[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:01.19,0:00:02.27,Default,,0000,0000,0000,,Welcome, everyone.
Dialogue: 0,0:00:02.27,0:00:04.61,Default,,0000,0000,0000,,Today we are going to begin a new unit.
Dialogue: 0,0:00:04.61,0:00:07.45,Default,,0000,0000,0000,,We are going to be talking about\Ngeography and development.
Dialogue: 0,0:00:07.74,0:00:12.38,Default,,0000,0000,0000,,And by geography, I mean the relatively\Nimmutable and constant features,
Dialogue: 0,0:00:12.38,0:00:16.02,Default,,0000,0000,0000,,things like location, topography, climate,
Dialogue: 0,0:00:16.23,0:00:19.56,Default,,0000,0000,0000,,including temperature,\Nrainfall, soil quality,
Dialogue: 0,0:00:19.86,0:00:22.45,Default,,0000,0000,0000,,wildlife, especially parasites,
Dialogue: 0,0:00:22.54,0:00:24.60,Default,,0000,0000,0000,,and the influence of all of these \Non development.
Dialogue: 0,0:00:24.90,0:00:26.45,Default,,0000,0000,0000,,This is obviously a big topic,
Dialogue: 0,0:00:26.45,0:00:30.60,Default,,0000,0000,0000,,so today we are just going to focus on\Ngeography and trade.
Dialogue: 0,0:00:31.17,0:00:34.12,Default,,0000,0000,0000,,So I want to begin by \Ngiving two perspectives on trade.
Dialogue: 0,0:00:34.12,0:00:36.76,Default,,0000,0000,0000,,The first is the Ricardian perspective.
Dialogue: 0,0:00:37.00,0:00:42.44,Default,,0000,0000,0000,,So Ricardo said, when 2 countries\Nspecialize in their comparative advantage,
Dialogue: 0,0:00:42.72,0:00:44.66,Default,,0000,0000,0000,,that is, they specialize in\Nproducing the good,
Dialogue: 0,0:00:44.66,0:00:47.88,Default,,0000,0000,0000,,which they can produce\Nat lowest opportunity cost,
Dialogue: 0,0:00:48.30,0:00:49.40,Default,,0000,0000,0000,,and then they trade,
Dialogue: 0,0:00:49.69,0:00:51.06,Default,,0000,0000,0000,,both nations are better off.
Dialogue: 0,0:00:51.61,0:00:55.36,Default,,0000,0000,0000,,Now, notice that innovation \Nis not the focus of Ricardo.
Dialogue: 0,0:00:55.61,0:00:59.39,Default,,0000,0000,0000,,So Ricardo says, "There already are\Ntwo goods, wine and cloth.
Dialogue: 0,0:00:59.50,0:01:04.98,Default,,0000,0000,0000,,We can get more of both goods\Nif Portugal specializes in producing wine,
Dialogue: 0,0:01:04.98,0:01:08.80,Default,,0000,0000,0000,,England specializes in producing cloth,\Nand then they trade."
Dialogue: 0,0:01:09.16,0:01:10.59,Default,,0000,0000,0000,,So for Ricardo,
Dialogue: 0,0:01:10.59,0:01:14.12,Default,,0000,0000,0000,,trade is about improvements\Nin static efficiency.
Dialogue: 0,0:01:14.65,0:01:19.97,Default,,0000,0000,0000,,Notice also that in Ricardo, \Nmarket size is really not a key variable.
Dialogue: 0,0:01:20.57,0:01:23.78,Default,,0000,0000,0000,,The situation is very different\Nin Adam Smith.
Dialogue: 0,0:01:24.21,0:01:27.47,Default,,0000,0000,0000,,Adam Smith has a \Ncompletely different theory of trade.
Dialogue: 0,0:01:27.79,0:01:29.28,Default,,0000,0000,0000,,Let's take a look at that.
Dialogue: 0,0:01:31.06,0:01:35.10,Default,,0000,0000,0000,,Smith lays out his theory of trade \Nin a chapter in the Wealth of Nations
Dialogue: 0,0:01:35.26,0:01:40.25,Default,,0000,0000,0000,,called {\i1}The division of labor is limited \Nby the extent of the market{\i0}.
