The subject of Artificial Intelligence has filled the media for the last six months, with both optimistic and dire predictions of its gigantic effect on the world. Yet not all innovations are world-changing, however profitable they may be to their inventors, while some innovations – social media, for example — have changed social mores while being generally damaging to people’s standard of living and happiness. Very few inventions are both revolutionary and wholly beneficial, boosting the living standards of all. I would like to examine one such invention: the river steamboat.
While the Industrial Revolution immeasurably raised everybody’s living standards in the long-term, it cannot be denied that the effect of some of its inventions was equivocal in the short and even the medium term. The mechanization of textile manufacture, for example, raised the industry’s productivity tenfold or more and thereby benefited consumers all over the world by providing them with clothing that was far cheaper and of better quality. However, its effect on the industry’s workforce was less pleasant; they were forced into the far more disciplined environment of factories and, through intensive competition between factories, their working conditions were poor and their pay reduced to a subsistence level.
Sir Robert Peel, father of the prime minister, was a particular offender here; he did not lead in mechanization but instead contracted with orphanages in London, Manchester and Birmingham to supply orphans who could be indentured until the age of 21 without the right to leave their jobs; his workforce was thus exceptionally cheap and competitive, without much expensive machinery. (His son the Prime Minister falsely applied the same principle to Britain as a whole, failing to recognize that high wages, not low ones, are the principal spur of industrial innovation.)
The railways too were distinctly equivocal initially, although their long-term effects were gigantic and liberating. The capital cost of building railroad tracks across several hundred miles was immense, and through competitive exuberance, a “railway bubble” took place, building immense quantities of expensive and unproductive track, with little or no return until the lines were finished, and sucking capital out of the rest of the economy, lowering living standards for a decade or more. In Britain, this together with economically inept Whig government made the years 1831-42 very unhappy, with repeated instances of mass unrest; only after the railway network neared completion around 1842 did its overall economic effect swing into the positive, raising wages and living standards across the economy after a lengthy “Engels Pause.” On the Continent, because railway building arrived a few years later, its negative effects were at their worst in 1846-48, sparking revolutions across Europe in 1848. Only after 1850 did prosperity return.
A much more unequivocally positive invention, two decades before the railroads, and requiring only modest up-front investment (therefore without the railroads’ impoverishing effect) was the river steamship.
River steamships had been built from as early as 1783, as James Watt’s atmospheric engine became available, but steamships that could make rapid progress upriver required high-pressure engines, which were not available until after the 1800 expiry of Watt’s patent. The Charlotte Dundas completed in 1803 by William Symington led to nothing short-term in England, whose rivers were too wimpy to make river steamboats of much value, while its exquisitely constructed canals were too narrow and delicate for steamboat use.
However, Robert Fulton was present at the Charlotte Dundas’s trials; after attempting unsuccessfully to offer a steamboat to Napoleon he moved to New York and in 1807 established commercial service on the Hudson River from New York to Albany using his North River Steamboat rechristened the Claremont after his patron Robert Livingston’s estate. U.S. progress in river steamships then became the fastest in the world, with Britain only instituting a regular steamship service from London down the Thames to Margate in 1815. Only in warships did Britain lead the way, with the Diana, built in Kiddepore India, achieving a notable victory in the First Burmese War of 1824-26, when Captain Frederick Marryat steamed up the fast-flowing Irrawaddy River in pursuit of the elite Burmese war praus, whose oarsmen collapsed in exhaustion when chased up-river for several hours by the Diana’s inexorable paddle wheels. The Burmese were so impressed that they demanded the Diana as part of the peace settlement.
Fulton’s first Mississippi steamer, the New Orleans, was launched at Pittsburgh in 1811 and the first classic Mississippi steamboat with two decks, a high-pressure engine and a stern paddlewheel, the Washington, launched at Wheeling, Virginia in 1816, made the trip up-river from New Orleans to Louisville in 25 days in 1817. By the late 1820s, Mississippi steamboats had made that river by far the most efficient way of reaching the Midwest, as recorded, with suitably caustic remarks about her fellow passengers, by Fanny Trollope in “Domestic Manners of the Americans,” steaming from New Orleans to Cincinnati in the winter of 1827-28.
The two great European rivers, the Rhine and the Danube, were slower to adopt steamship technology. A British ship operated on the Rhine in 1816, but was unsuccessful, possibly because of lack of local support. In the middle 1820s, three separate steamship companies were set up, the Dutch-owned NSM, to run steamships from Rotterdam to Cologne, the PRDG, which ran services between Cologne and Mainz and the DGRM, to run services from Mainz to Mannheim and if possible to Basel – all three companies being partly state owned, unlike their British and American equivalents. Ships were ordered from the NSM yards, with engines built in the English-owned John Cockerill company in Liege (until 1830 also part of the Netherlands) and were delivered in 1827-28. The first voyage was by the Friedrich Wilhelm of the PRDG, which on 1-2 June 1827 carried the elderly and corpulent Dowager Queen Charlotte of Württemberg from Mainz down the river to the Dutch coast, where she boarded a British frigate to visit her brother, King George IV, her first trip home since arriving in Württemberg in 1797.
The Danube was slightly behind the Rhine in adopting steamships, partly because of having no engine makers on the river. The Erste Donaudampfschiffahrtsgesellschaft was founded in 1829, majority owned by the Austrian state, although there were some private shareholders such as Prince Klemens von Metternich. It brought its first ship the Franz I, built in Trieste, into service the following year, to provide service from Vienna to Budapest and by 1835 it had established its own shipbuilding facility at Obuda, near Budapest.
All three steamship operations were remarkably successful, expanding far beyond the dreams of their founders until the railways duplicated their routes after 1850. The sparsely settled Mississippi region specialized in long-distance passenger travel, with the poorly constructed boats having a tendency to blow up – there were 7,000 fatalities from steamboat explosions before 1853 – Charles Dickens remarked on their dangers in 1842. Rhine steamboats, better built and thus safer, were more balanced between passenger and freight service; the “Rhine Cruise” business was early to develop, with the redoubtable Fanny Trollope taking one in 1833. The Danube steamboats, also with Germanic building standards and relatively high safety, were initially more freight oriented – the lower reaches of the river were still controlled by the Ottoman Empire until the 1856 Treaty of Paris. However, passenger service flourished initially between Vienna and Budapest, a distance of 151 miles, which took 14 hours downstream and 2 days upstream, and later along the length of the river. The company was immortalized in the 1936 masterpiece hit Donaudampfschiffahrtsgesellschaftskapitän attached hereto (my father, who was in southern Germany and Austria both before and after World War II, used to sing it to me in early childhood).
The example of steamship transportation shows what is needed for an innovation that truly advances human living standards and well-being. It must not have an excessive set-up cost in terms of the economy as a whole, which damages the rest of the economy during its interminable construction phase and steers its ownership towards governments and behemoths (the British HS2 high speed train, not even particularly innovative, is a modern example of this danger). It must not degrade the lifestyles of either its producers (textiles) or consumers (social media). It must allow consumers to do something beneficial to their living standards that they had never been able to do before. Finally, as seen in the steamship example, the service attached to the product may well produce better and more profitable businesses than the product itself – nobody made the money building marine engines that was made from the Mississippi, Rhine and Danube river steamboat services.
Is AI the next steamboat technology? We shall find out – but it probably could use a good Viennese hit song to popularize it!
(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)