Versailles for German revanchism, the rise of Hitler and thus the Second World War – the culmination of which we commemorated this week. 75 years ago yesterday, on 06 June 1944, the Allies – principally, the USA and the United Kingdom and Canada – invaded Nazi-occupied France.

Because we often tend to view history through the camera lens wielded by Hollywood we should not forget the preponderant role of Britain in D-Day, the most massive military operation of all time. People who have seen Steven Spielberg’s Saving Private Ryan (1998) probably think that it was a largely US affair. That is misleading.

Although Allied forces were under the ultimate command of a US General, Dwight D Eisenhower (who later became the 34^th President of the USA), the strategic plan for the Normandy landings was conceived and developed by a British lieutenant-general, Frederick E Morgan. The Deputy Supreme Allied Commander, Arthur Tedder, was British as were the Allied Air Commander-in-Chief, Sir Trafford Leigh-Mallory and the Allied Naval Commander-in-Chief, Sir Bertram Ramsay.

On D-Day itself British and Canadian forces landed 75,215 troops on French beaches over three landings and dropped 8,500 paratroopers. The USA put 57,500 troops ashore over two landings and dropped 13,100 paratroopers. Of the 1,213 warships taking an active part in the assault, 892 were British. The Royal and Merchant navies provided 137,824 personnel and the Americans 52,889. Of the 4,126 landing craft involved, 3,261 were British and 805 were American. Almost half of the 11,590 aircraft involved in the first day of the operation were RAF[i]. Let’s also not forget that while this massive operation was underway the Russians were tearing the guts out of the Wehrmacht on the Eastern Front.

Then, on 20 July this year we’ll note the 50^th anniversary of the Apollo 11 mission in which Neil Armstrong became the first man to walk on the surface of the Moon – thus realising a dream that mankind conceived in antiquity.

It is curious to reflect that the moon landing, which in so many ways symbolises the beginning of the Age of Technology, took place only 25 years after D-Day. But there is a trajectory of technological development which connects the two events. When the Allies occupied Germany in 1945 about 1,600 rocket scientists who had developed the German missile programme (the V1 and V2 rockets which at the time were labelled “flying bombs”) were rounded up and persuaded to move to the United States in an initiative called Operation Paperclip. In particular, Dr Wernher von Braun was recruited by NASA and was instrumental in the development of the US space programme.

That also reminds us how technologically advanced Nazi Germany was – and how terrifying technology can be when it serves the forces of evil. The Germans pipped the British to the post in the development of the jet engine and in the final months of the war actually had a rudimentary jet fighter in service for the Luftwaffe.

The British were no technological slouches either. In Britain’s War Machine, Professor David Edgerton[ii] shows that the myth of the plucky British fighting Nazi Germany alone after the summer of 1940 is a little overdone. Britain was an economic, military and – most importantly – technological colossus which stood at the centre of a vast global production system that had access to the world’s best scientists and was able to produce the most sophisticated weapons of the day. The Spitfire (manufactured by Supermarine, a subsidiary of Vickers-Armstrong) was faster and more manoeuvrable than the Messerschmitt 109. The British had radar long before the Germans even worked out that they could see their planes coming.


At Bletchley Park the genius Alan Turing was building the world’s first computers to decode German signals. Turing’s team broke the German Enigma codes some six weeks before D-Day and developed the capability to disseminate what we would call “fake news” throughout the Nazi high command. They even managed to persuade the Germans that any invasion – weather permitting – would take place in the Calais area. It is incredible that, despite the massive military build-up along the south coast of England, the German Commander-in-Chief, Field Marshal Erwin Rommel, was relaxed enough to return to Berlin for his wife’s birthday party the day before D-Day. (He subsequently paid a very high price for that: like a defeated Roman General, he was obliged by the Führer to take his own life (he swallowed a cyanide pill). An army officer of the old school, he refused to join the Nazi party.)

Moreover, the British started the War with a massive lead in nuclear technology – all of which was transferred to the Americans under the Manhattan Project, which designed and built the first atomic bombs. It is chilling to reflect that if Hitler had developed a nuclear bomb the world would probably look very different today. In fact, I probably wouldn’t be writing this piece at all as I would not have been born…And neither would most of my readers…

And later this summer we should also mark (though it will not be a state occasion) the 25^th anniversary of the internet – then called the World Wide Web. I admit it’s difficult to pinpoint a precise date when the internet began. Tim Berners Lee first proposed it in a paper submitted at CERN in March 1989 and a primitive internet was in use in the academic and research world by the early 1990s. But The World Wide Web Consortium (W3C) was only launched by Tim Berners-Lee after he left CERN in October 1994 at the Massachusetts Institute of Technology Laboratory for Computer Science (MIT/LCS). This was supported by the Defense Advanced Research Projects Agency (DARPA), an agency of the United States Department for Defense.

Thereafter, the first private internet service providers, such as Pipex, started to offer a subscription service to anyone with a phone line over a dial-up network…By the end of 1994 ordinary folk in advanced countries were communicating with one another using a totally new medium – email.

Now the technological arc of progress that connects the first moon landing to the first private email is just as fascinating as the one that connects the moon landing to D-Day. It is an extraordinary thing that Apollo 11 had transistor-powered communications technology but there was no on-board computer. The Saturn V rocket which launched it had been designed by boffins using slide rules. These days people don’t even drive from Westminster to Maidenhead without the help of a satnav; but Apollo 11 made it to the moon with little more than a gyro-compass.

