The American economic core area: North America

1. The American economic core area: North America dr. Jeney László Senior lecturer jeney@elte.hu Economic Geography I. International Business bachelor study programme (BA) Spring term 2015/2016. CUB Centre of Economic Geography and Futures Studies

2. Concept and divisions of America

3. Concept and discovery of America, its main features Name: Amerigo Vespucci (female version of the name: America) New World Discovery: 30–40 thousand years ago: from Asia (ancestors of Red Indians) 10 thousand years ago: Patagonia was reached Viking fishermen 1492.: Columbus (did not know, it was America) 1497.: John Cabot (North America) Area: 42 mn km2 (28%) (WR2.) Population: 870 mn (14%) A single or a dual continent? Physical Geography: joining of two continents Human Geography: division of one continent into two parts after colonisation • 3

4. Divisions of America (1 or 2) The Americas Physical Geography: North and South Human Geography: North and Latin • 4

5. Divisions of America (3 or 4) Physical Geography: North, Central, South Human Geography: North, Middle, South Human Geography: N, Middle, S, Caribbean • 5

6. Southern borders of North Amerca More clear-cut borders: E, W, N (only Greenland is debated) Only its Southern border is question History: within current USA –traditional Mexican–USA border (from colonization to 1849) Human geography: current Mex–USA state border (Rio Grande) Physical geography: within Mexico – Isthmus of Tehuantepec (216 km) Foreign trade: Southern borrder of Mexico (NAFTA, OECD) • 6

7. Evolution of the North American economic pole of the World • 7 • 7

8. Birth of the USA For a short time: four centuries First British settlement (1607): Jamestown (Virginia) Puritan spirit of the real founders of USA 1620: Mayflower (New England – Massachusetts) But: lots of religious persecuted persons arrived too Tenacious toughness, adventurous sprit, hard work Tensions of native population Not real melting pot (opposite to Sp., Fr. colonies) Initially problems: sailing, frost, hunger, epidemic XVIII. century: prosperous 13 British colony: integrated zone Swedish, Dutch colonies disappeared • 8

9. Commercial Farming Base Combination of: Natural resources (climate, land, soils, water) Economic factors  led to specialization Midwest: grain-livestock area Mississippi Delta: cotton area Great Plains: feedlots California (irrigated lands): grape (most productive vineyards) orange Drier, higher parts of the West: low productivity  grazing land • 9

10. Manufacturing becomes central Early 1800s East Coast: Southern New England, New Jersey, Eastern Pennsylvania Manufacturing developed from local crafts (pottery, smithing) Under family ownership Based mainly on water mill power Produced: metal, leather goods, textiles Required new transportation facilities Financed by federal investments By 1860: railroad reached Chicago from East Coast  construction  basis of iron industry expansion Coal, iron  steel production (Pittsburgh) Inland emerged from the East Coast (closely to the raw materials + as US settled newer markets) • 10

11. Manufacturing from 1860 to the World War II Value from manufactured goods > commercial farm products Agriculture become industrialized Till 1950s: manufacturing: primary engine fuelling the expansion of the US economy Consumer goods, transportation vehicles (cars, trucks, airplanes) Traditional developed Manufacturing Belt: New York, Chicago, Detroit • 11

12. Key economic industries after World War II Wider geographic diffusion of manufacturing industries: West Coast, Southern US too Distributing electricity to rural areas Interstate highways Airline routes Later: goal to satisfy more market needs (Latin America and Asia) Products became more technologically sophisticated High-tech goods: Silicon Valley of California, Boston, Washington US companies become multinational Service industries: financial, computer services, publishing Tourism: 54 mn visitors to USA, 64 mn American abroad World’s most developed country  economic prosperity, political influence Largest GNI (ppp): WR1 (however: fluctuating growth) • 12

13. Regional policies After Civil War: poverty in South Southern Appalachia: hill farms on small plots of eroded lands  extremely poor World crisis  1933: Tennessee Valley Authority (TVA) To stimulate economic growth in lagging regions However dominant US policies: against government-funded regional aid Economic and population growth, but environmental degradation 1960s: Appalachian region: poorest 1965: Appalachian Regional Commission (ARC): financial aid packages 1980s: Ronald Reagan reduced ARC’s funding and effectiveness Rural problems Metropolises: increasing dominance in economic and social life • 13

14. Canada Natural resources: diamond, irons, timber and other minerals Follows US, but with a time lag Industrialization from the World War II Import substitution industries: aluminium, vehicles, consumer goods production Hamilton: steelmaking center Montréal, Toronto, Vancouver: financial services, commercial enterprises GNI ≈ EU members, but not equals with US NAFTA: increased US investment • 14

