By Daniel Archibald | CFA
As the Roman empire was falling from its mount of global dominance, neighbouring nations and tribes began to stake their own claims for a share of the European landscape. The Huns started the process in the 4th century AD and the German barbarians helped to finish the job over the following decades. Anglo-Saxons moved into Britannia, while Franks and Vandals moved west through Gaul (modern France).
Throughout these years of invasions, many Romans were forced to flee their homes. Some might have escaped to the relative safety of the Alps, while others may have fled east to Constantinople. By the time of the second major sack of Rome in 455 A.D., the Roman empire was all but dead, with much of its former territories now under Gothic or Hun rule.
One popular hideout for roman refugees was the marshy islands in a lagoon on the northern tip of the Adriatic Sea. Once inhabited only by salty fishermen, the refugees soon started to develop the islands by driving posts into the sandy ground and building platforms for homes and buildings. 200 years later, the islands of refugees had become a major port town and independent nation known as the "Most Serene Republic of Venice".
The growth in wealth and prestige of the marshy islands was attributable to its major competitive advantage: Location. As one of the major ports which linked east to west, Venice was in a prime position to extract tariffs and duties from much of the goods entering and exiting central Europe. Their location also made it difficult for other nations to invade, and their growing naval war machine helped to protect their interests further.
North of Venice and past the Austrian Alps lies another area of geographical wealth. For much of its history, the territories of Germany have been the economic powerhouse of Europe. If not for a number of devastating wars of their own making, the tribes and states of the European heartland might be the largest nation in the world. But why has this area generated so much wealth over the ages? Again, the core of the answer is location. Thanks to the Alps and their constantly melting glacial peaks, Germany is blessed with deep and strong rivers: The Danube, which also connects east to west; the Rhine, which moves people and cargo from Switzerland to the North Sea; the Elbe; the Oder; the Spree. Just as a seaport can benefit from the logistical benefit of water transport, so too can the lands surrounding major rivers.
The American empire has also benefited over the centuries from large port cities and mighty river systems. However, for a while, its isolation from the wealth of Europe and Asia was seen as a hindrance. However, as Germany has often realised over its history, being in the middle of the global economy, can also have a major downside: war. In 1966, Geoffrey Blainey published a book about Australia titled "The Tyranny of Distance", which highlighted the disadvantages (and some advantages) of being so far from the rest of the world. But that distance has also afforded countries like America and Australia a level of protection from the ills of the world.
One major influencer of the global power landscape over the next few decades and centuries will likely be the technological advances in logistics. Over much of human history, geographical location was a driving factor in wealth generation. Whether it was access to natural resources, closeness to trading partners or positioning along major trade routes, wealth has often fallen slowly down through the hands of those with the geographical advantage. However, with the cost of logistics (energy, automation, speed, etc) falling, perhaps this competitive edge will no longer be a determinant of global power.