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Arthur
Donovan Talk
India
House Foundation
10
October 2007
It is a great pleasure to be here today and especially to be
in the company of so many people who not only can trace their origins back to
notable New York ancestors, but who are also committed to cherishing the
city’s heritage. And for an academic historian like myself, it is a special
treat to be speaking to you here in this distinguished private club that
houses one of the great collections of American maritime art. My wife Carolyn
and I are delighted to be here.
I will be brief – not something professors are known for – for the day is but
half over, and I will direct my brief comments to several subjects that I
hope you will find germane to the heritage and mission of India House. I will
also be emphasizing several historical links that I believe connect such
diverse topics as seafaring, commerce, the pursuit of liberty and the wealth
of nations.
History offers no end of awful stories of conquest, enslavement, warfare,
expropriation, banishment and suffering. And yet there is an ineradicable
element of struggle, aspiration and invention in the human spirit that
repeatedly makes itself felt and time-and-again raises historical narratives
above the grimness of mere existence. In modern times the hopefulness of the
eighteenth-century enlightenment laid the groundwork for the social and
economic advances of the nineteenth-century, but we also know that the rise
of modern industry and the destructive use of the tools it made available
prepared the way for the devastating wars of the twentieth century. Given
history’s record of death and destruction, I’m often astonished by how
eagerly people immerse themselves in the past both for entertainment and
instruction. But of course I am also grateful there is this unquenchable
appetite for history, for it reminds me that studying the past is more than
just a pathology of the professoriate.
Let me then hazard a few general statements about what we see when we look
back at New York’s past for both inspiration and for a sense of connection to
the present. One thing we find is that the longing for freedom and what the
sociologists call human agency is universal and inextinguishable. Consider,
for instance, the case of John Bowne, whose story many of you know quite well
from your association with Bowne House in Queens.
Bowne, an English settler, lived in Flushing, then part of the colony of the
New Netherlands. When Flushing received its town charter in 1645, The Dutch
West India Company granted it “liberty of conscience,” and two decades later,
when John Bowne was living there, it was widely known that he allowed Quaker
services to be conducted in his house. But by the 1660s the political
temperament in New York had changed. After heroic service in the Dutch wars
against Spain, Peter Stuyvesant was appointed by The Dutch West India Company
to be Director-General of the New Netherlands. At that time this Dutch colony
was in a ruinous and disorderly state and Stuyvesant brought to his new
duties a vigorous law-and-order attitude. He considered dissent a form of
disorder and, having declared Quakerism ‘an abomination,’ he had John Bowne
arrested. When Bowne refused to pay his fine or renounce Quakerism, he was
imprisoned and then deported to Amsterdam. He appealed to the Dutch
authorities, citing The Flushing Remonstrance, a document they had granted in
1662 that said “love, peace and liberty” should be extended to all residents,
including “Jews, Turks, and Egyptians”. Surprising as we may find it, given
that age’s record of bloodshed and persecution, Bowne’s appeal was successful
and he returned home victorious in 1664. The principle of religious liberty
that this decision represented was later firmly established in New York and
in the United States.
To my mind the central importance of the Bowne story is not just his
contribution to the establishment of religious liberty, but rather the
broader point that individual liberty is indivisible. Law and order are
important, but if they are imposed and enforced in ways that destroy
individual initiative and break spirits, they are also destructive. And of
course the same thing is true of economic liberty as well. If economic
activity is entirely in the hands of monopolies, such as the Dutch West India
Company or the British East India Company, companies that answered only to
their directors and had absolute control over their finances, resources and
markets, enterprise will not flourish. Liberty is not merely a string of
discrete beads that includes religious and entrepreneurial freedom; it is
rather a single chain whose links are made up of the particular freedoms
claimed by and granted to individuals. While liberty must be tempered by
respect for established law and by fair-handed universal application, it must
also be understood as an expression of human striving that should be nurtured
rather than suppressed. It was this broad and abiding concept of liberty that
freed merchants and entrepreneurs to innovate and build America, as they did
when they inaugurated Black Ball liner service to European ports and
steamboat service across the East River and between New York City and Albany.
