This essay is a practical exploration of the ideas I first introduced in ‘Geography is Humanity’s Fractal Objective Function’. The can be read in either order, but are worth reading together as a set.
Portugal at its peak was probably the wealthiest nation on Earth, yet for much of recorded history, the territory has been a relative backwater. Situated by land on the far edge of the European Continent and lacking river access to the Mediterranean, the Iberian Peninsula was a hinterland of the Ancient World.
Otherwise constrained by the wagon equation1, the key technology enabling the formation of larger states and trading empires were shallow-drafted vessels such as triremes and other galley ships. These enabled trade and communication across the relatively calm waters and shallow waves of much of the Mediterranean. A shallow draft is needed to navigate most rivers and natural harbours, but is unstable in rough seas and are unsuitable for vast distances across open ocean.
Prior to modern logistics, the Iberian peninsula’s mountains and river systems made internal travel difficult. Being either small, poorly navigable, or westward flowing into open ocean, the rivers disincentivise the formation of large rivermouth cities capable of trading and coordinating the development of a powerful centralised state. Consequently, rule tended to be loosely held by foreign powers who were able to divide and conquer the local tribes - Carthaginians based in modern-day Tunisia, Romans based in Italy, Visigoths based in Southern France, and Umayyads based in the Levant.
‘Hispania’ was thus loosely held even during the height of the Roman Republic, and formed a hotbed for rebellion, banditry, and protracted mountain insurgencies (mirroring Napoleon’s attritional campaign there two millennia later).
Even as shipbuilding techniques improved through the Middle Ages, particularly by the Vikings, Portugal remained on the periphery of both the Mediterranean trade, and the burgeoning economies centred on the coastal waters of the North and Baltic Seas. However, following the Reconquista (which itself largely progressed from one water catchment to the next over the course of centuries), the newly independent Kingdom of Portugal had every incentive to follow the gradient of its objective function and incrementally develop larger ships capable of carrying larger loads across longer distances.
The breakthrough came with the development of reliable ocean-worthy vessels caravel and the deep-drafted carrack which was stable in high seas and could carry much large cargoes. The costs of trade to the North Sea plummeted, while the larger cargoes were essential for supplying long exploratory expeditions. These developments led to innovations in navigation, seamanship, and cartography. The Age of Exploration had begun.
The advent of ocean-worthy vessels suddenly turned Portugal’s geography into an advantage, with exceptional deepwater harbours and an enviable position at the intersection of trade routes north, south, east, and west. Trade by sea provided economic opportunities, while isolation by land mostly spared the nation from the near-constant land wars that plagued continental Europe.
Opportunities to the South were to ultimately prove the most lucrative. Bypassing the Muslim-controlled trans-Saharan trade routes allowed the Portuguese to dominate the trade of sub-Sarahan gold, slaves, and ivory. Rounding the southern tip of Africa in 1488 opened the riches of the Indian Ocean, bypassing the overland route through the Muslim states of the Levant and Asia Minor. Spices like pepper were so valuable at this time that the pockets of dockworkers were often sewn shut to reduce theft.
Being early to the game, the Portuguese developed a string of forts and trading posts around the coast of Africa, the Indian Ocean, and East Asia. The trade of spice and other Asian luxuries into Europe brought tremendous wealth, but also the attention of competitors.
Early competition from the Spanish was met with concessions and treaties to keep the peace. However, as the technologies and maps spread further north, the Portuguese monopoly of the Indian Ocean trade would come under increasing threat from the Dutch, French, and English. Trade ships were lost to privateers, trading posts needed to be fortified, and the costs of the trade rose as more of the surplus needed to be invested in military protection.
Around this time, we also see the first signs of path dependence in the Portuguese approach. The forceful acquisition of trading posts, successful against undeveloped and fragmented princely states in East Africa, India, and the Indonesia Archipelago, proved extremely costly when employed against the still powerful and coordinated Ming China (though its isolationism would precipitate its eventual downfall).