Dialogue: 0,0:01:40.69,0:01:44.09,Default,,0000,0000,0000,,And Smith makes this remarkable\Nand very deep insight.
Dialogue: 0,0:01:44.20,0:01:48.44,Default,,0000,0000,0000,,He says, "As by means of water-carriage,"\Nthat is by ship and boat,
Dialogue: 0,0:01:48.77,0:01:52.99,Default,,0000,0000,0000,,"a more extensive market is opened \Nto every sort of industry
Dialogue: 0,0:01:52.99,0:01:55.62,Default,,0000,0000,0000,,than what land-carriage alone \Ncan afford it.
Dialogue: 0,0:01:56.07,0:02:00.63,Default,,0000,0000,0000,,So it is upon the sea-coast,\Nand along the banks of navigable rivers,
Dialogue: 0,0:02:00.63,0:02:02.61,Default,,0000,0000,0000,,that industry of every kind
Dialogue: 0,0:02:02.61,0:02:06.68,Default,,0000,0000,0000,,naturally begins \Nto subdivide and improve."
Dialogue: 0,0:02:07.34,0:02:11.93,Default,,0000,0000,0000,,So what Adam Smith is saying is that\Nwhen you're along in sea coast
Dialogue: 0,0:02:11.93,0:02:14.05,Default,,0000,0000,0000,,you have access to a larger market.
Dialogue: 0,0:02:14.05,0:02:16.85,Default,,0000,0000,0000,,You can sell your goods\Nin a larger market.
Dialogue: 0,0:02:17.17,0:02:18.57,Default,,0000,0000,0000,,And because of that, --
Dialogue: 0,0:02:19.18,0:02:24.41,Default,,0000,0000,0000,,you get economies of scale but, also,\Nyou get specialization of knowledge.
Dialogue: 0,0:02:24.70,0:02:28.41,Default,,0000,0000,0000,,You get people learning more as\Nthey produce more.
Dialogue: 0,0:02:28.41,0:02:30.49,Default,,0000,0000,0000,,This creates improvements.
Dialogue: 0,0:02:30.77,0:02:35.05,Default,,0000,0000,0000,,So for Adam Smith, \Ntrade is a dynamic growth story.
Dialogue: 0,0:02:35.19,0:02:38.11,Default,,0000,0000,0000,,Trade, means larger markets.
Dialogue: 0,0:02:38.66,0:02:41.65,Default,,0000,0000,0000,,Larger markets means more specialization.
Dialogue: 0,0:02:41.88,0:02:47.03,Default,,0000,0000,0000,,It means more improvements in knowledge, \Nand therefore it means more growth.
Dialogue: 0,0:02:47.75,0:02:50.42,Default,,0000,0000,0000,,So let's take a look at \NAdam Smith's theory
Dialogue: 0,0:02:50.42,0:02:52.16,Default,,0000,0000,0000,,and see if we can see it today.
Dialogue: 0,0:02:53.26,0:02:56.80,Default,,0000,0000,0000,,So what we have here is \Na map of GDP density,
Dialogue: 0,0:02:57.07,0:03:01.36,Default,,0000,0000,0000,,that is, the amount of GDP \Nproduced per square kilometer.
Dialogue: 0,0:03:01.70,0:03:05.30,Default,,0000,0000,0000,,And what you can see from this map \Nis that Smith was absolutely correct.
Dialogue: 0,0:03:05.58,0:03:08.97,Default,,0000,0000,0000,,So what you can see is that\Nwhere GDP is, where civilization is,
Dialogue: 0,0:03:08.97,0:03:10.35,Default,,0000,0000,0000,,it's along the coast.
Dialogue: 0,0:03:10.35,0:03:11.94,Default,,0000,0000,0000,,Here's the coastal United States
Dialogue: 0,0:03:11.94,0:03:15.36,Default,,0000,0000,0000,,and, along these navigable rivers, \Nthe Great Lakes region.
Dialogue: 0,0:03:15.65,0:03:20.16,Default,,0000,0000,0000,,You can also see Western Europe,\Nall along the coast,
Dialogue: 0,0:03:20.16,0:03:22.98,Default,,0000,0000,0000,,all of this coastal area, \NWestern Europe, highly developed.
