Geography of the World Economy

2: Population

People are both producers and consumers of G&S. They are the key productive factor, yets
their welfare must be the primary objective of economic growth and analysis. As their
population grows, there is imbalance between producers and consumers. Does population
growth stop sustainable development.

Global population distribution

In prehistory, 95% of humans were gatherers, or hunters, and it was a period were births =
deaths, so no significant increase in population. Following the rise of agriculture, , the
capacity of the population to sustain itself grew somewhat, but no significant change in
population. The significant change in population came with the Industrial Revolution,
allowing for large urban, dense settlements with the rise of machinery and industry, hence
exponential population growth.

What affects pop. Distribution?

1) Physical Geography
2) Industry and work
3) Living standards

2010 = 6.9 billion people. Unevenly distributed:

1) East Asia
2) South Asia
3) Europe
4) East US and Canada
6 countries: China, India, Pakistan, Japan, Bangladesh, Indonesia, home to 59% of
population
Population density: Population often related to land area (Pop density = number of
people/square km). Bangladesh is world’s most crowded country, with 148 million in area
size of Iowa. Other densely populated countries as Netherlands and SK are developed.
Indeed, high population density is not always evidence of poverty or of a Low-Income
Country. One reason why Netherlands are South Korea have big population density and so
many live well in small area, is the good industry and economic growth of this country, and a
small size allows for good network. Indeed, another example is Egypt, with 96% living on
land close to the Nile, because of fertile land, linkage, and the economic activity of the area.
What influences population distribution?
1) Physical environment: River sources, sea, vegetation, climate, natural disasters.
However, physical environment itself is insufficient, especially today with technology
(A/C, Heater, protective barriers and technology to warn disasters)
2) Economic activity: Labour markets, Job opportunities, Infrastructure
3) Living standards and Social: Food, Healthcare, fertility, immigration
4) Political Activity: War, democracy, tax policies, bad economic system
5) HISTORICAL CONTEXT: Industrial Revolution in Europe and West ensured strong
population distribution and migration to Europe and USA / China population
reflecting strong agricultural and industrial policies from Imperial Era to Communist
rule today

Population Growth over time and space

Each year, additional 76 million inhabit earth, with 208,000 daily births, However,
whereas some countries’ population is exponentially growing, others have higher death
rates than birth rates (Japan, Russia, Eastern Europe).
Population Growth

Population growth
9

0
1850 1930 1960 1976 1987 1999 2011 2022

Population (billions) Column2 Column1

Rapid growth of population expressed under notion of doubling times – number of

years it takes population to double in size, given particular rate of growth in general
Rule of 70: divide annual rate of growth by 70 to find year of doubling.
Vast bulk of population growth is in the developing world
 Population change = Births – Deaths + In Migration – Out Migration
Natural Growth Rate = Birth Rate – Death Rate
Net migration Rate = In Migration – Out Migration
Hence Population Change is NGR + MGR
Fertility and Morality: Crude Birth Rate = no. of babies born per 1,000 people per year /
Crude Death Rate = no. of death per 1,000 people per year / both affected by
healthcare, living standards, migration levels, cultural values and economic/political
circumstances

Malthusian Theory
Wrote 1798 book ‘Essay on Principle of Population Growth’. Very concerned over
growth and industrialization.
1) Believed that like animals, people grew exponentially in population, and considered
fertility as a biological inevitability, not a social construction
2) Believed food supplies grew at a slower rate than population. There is an
exponential growth of population, yet a liner growth of agricultural output, and
wrote of diminishing marginal returns
Malthusianism considers rapid population increase as a Trojan horse of societal ills.
Such theory supports use of contraceptive methods (even though Malthusian was
against them on religious grounds), and factors that reduce total fertility rate.
Critics noted 3 major errors
1) He did not foresee impacts of Industrial Revolution on agriculture, mechanization of
food production, and the eventual outcome of food production growing
exponentially, and even surpassing population increase rate. This was also the case
in 1950s Mexico (2nd biggest population then) with the Green Revolution in
agriculture
2) He did not see the opening of further grasslands in the Americas and Australia, which
increased wheat production
3) Thirdly, his fertility analysis was flawed, in that total fertility rates dropped during
the Industrial Revolution, proving fertility as a social construct.
In the 1960s, neo-Malthusianism came into play because of a growth of average
population rates (2.6% annually), adding an ecologic twist to his theories, with the Club of
Rome concerned about the impact of growing population rates. They funded the study, ‘The
limits to Growth’ of 1972, concluding that the Post-War economic growth was a threat to
sustainability which could exhaust natural resources as oil and food, hence they supported
use of contraceptive methods and birth control. However, such theories were also criticised.
Is overpopulation the one to blame for society’s problems, or government policy?

