Whaling

More winter reading: I recently finished Nathaniel Philbrick's "In the Heart of the Sea." It's about the 1820 wreck of the Nantucket -based whaling ship Essex. This true event is believed to have been the catalyst for Melville's fictional Moby Dick.

I learned a lot about the industrial organization of whaling --- Very interesting industry! Seems to have been a lot of labor-market-related knowledge spillovers that allowed the little island of Nantucket to dominate this industry. But those advantages were eventually outweighed by the fact that Nantucket's harbor isn't really that good. Any really big ship had to be unloaded far from shore, and whale oil brought in to the town by small boat. This is expensive, and eventually the industry moved.

Oh, and plus there was a horrible disaster on the Essex when an angry sperm whale attacked. For some reason Philbrick spends most of his pages on that rather than the economics of whaling...

The most relevant passage in the book to today's economy was this:

Making (Nantucket's) level of profitability all the more remarkable was the state of the world's economy in 1819. As Nantucket continued to add ship after ship to her fleet, mainland businesses were collapsing by the hundreds. Claiming that the "days of our fictitious affluence is (sic) past," a Baltimore newspaper reported that spring on "dishonored credits, deserted dwellings, inactive streets, declining commerce, and exhausted coffers."

Sounds familiar. And serves as reminder that economic times have been bad before. They'll get good again.