Dialogue: 0,0:03:23.31,0:03:24.87,Default,,0000,0000,0000,,Over here, Japan,
Dialogue: 0,0:03:24.87,0:03:27.63,Default,,0000,0000,0000,,and, of course, it's the coast of China
Dialogue: 0,0:03:27.63,0:03:31.63,Default,,0000,0000,0000,,which is rapidly developing\Nall due to those export markets.
Dialogue: 0,0:03:31.80,0:03:34.15,Default,,0000,0000,0000,,Here again, the coast of Australia.
Dialogue: 0,0:03:34.96,0:03:36.63,Default,,0000,0000,0000,,Now, in fact, what you can also see
Dialogue: 0,0:03:36.63,0:03:40.69,Default,,0000,0000,0000,,is that even in places\Nwhere there are great institutions,
Dialogue: 0,0:03:40.69,0:03:42.95,Default,,0000,0000,0000,,where they have \Ninstitutions of law and order,
Dialogue: 0,0:03:43.19,0:03:46.25,Default,,0000,0000,0000,,property rights, and incentives,\Nand so forth,
Dialogue: 0,0:03:46.25,0:03:51.01,Default,,0000,0000,0000,,that we can still have low GDP \Nper square kilometer.
Dialogue: 0,0:03:51.01,0:03:52.79,Default,,0000,0000,0000,,So take a look at Canada.
Dialogue: 0,0:03:52.79,0:03:56.52,Default,,0000,0000,0000,,So most of Canada, \Nit's like the Sahara Desert, --
Dialogue: 0,0:03:56.77,0:03:58.57,Default,,0000,0000,0000,,in terms of GDP.
Dialogue: 0,0:03:59.14,0:04:01.28,Default,,0000,0000,0000,,Canada, where Canada is developed,
Dialogue: 0,0:04:01.28,0:04:04.42,Default,,0000,0000,0000,,it's along the coast and \Nalong navigable rivers
Dialogue: 0,0:04:04.42,0:04:06.00,Default,,0000,0000,0000,,close to the United States.
Dialogue: 0,0:04:06.31,0:04:08.12,Default,,0000,0000,0000,,Even in the United States,
Dialogue: 0,0:04:08.12,0:04:11.58,Default,,0000,0000,0000,,there are entire regions \Nwhich really are bereft of GDP
Dialogue: 0,0:04:11.58,0:04:16.33,Default,,0000,0000,0000,,which are almost as barren \Nas is the Sahara Desert.
Dialogue: 0,0:04:16.64,0:04:19.19,Default,,0000,0000,0000,,So if you are looking \Njust at institutions,
Dialogue: 0,0:04:19.19,0:04:21.68,Default,,0000,0000,0000,,you might say, \N"Well, even in the United States,
Dialogue: 0,0:04:21.68,0:04:23.52,Default,,0000,0000,0000,,where we have these\Ngreat institutions,
Dialogue: 0,0:04:23.52,0:04:27.13,Default,,0000,0000,0000,,there's plenty of places \Nwhere there isn't much GDP,
Dialogue: 0,0:04:27.13,0:04:28.58,Default,,0000,0000,0000,,so it must be something else,
Dialogue: 0,0:04:28.80,0:04:30.10,Default,,0000,0000,0000,,and geography, --
Dialogue: 0,0:04:30.75,0:04:34.89,Default,,0000,0000,0000,,particular closeness to rivers\Nand closeness to sea coast
Dialogue: 0,0:04:35.02,0:04:37.48,Default,,0000,0000,0000,,is an important element of this.
Dialogue: 0,0:04:38.07,0:04:42.35,Default,,0000,0000,0000,,By the way, economists really \Nused to ignore geography.
Dialogue: 0,0:04:42.65,0:04:46.02,Default,,0000,0000,0000,,And it's due to Jeff Sachs \Nand some of his co-authors,
Dialogue: 0,0:04:46.02,0:04:48.76,Default,,0000,0000,0000,,particular John Gallup \Nand Andrew Mellinger
Dialogue: 0,0:04:49.10,0:04:51.26,Default,,0000,0000,0000,,that a lot of this work \Nstarted to be done.