Having won the Space Race against the USSR to the moon, the USA focused on the military applications of space technology. The Apollo 17 mission (December 1972) was NASA’s last manned space flight to the moon. Thereafter, the focus was on satellites and space stations. At the same time IBM (NYSE:IBM) began to offer data processing systems to corporate clients – though IBM’s first personal computers (or PCs as they came to be called) were not available until 1983 and Apple’s(NASDAQ:AAPL) Macintosh device went on sale in January 1984. So it was only about ten years from the first Apple Mac to the first private email.

As we know, the internet has changed the way we live, work and interact. Social media (Facebook launched in February 2004 – ten years after the internet became main-stream) has actually changed the way we behave and think. This has both social and political consequences. It is very unlikely that the current rise of populism (about which I wrote in this month’s MI magazine) would have happened at all without social media.

Lessons

There is a strong argument that many of the great advances in technology over the last 100 years have resulted from military expenditure, itself arising because of war or international tension. Consider that the Space Race took place during the intensification of the Cold War after the Cuban Missile Crisis (1962) and against the backdrop of the Vietnam War.

The combination of large defence budgets with free market capitalism stimulates innovation. Defence contractors which benefit from cleverly directed state military expenditure are incentivised to innovate. Tech companies often emerge as suppliers to defence contractors. Israel, which has succeeded in developing a thriving tech sector, is another example of the efficacy of well targeted military expenditure. For example, Israel has no less than nine start-ups manufacturing state-of-the art drones[iii].


Another lesson is that all technology is intermediate: the rise of one technology makes successor and spin-off technologies possible. Artificial intelligence has thus far been a kind of hobby for game players – like DeepMind Technologies (owned by Alphabet/Google (NASDAQ:GOOGL)) developing a programme to outplay the world champion of GO! Meanwhile, it is the military – here and over there and beyond – that is weaponising AI in ways that Alexa and Siri could never understand.

Thanks for coming, Donald – good to see you

Mr Trump’s participation alongside Her Majesty the Queen in the National Commemorative Event in Portsmouth on Wednesday (05 June), even more than his speech at the banquet at Buckingham Palace in his honour the night before, did much to underline what is special about the so-called special relationship.

For the first 90 years of the new Republic’s existence the relationship between Britain and America was especially poor. Things took a turn for the better in late Victorian times. In 1917 America at last became an ally with its entry into World War One against Germany.

Just a few weeks after America entered World War Two in December 1941, Churchill arrived in Washington and more or less moved into in the White House for three weeks, spending Christmas 1941 with President and Mrs Roosevelt. Churchill and FDR bonded over late-night drinking sessions. That was the beginning of the special relationship. That military alliance culminated with D-Day and its aftermath which required a level of military cooperation between two powers never witnessed before.

Whatever you might think about Mr Trump, it cannot be doubted that he believes there is still a special relationship – even with Britain as much the junior partner. That relationship is cultural, commercial, strategic and military and is underpinned by bonds of kinship and the fact that we make each other laugh. He genuinely wants a beautiful trade deal (if Britain is ever let out of its EU cage) – though the forces of Remain are using the tropes of chlorinated chicken and the supposed privatisation of the NHS to dampen expectations.

The UK is currently America’s seventh largest trading partner with US$127 billion in goods exchanged between the two nations last year[iv]. We could do better than that.

The fascist left was out on the streets of London this week, abusing American visitors when they should have been accorded the gratitude owed for America’s role in the Normandy landings and the ultimate defeat of Nazi Germany. Mr Corbyn revealed himself as both a hypocrite and a fool by protesting against Mr Trump with the mob and then quietly requesting a meeting – which was declined.

The other significant state visit this week was that of China’s President Xi to Moscow. No hostile demonstrations there. Rather the celebration of a robust transcontinental military alliance. Russian TV denounced the D-Day celebrations as underplaying the Soviet Union’s decisive role in the defeat of Hitler.

It seems that international tensions are rising – again…

***

I was trying to explain to a highly esteemed senior friend, who is a Biblical scholar, why we should all be worried about Huawei. The objective of the Chinese state, I said, was to roll out a monopolistic digital currency which, by means of a state-controlled Blockchain, would mean that Big Brother knew every time a penny changed hands between whom and why.

My scholar-friend immediately retorted: “Revelation, chapter 13 – verses 16-17”. I looked the Biblical reference up and read:

And he caused all, both small and great, rich and poor, to receive a mark in their right hand, or in their foreheads/ And that no man might buy or sell, save he that had the mark, or the name of the Beast, or the number of his name…

An ageing holy man writing in a cave on the Greek island of Patmos nearly 2,000 years ago had foreseen the future of technology. For the first time in many, many years I felt goose bumps tingling down my spine…

[i]I am grateful to Mr Nicholas Young for providing much of the information in this paragraph in his excellent letter to the Daily Telegraph of 01 June 2019.

[ii]Hans Rausing Professor of the History of Science and Technology and Professor of Modern British History at King’s College London.

[iii]See: https://www.israel21c.org/9-israeli-drone-startups-that-are-soaring-to-success/

[iv]See: https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom