Geography as Destiny? How Coastlines Shaped the Industrial Revolution

April 20, 2022

Britain's geographic isolation, surrounded by water with a high coastline-to-land ratio, wasn't merely a defensive advantage—it was the catalyst for a series of interconnected developments that positioned it perfectly for industrial takeoff. Through three critical mechanisms, Britain's island geography shaped its economic destiny:

First, the necessity of naval power for defense and trade created unprecedented demand for financial innovation, leading to sophisticated capital markets and early banking systems. Second, naval administration required organizational capabilities far beyond those of land forces, fostering institutions that would later support industrial expansion. Third, and perhaps most crucially, maritime interests gained significant political representation in Parliament, ensuring policies favorable to commerce and manufacturing over landed interests.

These geographic advantages weren't preordained to produce industrialization—but they created favorable conditions that, when combined with other factors, allowed Britain to cross the threshold into sustained economic growth before any continental rival. The story of how coastlines shaped industrial development offers fascinating insights into the complex interplay between geography, institutions, and economic transformation.

The Maritime Advantage: Britain and the Netherlands

When examining the economic trajectory of European nations over the longue durée (Figure 1), a striking pattern emerges. While the Industrial Revolution is typically associated with Britain, it wasn't alone in experiencing accelerated growth. The Netherlands (Holland) shows a similar upward trajectory beginning in the early 17th century, with both nations pulling away from their European counterparts by 1800. This parallel growth suggests that unique British innovations weren't the sole drivers of industrialization—rather, common underlying factors may have positioned both maritime powers for economic transformation.

Great Britain and the Netherlands share a distinctive geographic feature: both have exceptionally high coastline-to-land border ratios. Britain, being an island, has a water border to land border ratio of one—the highest possible. This seemingly mundane geographic fact had profound economic consequences.

Countries with extensive coastlines relative to their land area faced a unique imperative: they needed strong navies. Unlike land-locked countries that could rely primarily on armies, maritime nations required ships to defend their borders, protect trade routes, and project power. This necessity catalyzed several key developments (Glete, 1993).

As Figure 2 illustrates, there is a clear positive relationship between a nation's coastal border ratio and the size of its navy. Great Britain and the Netherlands maintained disproportionately large navies relative to their size, while continental powers with lower coastal ratios invested significantly less in naval forces. This pattern reflects the geographic imperative that drove maritime nations to build robust naval capabilities.

First, building and maintaining naval fleets was extraordinarily expensive—far more costly than raising armies. Ships were complex machines requiring specialized knowledge, materials from diverse sources, and significant capital investment. To finance these expensive assets, countries needed sophisticated financial instruments and institutions.

It's no coincidence that the three European countries with the earliest central banks were those with the highest coast-to-land ratios: the Dutch Republic established the first in 1609, followed by Sweden in 1668, and England in 1694. By comparison, Spain established its central bank nearly a century later (1782), while other continental powers waited until the 19th century.

Beyond Banking: The Organizational Innovation of Navies

The maritime imperative didn't just accelerate financial innovation—it transformed governance. Navies required unprecedented organizational capabilities that armies of the time didn't need. As naval historian Jan Glete notes, unlike the often ad hoc character of pre-Napoleonic armies, navies demanded:

• Careful long-term planning

• Sophisticated procurement systems

• Standardized construction techniques

• Centralized coordination

• Consistent maintenance regimes

• Meritocratic promotion systems

These organizational innovations strengthened the administrative and fiscal capacity of naval powers considerably. While continental powers could raise armies quickly when needed and disband them after conflicts, maritime powers needed to maintain permanent naval infrastructure, driving the development of more sophisticated state capacity (Glete, 1993).

Spain: The Misleading Myth of Maritime Power

Spain presents a fascinating counterexample that actually strengthens our coastline hypothesis. Despite popular perception shaped by the famous Spanish Armada, Spain actually had a surprisingly high land-to-coast ratio due to its inherited Habsburg territories across Europe (Glete, 1993). As Figure 2 reveals, the Spanish Habsburg territories maintained a much smaller navy than might be expected given their global empire, reflecting these geographic constraints.

The Spanish Habsburg empire was the most widespread agglomeration of territories in the world during the 16th century, connected primarily by maritime lines. However, contrary to what many assume, Spain never developed a centralized navy. The Spanish approach to naval problems was typically to organize regional solutions rather than build a permanent national navy.

