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from the banks of the Missouri. In the city of Tiflis in the Cauca-
sus, it was cheaper to import kerosene from Texas, across 8,000
miles of water, than to get it over land from Baku, less than 400
miles away. Similarly huge disparities between land transport and
water transport costs have been common in Africa, in Japan, and in
England before the railroad era. In the Ottoman Empire, the esti-
mated cost of shipping wheat just 100 kilometers exceeded the
value of the wheat itself.
Even after the development of roads and of motorized transport,
trains, and planes, water transport has generally remained much
cheaper than land transport. For example, transporting oil by ship
costs about one-fourth of the cost of transporting it by pipeline, less
than one-fifth of the cost of transporting it by railroad and little
more than one percent of the cost of shipping it by truck.
The vast amounts of food and other products needed continu-
ously to supply a city's population, and the vast amounts of raw
material and finished merchandise to be moved in and out of a
204 APPLIED ECONOMICS

city to earn the money to pay for that population's consumption,
have all been carried more cheaply by water. It is therefore hardly
surprising that so many cities are on rivers”London on the
Thames, Cairo on the Nile, Paris on the Seine, New York on the
Hudson. Many other cities like Singapore, Sydney, and Stockholm
are on harbors and still others are on huge lakes or inland seas like
Chicago, Odessa, or Sevastopol. Nor should it be surprising that
Western Europe, heavily criss-crossed by rivers, is one of the most
densely urbanized regions of the world, while tropical Africa”
where navigable waterways are much more scarce”has long re-
mained one of the least urbanized areas in the world.
The relatively few cities that have arisen independently of water-
ways have usually had other transportation advantages. In the
great desert regions, for example, the distances between sources of
drinking water”compared to the distance that a camel can travel
without water”determine which routes across the trackless sands
or dry steppes are feasible and which are not. In turn, these routes
and their traffic determine which of the oases have enough eco-
nomic activity passing through them to become permanent settle-
ments. Settlements at the crossroads of several routes through the
desert”Samarkand in Central Asia, for example”could grow to
be large cities, much as river and harbor ports grew into urban cen-
ters in other parts of the world. The development of railroads and,
later, automobiles and trucks, brought a revolution in land trans-
port that made water transport unnecessary to create major cities,
which could now be based on railroad junctions (Atlanta3) or based
on the automobile (Los Angeles).
The railroad revolution was particularly important in sub-Saharan
Africa, which was largely lacking in both waterways and draft ani-
mals”the latter being victims of disease borne by the tsetse fly.


3
An old Southern expression says: "Whether you are going to Heaven or Hell, you have to
change in Atlanta."
The Economic Development of Nations 205

Prior to the building of railroads by European colonial powers,
Africans often carried freight on their heads. While this made for
colorful caravans of porters, it was also a very expensive form of
transport. In British West Africa, for example, it took 37 men to
carry a ton of cocoa for a day s journey. A thousand times as much
could be carried ten times as far by train, using half a dozen men.
Despite the importance of these modern developments, for
most of history in most of the world, waterways have been crucial.
During the European industrialization of the nineteenth century,
every one of the early industrial regions had the benefit of naviga-
ble waterways. Where that advantage was lacking”as in parts of
Eastern Europe and Mediterranean Europe, and especially in the
Balkans, economic development lagged far behind that in such
countries as Britain, France, and Germany. The standard of living
in the less favored parts of Europe was much more like the stan-
dards of living in non-European countries than like those in the
more advanced parts of the continent. The fossil fuels which were
largely lacking in southern Europe, for example, often could not
be brought into the interior by water”the only economically fea-
sible way of delivering them.
Although urban growth was dramatic in much of nineteenth
century Europe, few towns developed in the Balkans. As roads
and railroads developed and were improved in the more developed
parts of Europe, they remained virtually unknown in the Balkans,
so that people living in Balkan villages were isolated from people
in other villages less than 20 miles away. The Balkan mountains
fractured the peninsula culturally as well as isolating it economi-
cally, thereby contributing to the tribalistic divisions and lethal ha-
treds which have long marked the region. Although the Balkans
were rich in natural harbors, there were few rivers to connect these
harbors to the hinterlands, which were often cut off by mountains.
While much of nineteenth century Europe not only grew eco-
nomically but became interconnected with other nations within
206 APPLIED ECONOMICS


