ED GLAESER: Boston was never a city of kings or conquerors.
The city's tallest building long bore the name of a smuggler, John Hancock.
By the 19th century, Boston was trumpeting its intellectual ambitions
as the Athens of America.
But all that learning was built on the wealth of a solid mercantile base.
During the 20th century, America started to see the rise of consumer cities.
Places like Los Angeles or Miami that grew
because people wanted to live there, not because firms had any particular reason
to choose that spot.
In a sense, Boston was America's first consumer city.
The colonists who came to Massachusetts during the 1620s, and to Boston
after 1630, were motivated by lifestyle choices more than economics.
They wanted to live in a Puritan society where
they would be free from persecution by English authorities.
And would, of, course be free to persecute others who
didn't conform to their own godly ways.
They wanted Boston to shine as a city upon a hill,
as John Winthrop preached aboard the Arbella on his way to the city.
I recognize that I'm displaying the standard economists
reductionism by referring to the desire for eternal salvation as consumption.
But, well, it certainly wasn't production.
Boston had essentially no natural economic advantages,
except for access to abundant cod, and some pretty great cranberry bogs.
Consequently, the first few decades of Boston's existence
were spent trying to find a sustainable economic model.
For the Bostonians needed to import English manufactured goods.
They needed guns, they needed bibles, and they
didn't have all that much that was worth shipping back across the Atlantic.
Boston didn't have gold and silver deposits
like the Spanish colonies of the south.
New England's climate is a bit too much like the climate of old England,
which meant that Massachusetts couldn't grow crops
like sugar that were valuable, because they were rare back in Europe.
In the early days, Boston and Massachusetts functioned as something
like a colonial era Ponzi scheme.
Which is appropriate enough, since Ponzi himself was also a Bostonian.
Each new wave of settlers brought with them a bit of gold.
The old settlers then sold food and land to the new settlers,
and used the cash that was paid to then pay for English manufactured goods.
But like all Ponzi schemes, this one couldn't go on forever,
and immigration to Massachusetts slow dramatically after 1640.
The chaos of the English Civil War slowed the migration,
and Cromwell's victory made it unnecessary to cross
the fierce Atlantic to enjoy the pleasures of banning makeup
and restricting Christmas celebrations.
So Bostonians needed a new business model.
They tried a number of different approaches.
John Winthrop's son founded an iron works
that he hoped would provide a valuable export industry.
It didn't.
Boston's economic salvation came from hunger in Barbados.
The Caribbean colonies were cash cows.
Europeans would pay a fortune for their sugar.
But the land became so valuable that it didn't pay to grow food there.
By 1647, Winthrop had learned that Barbados
planters where, and I quote, so intent upon planting sugar
that they had rather buy food at very dear rates than produce it by labor,
so infinite is the profit of sugar works.
So starting in the 1640s, a triangular trade began.
The more tropical colonies would ship sugar and tobacco back to Europe.
Boston would ship basic commodities, fish, livestock, wood products
to the southern colonies of the Americas.
New-Englanders would buy manufactured goods
with the cash earned by selling to the sugar producing regions.
As late as 1770, 73% of New England's exports were going to the Caribbean
and to the southern colonies.
35% of those exports were fish, 31% were livestock, and 21% was wood related.
Boston was one hub of that triangle, and also the triangular trade
and slaves that developed simultaneously.
For a century, Boston thrived as the preeminent trading hub of North America
and the largest city in English colonies with 12,000 inhabitants in 1720.
Boston's merchants were smart, and the city's sailors were skilled.
But Boston had no natural lock on this export model.
The cities of Philadelphia and New York were further south.
They each enjoyed a better river network, and a more fertile hinterland.
Philadelphia's population surpassed that of Boston after 1740.
Boston's mid 18th century economic doldrums
led to some pretty ornery merchants.
Including John Hancock, who took particular umbrage at England's
attempts to tax and limit their trade.
Their unhappiness was one of the contributing factors
that led to the American Revolution.
But after that revolution, Boston soared once more, and once again,
its success reflected its stock of water related human capital.
The decades after 1790 were an era of early globalization.
America was freed from trading restrictions,
and merchants started buying bigger boats that
were capable of sailing odysseys.
They traveled to Canton and South Africa.
They cruised for whales in the Pacific Ocean.
Boston's slightly more northern location mattered less
when the ships were traveling such long distances.
Between 1790 and 1840, Boston's population
increased from 18,000 to 90,000.
And its economic strength was in the sea, no manufacturing.
As late as 1840, Boston had 10,000 workers
in the maritime trades and only 5,000 manufacturing,
which was less than neighboring Lowell, one center of Massachusetts
textile industry.
Boston still shows the legacy of its commercial strength
during the era of sail.
The wharves that still stand, most notably the Long Wharf
itself were the centers of commerce during that era.
Small houses close to the port, like the still standing home of Paul Revere,
were built so that their residents could walk to the wharves.
The old statehouse, a site on Boston's Freedom Trail,
once held a merchants exchange and warehouses.
State Street, which was once King Street,
leads right from that building down to the wharf.
The city's large Irish population is also a gift of Boston's dominance
during the era of sail.
Desperate immigrants could sail to Boston
faster than they could to New York during the 1840s.
And consequently, Boston became a major port of entry
for those who were fleeing the potato famine.
When the era of sail was replaced by the air of steam,
New York's maritime dominance became almost complete.
And subsequent immigrants would come overwhelmingly
to Ellis Island, not Boston.
As a consequence, New York will become a dizzying ethnic mix,
while Boston was still dominated by the divide between Irish and Yankee.
Boston's merchants did many great things.
They fought for liberty, which is so valuable
for their financial livelihoods.
They built the infrastructure, including rail lines
that would help Boston reinvent itself once again during the Industrial Era.
They invested in colleges and universities.
After World War II, those academic institutions,
especially I hate to admit, MIT, provided new entrepreneurial energy
for the region.
Boston may not have the great palaces or monuments
of imperial cities like Vienna or Paris, but it remains a handsome city,
displaying the wealth that its merchants earned by using
their wits to trade with the world.