Demographic Transition Theory

Developed during the 1960s as an alternative to Malthusianism. This approach studies
change of birth, death, and growth rates, in 4 historical stages.
1) First stage: Pre-Industrial Society
In a rural, pre-industrial society, birth and fertility rates are high, with large families. In
Rwanda for example, there are 8.5 children per mother, in contrast to industrialized
societies. They are high as every kid contributes economically to the household by helping
with farming and housework, with children offering more than they consume to the Earth or
their societies. Due to lack of social care programs, elderly also have to depend on their
offspring for assistance. Finally, with higher infant mortality rates, people have more kids to
ensure backup in case of death. In such societies, it must be taken in mind that life
expectancy is lower, and the median age can be as low as 18, indicating high mortality rates.
Because both fertility and mortality rates are high, natural population growth is relatively
low, often fluctuating around zero.
2) Second stage: Early Industrial Society
Occurs in early phases of industrialisation, with growth of manufacturing jobs in urban
areas. Like Pre-Industrial Societies, fertility rates are high, especially given that the majority
of people still live in rural areas. However, there is a supposed fall in mortality rates due to
increase in life expectancy, with the supposed arrival of better medical care and vaccines.
However, this is not entirely agreed, as in the case of Victorian England, hospitals were
filthy, vaccines came after occurrence of many deaths, and many diseases still existed at
large during this era. It is argued that it is public measures such as cleaner drinking water
and sewers, mechanized food production, and private healthcare providers which reduced
the death rate that existed in the previous stage. Furthermore, the falling death rates are
brought by falling infant mortality rates, as new-borns benefit most from increased
healthcare, and more babies survive to adulthood by this stage, adding to increase in birth
rate in exponential manner.
3) Third Stage: Late Industrial Society
Majority now lives in cities. Death rates remain low for mentioned reasons, and life
expectancy now getting high, but fertility rates also at lower level than before, and birth
rates. Smaller families in urban areas are now more common, as benefit/cost ratio of having
children declines, and more women entering labour market by then, with pregnancy
bringing the cost of interruption of their labour. There is clear link between labour market
and fertility behaviour, going in contrast with Malthusian’s belief of humans being slaves to
biological urges of childbearing. There is a lowering of both fertility rate, and mortality
rate.
 4) Fourth Stage: Post-Industrial Society
By now, everyone is relatively wealthy, in highly urbanized environments. Causes of deaths
not infection, but now more matter of lifestyle (smoking, heart issues, driving, suicide).Birth
rates also fall due to higher personal costs of having children, in some cases there is
negative population change, with death rate being higher. Governments now even support
and give incentive for growing birth rates. There is both falling fertility rate, and mortality
rate.
However, the exponential population growth that has been experienced has come from
developing countries, that are still in the first or second stage, bringing fear of resource
exhaustion, overfishing, deforestation, and income inequality, with labour forces of both
rich and poor countries competing with one another.

Criticisms of DT Theory:
1) Model derived from West and then applied to non-Western countries

Malthusianism: DT Theory
People are slaves of biological need to Fertility is a social construct affected by
reproduce uncontrollably economic and social factors
Population grows uncontrollably Population growth is affected by external
events, and can both rise and fall according
to them
2) Demographic changes in developing world have been more rapid than the West, as
one/two generations brought as much change worth centuries in the West

