When a Small Island Has Big Ideas

Yesterday, I learned about the Caribbean island of Nevis from my very knowledgeable guide, Andrew (aka Hollywood). He started with the 1755 birthplace of Alexander Hamilton. My favorite person, Hamilton, had a tough start. As the child of an unmarried mom, he was ostracized by his neighbors. Consequently, and perhaps crucially, he was embraced by the island’s Jewish community. Our guide showed us where he attended a Jewish school.

From there, by 1766, he was in St. Croix, employed by merchants for whom, even at 14 years old, he sometimes ran the firm. In 1772, one of his employers sponsored his emigration to the colony of New Jersey. And the rest of the story shows us the role one man can play in a nation’s history.

Nevis’s Technological Innovation

On Nevis, making sugar cane during the 17th century could have depended on cattle. In sugar cane mills, rollers extracted liquid from the stalks. Cattle kept those rollers moving when they walked in the large circles that turned the wheels:

However, the story of sugar cane is really a steam engine tale.

On Nevis, plantation owners had to decide when to update their cattle mills. Predictably, the decision related to productivity and yes, the steam engine was certainly an improvement.

But it was not that easy.

Then though, plantation owners hesitated because of the expense and expertise. After importing from England the proper size engine (4, 6 or 8 hp), they worried about repairs and having the appropriate on-site human capital. Finally, needing repairs, a defective steam engine needed parts that were an ocean away. And still their proximity to a main road and the port were considerations. For these reasons, steam engine adoption unfolded slowly:

Our Bottom Line: The Factors of Production

My visit to Nevis reminded me that we never move far from land, labor, and capital.

With Alexander Hamilton, Nevis sent New Jersey the man that would assist George Washington during the Revolutionary War and then become his Secretary of the Treasury. Through the Treasury, Hamilton propelled U.S. economic development with a plan that focused on credit, banking, and manufacturing. Still today it is relevant.

Similarly, adopting the steam engine, like all businesses, Nevis’s plantation owners only moved ahead when their marginal benefits exceeded their marginal costs.

We could say that sometimes a small island has big lessons.

My sources and more: Thanks to our gifted Nevis tour guide Hollywood (aka Andrew) for introducing me to steam on Nevis and so much more. (I was thrilled to have been on a street traveled by Alexander Hamiton.) From there this academic paper had many of the details. And finally, I hope you will take a look at this past econlife post on the private and social return from innovations.

Please note that the rotary motion steam engine in our featured image resembles James Watt’s (1736-1819) models.