The American economic core
area: North America
dr. Jeney László
Senior lecturer
jeney@elte.hu
Economic Geography
I. International Business bachelor study programme (BA)
Autumn term 2015/2016.
CUB Department of Economic Geography and Futures Studies
Concept and divisions of
America
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%)
Physical Geography: joining of two continents
Human Geography: division of one continent into two
parts after colonisation
3
Divisions of America (1 or 2)
The Americas
Physical Geography:
North and South
4
Human Geography:
North and Latin
Divisions of America (3 or 4)
Physical Geography:
North, Central, South
Human Geography:
North, Middle, South
Human Geography:5
N, Middle, S, Caribbean
Division of America from the
viewpoint of Regional Geography
North America (English America)
Latin
America
Middle
America
Mexico
Central America
The Caribbean
South America
Inner dividing borderlines:
– Human Geography: State border
between USA and Mexico (border
of North and Latin America)
– Physical Geography: Isthmus of
Tehuantepec (216 km) (border of
North and Central America) 6
Evolution of the North
American economic pole of the
World
7
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
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 
9
grazing land
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
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
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
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
13
social life
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
The North American economic
integration: NAFTA
Canada and USA: significant and
multifaceted economic systems

USA
– $47,200 per capita GDP (ppp) (2011)  largest economy in the
world
– Technologically the most developed economy
– GDP: services 76.7%, industry 22.2% and agriculture 1.2%

Canada
–
–
–
–
$39,400 per capita GDP
Economic trends ≈ to that of USA
Significant growth in services, mining and manufacturing sectors
GDP: services 78%, industry 20% and agriculture 2%
16
NAFTA



The North American economy could be defined in the
economic areas of the North American Free Trade
Agreement (NAFTA): Canada, USA and Mexico
One of the four largest trade blocs in the world
Its implementation: 1994
– Allowed for strong economic cooperation
– Hopes of eliminating barriers of trade and foreign investment
between the three member countries

Earlier: Canada and USA already conducted the largest
bilateral trade relationship in the world before
– Canada–USA trade relations already allowed trade without taxes
and tariffs
17
– NAFTA allowed Mexico to experience a similar duty free trade
NAFTA

Trade volume steadily increased annually
– Trade between the three 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
North American economy

USA also take part in inter-continental trade
blocs
– Trade agreements under the Transatlantic Free Trade
Area with EU
– US-Middle East Free Trade Area: with numerous
Middle Eastern countries and itself
– Trans-Pacific Strategic Economic Partnership: with
Southeast Asian nations, Australia, and New Zealand
19
Advantages and disadvantages of
NAFTA
Supporters of NAFTA
New markets for the 3 countries
Critics of NAFTA
New markets primarily for Mex and
Can
Mexican cheaper goods force down Low labour costs  USA and Can
the prices of USA and Can goods  companies move to Mex  higher
consumers win
unemployment
Stronger global economic weight in More significant economic disparity
competition with the EU and others between USA, Can and Mex
Democracy and political stability in Higher economic disparity within
Mex  greater stability in N America Mex  political instability in Mex
Jobs in (mainly North) Mex  higher USA culture overpowers in Can and
living standards, employment rates Mex. SW USA: increased use of
Spanish language  tensions
Environmental agreements 
USA factories relocate to Mex 
healthier environment in Mex
polluted areas in Mex
20
Equal treatment of corporations
Too powerful corporations
North American
metropolization
21
Population change of Chicago,
1831–1930
4000000
3500000
3000000
fő
2500000
2000000
1500000
1000000
500000
0
1820
1840
1860
1880
1900
1920
22
1940
N-Am: cities on peripheries, EU: in the centre
23
Urban – rural duality
Share of cities
country
population
GDP
USA (SMA)
38%
49%
Kanada (CMA)
45%
54%
24
New York –
Manhattan


1.5 mn citizens, de 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)
25
– Segregation: Little Italy, Chinatown
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 citiesof 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)
26

Landscape: CN Tower (553 m)
Inner structure of cities


Friedrich Engels (1845):
state of working class in
England
Richard Hurd (1903)
Principles of City Land
Values
27
Concentric zones of urban land use
(Burgess & Park 1925)
„L” tracks
28
Sectoral model of Hoyt
(1939)
29
Policentric model of Harris and
Ullman (1945)
30