§1. Don't believe the hyperbole: properties and prices of new materials [00:00]
Last time I talked about 3D printing, and the generalization of that story is: don't believe all the hyperbole you hear in the press about some new material or new process. Bob Sprague, who I've quoted before — he was head of materials for GE aircraft engines for twenty or thirty years — has a line I like: whenever you first hear about the properties of a new material, write it down, because those are the best properties the material will ever have.
Student: [question about anisotropy in 3D-printed material]
Only in terms of gravity. There's no structure like the wood structure — anisotropic, if that's what you're talking about — because it's basically a bunch of little castings. Because of the thermal conductivity, you can think of it as a little sphere that solidifies. You don't get a lot of columnar growth and things like that. In fact, that Inconel 100 piece, the little flat piece I sent around — you actually get very fine grain size because you're doing rapid cooling, and you'll have very small flaws or inclusions because of the rapid solidification time. It's not super rapid, it's not a million degrees per second, but it is on the order of somewhere between a thousand and ten thousand degrees per second. It's cooling very quickly, and that gives you relatively small defects, because the defects are generally proportionate to the size of the casting. This casting is pretty small, only a couple of millimeters or smaller, and so you get very fine structure which gives you very good properties. It's fairly uniform — pretty isotropic, I guess that's your question. So it's isotropic in general. In fact it'd be hard to make it anisotropic because of the very fine grain size that you get. And that's because of the high thermal conductivity and rapid cooling time.
So anyway, Bob Sprague said: whenever you first hear about the properties of a new material, write it down — those are the best properties the material will ever have. The person who replaced him, Jim Williams, who had been Dean at Carnegie Mellon and then went to General Electric for about ten years, and then became Dean at Ohio State — Jim Williams used to have a corollary: whenever you first hear about the price of a new material, write it down, that's the lowest price the material will ever have. People always glorify their material and tell you wonderful things about it, and you have to be very careful about what people tell you about a new material.
About thirty years ago I was sitting in what was the Chipman Room back then, listening to a talk from a new young professor who was working on electrically conductive polymers. Anybody familiar with electrically conductive polymers? The first one that came out was polyacetylene. These are polymers with lots of double bonds, so they have some free electrons, which means they can be electrically conductive. The only problem is they tend to decompose in air — the humidity in the air and so on. But they're very light, and he mentioned something I'd never thought about before. He said these were going to be the material of the future, they were going to replace copper, because the specific electrical conductivity of polyacetylene and these new electrically conductive polymers was less than that of copper. And copper is the electrical conductor we use in general.
That sounded pretty impressive to me. Copper had already taken a big hit from the fiber optics community — you now have photons carrying the information for data — and now we were going to have plastic wires that carry electricity because they have a lower specific electrical conductivity. What does it mean to have a specific electrical conductivity, or a specific thermal conductivity? Per unit mass — you divide by the density.
That sounded pretty impressive, except the next morning when I was shaving, I almost cut myself when I realized: wait a second, aluminum has a lower specific electrical conductivity than copper, and we've been using mostly copper rather than aluminum in rotating machinery, because the important parameter for selection of material in something like a big motor or a generator rotor is not specific electrical conductivity. You might want lightweight, except you really want the best conductivity — you don't want the best specific conductivity per density in that case. You want the best electrical conductivity, and the only thing with better electrical conductivity than copper is silver. Well there's an obvious reason we don't use silver for big motors.
Although during World War Two when they were separating uranium in the magnetic separators at Oak Ridge — it was basically a great big mass spec, they were separating uranium-235 from 238 — they had a shortage of copper. All the copper was being used for shell casings for the guns. It turns out they borrowed something like fifty tons of silver from the U.S. Mint in Philadelphia, and they wound their magnets out of silver for Oak Ridge to make the nuclear weapon. After the war they had to return the fifty tons to the U.S. Mint because it didn't deteriorate in service. Silver is the only thing that would be better to wind the electrical windings of a great big motor — unless you have a superconductor that works. That's another story; I could spend an hour on that about high-temperature superconductors and whether they're going to make big magnets.
In any case, you have to be careful when people are telling you about the properties of new materials, because they often oversell them, to be frank. Hey, it's their product, their marketing. It's like the person who calls you on the phone and wants to sell you something — they're usually not telling you the whole story, and it helps to get the whole story.