15. The North American economic integration: NAFTA

16. Canada and USA: significant and multifaceted economic systems Per capita GDP (ppp) (2011) USA $47,200 (largest economy in the world) > Canada $39,400 Similar sectoral composition of GDP Services: USA 76.7% < Canada 78% Industry: USA 22.2% > Canada 20% Agriculture: USA 1,2% < Canada 2 % Similar economic trends USA: technologically the most developed economy Canada: significant growth in services, mining and manufacturing sectors • 16

17. NAFTA Earlier: Canada and USA already conducted the largest bilateral trade relationship in the world Canada–USA trade relations already allowed trade without taxes and tariffs North American Free Trade Agreement (NAFTA): Canada, USA and Mexico NAFTA allowed Mexico to experience a similar duty free trade Its implementation: 1994 North American economy could be defined in its economic areas One of the four largest trade blocs in the world Allowed for strong economic cooperation Hopes of eliminating barriers of trade and foreign investment between the three member countries • 17

18. NAFTA Trade volume steadily increased annually Trade between the 3 NAFTA states reached an all-time historical increase of 24.3% or USD $791 billion The NAFTA trade bloc GDP (PPP): $17.617 USD trillions (WR1) This is in part attributed to the fact: GDP of USA $14.7 trillion (WR1) The countries of NAFTA: also some of each other's largest trade partners USA: largest trade partner of Canada and Mexico Canada and Mexico: each other's third largest trade partners • 18

19. Advantages and disadvantages of NAFTA • 19

20. Participation of USA in inter-continental trade blocs Trade agreements Transatlantic Free Trade Area: with EU US–Middle East Free Trade Area: with numerous Middle Eastern countries Trans-Pacific Strategic Economic Partnership: with Southeast Asian nations, Australia and New Zealand • 20

21. North American metropolization • 21 • 21

22. Population change of Chicago, 1831–1930 residents 22

23. N-Am: cities on peripheries, EU: in the centre • 23

24. Urban – rural duality • 24

25. New York – Manhattan 1.5 mn citizens, but 1.8 mn workplaces Skyscrapers: Empire State Building (381 m, World Record from 1931) World Trade Center (412 m, till 2001) Polarization in incomes Average is 2x higher than national average 1/5 of population is under poverty rate (slums, criminality) Mixed population (melting pot): 30% Spanish-speaking (Puerto Rico), 27% Afroamerican, 10% Asian Jewish (mostly from East Europe, 2nd largest community after Israel) Segregation: Little Italy, Chinatown • 25

26. Toronto On the bank of the Lake Ontario (seat of Ontario state) 19th century: „Canadian Chicago”: starting point of industrial diffusion + economic centre 5 mn (largest Canadian city) One of the most multicultural cities of the world (100 ethnics) Best place for living in the world (Economist, 1994) Leading metropolis of industrial, commercial and financial life Industries: metallurgy (agricultural machines, airplanes, electronic equipments, heating elements for nuclear plants), chemical firms, automotive industry) First electronic managed stock exchange (Bay Street) Landscape: CN Tower (553 m) • 26

27. Urban Landscapesbasedonstudies of Chicago (1900 to 1950) • 27 • 27

28. Concentric zonemodel of Burgess & Park (1922–1925) • Concentric zones of urban land use • CBD (Central Business District): Loop tracks of elevated railroads, skyscrapers, turism • Wholesale, lightmanufacturing: zone in transition (mid 19th cent., strong ageing, inner industrial, outer residential zone‚ Ghetto’ ≠ residentalclusters of AfricanAmericans) • Lower-classresidential: zone of industrial workingmen’s homes (late 19th cent., tenement houses with 2 flats) • Middle- and higher-classresidential: apartment houses (middle) and single family dwellings (high) • Residentialsuburbs: commuters zone • Agricultural zone: supplier belt • Gravitation zone: hinterland of metropolis „L” tracks 28

29. Sector model of Hoyt (1939) • Location of the high-rent residental areas • Based on the model of Burgess • For 64 American cities, 3 dates • Results • Sectors instead of/besides concentric circles • Impact of railroads and highwaysonthelocation of differentlanduses • Sectors are separated from each other by the avenues • Sectors are moving towards the edge of the cities on a long run (suburbanization) • Urban districts/sectors: • CBD • Wholesale, light manufacturing (industry) • Lower-class residential • Middle-class residential • Higher-class residential 29 29

30. Multiplenuclei model of Harris & Ullman (1945) • Policentric: outer centres besides the CBD • Single center + commercial and manufacturingdistrictsnotincloseproximitytoit • Parts of cities: • CBD • Wholesale, light manufacturing (industry) • Lower-class residential • Middle-class residential • Higher-class residential • Heavy manufacturing • Outlying business district • Residentialsuburbs • Industrial suburbs 30