Rome, Italy, 6 August 2009. This is the first in the series of 4 articles on the surprisingly large role that geography plays in shaping national economics.
Rivers offer irrigation and shipping, and ports give access to international trade. The US, Russia, China, and Europe all have dissimilar geographies, and thus their economic mandates and priorities are different.
The US has a head start over most other economies due to its fortunate geographic structure. It has big natural ports on the Pacific and Atlantic oceans, the longest network of navigable rivers in the world, gigantic arable landmasses, and more.
The Midwest is the breadbasket not only of the US but also of the world. This quality land has the good fortune of being linked into the Gulf of Mexico via the Mississippi, Missouri, Ohio, Tennessee, and Red rivers.
This natural transportation system is free. While other countries have to invest billions to build and maintain such networks, the US has capital to spend elsewhere, almost guaranteeing its long-term wealth. Early on, the US used that capital to build an incomparable road-and-rail network, fueling western expansion to the Pacific.
Its neighbors, Canada and Mexico, suffer from geographic barriers that mean neither is much of an economic or physical threat. They both lack comprehensive river networks, are both mountainous, and are either too hot or too cold.
Such geographic differences mean that the US borders need not be protected much at all. Most of the Canadian border is unguarded forest and meadows, and the Mexican border is only a fence, with limited patrols.
So the government can let economic forces prevail on their own, as there are no immediate threats. There is no reason for the military to be on edge at home, and thus no need to implore banks and businesses to work in a way to protect the 50 states.
The result? Free-market capitalism, (which is not perfect, and has indeed been the cause of much of this recession).
Bjorn Borgisky, EconomyWatch.com