Wednesday, September 14, 2005

Slide Rule by Nevil Shute

A book review by Gene Barth

"Slide Rule"

The Entrepreneur Versus the State

Novelist Nevil Shute spent the first two decades of his adult life “messing about with aeroplanes”. Slide Rule is Shute’s account of his years in the young British aviation industry. Starting in 1920 as an unpaid college intern on the skeletal staff of a “start-up” that eventually became De Havillands Aircraft Company, Shute left aviation in 1938 as managing director of his own company, Airspeed, Limited.

Unfortunately, Nevil Shute’s career in aviation coincided with the rise of socialism in Great Britain. Shute’s particular nemesis was the Air Ministry, an entity as destructive of innovation in aviation as our own FCC is in the business of telecommunications. In both of Shute’s major successes the establishment of Airspeed, Ltd. and, earlier, his capable involvement in the successful development of an intercontinental airship, the R100 -- the Air Ministry ultimately destroyed the business value of his efforts.

Unlike most victims of statism, Nevil Shute, a successful author, had his own public voice and the will to use it. In Slide Rule, he relates in compelling detail the “competition” between the company for whom he worked on the R100 as chief calculator, the Airship Guarantee Company (ACG), and “a staff of government officials attached to the Air Ministry” at Cardigen.

Shute knew that the last airship made by the Cardigen group, the R38, had split in half during a test flight, killing forty-four aboard the craft. Reading up on the state of the art in airship stress calculations, Shute happened to read the report on the accident inquiry into the R38 disaster.

“I had come from the hard commercial school of de Havillands where competence was the key to survival and a disaster might have meant the end of the company and unemployment for everyone concerned with it. It was inexpressibly shocking to me to find that before building the vast and costly structure of the R38 the civil servants concerned had made no attempt to calculate the aerodynamic forces acting on the ship, and I remember going to one of my chiefs with the report in my hand to ask him if this could possibly be true. Not only did he confirm it but he pointed out that no one had been sacked over it, nor even suffered any censure. Indeed, he said, the same team of men had been entrusted with the construction of another airship, the R101, which was to be built by the Air Ministry in competition with our own ship, the R100.”

Shute quickly got over his shock. In five years, ACG brought the R100** in on schedule and under budget, and exceeded performance specifications. At 81 mph, she was the fastest airship of her day. By now, Shute was chief engineer and he presided over 8,000 miles of largely trouble free test flights capped with a transatlantic flight to Canada and back.

By contrast, the Air Ministry ship, the R101, was dangerously overweight and underpowered as a result of poor engineering, including dedicated motors for reverse rather than gearboxes! Goaded by the success of the R100 and the political demands of their boss, Lord Thomson, the Cardigen men increasingly operated in an atmosphere of evasion and despair, unwilling to acknowledge the R101’s flaws, much less fix them.

Forgoing a rigorous program of test flight flights, the R101 set out on her maiden voyage on October 4th, 1930, bound for India. She got no further than Beauvois France, about 220 miles from Cardigen, before hitting the ground in bad weather and bursting into flames. Every ship’s officer and every government official aboard died in the fire, including Lord Thomson, who had staked the prestige of “State enterprise”, and his life, on the R101’s maiden voyage.

With consecutive Air Ministry disasters, civil airship transport died in Britain, and with it the business prospects of ACG. Remarkably, Shute responded to this blow by setting out to found his own airplane company.

In the course of showing the reader how he succeeded in founding Airspeed, Ltd., Shute delivers intriguing insights from the world of engineering and the world of commerce. He explains how a prosperous city generates risk capital for its own start-ups through real estate appreciation at the margins of the city. How inherited wealth enables aggressive, entrepreneurial management in start-up enterprises. And, of course, how he managed to start Airspeed Ltd and move it forward in the midst of a depression by shrewdly assessing the direction of the industry and its burgeoning capital requirements, and then innovating ahead of much larger companies to generate investor support and sales.

Ultimately, however, Airspeed Ltd. also came to grief at the hands of the Air Ministry. This time Airspeed was not the victim of a bizarre “competition” between “State enterprise” and private endeavor. Instead it was only one of many victims as the Air Ministry, emboldened by the prospect of war, effectively nationalized the entire British aviation industry.

Upon receiving a cost plus contract from the Air Ministry for far more planes than it had ever before sold at one time, the bottom fell out of Airspeed’s stock price. Investors understood that although Airspeed’s factories would be operating at capacity for years to come, Airspeed was no longer manufacturing planes at profit for customers: it was now making planes on demand and at cost for a master.

Airspeed is a remarkable document on the character, psychology, and mind of an entrepreneur, an innovator. It is also clear proof that such men are doomed in a culture of socialism.

**To see interior photos and plans from R100 please click here.

The photos evoke the elegance of 1930s luxury travel. It is clear why these great vessels were called airSHIPS. Nevil Shute is the man poised on the dining room stairs in the 2nd photo from top.

Gene Barth works in a research lab at the University of Chicago Medical Center and is a regular contributor to TIA Daily.

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