The Spectacular Rise and Fall of U.S. Whaling: An Innovation Story

An extinct business offers surprisingly current lessons about the triumph of technology, the future of work, and the inevitable decline of industries that might not be worth saving

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"Some years ago -- never mind how long precisely -- having little or no money in my purse, and nothing particular to interest me on shore, I thought I would sail about a little and see the watery part of the world." -- Moby Dick

One hundred and fifty years ago, around the time Herman Melville was completing Moby Dick, whaling was a booming worldwide business and the United States was the global behemoth. In 1846, we owned 640 whaling ships, more than the rest of the world put together and tripled. At its height, the whaling industry contributed $10 million (in 1880 dollars) to GDP, enough to make it the fifth largest sector of the economy. Whales contributed oil for illuminants, ambergris for perfumes, and baleen, a bonelike substance extracted from the jaw, for umbrellas.

Fifty years later, the industry was dead. Our active whaling fleet had fallen by 90 percent. The industry's real output had declined to 1816 levels, completing a century's symmetry of triumph and decline. What happened? And why does what happened still matter?

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BLUBBER!

Fat had never made a city so flush.

In the mid-nineteenth century, New Bedford, Mass., was the center of the whaling universe and the richest city per capita in the United States -- if not in the world, according to one 1854 American newspaper. The US whaling industry grew by a factor of fourteen between 1816 and 1850. Still New Bedford swallowed half of America's whaling output by mid-century. Demand for New Bedford's haul came from all over the country. Sperm oil could lubricate fancy new machinery. Inferior whale oil could light up a room. Baleen, or whale cartilage, could hold together a corset.

280px-Unidentified_sailing_ship_-_LoC_4a25817u.jpgThe thesis of Leviathan, the ur-text of whaling economics, is that the source of our dominance in the 19th century will feel familiar to a 21st century audience: a triumph of productivity and technology. Leviathan uncovers countless examples of innovation, but I'll limit our list to four areas. First and most broadly, Americans sailed bigger and better ships (like the barque to the left) guided by smarter ocean cartography and more precise charts. Second, a series of tinkerings with harpoon technology led to the invention of the iron toggle harpoon, an icon of 19th-century whaling and the unofficial symbol of the city of New Bedford.

Third, innovations in winch technology made it easier to pull in or let out large sails, reducing the number of skilled workers needed to man a vessel. It would hardly be hyperbole to say that winch tinkerings practically made the book Moby Dick possible. Melville could realistically populate his book with shady, far-flung, ragtag characters precisely because the vessel's technology had become so easy to maneuver, even an unwashed cannibal could use it.

Fourth, whale captains were innovators in employee compensation. In the lay system, "every member of the ship's company from captain to cabin boy signed on, not for a wage or piece rate, but for a predetermined percentage of the value of the product returned," Lance E. Davis, Robert E. Gallman, Karin Gleiter write. Savvy captains of the whaling barques, not unlike some creative corporate boards today, were keen to aligning company interests.

'YE DAMNED WHALE'

The standard explanation for the decline of whaling in the second half of the century is a pat two-parter consisting of falling demand (from alternative sources for energy) and falling supply (from over-hunting). But according to Leviathan, the standard explanation is wrong.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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