But road transportation is waaay more expensive than water transportation—up to 10x more
These increases in transportation costs seem like not a big deal, but the impact is massive
Because here's the key: doubling transportation costs can reduce wealth by 90%:
• If you 2x transportation costs, you divide by 4x your potential markets
• But network effects grow with the square of nodes. 4^2=16
Doubling transportation costs can reduce trade potential by 16x!
A 16x reduction is a 94% reduction in wealth
Of course, the full 16x is not achieved in reality, and also now transportation costs are low enough that they aren't an obstacle to all types of trade
But the impact on trade is massive, and hidden: You don't know how much trade never happened because transportation costs were too high!
So you should be irate when you hear that the productivity of "Other transportation and support activities"—which includes marine cargo handling—has declined by 29%
(source: )
The most outrageous part is not the rent-seeking behavior of asking for a 77% increase in salaries—an ask they can only do because they have a monopoly
The worst part is that they're blocking automation. Every industry automates to make everything cheaper and get more business. But when you have a monopoly, you don't care. You abuse it.
The worst part is they should be looking forward to it, because, as they say, the work is back-breaking!
The worst part is that it would be better for longshoremen over the long term!
More productivity➡️Cheaper service➡️More business!
It should be a national mandate to allow port automation
Starship is going to change humanity well beyond going to Mars: It will transform the Earth too because the cost of sending stuff to space is about to drop by 10x
A tip of this future comes from the Silk Road [1/6]
Why was it called Silk Road? Because silk is expensive & light
Transportation costs depend on distance and weight: The longer the distance and the heavier the goods, the more expensive transportation
So over long distances, only light & valuable goods could be sold—like silk
Cheaper transportation techniques like ships and railroads allowed many more goods to be traded over much longer distances
It started with tobacco, sugar, china, cotton... Eventually, things like corn & wheat
Lebanon could be rich, but it's chaotic. Why?
Geography, which is reflected on its flag
You can understand it with just these maps:
🧵
Here's the population density in the Middle East
Lebanon is in the small region of the Levant, surrounded by 4 traditional superpowers: 1. Asia Minor—now Turkey 2. Mesopotamia—now mostly Iraq 3. Persia—now Iran 4. Egypt 5. And also has sea access for Mediterranean superpowers
1. Because 🇱🇧Lebanon is in the middle of these superpowers, they vie for its control 2. Because🇱🇧is smaller, it can't fully assert its independence
Conflict between 🇲🇽Mexico and 🇪🇸Spain, because 🇪🇸 hasn't apologized for its invasion of 🇲🇽 500 years ago
Here's what happened, and why this is ignorant and hypocritical:
1. When the 🇪🇸 arrived to Central America, the Aztecs were in the middle of a brutal conquest (green below)
Ppl don't realize how recent this had been before the arrival of the 🇪🇸
• Tenochtitlan was formed less than 200y earlier
• The 1st king of the Mexica was crowned just 150y earlier
• The Aztec Triple Alliance formed less than 100y earlier
This was not the 1st wave of conquests & massacres in the region. They'd been at it for thousands of years
And the Aztecs were not particularly kind. Tenochtitlan displayed walls of skulls from its enemies
Their rise includes killing & skinning the daughter of an allied king!
Massive floods across the Western world. What pattern do you see?
1. Massive floods in Vienna, carrying cars and everything else on its path.
The Danube is mostly embanked, no floodplains
2. Budapest is underwater
The city is also built on the Danube's floodplain. In fact, most of the Danube has embankments, and the floodplains and dams upstream are not enough to absorb all the water
3. Flood disaster in Głuchołazy, Poland, worst one in 100 years. Why? Because the river is fully embanked, has no floodplains anymore, and goes through the middle of the city