A Tale of Whale Oil: An Economic Lesson from In the Heart of the Sea

In Climate Change, Development, Economics, Energy, Environment, Movies, Reviews by JD King1 Comment

“I hear someone’s found oil by drilling into the ground. Who’d have thought!”

These are the final words echoed in the blockbuster movie, In the Heart of the Sea, which was released to DVD this week, and those words deserve contemplation. Once upon a time, men had to risk their lives, spend years at sea and harpoon 60-ton whales in order to harness the benefits of a single drop of oil.

Director Ron Howard’s (Cinderella ManBeautiful Mind) latest movie is truly a spectacular retelling of a New England whaling ship’s sinking by a giant sperm whale in 1820. It’s not just any ol’ whale tale though — it’s the “incredible true story” that inspired Melville’s popular novel, Moby-Dick. I found it to be a tremendously entertaining film!

But for me, the movie was also a timely reminder of how much we take oil for granted in our day and age. Amidst a churning sea of climate change madness and fossil fuel hating, we have become more than just a little bit spoiled.

I’ve always been fascinated by the latter part of the whaling age — it’s just so surprisingly recent! Even as late as the 1930s the whale harvest is estimated to have been at more than 50,000 annually. I can marvel for hours at photographs of gritty, bearded northern Californian whalers proudly posing in front of their 120,000 pound catches next to their families and crewmates!

The length people had to go to back then to obtain whale oil and thus keep the lights on was remarkable: Months or even years at sea; brutally hard, dirty work that was risky and, at times, fatal. And just to think — this was the normal way of life only a little more than a century ago!

What changed things? Sure, it was partly the discovery of oil in the ground, the development of kerosene and Thomas Edison’s invention of the light bulb. But there’s more to it: The biggest reason the world moved past whale oil is the fact that the whale oil supply was running out!

You may be thinking, “Duh.” But here’s the thing: It wasn’t Greenpeace or government intervention that saved the whales or switched the economy over to the better system of “ground” oil — it was the economy. In the Heart of the Sea captures this beautifully as viewers follow the hero, Owen Chase, on an adventurous global search for a dwindling whale supply.

Price functions in economics as a measure of scarcity. As whale numbers dropped, the cost of whaling was no longer worth the risk — it was just too expensive and burdensome to carry on. And with supply dwindling, prices for whale oil shot up. This sent a price signal economically that there was money to be made finding a substitute for whale oil. When Edison went to work and found a way to make light with electricity, it wasn’t long afterward that demand for whale oil around the world plummeted, and then the whale population recovered!

Is using resources a good thing then? That’s precisely the late economist Julian Simon’s Grand Theory:

The more [resources] we use, the better off we become — and there’s no practical limit to improving our lot forever. Indeed, throughout history, new tools and new knowledge have made resources easier and easier to obtain. Our growing ability to create new resources has more than made up for temporary setbacks due to local resource exhaustion, pollution, population growth and so on.

Simon argued that, especially in a free market society, humanity’s problems tend to create their own solutions. It sounds ironic, but the whaling saga is a prime example of this. Furthermore, humanity also tends to be far better off with the new solution found than before the problem came up in the first place.

So, before you’re tempted to fret about peak oil — or peak anything, for that matter — sit down and watch In the Heart of the Sea. You’ll be, first of all, highly entertained, and secondly, thankful for the world you live in now. You may leave the movie thinking to yourself as the credits begin to scroll, “I hear they’ve found a way to get energy from the sun, wind, sea water, and ice at the bottom of the ocean. Who’d have thought!”

Featured image from the original movie poster.

J.D. King loves Jesus, his wife Katherine, hiking, camping, hunting, fly fishing, and filmmaking.

Comments

  1. guytak@juno.com'

    Patrick Moore, a FORMER member and co-founder of Greenpeace would argue that GP saved the whales. Well maybe in the 1970’s But if kerosene had not come along the whales would most likely been extent BEFORE the 1970’s. BTW Patrick Moore left Greenpeace, because they ceased to care about people.

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