Baby Boom Growth

1960s Baby boom growth. 1946-1964 brought largest generation in history, 90 million
strong and 40% of Americans today. It was a period of economic boom, social growth, and
population growth. Many entered college by 1970, and women started entering the
workforce too, increasing labour supply, yet also large investment in capital stock and
infrastructure. This generation in total also made less children than the previous one. Their
expenditure helped boom the housing market in the 90s and 2000s, bringing new markets,
new services, and new technologies. As they are now retiring, there will be a gap in their
employment, and a cost on Social Security. There will be a declining ration of working and
non-working adults.
 Migration
Movement involving change of permanent residence to another place
Causes: Both Push and Pull (Check www.migrationdataportal.org)
Push: Unemployment, low wages, poverty, famine, war
Pull: Job and educational opportunities, high wages,
Can be both voluntary and involuntary
Economic of Migration: Basically, think of Labour Demand and Labour Supply graphs
Example: Italian migration, where 30 million emigrants left between 1861 to 1895, with over
14 million of them leaving in the decades following the unification of Italy, during the ‘great
emigration (1876-1915)’
Asylum-seeker = person who left his country and is seeking protection from persecution and
serious human rights violations in another country, but not legally recognized yet as a
refugee and is waiting to receive a decision on asylum claim. Seeking asylum is a human
right, which everyone is entitled to.
In the Mediterranean, people are dying by being abandoned at sea, with the authorities not
responding to emergency calls to help them.
Internally displace people (IDPs) = unlike refugees, they have not crossed a border to find
safety, and are on the run at their own home. They still remain under the protection of their
government, even if government might be the reason of their displacement, and they often
move to areas where it is difficult for us to deliver humanitarian assistance and as a result,
these people are among the most vulnerable in the world.

Cities and urban Economies

Cities lie at heart of economic geography for millennia, playing economic, political and social
role, the engines of capitalist growth and centres of innovation and information.
Rise of the modern city
Cities grew since the sixteenth century onwards, along with the emerging capitalist
economy, fuelled by rising productivity and population growth, with an emerging merchant
class because of increase in commerce and trade and along with it the working class.
Indeed, the rise in commerce, trade networks, and technology, destroyed feudal barriers to
growth, and many firms and industries gathered in a single area proved useful for
communication and low transport costs. The subsequent Industrial Revolution industrialized
agriculture, and lead to strong migration from rural to urban areas, bringing rapid growth of
urban areas as London, Birmingham, and Glasgow.
The rise of urban areas in Europe was accompanied by colonialism, with colonized lands also
experiencing industrialization and urbanization, with rise of port cities in Lima and Indonesia
for example, and growth of trading centres such as Hong Kong and Singapore, creating a
global maritime-based economy. At a greater extent, with increasing migration towards the
West and the USA, the Manufacturing Belt came into being, with cities like Chicago and St
Louis consolidating agricultural trade and railway systems, fuelling achievement based on
industry and technology, yet also bad labour conditions.
Today, global corporations dominate cities, land area, and skylines, fuelling new markets,
pouring resources on urban renewal projects, and commodifying larger spheres of social
life.

Urban Economic Base Analysis

Economic Base Analysis offers means of understanding how cities are integrated with
another, and an understanding of function of urban economies. Indeed, as part of capital
division of labour, cities are integrated with wider economic environment, and linkages
among cities are basically linkages among firms, creating geographies that in extension
affect their surroundings.
Indeed, one part of geography of capitalism is the tendency of cities to specialize in
production of some outputs to exclusion of others (comparative advantage). For example,
New York is in garment and finance, Detroit in cars, Akron in rubber, etc. Basically, economic
base (or export base) is what links city to markets in other regions and countries. Similarly,
apart from industrial and agricultural goods, services are also exported by a city, such as
New York and financial services, LA and film/entertainment services, Washington and govt.
services, or Pittsburgh and healthcare services.
Urban economy can be divided in 2 segments, basic sector(B), and nonbasic sector (NB).

Basic sector Nonbasic sector

 Export-oriented (agriculture,  Recycles corporate and personal incomes
manufacturing, or services) to meet firms’ and households’ demands
(retail trade, eating and drinking
establishments, real estate).
 Rely on local earnings and cater to local
demand.
Sometimes sector is not simple (New York both exports handle corporate mergers in
another rts goods and services, yet also has retail services, or legal services to help merger
in another city.

How to calculate sizes:

Total Employment (T) = B + NB
Multiplier (M) = T / B (Calculates to what extent basic sector drives total economy to impact
BS on urban area)
Change in total economy (ΔΤ) = mΔΒ (Calculates to what extent change in basic sector can
change total economy)
For example, a paper mill hiring 100 additional workers, with calculations, can create 250
jobs in community. When basic sector expands or contracts, initial changes reverberate
through local economy, in 3 constituent parts.
1) Direct effects (changes in total employment include changes in basic sector)
2) Indirect effects (changes in total employment include changes in firms that sells
goods and services to export base through subcontracts). For example, paper mill
will increase purchases of equipment, repair, and maintenance, or want legal
services, hence affecting others’ growth. Depends to what extent firm cooperates
with other local firms though
3) Induced effects (changes in employees’ wages affect their spending in local
economy)
Multiplier is double edged sword, as multipliers can be both upward and positive, and
downward and negative. For example. Seattle depended on Boeing with its steel
manufacturing, and when Boeing sneezed, Seattle caught cold.
Furthermore, the more a city grows, the more the basic sector falls, and the nonbasic
increases, because of diversification of a local economy, whereas small towns are
dependent or limited industries, or even limited firms in some cases.

