The First Great American Industry (Update)

Key takeaways

Whaling was a critical part of early American capitalism, significantly influencing the economy and culture.
The rise and decline of the American whaling industry offer insights into investment strategies and economic evolution.
Modern environmental activism is rooted in the history of practices such as whaling, highlighting changing societal values regarding wildlife.
Technological innovations have historically shaped industries, including whaling, reflecting broader economic trends.
Understanding historical economic models can inform contemporary discussions about investment, risk, and sustainability.

Summary

The Rise and Fall of the American Whaling Industry

The episode explores the history of whaling in America, detailing its rise as a dominant industry in the 19th century. It highlights how whaling contributed significantly to the U.S. economy, providing wealth and resources for investment in other sectors such as textiles and banking. The narrative reflects on how America became the center of the whaling industry, focusing on key locations like Nantucket and New Bedford.

Economic Impact and Cultural Significance

The discussion delves into the economic importance of whale oil for various uses, including lighting and consumer goods. The episode covers how whaling influenced American culture, setting the stage for its depiction in literature, such as Moby Dick. The cultural relevance is underscored by the large-scale hunting practices and their implications on wildlife and conservation.

Environmental Activism and Modern Whaling

The transition from a thriving whaling industry to modern environmentalism is discussed, featuring the activism of figures like Paul Watson. The episode discusses ongoing whaling practices, their legality, and modern environmental perceptions. It highlights the contrast between historical and contemporary views on whales, noting how public sentiment has shifted towards conservation and protection of these creatures.

The Technology and Innovation in Whaling

Innovation in shipbuilding and processing methods played a crucial role in enhancing the efficiency of whaling operations. The podcast discusses technological advancements that allowed for the expansion of the whaling industry into far-flung waters, revolutionizing the industry and leading to greater catches and profits.

The Decline of Whaling and Lessons for Today

Towards the end of the episode, the causes of whaling's decline are examined — from environmental changes, technological advancements in alternate energy sources to evolving public opinions on conservation. It examines the 'principle-agent problem' seen in modern industries, using whaling as an example of concentrated versus corporate investment strategies.

Show notes

Whaling was, in the words of one scholar, “early capitalism unleashed on the high seas.” How did the U.S. come to dominate the whale market? Why did whale hunting die out here — and continue to grow elsewhere? And is that whale vomit in your perfume? (Part 1 of “Everything You Never Knew About Whaling.”)

SOURCES:
- Eric Hilt, professor of economics at Wellesley College.
- Nathaniel Philbrick, writer and historian.
- Paul Watson, environmental activist and founder of the Sea Shepherd Conservation Society.

RESOURCES:
- “Calls From the Deep: Do We Need to Save the Whales All Over Again?” by Sophy Grimshaw (The Guardian, 2020).
- “The Very Small World of V.C.,” by Avi Asher-Schapiro (The New Republic, 2019).
- “How Nantucket Came to Be the Whaling Capital of the World,” by Nathaniel Philbrick (Smithsonian Magazine, 2015).
- “Fin-tech,” (The Economist, 2015).
- “The Spectacular Rise and Fall of U.S. Whaling: An Innovation Story,” by Derek Thompson (The Atlantic, 2012).
- Leviathan: The History of Whaling in America, by Eric Jay Dolin (2007).
- “Incentives in Corporations: Evidence from the American Whaling Industry,” by Eric Hilt (NBER Working Papers, 2004).
- In the Heart of the Sea: The Tragedy of the Whaleship Essex, by Nathaniel Philbrick (2000).
- “Productivity in American Whaling: The new Bedford Fleet in the Nineteenth Century,” by Lance Davis, Robert Galiman, and Teresa Hutchins (NBER Working Paper, 1987).

EXTRAS:
- “Is Venture Capital the Secret Sauce of the American Economy?” by Freakonomics Radio (2021).
- “Is the Future of Farming in the Ocean?” by Freakonomics Radio (2021).

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