Urban historians sometimes puzzle over why one city grows and its competitors do not. One rivalry, between St. Louis, Missouri, and Chicago, Illinois, is particularly interesting.
In 1840, St. Louis was a thriving part of the “urban frontier,” with a population of 35,979. It managed a rich fur trade, was a major transfer point for goods coming upriver from New Orleans (the nation’s third-largest city at the time), and its two major rivers enabled it to send grain from Midwestern prairies down the Mississippi for shipment east. Indeed, as one historian noted,
“Perhaps no American city was born under such favorable auspices as St. Louis, Missouri. It was located at the confluence of navigable water courses which drained over a million square miles of the continent, and it was built by a number of big businessmen (“big” for that time, which was 1764) who knew precisely what they were doing.”[1]
In contrast, Chicago was a hamlet of 4,470 people.
When economist Harold Demsetz looked into the history of the fur trade in the Labrador Peninsula in 1967, he was not studying environmental protection. He was exploring the origins of property rights. Yet his findings contributed to a major rethinking of environmental issues. Here’s what he found.
Before 1700, Indians hunted beaver in forests around Quebec, using them for food and fur. Because the demand for beaver was limited, says Demsetz, “hunting could be practiced freely.”[1]
