texting is 20 years old

Infrastructure: The Internet and Canals

Jan 24, 2013 • Businesses, Demand, Supply, and Markets, Developing Economies, Economic History, Economic Thinkers, Financial Markets, Government, Innovation, International Trade and Finance, Macroeconomic Measurement, Thinking Economically, Uncategorized • 241 Views    No Comments

An internet connection and a canal could be rather similar.

Internet Connections in the Americas, 2012:

Internet Connection Speeds Americas

Looking beyond the Americas, South Korea leads the world with the highest proportion of its population having fast internet service (more below).

Shipping Connections Between Cincinnati and New York, first half 19th century:

  • In 1817, by river and wagon: 52 days.
  • In 1843, by steamboat, canal and railroad: 18-20 days.
  • In 1852, by canal and river: 18 days.
  • In 1852, by railroad: 6 to 8 days.

 

But that was not all. The cost plunged. Sending your shipment by land in 1821 would have cost $32 a ton for 100 miles. By rail in 1853, you would have spent less than $4.00 a ton for the same trip.

The connection?

Nineteenth century shipping speed and the internet are both about infrastructure. Almost 200 years ago, by building a canal network and then railroads, we created a transportation infrastructure that brought us all closer in the US and beyond. Now, with the internet creating an information infrastructure, again, we are even closer because of our accelerated ability to communicate.

The impact?

During the nineteenth century, a transportation “revolution” enabled a national market and regional specialization to flourish. It permitted us to enjoy David Ricardo’s comparative advantage with producers growing and manufacturing optimally. It fueled economic growth.

Are the fastest and most widespread internet connections also fueling economic growth–or is it the reverse?

Worldwide High Speed Internet Connectivity

Sources and Resources: This Quartz article has a brief summary of this Akamai report,”State of the Internet” that was the source of the above infographic and information on connectivity. For more on worldwide internet facts, you might want to look at this broadband report from the OECD and for David Ricardo and comparative advantage, econlib.org is always useful.

Related Posts

« »