the continent and overseas, much of Eastern and Southeastern
Europe lived close to "self-sufficiency"”which is to say, it was iso-
lated, poor, and backward.
To have a large economic or cultural universe, it is not enough
that there be waterways. How navigable those waterways are is
crucial. Africa has the Nile and other great rivers, but these other
rivers have serious impediments to navigation, and have seldom
produced either cities or civilizations comparable to those of
Egypt. Because most of sub-Saharan Africa is more than a thou-
sand feet above sea level, its rivers must come down from that alti-
tude on their way to the sea. The resulting rapids, cascades, and
waterfalls prevent even the greatest of sub-Saharan rivers from
providing access to and from the sea, in the way that the Hudson,
the Yangtze, the Danube, or other great commercial waterways of
the world can. Although Africa's Zaire River carries more water
than any of these three other rivers just mentioned, its waterfalls
alone are enough to preclude it from having the same significance
as an artery of trade or as a site for cities. Even African rivers that
are navigable may be navigable for some limited distances between
cascades or waterfalls, or by boats of limited size, or for some lim-
ited times during the rainy seasons. However, the dry season often
severely reduces or eliminates their navigability. There are no
mountain ranges in sub-Saharan Africa to catch snow, whose
melting would provide the water to sustain its waterways when
there is no rain, as mountain snows do in other parts of the world.
Nor is Africa's geographic situation any better as regards har-
bors. Not only does the smooth African coastline provide few har-
bors, its coastal waters are often too shallow for large, ocean-going
ships to approach closely to the land. The net result was that, even
during centuries when much of the international trade of the
world went around Africa on its way between Europe and Asia,
relatively seldom did these ships attempt to stop and trade with
The Economic Development of Nations 207

Africans. They could stop in those relatively few places where
there were harbors or they could anchor offshore and have cargo
loaded onto smaller craft that were able to make their way to land
through the shallow coastal waters. Still, the higher costs of taking
much longer to unload a given amount of cargo meant that there
were severe constraints against international trade with even the
coastal peoples of Africa, much less those in the vast interior hin-
terlands or at higher elevations. Moreover, the coastal plains of
Africa average only 20 miles in width, often with steep escarp-
ments behind them.
In short, with harbors as with rivers, Africa seldom had the geo-
graphic essentials for developing cities. Where cities or large-scale
political units did develop in tropical Africa, it was typically where
these geographical hindrances were not as great.
Disparities between the costs of land transport and water trans-
port translate into similar disparities in the reach of trade and in
the range of goods which are feasible to trade by nations and peo-
ples with and without navigable waterways. Huge transportation
costs shrink the economic universe, severely limiting how far
given goods can be carried, and severely limiting which goods
have sufficient value condensed into a small size and weight (gold
or diamonds, for example) to be feasible to transport over land for
substantial distances. These same high transportation costs
shrink the cultural universe as well, handicapping not only eco-
nomic development but, more importantly, the development of
the people themselves, who lack access to as wide a range of other
people's knowledge, skills, and technologies as do people who are
situated in port cities and other cultural crossroads.
The significance of particular geographic features”mountains,
rivers, climate, soil, etc.”is even greater when these features are
viewed in combination. For example, the effect of rainfall on agri-
culture depends not only on how much rainfall there is but also on
208 APPLIED ECONOMICS


the ability of the soil to hold it. Thus a modest amount of rainfall
may be sufficient for a flourishing agriculture on the absorbent
loess soils of northern China, while rain falling on the limestone
soils of the Balkans may drain off rapidly underground. Similarly,
the economic value of navigable waterways depends on the lands
adjacent to them. Navigable rivers which go through land without
the resources for either industry or agriculture”the Amazon for
example”are of little economic value,4 even though navigable wa-
terways in general have been crucial to the economic and cultural
development of other regions more fully endowed with other re-
sources.
In Russia as well, waterways isolated from the major natural re-
sources of the country, as well as from each other, cannot match the
economic role of rivers which flow into one another and then into
the sea, after passing through agriculturally or industrially produc-
tive regions, as in Western Europe. The Volga is Russia's premier
river for shipping, even though there are other Russian rivers which
have more than twice as much water flow, because the Volga passes
through areas containing most of the resources and people of the
country. Larger rivers in Siberia, which drain northward into the
Arctic Ocean”when they are not frozen and cannot flow at all”
have no such economic significance as the Volga.
Similarly, harbors that are not as deep, not as wide, nor as well-
sheltered as other harbors, may nevertheless become busy ports if
they represent the only outlets for productive regions in the vicin-
ity, as has been the case of Genoa in northwestern Italy or Mom-
basa in East Africa. Similarly, the port of Dubrovnik on the
Dalmatian coast, strategically located for the international trade