With no new oceans to explore, exploration strategies began to produce diminishing returns. The 17th Century onwards saw an uneven decline in the extent of their empire, as colonial possessions were lost in a series of conflicts with Northern European powers. The devastating 1755 Lisbon Earthquake (which killed roughly 1/5 people living in the capital), inflicted enormous social, economic, and psychological damage on the Portuguese, and hastened the decline of the empire considerably.
Exploitation strategies became increasingly favoured, and the development of their Brazilian colony (including the transfer of nearly 5 million slaves from Africa) bolstered a faltering economy. However, as Brazil developed, so did its capacity to act as an independent centre of power. The Atlantic had always imposed costs on rule from European Colonial Offices. By the Late 18th/Early 19th Centuries, the ‘home team advantage’ (e.g. shorter lines of communication and supply, greater legibility of the territory) proved decisive for many American independence movements, including for Brazil in 1822.
Lacking the plentiful natural resources required to keep pace with the rapidly industrialising Northern Europe, Portuguese culture continued to view itself as a nation of sailors and traders throughout this period, leading to chronic underinvestment in domestic industries. The British industrial juggernaut in particular was therefore able to increasingly dictate terms to the Portuguese, progressively stripping them of their overseas possessions.
By the 20th Century, only a few Asian ports and two Southern African colonies remained of Portugal’s trade empire. Many colonial powers were recognising that the costs of their overseas empires no longer merited their retention. The Portuguese however continued to attempt to execute their colonial strategy, overthrowing their monarchy in reaction to the capitulation of colonial ambitions by the King. Portugal would spend much of the 20th Century under the fascist rule of the Estado Novo, fighting in vain to retain its colonies. Ultimately, fascist regimes hinder the ability to update culturally, similar to how planned economies struggle to update economically.
Failing to take advantage of the new horizons opened by the technological revolutions of the 20th Century, Portugal remained desperately poor even by the standards of the time. Eventually, Estado Novo collapsed in 1974, and Portugal finally began to integrate with the modern world (by this time, the GDP per capita of France and West Germany was 5x that of Portugal), bringing a great tailwind of growth. However, Portugal’s isolated geography now comes full circle and is once again a hindrance. Road and rail connections into the economic heartland of Europe are relatively poor, limiting Portugal’s ability to fully integrate into industrial supply chains. Portugal settles into the relative ease of high-value tourism (a whopping 10% of GDP) and net EU transfers, with some trade in relatively low-value-add products, particularly with next-door Spain.
A generation later, new digital horizons have opened. Physical geography need not be such a disadvantage. Unfortunately, EU membership also reveals itself to be something of a double-edged sword. The ease of touring or retiring to Portugal brings great wealth to the country but pushes up the relative price of housing and places pressure on its digital growth strategy. Meanwhile, automatic entry into the economic powerhouses of Central Europe encourages talented young people to follow network effect incentives and emigrate abroad. Finally, the high value of the Euro and EU trade regulations makes any set of export-driven trade policies more difficult.
Geographic objective functions are not deterministic; there is nothing to say that Portugal could not adapt to the emerging geography and become a centre of exploration and innovation once more. To do so, the culture needs escape its path dependence and return to the exploratory mode required to chart and adapt to these new possibilities.
If you’ve made it this far, and haven’t read it already, I highly recommend reading my earlier essay on geography, which dives deeper into the concepts underlying this practical exploration.
Essentially, since draft animals eat large amounts of food, available cargo space diminishes rapidly as the transport distance increases, as more and more of the total is taken up by food the animals will need to eat later in the trip. A day’s trip, and you can feed them up before you set off, with perhaps only some small supplement required. A longer trip, and depending on factors like the quality of the roads, wagons, and how much grazing is available along the way, one sooner or later reaches the point where one’s entire cargo is purely food eaten on the journey. This dynamic made waterways the key transport network for early states until the advent of rail.