Today’s Thesis Corner features Sound Economics’ very own Finn Dobkin. His thesis examines why the Great Depression affected Washington State more severely than the rest of the country. Upon further analysis, the history of Washington’s economy explains its collapse. In 1821, the Hudson Bay Company merged with the Pacific Northwest Company during the period of European colonization. Since the Hudson Bay Company was located overseas in London, it exerted no in-person control over Washington’s economy. The company focused more on exploiting Washington’s resources for short-term profit, particularly fur and timber, which continued throughout most of the state’s history. During WWI, Washington’s economy was centered around shipbuilding, and thus relied on timber. The war resulted in a regional recessionary period, and primary source economies such as Washington’s at this time are particularly susceptible to boom-and-bust cycles. As Washington finally recovered from this recession, the Great Depression hit, and the effects on Washington’s economy were further amplified.
How did you come across this topic and what made you want to pursue it?
My original topic was the culture and poverty of Appalachia and whether or not that theory was valid, but I quickly realized that the data for Appalachian poverty was lacking so I was interested instead in rural areas in Washington. Historically speaking Washington has been a very rural state up until the last 50 years. That got me thinking about how it transitioned from a rural to a metropolitan area. The New Deal was a big part of the country’s history, particularly with economic development, even to this present day. I was interested in how the New Deal affected Washington State which led me to a bigger picture, which was the economic history before the Great Depression. Because Washington state was hit so hard by the Great Depression, I became interested in how the economy changed pre-Depression to post-Depression.
Has Washington’s economy changed enough to avoid a similar collapse?
Eastern Washington is very rural, agriculturally based but then you have places like Seattle that are based in technology and Tacoma which has a lot of international trade. I’d say as a whole Washington’s economy is far more resilient than it was 100 years ago.
Could you expand on the Hudson Bay Company (HBC) and its influence on the PNW economy?
The HBC actually still exists today, although it doesn’t partake in the same trade that it used to. Basically, they merged with the NW company in 1821. They primarily worked with timber and fur during that time period. This was far before the Manifest Destiny so there wasn’t much settled in the PNW until 1849 with the Oregon Treaty. Timber and fur were exported to either Hawaii or California but at that time there wasn’t a common currency that was used in those areas, so those areas often traded goods. Eventually the HBC switched to agriculture for a while and focused on two main farms [one being the Cowlitz farm, the other located in Puyallup]. While these farms weren’t successful, they did bring populations of people not centered around timber and fur to the PNW, which was important to settling the area as a whole pre-Oregon Treaty.
Did any other states have similar resource-based economies that had a collapse as well?
Basically, the entirety of the mountain west region with the exception of California. Oregon and Colorado had similar issues. The industries in these areas were different; Washington was unique in that it produced timber for shipbuilding. Colorado had a lot of mining, Oregon had forestry. All of them suffered from very bad boom-and-bust cycles during the Great Depression. Washington was worse because they were in a regional recessionary period exiting WWI.
Any advice for incoming seniors [in econ department]?
[Laughs] If you’re doing an economic history paper, start it in the summer. It is a lot, a lot of research. My final paper is around 48 pages. It can be difficult to find data. I ended up contacting a lot of historians around the state. People are very interested in this sort of thing, especially academics, and they are more than willing to help out even if they don’t teach at this school. Additionally, just get good at writing. It makes it so much easier and helps so much if you know how to communicate ideas.
Special thank you to Finn for interviewing with me!