Were railroads indispensable to American economic development?
Upvote:2
Fogel's contention is disputed by at least two other economists. http://en.wikipedia.org/wiki/Rail_transport_in_the_United_States
One of them is Walt Whitman Rostow, who specialized in the study of the "take-off" of developing countries. His argument was that railroads turned the U.S. from a developing to a developed country around 1840 not only because they improved transportation, but because of their "spillover" effects on creating demand for manufacturing and banking, two other important sectors.
Albert Fishlow argues that by 1890, the savings on using railroads versus alternate forms of transportation amounted to 15% of GDP, more than twice Fogel's estimate of such savings.
Upvote:5
The literal answer is no. What most people would describe as a reasonable answer is yes.
Russia, and the central Asian countries such as Kazakhstan and Afghanistan are examples of what development is like without efficient transportation. Are they more developed now than 100 years ago? Certainly. In comparison to the US? Absolutely not.
Development in the US would have been along coasts and rivers in the 19th century, and would have been slower. With the discovery of oil, we could then build the road system and aircraft that make up much of our economic backbone now. However, extracting and distributing oil requires large amounts of steel, and the process of moving the raw and finished goods associated with steel involve significant weight, and much of the resource is inland. While motorcars appeared almost instantly with the availability of oil, heavy duty trucking only emerged toward the end of the 1930s. Therefore, development that began in the 1820s would have been deferred until the 1930s. The US, in that case, might look more like the Ukraine or Romania.
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