Dialogue: 0,0:04:51.38,0:04:53.80,Default,,0000,0000,0000,,In addition to the article\Nwhich I've noted here, --
Dialogue: 0,0:04:54.36,0:05:00.05,Default,,0000,0000,0000,,these three authors have a review article \Nin Scientific American, 2001,
Dialogue: 0,0:05:00.05,0:05:02.36,Default,,0000,0000,0000,,called {\i1}The Geography of\NPoverty and Wealth{\i0},
Dialogue: 0,0:05:02.36,0:05:03.49,Default,,0000,0000,0000,,which I recommend.
Dialogue: 0,0:05:04.11,0:05:07.18,Default,,0000,0000,0000,,Now, if being close to rivers,
Dialogue: 0,0:05:07.18,0:05:09.53,Default,,0000,0000,0000,,if being close to the sea coast \Nis important
Dialogue: 0,0:05:09.74,0:05:11.24,Default,,0000,0000,0000,,then what is the worst thing?
Dialogue: 0,0:05:11.59,0:05:15.72,Default,,0000,0000,0000,,Well, the worst thing that can happen\Nis if you are landlocked.
Dialogue: 0,0:05:15.82,0:05:16.74,Default,,0000,0000,0000,,Let's take a look.
Dialogue: 0,0:05:19.90,0:05:23.78,Default,,0000,0000,0000,,So what we're showing here\Nis GDP per capita in countries
Dialogue: 0,0:05:23.78,0:05:26.76,Default,,0000,0000,0000,,which have access to the coast over here,
Dialogue: 0,0:05:26.94,0:05:29.96,Default,,0000,0000,0000,,compared to countries \Nthat are landlocked over here.
Dialogue: 0,0:05:30.30,0:05:34.10,Default,,0000,0000,0000,,And what you see immediately \Nis that countries which are landlocked
Dialogue: 0,0:05:34.40,0:05:36.49,Default,,0000,0000,0000,,have half, actually, \Na little bit less
Dialogue: 0,0:05:36.49,0:05:41.39,Default,,0000,0000,0000,,than half the GDP of countries \Nwhich have access to the coast.
Dialogue: 0,0:05:41.91,0:05:44.71,Default,,0000,0000,0000,,If we look over here,\Nat the landlocked countries,
Dialogue: 0,0:05:44.71,0:05:48.20,Default,,0000,0000,0000,,you can see there's actually\Na few landlocked ones in Europe:
Dialogue: 0,0:05:48.20,0:05:52.14,Default,,0000,0000,0000,,Austria, Czech Republic, Hungary,\Nof course, Switzerland.
Dialogue: 0,0:05:52.48,0:05:56.53,Default,,0000,0000,0000,,But, equally true, these countries \Nare actually quite close to the coast
Dialogue: 0,0:05:56.53,0:05:58.56,Default,,0000,0000,0000,,and they are close\Nto other rich countries.
Dialogue: 0,0:05:58.56,0:06:02.37,Default,,0000,0000,0000,,If you take those countries out,\Nthe differences become even more stark.
Dialogue: 0,0:06:02.90,0:06:06.30,Default,,0000,0000,0000,,Among the landlocked nations,
Dialogue: 0,0:06:06.30,0:06:09.24,Default,,0000,0000,0000,,the richest outside of Europe\Nis actually Botswana,
Dialogue: 0,0:06:09.24,0:06:11.19,Default,,0000,0000,0000,,which has diamonds.
Dialogue: 0,0:06:11.19,0:06:12.45,Default,,0000,0000,0000,,Pretty lucky for them.
Dialogue: 0,0:06:13.36,0:06:16.94,Default,,0000,0000,0000,,What you also notice is that \Nall of these countries here,
Dialogue: 0,0:06:16.94,0:06:18.44,Default,,0000,0000,0000,,they are all in Africa.
Dialogue: 0,0:06:18.44,0:06:23.40,Default,,0000,0000,0000,,In fact, Africa has more\Nlandlocked countries
Dialogue: 0,0:06:23.40,0:06:25.76,Default,,0000,0000,0000,,than any other continent.
Dialogue: 0,0:06:26.13,0:06:28.79,Default,,0000,0000,0000,,Let's take a close look\Nat why this is the case.
Dialogue: 0,0:06:31.20,0:06:33.50,Default,,0000,0000,0000,,Okay, here is a standard-looking\Nmap of the world
Dialogue: 0,0:06:33.50,0:06:34.96,Default,,0000,0000,0000,,you probably all seen it before.
