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of millions of dollars for Royal Caribbean. That's how their waiters could be paid $50 a
month with no days off for up to seven months.
This business model is every corporation's dream. Indeed it has been so successful that
Carnival and Royal Caribbean have been able to buy out their smaller competitors while
expanding their fleets with new ships. Today the two firms account for 66 percent of the
global market; Carnival at 45 percent and Royal Caribbean at 21 percent.
As the American lines expanded to the United Kingdom and the rest of Europe and
then into Asia, annual passenger load tripled from 500,000 in 1970 to 1.5 million in 1980,
and then grew exponentially to 4 million in 1990 to over 13 million in 2010. Passengers
came from every economic class and every level of sophistication from people who had
never seen the sea before to people who had seen everything and wanted an easy way to
travel. They helped propel the cruise industry to reach the phenomenal growth rate of
1,000 percent in four decades.
After his company had made him a billionaire, Ted Arison returned to Israel, leaving
behind his son Micky to take over Carnival Cruise and a solid record of promoting the
arts through his own foundation and sports by bringing a top-flight professional basketball
team to Miami. In Israel he set up Arison Investments and again spent millions on phil-
anthropy. His prize project was the Arison School of Business, which he founded at the
Interdisciplinary Center in Herzliya, a well-regarded institute with strong ties to the gov-
ernment and conservative parties. He died in 1999 a very wealthy and happy man. Yet it is
hard to square Arison's strong attachment to the special land and people of Israel with his
cruise line's business practices that have helped erase what is distinctive in so many other
spots on the globe.
American unions fought back against cruise line practices in the 1960s and 1970s, but
they were on the wrong side of history. The battle was joined just as globalization took off,
opening up previously sheltered markets around the world, Communist and non-Com-
munist. Manufacturing was moving out of Europe and the United States and into South
America, Africa and Asia, where China became one great factory employing very cheap
labor. In this new atmosphere, trade agreements centered on opening new markets and
protecting investments. Negotiators rarely discussed labor protections or environmental
regulations.
American unions and international labor organizations were blocked. They opposed
the use of flags of convenience and foreign registries; the International Transport Workers'
Federation launched its first campaign against flags of convenience in Oslo, Norway, in
1948. But that and every subsequent campaign has failed, in part because there is no en-
forceable law in international waters and secondly because unions have fared so badly in
globalization.
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