It was not only New York City’s natural endowments that turned it into a hive
of commercial enterprise in the eighteenth and nineteenth centuries. The
city’s rise to greatness was also a product of free and ambitious individuals
who were eagerly making their way in the world in which they found themselves
living.
Adam Smith understood liberty in these terms, and in The Wealth of Nations he
made it a central tenet of his argument for individual enterprise. If you
have ever spent time reading around in Smith’s classic, you will know that
the English East India Company, a powerful closed corporation, was his bete
noire. But I’d like to direct your attention to another of Smith’s arguments,
one that seems to me especially relevant to our own age of containerization
and globalization, and that is his analysis of the economic importance of
transportation. Indeed, I’ll go so far as to say that low-cost
transportation, “outsourcing” and marketing, all of which are core activities
in today’s global economy, were also fundamental to Smith’s statements about
the division of labor and increasing labor productivity.
As you all know, Smith famously explained how more extended markets create
increased demand, how increased demand gives rise to a greater division of
labor, how the division of labor leads to increased productivity and lower
unit costs. His analysis describes what we might call “a virtuous circle of
commerce.” But how can an economy not enjoying the benefits of this virtuous
circle be structured so that it can share in the increased Wealth of Nations
that is Smith’s main concern? Of course this is the very question that is
being asked today by those who are seeking to help the under-developed
nations of the world participate in the global economy that is enriching the
developed nations to such an astonishing degree. For Smith, the answer was
shipping, the movement of goods by sea. He carefully demonstrates that
water-borne commerce is much less costly than overland haulage, and this is
still true even after the development of railroads and motortrucks. That is
why, Smith explains, “It is upon the sea-coast, and along the banks of
navigable rivers, that industry of every kind naturally begins to subdivide
and improve itself.”
And so we return to New York City, a port endowed with an unmatched bounty of
natural bays, harbors, rivers and seaways that connect it to the oceans and
protected waterways of the northeast. After it had grown into the nation’s
greatest seaport and dominant commercial center, New York inevitably became a
center of railroad service as well, when this new mechanical mode of
transportation was developed. With its packet liners and then its
steam-driven liners connecting the city to overseas ports and markets, and
with the North River linking it to the Erie Canal and inland cities and the
waterways that radiated from them, and with Long Island Sound providing a
sheltered waterway to the towns and markets of the Northeast, New York was
uniquely situated to benefit from the transportation advantages that Smith
identified. And so it did, and so it still does.
Malcom McLean saw all this clearly in the 1930s when he began providing
trucking services between North Carolina and the Northeast. In 1937 he spent
a long, frustrating day in Hoboken, waiting for the longshoremen to unload
the truck he had just driven up from the south so that he could head home.
When, later in his life, he was asked when he first thought of
containerization, he recalled that day, but avoided explaining in detail just
what it was that inspired him. I believe he spent much of the day watching
with fascination as a huge gantry on a nearby dock in Jersey City lifted
railroad boxcars loaded with cargo onto a ship operated by the SeaTrain Line.
SeaTrain’s ships carried boxcars of freight, not cargos handled breakbulk,
and because they moved the boxcars over long distances by water, they did do
so more cheaply that the railroads could move them when hauling them
overland. When, two decades later, McLean was ready to do the same thing with
his burgeoning trucking company, he naturally located his first terminal near
New York City. McLean, Like Adam Smith, realized that water carriage is
cheaper than overland carriage, and that lower freight costs would increase
economic activity.
Today we live in a world of nations linked by container services and in an
era of astonishing wealth creation. New York has played a central part in
today’s globalization, just as it has been the leading center of wealth
creation in the United States since the nation’s birth, and there is no
reason to think it will not continue to play that role in the future. It is a
great legacy, one we should all strive to understand better and to make
better known.
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