§2. Externalities: pollution, embargo, war, culture [07:27]
We started talking about externalities. When I taught this course a few years ago I used to say the most important parameters were price and availability of a material. Well it turns out more and more those are taking a back seat to the externalities. Does anyone remember the definition of externality? An externality in economics is something where someone else has to bear the price of something they had not intended to bear the price of. That could be air pollution, water pollution — it could be political, economic, social, environmental, military. Lots of different things are now influencing material selection more than just the basic properties of materials.
We talked about rare earth metals, and how China basically decided to hold Japan hostage, and by extension the rest of the world in electronics, by withholding the rare earth metals. Not because they had a monopoly on the availability of the rare earth metal ores, but because they had been willing to accept the pollution and to pay their workers very low wages, because that's the going rate in China. They had a de facto monopoly with a hurdle of probably five years before someone else could enter the market. You can't just stop all the production of electronics in Japan for five years — you're going to have to pay the price somewhere. Same type of thing as the oil embargo of '73.
We talked about economic sanctions that have to do with environmental things. We started to talk about social things where people want to get the lead out of things. And people will pay a fortune — I was actually the person who helped get rid of Building 20. You don't know Building 20, you know the Stata Center, but in World War Two, to develop radar, they built Building 20, which was on the site of what is now the Stata Center. The building was nothing but asbestos, but it was considered a wonderful incubator because it was wood-framed and you could tear down walls. Some people wanted to turn it into a national historic landmark for all the great innovative science that had been done in Building 20. I looked at it and said: that's a big asbestos liability, someday it'll cost us a fortune to bulldoze that and get rid of it — we'll have to clear out Cambridge and wrap it in a big plastic bubble because someone's afraid we're going to release some asbestos.
So when they built the new biology building twenty-five years ago, the physicists were supposed to backfill into buildings 16 and 56, which is where the biology department had been. And they came and said, oh that space is no good, that's not good enough for us, we're the physicists, we want a new building. They wanted to build a building right there. But this was 1992, and peace had broken out and MIT was looking at decreasing research budgets because we weren't going to get all this money from the Defense Department. They came to extended engineering council, and they discussed how the physics department wanted to build a new building and charge all the rest of us fifty million dollars on our overhead base so they could have a nice new building, because 16 and 56 were not good enough for the physicists. I raised my hand and said: well tell the physicists to stay where they are, we're not going to have a bigger research budget, we can't afford this increased overhead. And what's more, take the people in Building 20 and move them into 16 and 56, and you can tear down Building 20.
They said, well what will the physics department do for a new building, and I said: give them a hunting license. Whichever school, school of science or school of engineering, can come up with the money to build on that site first, gets to build the new building. People said, well what if the physics department comes up with the money before the school of engineering. I said: they've been trying for thirty years and all they raised was three million dollars for a new building. Who in this room — which is engineering council — thinks the school of engineering couldn't raise the money for a new computer science electrical engineering building faster than the physics department has in the last thirty years? And everybody said, oh yeah that's right. So they told the president of MIT, put the school of engineering and school of science in competition to raise the money. Joel Moses went out and within a year and a half he had a hundred and fifteen million dollars committed to build the Stata Center. Then they spent four hundred and thirty million dollars on it, so it didn't quite work out financially the way we wanted, because they didn't stick to the agreement, but that's another story.
Anyway, the point is asbestos and things like that become unacceptable over time, socially. Environmental: carbon-free metal reduction. If you look at the free energy diagrams — which I happen to have here — every metal on the periodic table can be reduced from its oxide using carbon if you go to a high enough temperature. [Tom opens a thermodynamics textbook to an Ellingham diagram.] This is the fifth or sixth edition; this is an Ellingham diagram — free energy of formation versus temperature. The free energy of formation increases for every metal on the periodic table. I used to base final exams on this diagram. You'll see that the free energy of formation increases for cobalt and iron, and you can see which ones are more stable — down here you've got aluminum and calcium. But notice this carbon plus oxygen going to carbon monoxide has a negative slope. That means carbon monoxide, if you go to a high enough temperature, will eventually become lower than the free energy of formation of any of the other oxides on the periodic table, and therefore if you go to high enough temperatures any metal can be reduced from its oxide to the metallic form using carbon.