"The Amazon, for example, is by far the world's greatest river but the soils in its region have been
characterized as "startlingly poor" and it has led to no great cities being established along its banks.
See Jonathan B. Tourtellot, "The Amazon: Sailing a Jungle Sea," Great Rivers of the World, edited by
Margaret Sedeen (Washington: National Geographic Society, 1984), p. 302.
The Economic Development of Nations 209

routes of the Middle Ages, flourished despite a harbor that was
not particularly impressive in itself. While the historic role of
London as a world port has depended on the Thames, this river is
also not especially impressive in itself, but has simply provided an
outlet for impressive industrial and commercial facilities nearby.
Sometimes a variety of favorable geographical features exist in
combination within a given region, as in northwestern Europe,
and sometimes virtually all are lacking, as in much of tropical
Africa, while still other parts of the world have some of these fa-
vorable features but not others. The consequences include not
only large variations in economic wellbeing but, more funda-
mentally, large variations in the skills and experience”the hu-
man capital”of the people themselves. Given the enormous
range of combinations of geographical features, the peoples from
different regions of the earth have had highly disparate opportu-
nities to develop particular skills and economic experience or to
acquire them from others. International migrations then put
these peoples with disparate skills, aptitudes, and outlooks in
proximity to one another and in competition with one another in
other lands, often producing very different economic and social
outcomes.
Among the more geographically fortunate parts of the world, in
terms of having the natural resources needed for the development
of a modern industrial economy, as well as the navigable water-
ways to carry both these resources and the products resulting from
them, have been Northern and Western Europe. Iron ore and coal
deposits, the key ingredients of steel manufacturing and the heavy
industry dependent on it, are concentrated in the Ruhr valley, in
Wales, in Sweden, and in the region so bitterly fought over by
France and Germany, Alsace-Lorraine. In addition to the broad
coastal plains which have provided the peoples of Western Europe
with much prime agricultural land and with navigable rivers, Eu-
210 APPLIED ECONOMICS


rope in general has many peninsulas, islands, and numerous har-
bors that give the continent excellent access to the sea.


Climate
Favorable climate is also a factor. The Western European climate
is greatly benefitted by the flow of the Gulf stream, as a separate
waterway cutting through the North Atlantic, just as other streams
flow through land. This stream of warm water, originating in the
Gulf of Mexico, warms Western Europe to give it milder winters
than places at similar latitudes in the Western Hemisphere or in
Asia. London, for example, is farther north than any place in the
48 contiguous United States, yet it has milder winters than New
York City, much less cities in Minnesota or Wisconsin.
Eastern, Central, and Mediterranean Europe do not share all
these advantages. The Gulf Stream's influence on the climate of
European nations on the Atlantic coast becomes progressively less
in the more distant central and eastern portions of the continent,
where rivers are frozen for more days of the year and where winters
are longer and more bitterly cold. The natural resources required
for modern industry are also less abundant and, in many places,
virtually non-existent in Central and Eastern Europe. The broad
coastal plains of Northern Europe have no counterparts in the
Balkans, where hills and mountains come down close to the sea
and the coastal harbors often have no navigable rivers to link them
to the hinterlands. Spain has likewise been lacking in navigable
rivers and Sicily lacking in both rivers and rainfall.
These sharp differences in geographical advantages have been
reflected not only in great disparities in wealth among the different
regions of Europe, but also in similarly large differences in skills,
industrial experience, and whole ways of life among the peoples of
these regions. Thus, when the peoples of the Mediterranean mi-
The Economic Development of Nations 211

grated to the United States or to Australia, for example, they did
not bring with them the industrial skills or the whole modern way
of life found among German or English immigrants. What they
did bring with them was a frugality born of centuries of struggle

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