Dialogue: 0,0:06:35.16,0:06:38.55,Default,,0000,0000,0000,,It's not obvious from this map \Nwhy Africa should be
Dialogue: 0,0:06:38.55,0:06:40.29,Default,,0000,0000,0000,,particularly landlocked.
Dialogue: 0,0:06:40.67,0:06:43.65,Default,,0000,0000,0000,,But there's also something funny\Nabout this map, something odd.
Dialogue: 0,0:06:43.80,0:06:45.17,Default,,0000,0000,0000,,Take a look at Greenland.
Dialogue: 0,0:06:45.39,0:06:47.65,Default,,0000,0000,0000,,Greenland on this map looks huge,
Dialogue: 0,0:06:47.65,0:06:50.31,Default,,0000,0000,0000,,it looks almost as big as Africa.
Dialogue: 0,0:06:50.63,0:06:52.58,Default,,0000,0000,0000,,And, yet, when you check the statistics,
Dialogue: 0,0:06:52.58,0:06:57.41,Default,,0000,0000,0000,,what you find is that Greenland is, \Nin fact, 1/11 the size of Africa.
Dialogue: 0,0:06:57.69,0:06:58.59,Default,,0000,0000,0000,,What's going on?
Dialogue: 0,0:06:59.18,0:07:01.33,Default,,0000,0000,0000,,Well, this is actually an illusion.
Dialogue: 0,0:07:01.74,0:07:05.75,Default,,0000,0000,0000,,It's an illusion created by \Nthe particular projection we've used,
Dialogue: 0,0:07:05.75,0:07:07.35,Default,,0000,0000,0000,,the Mercator projection, --
Dialogue: 0,0:07:07.71,0:07:13.40,Default,,0000,0000,0000,,to project a 3D surface, \Nnamely a globe, onto 2 dimensions.
Dialogue: 0,0:07:13.75,0:07:18.68,Default,,0000,0000,0000,,Whenever you take a 3D surface\Nand you map it in 2 dimensions,
Dialogue: 0,0:07:18.68,0:07:21.23,Default,,0000,0000,0000,,you are bound to get some illusions.
Dialogue: 0,0:07:21.23,0:07:24.80,Default,,0000,0000,0000,,And in this case, \Nwe get the illusion of size.
Dialogue: 0,0:07:25.63,0:07:27.56,Default,,0000,0000,0000,,Let's take a look at \Na different projection.
Dialogue: 0,0:07:27.56,0:07:29.48,Default,,0000,0000,0000,,This is the Albers Projection,
Dialogue: 0,0:07:29.62,0:07:32.54,Default,,0000,0000,0000,,which maintains equal sizes areas.
Dialogue: 0,0:07:32.54,0:07:36.73,Default,,0000,0000,0000,,We are going to get some illusions \Nabout the shape of continents,
Dialogue: 0,0:07:36.73,0:07:39.86,Default,,0000,0000,0000,,but we are going to get \Nthe right equivalent sizes.
Dialogue: 0,0:07:39.86,0:07:42.84,Default,,0000,0000,0000,,And on this projection \Nwhat you see, quite correctly,
Dialogue: 0,0:07:42.84,0:07:45.76,Default,,0000,0000,0000,,is that Greenland \Nis much smaller than Africa.
Dialogue: 0,0:07:46.33,0:07:50.87,Default,,0000,0000,0000,,What you also see is that Africa is huge.
Dialogue: 0,0:07:51.08,0:07:54.20,Default,,0000,0000,0000,,Africa is an enormous continent.
Dialogue: 0,0:07:54.74,0:07:57.42,Default,,0000,0000,0000,,Let's also show that in a different way.
Dialogue: 0,0:07:59.64,0:08:01.79,Default,,0000,0000,0000,,Okay, here's another way \Nof looking at Africa
Dialogue: 0,0:08:01.79,0:08:04.56,Default,,0000,0000,0000,,and what you can see,\Nagain, Africa is big.
Dialogue: 0,0:08:04.70,0:08:09.05,Default,,0000,0000,0000,,You can fit the entire United States,\Nexcluding Alaska, into Africa.
