An internet connection and a canal could be rather similar.
Internet Connections in the Americas, 2012:
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.
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.
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?
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.
Have you ever thought about the difference that a clock makes? Described in The Geography of Time, a pre-clock world meant you could not say, “I will meet you at 12:30 for lunch” or “Your workday is 9-5.”
By the 1820s, though, technology had progressed enough that many places in the U.S. had clocks. The next problem though, was deciding the right time. How to measure? Where to measure? And why?
The reason was the economy.
During the 1860s, the 70 or so different time zones in the U.S. needed coordinating. Seeing an opportunity to profit, Alexander Langley sold what he called the “right time” to people in the Pittsburgh area. Using Western Union, for an annual fee of $1000, he sent the time to the Pennsylvania Railroad so that they could standardize train schedules. By 1883, the railroads had declared there were 4 time zones in the U.S. And, in 1918, the Congress agreed.
You might want to read Keeping Watch A History of American Time for some good stories about time conflicts. Also, a previous post about The Geography of Time is here.
The Economic Lesson
Railroads facilitated a national market, regional specialization, and maximum productivity because each area of the U.S. could do what it did best. As our national market grew, the need to standardize train schedules became increasingly necessary.
An Economic Question: Using the concept of a national market, how might you explain why the euro zone was created?
Why, you may wonder, is an economist presenting a major address today at the Association of American Geographers? Looking back and looking forward, Paul Krugman’s speech provides the answer.
Economic geography involves mathematical modeling and also costume jewelry in Providence, RI and detachable collars and cuffs in Troy, NY. A 2008 World Bank report says that it involves seeing the world through a 3D lens: density (cities), distance (migration), and division (barriers).
Economic geography takes us at first to the regional specialization that characterized the growth of US manufacturing during the 19th century. But then, we need to go to Wenzhou, where 95% of the world’s cigarette lighters are now made, elsewhere in China, and to other developing nations.
The point of all of this? Together, economics and geography create a synergy through which we can better understand regional specialization and economic growth in developing nations.
The Economic Life
The World Bank’s 3D’s involve the Density that we find in population centers, the Distance that people migrate to enjoy economic opportunity, and the Division that needs to be overcome when migration is blocked by political barriers.