Well today we're trying to get rid of the CO2. As Professor Sadoway used to say, if making metals in billion-ton quantities is the problem of generating a lot of CO2 — maybe it's not as bad as the cows generating methane or the utilities generating electricity, but the metals business produces a lot of CO2 because we make things in very large quantities. Professor Sadoway said, well then we should be the ones to figure out how to clean it up, and get away from carbon-free metal reduction. So Professor Allanore and Professor Sadoway and a number of other people in the department have various schemes to generate metals without using carbon. In general they're going to do that by using electrons, and today where do most electrons come from? The utility, which burns coal — that's in the news this morning. However, you do have hydroelectric plants, you have nuclear power, you could maybe think of solar, but you'd have to have a very large solar grid to get to the thousands of megawatts of power you need. Aluminum plants are located at the source of the electricity — great big hydroelectric power plants in Norway, or James Bay in Canada, or originally Niagara Falls. Where did Charles Martin Hall, Alcoa, build their first reduction plant? Niagara Falls — because it was a source of relatively free electrons.
The military. You might know the story of Japan and iron, oil, and steel. It's called World War Two. You may not have heard about it before, but we always say the Japanese did a sneak attack on Pearl Harbor. Let's ask the five wise's — why did the Japanese go to war with the United States? Well, they did it because we decided to withhold from them all the scrap iron and steel, and raised the prices on scrap iron and steel. We were stopping their steel economy in Japan. They were trying to be a military power — they already controlled Korea and they wanted to go into China, they had imperialistic inclinations. We at that time were probably the major exporter of oil in the world. We were essentially doing to the Japanese what the world does to North Korea today — we put them in isolation, what we do to Iran today to get them to stop their nuclear thing. The Japanese basically decided they would try to do a sneak attack on Pearl Harbor because we were playing games with the oil and steel business.
Cultural. Gold. What's one country that contains half the world's gold?
Student: India.
India. How do you know it's India? You're right, exactly. Indian people have slightly darker skin, and it matches very well with gold. If you go anywhere in India you'll see people — some of the poorest people — wearing gold jewelry, and there are a billion of them. Half of all the world's gold reserves that have ever been mined are mostly on the necks and wrists of people in India. We may have more in our central bank than anyone else, in Fort Knox, but India has more on people's necks and arms. It's a cultural thing. And platinum jewelry is very popular in Asia because people like the color of platinum with the color of the skin. So those are cultural things about jewelry production.
§3. Regulated monopolies and the transistor [19:19]
Regulatory. Utilities and the rate base. Anybody know what a rate base is for a utility? A regulated monopoly. We don't have two companies that deliver electricity to your home, we have one. In the old days we had something called American Telephone and Telegraph — we actually still do, but it was a regulated monopoly in the old days. In a regulated monopoly the regulators in the government will actually set the profitability of the company. People used to think, wasn't it foresightful for AT&T to run Bell Laboratories and spend all this money on basic research. Well that's a load of bull. AT&T had a promise from the regulators that they could make six percent profit on whatever they could justify spending, and they could justify spending on a huge research facility. They did a lot of great basic research, but almost all of it was aimed at improving the productivity and the reliability of the telephone system.
You'll hear, oh they invented the transistor, that came out of basic research. Another fallacy. The transistor was developed because in 1925 AT&T had statisticians who were looking at the reliability of the phone system at the time. It was little mechanical switches — you see the old TVs and the telephone operator taking the plug and putting it from one hole to another, that was how they were switching. But when they were putting the plug in, it was a mechanical plug, and anyone who looks at mechanical things knows that after ten thousand hours of operation or whatever, they tend to fatigue or wear and they break. So from 1925 on, Bell Laboratories was trying to find a replacement for the mechanical switch. They could plot the increased use of phone usage, and they knew that sometime in the 1950s the entire system would break down — because to make a phone call from A to B you would have to go through so many switches that the probability of failure would be horrendous, and the system would just collapse because it would be unreliable. The transistor came out of an applied study to find an electrical switch that would be more reliable than a mechanical switch. How many of you have heard that the transistor is evidence of how basic research pays off? Well it's not basic research, it was applied research. It was a regulated industry — they could make six percent for every dollar they could spend, they just had to justify that what they were spending it on had some basis in improving the phone system.