Dialogue: 0,0:08:09.05,0:08:12.74,Default,,0000,0000,0000,,You can put China as well into Africa.\NIndia can go into Africa.
Dialogue: 0,0:08:12.74,0:08:14.24,Default,,0000,0000,0000,,Eastern Europe, most of Europe;
Dialogue: 0,0:08:14.24,0:08:17.18,Default,,0000,0000,0000,,here's Italy, Germany, France,\Nand Spain, and so forth.
Dialogue: 0,0:08:17.56,0:08:20.01,Default,,0000,0000,0000,,Now, remember that chunk\Nin the United States,
Dialogue: 0,0:08:20.01,0:08:22.04,Default,,0000,0000,0000,,which is inland, \Nwhich had low GDP,
Dialogue: 0,0:08:22.04,0:08:24.72,Default,,0000,0000,0000,,well, just map that into Africa.
Dialogue: 0,0:08:24.88,0:08:27.53,Default,,0000,0000,0000,,You can see what is going on.
Dialogue: 0,0:08:27.64,0:08:29.46,Default,,0000,0000,0000,,Here's another way of looking at this.
Dialogue: 0,0:08:29.60,0:08:31.33,Default,,0000,0000,0000,,Let's go back to our projection.
Dialogue: 0,0:08:31.61,0:08:33.58,Default,,0000,0000,0000,,Take a look at the coastline of Africa.
Dialogue: 0,0:08:34.37,0:08:35.93,Default,,0000,0000,0000,,Here's the coastline of Africa.
Dialogue: 0,0:08:35.93,0:08:38.54,Default,,0000,0000,0000,,Now compare with the coastline of Europe.
Dialogue: 0,0:08:38.78,0:08:41.46,Default,,0000,0000,0000,,Well, in Europe you've got \Nall these nooks and crannies
Dialogue: 0,0:08:41.46,0:08:43.63,Default,,0000,0000,0000,,and inlets and seas.
Dialogue: 0,0:08:43.68,0:08:46.69,Default,,0000,0000,0000,,Here's the Black Sea\Nover here and so forth.
Dialogue: 0,0:08:47.24,0:08:50.59,Default,,0000,0000,0000,,In fact, what you'll find if you do this,\Nif you measure the coastline,
Dialogue: 0,0:08:50.77,0:08:54.55,Default,,0000,0000,0000,,is that the coastline of Europe,\Nis 2-3 times longer
Dialogue: 0,0:08:54.55,0:08:56.08,Default,,0000,0000,0000,,than the coastline of Africa.
Dialogue: 0,0:08:56.61,0:08:58.02,Default,,0000,0000,0000,,2-3 times, by the way,
Dialogue: 0,0:08:58.02,0:09:00.34,Default,,0000,0000,0000,,because it can actually differ \Ndepending upon
Dialogue: 0,0:09:00.49,0:09:04.68,Default,,0000,0000,0000,,how you measure those fjords\Nand so forth in Europe.
Dialogue: 0,0:09:04.68,0:09:08.54,Default,,0000,0000,0000,,The fractal nature of coastline makes it\Na little bit arbitrary to measure.
Dialogue: 0,0:09:09.14,0:09:10.61,Default,,0000,0000,0000,,Basic point however is,
Dialogue: 0,0:09:10.79,0:09:14.09,Default,,0000,0000,0000,,Europe is much smaller than Africa,
Dialogue: 0,0:09:14.09,0:09:16.48,Default,,0000,0000,0000,,and, yet, the coastline of Europe,
Dialogue: 0,0:09:16.48,0:09:19.56,Default,,0000,0000,0000,,the access to the ocean,\Naccess to the seas,
Dialogue: 0,0:09:19.56,0:09:22.42,Default,,0000,0000,0000,,to navigable rivers, \Nmuch much larger.
Dialogue: 0,0:09:22.62,0:09:25.70,Default,,0000,0000,0000,,So Europe has much more access to trade
Dialogue: 0,0:09:25.91,0:09:27.76,Default,,0000,0000,0000,,than does Africa.
Dialogue: 0,0:09:33.12,0:09:34.58,Default,,0000,0000,0000,,So let's review briefly.
