Portages: Or, The Economic Past is Here — It’s Just Evenly Distributed

canoeing-portaging.jpg

I am fascinated with how we don’t notice that much of the past is still with us, that it’s so evenly distributed as to be invisible. I often talk about this in the context of urban fire departments, and the small percentage of their calls that are actually for fires.

A new NBER paper got me thinking about the same thing in a surprising context: river portages. I think this stuff is riveting. [-]

Portage: Path Dependence and Increasing Returns in U.S. History

Hoyt Bleakley, Jeffrey Lin

We examine portage sites in the U.S. South, Mid-Atlantic, and Midwest, including those on the fall line, a geomorphologic feature in the southeastern U.S. marking the final rapids on rivers before the ocean. Historically, waterborne transport of goods required portage around the falls at these points, while some falls provided water power during early industrialization. These factors attracted commerce and manufacturing. Although these original advantages have long since been made obsolete, we document the continuing—and even increasing—importance of these portage sites over time. We interpret this finding in a model with path dependence arising from local increasing returns to scale.

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