Suppose that the 300 million people who live in the United States were all bunched together at the population density of Brooklyn. And for those not familiar with it, Brooklyn is certainly not the most densely populated part of New York City (that would be Manhattan). Denver's Capital Hill neighborhood, for example, is more densely populated than Brooklyn. So, how much space would it take to fit the population of the United States in one place at Brooklyn's population density?
Answer: About the land area of New Hampshire "with extra room for parks (because Brooklyn could use more)."
Of course, not all activities necessary for the survival of the United States economy and civilization can function at that population density. A big chunk of the United States is farmland and the 2%-3% of the population in the farm economy would have to be spread out to tend those farms. Likewise, another 1%-2% or so of the population is engaged in harvesting lumber, fishing, and mining, which likewise have to be undertaken where the resources are located.
Even these intensely location dependent industries continue to grow less labor intensive. Less than half of all farms produce a very large share of all agricultural output in the United States. Shrinking wild fish resources mean that in the future there will be fewer fishermen. Recycling has muted the demand for newly mined metals. An increasingly paperless world needs less pulpwood than it used to require. Energy efficient technologies have reduced the amount of energy consumed in the course of making each $1,000 of GDP.
But, for the most part, location is a matter of choice. Historically, for example, car factories and other heavy industry in the United States was located in Rust Belt in cities like Detroit, Flint, Toledo, Cleveland, Buffalo and Pittsburg. But, there's nothing sacred about that today given the much reduced cost of transportation. A new automobile assembly plant was recently built in Mississippi, and the old guard of internal combustion engine automobile makers recently handed over an automobile assembly plant in California to a new guard company set on making electric cars. Some of the cars you see on the street were made in Japan (which is famous for its utter dearth of natural resources) and Germany, both of which are half a world away, even though a car is one of the heaviest goods (and hence most expensive to transport) that the average person owns other than a home. Vehicles are made in North American both in Mexico, just across the border from El Paso, Texas, and in Ontario, just across the border from Buffalo and Detroit. Manufacturing enterprises have immense freedom to locate pretty much anywhere they want, subject to very modest constraints.
Most of the economy, retail trade, hotels, branch commercial banking, gas stations, post offices, schools, hospitals, construction, government, and so on, needs to be located conveniently to the people who buy the goods and services they offer but aren't intrinsically connected to any particular place. There is very little that is done in Denver that couldn't be done just as functionally in Fort Collins or Colorado Springs had the path of history taken a slightly different step.
We also have quite a few industries where geography is absolutely critical, but it is critical because the industries operate in national or international marketplaces where proximity to industry colleagues is critical. New York is the center of the American investment banking industry because it started there and never left, and because there is considerably value in that industry in being able to have face to face meetings with other members of the investment banking community on short notice, not because the intrinsic geographic benefits of New York, like its status as a port city, have any continuing relevance to what the financial industry does there these days. The same is true for some of New York City's other major industries like television, publishing, and live theater. These industries are prominent simply because they thrive on large local markets and intra-industry interactions, and the New York City metropolitan area is one of the largest local markets in the country with the most established publishing houses and theater scenes. It is helpful to have key parts suppliers for a company near the company that makes the final product, particularly if the parts are physically large, the demand for them fluctuates unpredictably, and it may be necessary to make adjustments to return or modify parts that don't quite fit.
Indeed, industry inertia frequently trumps considerations of geography that would seem to be important. Lots of movies set in the United States are filmed in Prague or Toronto, for example. A majority of publicly held companies in the United States are incorporated in a suburb of Philadelphia called the state of Delaware that doesn't have any notable skyscrapers of its own (the pyramid of Giza built by the ancient Egyptians was 451 feet tall, while the tallest building in the state, the Chase Wilmington Building, is 330 feet tall), lacks an Ivy League college or a prestigious law school, is the only state in the United States without commercial air service, and closes its bars at 1 a.m. The state doesn't even have a single major league professional sports team of its own.
Even industries you might think of as highly location dependent, like tourism, aren't quite as bound to a particular place as you might think. Las Vegas could have been built anywhere within a moderate drive from a major population center. Disneyland and Disney World are likewise not to tightly tied to the world beyond their walls, a fact evidenced by the fact that new ones have sprung up across the world.
If a Nor'easter did to New York City what Hurricane Katrina did to New Orleans, with a similar amount of lead time to allow most people to evacuate, and the Mayor of New York City convinced everyone to move to Fargo at some critical moment, the city that never sleeps could be rebuilt in the Great Plains and continue on a more or less business as usual basis. Something is lost in translation at first, as we observe in cases where national capitals are relocated to completely planned cities like Canberra, Australia and Brasilia, Brazil. Washington D.C. was established on that kind of basis as well, but has aged enough into a character of its own that we tend to forget that fact.
The disconnect between economic activity and location is relatively new. In the 1920s, for example, close proximity to natural resources, consumers, water routes and rail lines was much more important for manufacturing firms. Until World War II, a much larger share of the population lived on farms.
Telecommunications have gotten cheap even more recently. I used to spend a large share of my monthly budget on long distance phone charges so that I could talk with the woman I would later marry when I was in law school, while she was half way across the country going to school somewhere else. These days, there is usually no extra charge for long distance calls relative to local ones. The postal service is coughing up red ink because information can be sent for a near zero marginal cost over the Internet and so people don't send letters nearly as often.
It isn't that location is irrelevant. But, today, what matters is "who lives there?" and "how nice of a place is it to live?" Not, "what is there?"
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