That's still true in the utilities business — the electrical utilities, the water utilities. They have commissions usually run by the state — in Massachusetts it's the Department of Public Utilities — and they basically set the profitability of these companies. They look at them critically and they'll say, we'll let you make five percent so that people who invest in your stocks can put them through pension funds, you make enough money to retire, and whatever you can afford to spend you can spend. Anyone gone to the store and bought some LED light bulbs that were discounted because the local utility was paying seven dollars for that light bulb? Why do they do that?
Student: [answer about energy savings]
That's part of it, but it's really an economic reason.
To build a new power plant — a big one comes in at a thousand megawatts of electric power generation, a thousand megawatts is a billion watts — the installed price to build that plant is about two thousand dollars a kilowatt. If you could save electricity at less than two thousand dollars a kilowatt, it's more efficient for society to give you efficient light bulbs. If they can give you a discount on the cost of a light bulb for less than two thousand dollars a kilowatt over the life of that light bulb, it's a win-win. The regulators basically say, we'll let you make a little more on all these discounts you'll give on energy-efficient equipment and light bulbs, so you won't have to tear out half of Belmont to build a generating station. Having lived in Belmont — no one wants the coal-fired plant in their backyard, not even a gas-fired, quiet plant. They don't even want hydroelectric plants. They really don't want any electric plant in their backyard.
Take the people on Martha's Vineyard, Nantucket. They don't want those windmills destroying their view of the ocean. Now wait a second. If you told them we're going to triple your electric bill because that's what you want — would they say yes or would they say no? But that's not what people tell them; they say oh, it's going to destroy my view. What is the choice? We're now paying over twenty cents a kilowatt-hour in Massachusetts. Those are externalities on what we choose to do.
§4. Embargoes, transportation, and the Saugus ironworks [25:46]
Embargoes. There were blood diamonds in Angola back longer ago than — actually, when your parents were in diapers. Rhodesia, which is now part of Zimbabwe, just northeast of South Africa — they had the world's best chromium ore reserves. They had a civil war going on, and the world tried to put pressure on them, just like we try to put pressure on North Korea and Iran and other countries to not build nuclear weapons. Rhodesia wasn't building nuclear weapons, but it was a lot of pain and suffering for a lot of people there. So we basically said we're going to put an embargo on Rhodesian chrome. They had the best chrome ore in the world — it was so good you could basically just take that rock and crush it and throw it into your steel furnace to make stainless steel. That's how good it was. No one else had chromium that good. We used to have iron ore that good — it was called the Mesabi Range in Minnesota, and it ran out about 1948, but it was so good we could crush the rock and put it right into the blast furnace to make steel. We didn't have to process it. We had the world's cheapest iron ore in the United States, but we used it all up.
Rhodesia had the best chrome, and you couldn't fake Rhodesian chrome. There was nowhere else in the world that had anywhere near that quality. But we weren't supposed to be importing it, and we couldn't keep them from exporting it. It turns out they still sold it on the black market, and the people using it knew it was Rhodesian chrome, but it got laundered through some other country, and the customs agency kind of looked the other way, even though we knew we were still supporting the civil war in Rhodesia. Officially we weren't. So there are embargoes that work and don't work. Same thing in the oil business — the Nigerians are always cheating on the Saudi Arabians on the oil cartel.
Transportation as an externality. My example here is copper tubing. We think copper tubing is expensive, but it's not that expensive. All through the 1980s and 1990s, when all these metal-producing industries were going offshore to lower labor rates, we never lost the six factories in the United States that made copper tubing. Reading, Pennsylvania had this old plant — I had a student do an LGO thesis down there at Reading Tube — and there were six of these plants in the United States. The reason was, when you ship copper tubing you're shipping a lot of air in the hole — large volume. It's expensive but it's not that expensive — go to a hardware store and you might have to pay eighty bucks for a ten-foot length. The shipping costs were too great, and so we actually kept those industries because of the transportation costs. There are a few other industries like that, but that's one example.
