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

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?