Erie Canal Part 1: Globalization Circa 1824

To hear some people talk, the globalization of the US economy is a new phenomenon ushered in with NAFTA or the collapse of the Soviet Union or new telecommunications technologies. While the world has been getting smaller because of all these elements, globalization is hardly new to this country. In fact, the United States has thrived on globalization when it has played its card right.

I just read a very interesting book published last year that looks at one of the earliest and most profound steps of globalizing the U.S. economy. If you have any interest in U.S. history or the development of our economy (or if you live in New York state, where I grew up), then you ought to read Wedding of the Waters, The Erie Canal and the Making of a Great Nation by Peter Bernstein. (Just click here or on the link above for a summary).

There’s lots that can be said about this book, it is so rich in American history and the impetus that made New York into a greater port and financial center. But since we are manufacturing folks, I want to draw your attention to its focus on how this public investment in the Erie Canal ushered in a hugh private sector boom in manufacturing in towns and cities from Buffalo right down to New York (at first) and later all through the Great Lakes which used the Erie Canal to grow and expand their economies. Buffalo, Rochester, Syracuse and other cities were mere wilderness when the canal opened in 1824.

Author Bernstein writes at one point: “the growth of population, the extension of the canal’s stimulus to the new lands in the west, and the accelerated pace of technological change–combined to create a multitude of new markets large enough to support production sold to buyers elsewhere or consuming products from other markets. Commercialization of economic activity spread rapidly, from simple goods for household use to the manufacture of steam engines and heavy engineering.” One historian at Columbia University said that the opening of the canal was the dividing point between the “Frontier Without the Factory” and the “Frontier With the Factory.”

There is a lot of relevance to today’s pace of innovation and the role of manufacturing in it. The Chancellor at Syracuse University saw some of these parallels and opened a speech a few days ago with a reference to Wedding of the Waters. This is a blog and it’s got to be short, but if you are interested, here is the link to Chancellor and President Nancy Cantor’s speech at the City Club of Cleveland.