My other example is Saugus Ironworks. Have you been to Saugus Ironworks, in Saugus, Massachusetts, just up the north shore here? Saugus Ironworks was actually another transportation story, but one where it was an energy crisis in the early seventeenth century. Saugus Ironworks was 1619 or so. In the sixteenth and seventeenth century in England they were having an energy crisis. What was the source of energy in England then? Wood. They were deforesting England, and they had three uses of trees — we'll talk about this later. One was to make cast iron for military purposes, to make cannons for your ships. Another was for shipbuilding — you needed the great big masts for the sailing ships. And another — it turns out they were starting to make window glass. I told you the story about bullseye glass, and we'll talk about that some more. They had to use charcoal to make the iron and to make the glass, and then you needed great big trees for the masts of the big sailing ships, man-o'-wars and so on.
England was being deforested and they were having an energy crisis, and they were passing laws — I'll read you some of the historical story behind all that. They essentially built an ironworks when they learned about the new world. They sent people over here. They built a glassworks down in Jamestown, Virginia. They came over and built the glassworks in Jamestown Virginia — why? Because they needed trees, and if there was anything they had on the east coast of North America at that time, we had trees. Up here they built an ironworks, Saugus Ironworks, a national historic site now, and we'll talk about that more later. It wasn't a transfer — this was a case where it was worth it because you had such high energy costs in England, to come over here to get your energy, which was trees. So the energy crisis of 1973 was not the first energy crisis.
§5. Externalities assignment and the Bombardier story [31:48]
I now have an assignment for all of you on externalities. If anyone has their own externality story where something didn't get done — if you can think of an externality story I'd love to collect them. Here's one from Caroline Joseph; I think she's a second-year graduate student now. When she did her internship project as an undergraduate she went down to one of the oil companies in Houston. She took this course, and I said the same thing — anyone have an externality story? For her internship she was supposed to be looking at corrosion tests of clad pipe. They wanted to do an oil project in some country — she didn't tell me the country, and I don't care about the country for this purpose. She was supposed to be looking at the corrosive nature of this oil or gas field and try to determine — material selection problem — should they use regular old carbon or alloy steel, which would corrode in this environment, or should they use more expensive clad pipe. That was the question being posed to her as part of her internship.
What she found out was: eventually the project got canned, but it really didn't get canned for the corrosion reason. She did determine that they really should use clad pipe; it was a very corrosive product coming out of the ground in that country. But there were several other problems. The operating company had strict requirements: make sure a certain percentage of the construction materials were made in that country. Lots of countries have that in big projects. If Boeing sells an airplane to Korea, they're going to demand that a certain fraction of that aircraft is built in Korea — they're called offsets. With big contracts, the other country is going to require offsets — you're going to have to do some of your manufacturing in that country so they're not paying the full freight. Another is that the country required employment of local workers.
That's true in Canada, right next to us. I had an opportunity to go do some studies at a lab in western Pennsylvania that does lightning tests. I'd actually scheduled a time, and when I got there, there were nothing but technicians. That was because the engineers and some technicians were supposed to go to Canada to do some tests for Bombardier on the aircraft up there. When they got to the Canadian border, the Canadians looked at it and said: well, we'll let these engineers in because they have specialized skills to do these tests over the next three weeks in Canada, but we're not going to let your technicians in. We have technicians in Canada — they'll do all the technical work. So they had to send all their engineers to Canada to do technician work, because just because they had technicians in Canada didn't mean those technicians could do what these guys needed to do. But I got to go, and I got nothing but technicians in Pittsfield, Massachusetts, which turned out to be good because they told me all kinds of stories. That's another story.
Local workers, unless they've been there for more than fifteen years in that country — well, those people tend to be managers anyway. So it just wasn't going to work for external reasons, so they canned the project.
There's an article that will be posted on Stellar. By the way, I'm told that all the videos are up — maybe not all of them, but there are links on my website now to at least the first four days of lectures, and we'll get the others up soon, now that we've gotten permission from my former postdoc, who runs the website. Here's an article by Norm Augustine. Norm Augustine is a very interesting person — Princeton grad, he's on the MIT Corporation, he used to be CEO of Lockheed Martin, he was asked to be the president's science advisor, he's a big-time spokesman for engineering. In the early '90s he gave a talk at the University of Colorado, at their engineering centennial in 1993, called "Socio-Engineering and Augustine's Second Law Thereof." He's basically talking about externalities from twenty-three years ago. He calls it socio-engineering, but he gives you a little history of what the constraints on engineering were over the last couple of centuries, and he says we've now entered the age of social engineering. Which is my point — actually, it's not my point, it's his point from twenty-three years ago: increasingly, externalities influence material selection more than the actual properties and cost of the material.