Dialogue: 0,0:09:34.99,0:09:38.31,Default,,0000,0000,0000,,From Adam Smith, we have that\Nsea coast and navigable rivers,
Dialogue: 0,0:09:38.31,0:09:40.79,Default,,0000,0000,0000,,that leads to trade to larger markets.
Dialogue: 0,0:09:40.100,0:09:43.82,Default,,0000,0000,0000,,Larger markets that means\Nmore specialization
Dialogue: 0,0:09:43.82,0:09:46.45,Default,,0000,0000,0000,,and improvements in knowledge,
Dialogue: 0,0:09:46.57,0:09:49.45,Default,,0000,0000,0000,,and improvements in \Nknowledge lead to growth.
Dialogue: 0,0:09:49.98,0:09:52.34,Default,,0000,0000,0000,,In contrast with this, \Nif you are landlocked,
Dialogue: 0,0:09:52.34,0:09:54.34,Default,,0000,0000,0000,,you don't get those trade,\Nyou don't get trade,
Dialogue: 0,0:09:54.34,0:09:57.28,Default,,0000,0000,0000,,you don't get larger markets\Nyou don't get that specialization,
Dialogue: 0,0:09:57.28,0:09:59.03,Default,,0000,0000,0000,,you don't get \Nthat improvement in knowledge,
Dialogue: 0,0:09:59.10,0:10:01.62,Default,,0000,0000,0000,,and, instead, you get stagnation.
Dialogue: 0,0:10:02.27,0:10:05.03,Default,,0000,0000,0000,,Now, again, let's apply this to Africa.
Dialogue: 0,0:10:06.82,0:10:11.42,Default,,0000,0000,0000,,Adam Smith in fact had the theory\Nand application done in 1776.
Dialogue: 0,0:10:11.79,0:10:15.47,Default,,0000,0000,0000,,He says, "There are in Africa\Nnone of those great inlets,
Dialogue: 0,0:10:15.47,0:10:17.93,Default,,0000,0000,0000,,such as the Baltic\Nand Adriatic seas in Europe,
Dialogue: 0,0:10:17.93,0:10:21.37,Default,,0000,0000,0000,,the Mediterranean and the Black Sea \Nin both Europe and Asia [...]
Dialogue: 0,0:10:21.57,0:10:26.38,Default,,0000,0000,0000,,to carry maritime commerce into\Nthe interior parts of that great continent:
Dialogue: 0,0:10:26.62,0:10:30.47,Default,,0000,0000,0000,,and the great rivers of Africa \Nare at too great a distance from one another
Dialogue: 0,0:10:30.74,0:10:34.32,Default,,0000,0000,0000,,to give occasion to \Nany considerable inland navigation."
Dialogue: 0,0:10:34.56,0:10:39.38,Default,,0000,0000,0000,,So Adam Smith nailed in 1776\None of the key connections
Dialogue: 0,0:10:39.38,0:10:41.12,Default,,0000,0000,0000,,between geography,
Dialogue: 0,0:10:41.12,0:10:44.53,Default,,0000,0000,0000,,between access to the coast,\Naccess to navigable rivers,
Dialogue: 0,0:10:44.53,0:10:45.85,Default,,0000,0000,0000,,and development.
Dialogue: 0,0:10:46.10,0:10:49.67,Default,,0000,0000,0000,,Amazingly, it wasn't until \Nsome 200 or so years later
Dialogue: 0,0:10:49.67,0:10:53.05,Default,,0000,0000,0000,,that Jeff Sachs and others \Nreally began to pick this up
Dialogue: 0,0:10:53.05,0:10:55.89,Default,,0000,0000,0000,,and bring it back into the growth story.
Dialogue: 0,0:10:56.13,0:10:59.42,Default,,0000,0000,0000,,One reason to remember \Nour history of economic thought.
Dialogue: 0,0:10:59.94,0:11:03.90,Default,,0000,0000,0000,,Okay, we'll be looking more\Nat development and geography,
Dialogue: 0,0:11:03.90,0:11:07.24,Default,,0000,0000,0000,,in particular malaria and other parasites\Nand things like that,
Dialogue: 0,0:11:07.24,0:11:09.77,Default,,0000,0000,0000,,and their influences in the next lecture.
Dialogue: 0,0:11:10.05,0:11:10.79,Default,,0000,0000,0000,,Thanks.