The famous Spanish Armada that confronted England and the fleet at the Battle of Lepanto were essentially two different entities built for specific purposes—not part of a sustained naval tradition. The Armada of 1588 represents a temporary concentration of maritime resources rather than evidence of ongoing naval investment. During Spain's "golden age" in the 17th century, the crown did not maintain a permanent navy to protect merchant fleets (Glete, 1993).

This Spanish exception is particularly revealing. Despite having significant maritime interests and colonial holdings, the Spanish Habsburgs often contracted out naval defense to entrepreneurs, typically from Italian and Dalmatian states like Genoa and Ragusa (present-day Dubrovnik). As Glete explains: "the Mediterranean style of contracting out all major aspects of naval administration to entrepreneurs became a common form for the sailing navy in Spain" (Glete, 1993, p.149).

Spain's need to protect its scattered European territories required substantial investment in its army, drawing resources away from naval development. The country's mountainous interior and limited navigable rivers further complicated internal transportation, hampering the development of an integrated shipbuilding industry. These geographic constraints help explain why Spain, despite its early colonial wealth, failed to develop the financial and organizational innovations that drove industrialization in Britain and the Netherlands.

The Political Economy of Maritime Power

Perhaps most interestingly, the need for navies shaped the political representation and priorities of these nations. In England, ports had meaningful representation in Parliament since the 14th century, with the "Cinque Ports" and other commercial harbors allocated seats in the House of Commons.

Out of 404 representatives in the English Parliament, approximately 50 represented areas with commercial ports. This ensured maritime commercial interests had a political voice, influencing policy in ways that favored trade and naval development.

Contrast this with Poland-Lithuania, which despite having prosperous ports at Danzig (Gdańsk) and Riga, gave them minimal representation. Of the 170 deputies in the lower house of the Sejm (Polish parliament), only about 2% represented port cities. This limited representation meant maritime interests were largely neglected in policy decisions (Jędruch, 1982).

Why Naval Powers Had Institutional Advantages

Another crucial but often overlooked aspect: navies couldn't easily be turned against a country's own population. While armies could (and often were) used to suppress internal dissent or extract resources from citizens, ships had limited utility for internal control. This created different incentives for rulers:

• Maritime powers needed to persuade rather than coerce their citizens to generate tax revenue

• Property rights became more secure when rulers couldn't easily seize assets using military force

• Commercial interests gained political influence because their cooperation was essential

These dynamics fostered political and economic systems more conducive to early industrialization in maritime nations.

The Navigation Acts passed by Parliament in 1651 exemplify how maritime interests shaped economic policy in England. These acts banned foreign ships from English ports and established protections for English merchants, requiring a robust navy for enforcement. As Glete observes: "It was the short-lived English republic which created both a much increased English navy and the mercantilist regulations for trade and colonies which were to become such an efficient stimulus for the enforcement of state monopolies on violence at sea" (Glete, 1993, p.483).

The Legacy of Geographic Determinism

The story of coastlines and industrialization reminds us that geography isn't destiny—but it does set parameters that influence historical development. Britain and the Netherlands' high coast-to-land ratios created conditions that favored financial innovation, organizational capacity, and commercial representation.

Of course, many other factors contributed to why some nations industrialized earlier than others. But understanding how something as fundamental as the shape of a nation's borders influenced its development trajectory gives us valuable insights into the complex interplay between geography, institutions, and economic growth.

In our next post in this series, we'll explore another geographic factor that counterintuitively influenced industrialization: the paradox of agricultural prosperity, and why fertile lands sometimes hindered rather than helped economic transformation.

References

Fouquet, R., & Broadberry, S. (2015). Seven centuries of European economic growth and decline. Journal of Economic Perspectives, 29(4), 227-44.

Glete, J. (1993). Navies and nations: Warships, navies and state building in Europe and America, 1500-1860. Almqvist & Wiksell International.

Jędruch, J. (1982). Constitutions, elections, and legislatures of Poland, 1493-1977: A guide to their history. University Press of America.

Lukowski, J. (1991). Liberty's folly: The Polish-Lithuanian Commonwealth in the eighteenth century. Routledge London.

North, D. C. (1991). Institutions. Journal of Economic Perspectives, 5(1), 97-112.

Roberts, M. (1984). The Swedish imperial experience 1560-1718. Cambridge University Press.