Any questions? I'm done with externalities. Anyone think of an externality that you know about?
§6. Ashby's plot and the ceramics fever [36:30]
Now let's go into — I used to say, availability and cost were the primary drivers. I did talk about Mike Ashby, and he has this plot in his books that gives the use of materials over the ages. He's a structural materials person — there's a structural materials course — and so he talks about basically metals, polymers, elastomers, composites, and ceramics and glasses. So four classes of materials. He has a very nonlinear scale here, starting out 10,000 BC and moving up to 5,000 BC, so it's nice and linear every 5,000 years, and then it jumps to every century, and then it jumps every ten years — sort of an interesting scale, but it gives him the shape of the plot he wants.
Early on we had lots of woods and skins and things that we'd consider polymers or elastomers. We didn't really reduce much metal 10,000 years ago — we did some, but not much. Mostly we used stone and ceramics and glasses, and the composites were straw and brick and paper and things like that — that was 10,000 years before the Christian era. Now we've got — this is actually the original plot that he had. He was showing increasing use of metals all the way up to around 1960 or so, but then he was showing a decreasing amount of metals and increasing plastics, and great growth of composites from almost nothing to taking over a huge amount of society. He was also predicting — in 1980 I told you about ceramics fever in Japan — that people were going to make everything out of ceramics because they don't corrode and they have tremendous strength. Well they do corrode, and they have lousy fracture energy, they're brittle, so that's sort of the overselling I was talking about. People were spending billions of dollars in research in the mid-80s, and frankly Ashby was buying this crap.
Did I tell you about myself and the kitchen sink at the National Institute of Standards and Technology? When I got back from Japan, like 1986, I was an up-and-coming material scientist at MIT. I hadn't got full professor yet, but I was getting to be known. I gave a talk on what I'd learned in Japan, from spending a year there studying what was going on in material sciences in Japan. Great big auditorium at the National Institute of Standards and Technology in Gaithersburg, Maryland. I was telling them about the ceramics fever in Japan and how they had two million people come to a scientific show about fine ceramics, how they were going to take over engines and everything else. This is probably the premier material science laboratory for the U.S. government — in fact I used to be on their advisory committee, and I called NIST the crown jewel in the federal laboratories. Seven hundred federal laboratories, but they've had several Nobel Prize winners at NIST — just an outstanding laboratory.
I got up and said: well, the problem with ceramics is they're brittle. Now I knew that — everybody knew that. Griffith was the father of fracture mechanics; he was studying fracture of glass in 1925, he knew that. But ceramicists sort of glossed that over because they wanted to get research contracts by saying oh, ceramics don't corrode. I said, ceramics do corrode, they do develop flaws, and the critical flaw size is so small because they're so brittle that you can't even inspect for it. In fact this is not going to work, and in fact the only high-volume ceramic materials we use are portland cement and toilet bowls, and I throw in the kitchen sink — but you have to line it with gray cast iron to give it fracture resistance. That was my hyperbole way of saying you're all lying to me about fine ceramics.
Now portland cement — we're going to see, we use fifty percent more portland cement by ton than we do steel in the world. In terms of a man-made structural material, it is number one. It's a ceramic, even though it's brittle, and it's been around for thousands of years. I said portland cement and toilet bowls. Why did I say toilet bowls? If you ask a ceramist, you'll find that the whiteware industry has been one of the primary industries — whitewares are toilet bowls and sinks and bathroom fixtures, and they make them in huge quantities. I said I throw in the kitchen sink, except the kitchen sink has to be lined with the most brittle metal we have — just about, cast iron — in order to give it fracture resistance. If you drop something in the kitchen sink you don't want it to shatter. You tend not to have heavy things in the bathroom sink.
