Chapter 2:

Intro. to Economic Geography

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Economic systems are an important
part of any culture
• Culture has geography or spatial pattern
• Every society (culture) must answer the basic
economic questions:
– What to produce
– How to produce it
– Who will get what is produced
• Cultural influences on the economic system
– World view of the culture
– Technological level of the culture
– Political structure of the culture 2
 Culture & Geography
• Non-cultural influences
– Relative location & accessibility
– Topography & Climate
– Resources available from the environment
• Factors of production in all economic systems
– Land – real estate and natural resources – raw materials
– Labor – mental and physical efforts applied to “land” and
“capital” to facilitate production
• Management or entrepreneurship – that segment of
labor which organizes land, capital, and the other
segment of labor to produce goods and services
– Capital – the tools and facilities needed for production 3
 It begins with physical place
• What does nature provide that is useful?
• = Mother nature (also called 1st order geography)
 Elements of physical place with economic
significance:
– Climate and flora and fauna
– Topography: landforms
– Soil
– Rivers (nature and flow) OR lack of rivers
– Mineral deposits
• World View & Culture may influence both what
and how (these) elements are used in the society
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It continues with relative location
• Peripheral or
central location?
• Accessibility?
Major world trade lanes

Mongolia – rather inaccessible

Western Europe -- centrality

Australia (not seen) – peripheral 5

Location Factors for Firms & more

• Many factors
influence
locational
decisions of
firms,
individuals/pop
ulation/labour,
governments,
etc.
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 Technology & the Economic
geography
• Technology will influence the range of possible uses of
economic elements across space (spatial distribution,
alter geography, etc.)
• “Nature, despite the limitations with which it hedges
human initiative and enterprise, is not only very
diverse but also remarkably malleable/flexible (with
technology).” W. Gordon East The Geography Behind
History
• In the interplay between humans and environmental
conditions, humans are the “choosers.” Therefore,
human choices (given culture) become extremely
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meaningful.
 Balanced Economic Approach
• Governments & firms often consider
only spatial elements that can be
quantified in dollars and discount other
factors (i.e., factors that are difficult to
quantify)
• The significance of the laws of ecology
must be factored in
– Some “costs” are difficult to quantify, but
must not be discounted because of that.
– Human & social costs are important
As in definition in ch 1 = see economic
geography very close to human geography 8
 Geography from Early Cradles of
Civilization: Economic Factors

• Productive soil to support agriculture

• Adequate access to water: rainfall and/or rivers
• Transportation – domesticated animals & rivers
• Reasonable temperature range for human activity
• Plants and animals that could be domesticated or already
had been domesticated
• Some metal ores that could be refined to make tools and/or
weapons
• Location where ideas could mix, spaces for ideas
• Some degree of natural defensibility (rivers, mountains,
etc) 9
 Cultural developments with economic
implications had geographical patterns
• Control of fire • Age of Reason
• Stone tools • Scientific Revolution
• Domestication of plants • Agricultural Revolution
and animals • Democratic Revolution
• Metal tools • Industrial Revolution
• Boats • Internal combustion
• Agriculture engine
• Urbanization • Communication
• Rise of the nation-state Revolution
• Renaissance • Microelectronics and the
computer age 10
The above list are good part for Assignment 1
variables selection

Classification Continuum,
= have geographical patterns

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 Classification

• Market Economy [capitalism; free-enterprise]

– Private ownership of capital & “land”
– Minimal government ownership or regulation
[laissez-faire capitalism – the impossible extreme
of not government involvement in the economy]
– Profit-motive is the driving force – the engine that
drives the economy – encourages risk-taking.
– Competition results in efficiency and the lowest
possible consumer prices
– Price regulating mechanism is supply and 12
demand
In theory, an ideal, market is automatic
regulating mechanism 13
Stock Market – supply & demand
vs Live Stock

Many Americans have much of their financial future tied up in

the stock market – insurance policies, 401K plans, pension
funds, mutual funds, etc. In other geographies, cattle are the
insurances
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• Command economy disappearing?
– Capital and land can’t be privately owned
– Production & pricing planned by agency of govt.
• Influenced by political/social agenda of the government
– General absence of competition
– Consumer interests may have a low priority
– Efforts to have a total command economy have
never succeeded: Soviet Union, earlier China, etc.
• Tend to be inefficient, producing poor-quality goods
• Needed elements of “capitalism” to be sort of
successful
• Really were “socialist” – much government control.
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Destitute couple in Russia

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Homeless in
Russia

• Source of political
instability – this
condition didn’t exist
under communism.
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Russian disinfection center:
geography still leads to differences
within

Homeless man cleans up

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Economic Variations in Russia 19
 Decline in Traditional Economy &
geographical barriers
• Non-industrial
• Basic economic questions answered by doing what
is “customary”
• Generally opposed to risk-taking behaviors
• Private ownership of capital
• Land may be privately owned, but often is
considered the property of the group – the tribe.
• No country today has this economy,(decline of
geographical & cultural barriers contributed),
but there may be areas within developing countries
where this is the type of economic system 20
 Mixed economy – what all countries
really have.
• Mostly combination of market & command
economies
• U.S. – Mixed Market Economy – leans toward the
market system, but there is government involvement
in the economy
• China – Mixed [socialist economy] – overall planning
by the government, but some “privatization” has
been allowed – joint ventures with capitalist firms
from outside China – SEZ’s & unique status of Hong
Kong
• Brazil – Mixed Market Economy with pockets of 21
traditional economy in the interior
 Sizes of Economies

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• Location/geography has different
influences on these categories
(1) Primary activities – location greatly matters, i.e.,
practices better and succeed better depending on the
location
(e.g., cheap or skilled labor location, abundant fertile land
area, good weather/climate, river for irrigation, etc. have
positive influence)
(2) Secondary activities – location greatly matters,
practices and succeed depend on the location factors (e.g.,
cheap or skilled labor location, power supply, road to
market, large market/customers base, etc. have positive
influence)
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(3) Tertiary activities – location greatly
matters, but not as much as the
above two.

(4) Quaternary activities – (Info services, R&D,

management, etc.) location hardly matters, most
things done from office.

(5) Quinary activities – (executive and decision-

making works, e.g., HQ, government, etc.) location
hardly matters, most things done from office.

More on these and development in Chapter 3

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