§7. The Future of Metals: why steel still wins [43:09]
So Ashby was buying into all this hooey in the 1980s about fine ceramics taking over — see how ceramics were going to grow like that. Bull. Here we are in 2015 and ceramics are still, it's still portland cement. Composites were going to take over the world — what's the problem with composites? They're too pricey. I passed around that little piece of the X-33 space plane — twelve thousand dollars a pound. Fantastic if you're going into space at twenty thousand dollars a pound — cost savings. But you can't afford to even make a Boeing aircraft out of composites very well, which we're learning through the 787. Plastics were just going to grow like mad — I'm going to show you how big this is, and Ashby was off by quite a bit. And metals were just going to — the metals industry was dying.
So I listened to this for years and I got people very upset with me because of my negative way of saying things. I finally took some of the ideas and I wrote an article — not that anyone wanted to publish it. I had to publish it in the Welding Journal because no one else cared about metals at that time. This was June 1991 — an article I called "The Future of Metals." I pointed out that among all the metals in the world, ninety-five percent of all metal made in the world is steel, less than two percent is aluminum, and just over one percent is copper. Steel is the dominant metal, and we'll talk about why. I told you, you're going to hear me keep talking about steel as a structural material — well, this is one of the reasons. It's not me. I'm not the one who bought a billion tons of steel every year — this is what the world buys.
I also talked about some of the other properties and the growth in these industries. Fine ceramics — this is when fine ceramics was going to take over the world — I pointed out that fine ceramics had a market value in 1990 of about five billion dollars annual, and the estimated annual growth was going to be twenty percent. Composites was about a fifteen billion dollar industry — fancy composites, not portland cement but advanced engineering composites — so it was three times as large, and it had a growth rate of ten percent. Semiconductors, silicon, in 1990 — we had computers back then, right, this was right before cell phones — that was only a hundred billion dollar industry and it had a five percent growth rate. And steel at that time was a five hundred billion dollar industry with a two percent annual growth rate. Everybody says, oh it's got lousy growth rates, over the hill, it's going to die. You saw that in the Ashby plot — metals were decreasing. Well, if you multiply these two columns together, you find that the two percent annual growth rate on a five hundred billion dollar business is more than the growth of all these other businesses combined.
Now the problem was, the steel industry was losing its shirt back then. There was a guy named Mittal in India — anybody ever heard of Mittal, M-I-T-T-A-L? He knew that steel was an important material, and he went around buying up these old steel plants. There were plenty of steel plants for sale, and the reason was, with the Arab oil embargo and stuff in the 1980s, the United States had used a hundred million tons of steel a year — I've got plots, it's actually in this article — a hundred million tons a year, century constant. But at the same time the employment went from half a million steel workers to two hundred and fifty thousand steel workers in ten years. You'd read in the Wall Street Journal the steel industry was dying — they were laying off half their workers over ten years. Wait a second: it had constant consumption, the employment to produce it went down by a factor of two — what happened to productivity? It went up by a factor of two. I did that one in my head. If half the people produce the same amount of product in 1990 as they did in 1980, productivity doubled.
What was the U.S. total productivity increase in the 1980s? It was one percent overall, across industries. In the steel industry it was six or seven percent increase in productivity. Remember yesterday I told you productivity isn't everything, but in the long run it's nearly everything. The steel industry was remaking itself for various reasons, and we'll talk about some of this stuff later. The only industry that had a better growth rate in productivity in the 1980s was the mining industry — they were close to ten percent annual productivity increase. But all Wall Street does, and all the politicians, is look at the number of jobs that are lost, and they say oh, we lost jobs. Well of course you lose jobs — if productivity goes up you're going to have to find something else for those people to do. There are lots of McDonald's and Burger Kings and Subways, and you can pay those people nine bucks an hour. Bernie Sanders gets in, it'll be fifteen — he said so last night. So your Subway price is going to go from a five-dollar footlong to a seven-fifty footlong. But it's just simple economics.
So you can read what I said twenty-five years ago about the future of metals. There really was going to be a future of metals, and Mittal knew it. He had the money to invest in the steel mills, and now he's a multi-billionaire. Nobody else wanted these steel mills — they were selling them for ten cents on the dollar. These fat cats on Wall Street were so bright, they knew steel was dying and so they were going to dump it at ten cents on the dollar, and Mittal said: I'll take that. Anyway — enough for today of hanging out my opinion of the intelligence of Wall Street.