The Urban Division of Labour

Within and among cities, there exists a division of labour, that is, social and spatial
patterns of production that link individuals, firms, and urban areas together into
complex network. Urban areas are advantageous as everything’s close and connected,
meaning low shipment/transport costs, hence higher profit. Indeed, it can be from
transfer of raw materials and parts to meetings of executives. This is agglomeration.
Areas which take full advantage of the agglomerated economies are the Central
Business Districts, which previously were formed by small manufacturing firms, and are
now skyscrapers, banks, firms concerned with information, services, and white-collar,
whereas manufacturing firms are now in more suburban areas, with lower rent and
more space for production. This is spatial Division of Labour.
There is an urban hierarchy, which ranges from small towns, which rely on primary
sector, to global cities, from by cities linked across the world.
Economic power of cities
Half of the world lives in them, generation more than 80% of global GDP today.
However, only 600 urban centres, with a fifth of the world’s population, generate 60% of
global GDP.
In the coming years, two types of cities will drive growth for the global economy
1) Major cities in emerging markets
2) Mid-sized cities that can flourish this century with high-tech and globalization.
Indeed, we can see in terms of emerging markets, the tremendous contribution to global
economic growth provided by China’s leading metropolitan areas, and there are still
cities in China where economic growth exceeds 10% annually.
Meanwhile, major emerging market metropolitan areas such as Sao Paolo, and Mexico
City, are developing into some of the most economically important cities, and African
cities have the highest population growth.

Urban Residential Space

What of the residents?
Resident Location Decision = where will a citizen live? Many factors in account :
Proximity to work / income / space / safety. Poorer households prefer to live close to
work as they might lack car, whereas middle class lives in urban periphery, favouring
space over proximity. Rich outbid the poor
Filtering Model of Housing = process which households pass from one owner to the
other. Principle that the more someone lives in a house, the more it depreciates in
value. Hence, lower households more likely to live at used/rented households
Housing Demand and Supply = think of the demand and supply graph

Patterns and Problems of the Sprawling Metropolis

The main pattern since WW2 is a move away from cities to the suburbs
Suburbanization = since 1890s, urban elite preferred to live outside from the filthy
cities, and the introduction of the streetcar helped this further. After WW2,
suburbanization boomed, due to demand for housing that accumulated during
depression, Baby Boom, and economic prosperity. Helped further by govt. policies, such
as the construction of the circumferential highway network of 1956, making most place
on expressway just as accessible as the inner city. Edge cities later came to play, with
huge regional shopping centres, and other commercial, industrial, recreational, and
cultural facilities.
Exurbs (boomtowns), also exist, which are the outmost edges of the metropolitan cities.
With the opening of new infrastructure and technology, more businesses, more
 businesses consider moving there, as cheaper land means larger properties and lower
prices. Also, by moving to such smaller towns, they can deal with less competition.
Problems of suburbanization
1) Inner City decline: minorities in particularly affected, as they stayed in inner city,
with de-industrialization, and many facilities or activity moving out. With declining
income and tax revenues, less adequate public services are provided there, along
with less political power for the residents there to have their concerns heard by
public offices.
2) As the distance between the house and the work area in the city grows, there is
longer commute, meaning more pollution
3) Farmland is eroded to build suburban communities
4) Building road and infrastructure in lower-density areas is costly
5) Gentrification: rebirth of activity in many downtown areas, with ’yuppies’ who had
big disposable income, along with families who move back in the inner city for
recreational activities, making city centres trendy and artsy, but bringing rise in rent
and living costs in the areas, affecting poorer long-time residents in such areas,
moving them out in favour of higher-income tenants
Case study = Milan
In the 1970s, the historic centre disappeared, with thousands of illegally built houses,
farmhouses, worker shacks, and luxurious residential districts.
There is a master plan in Milan, in force from the 50s, and an even older building regulation
from 1920, which has been waiting to be revised and updated since 1953 in light of the new
urban planning criteria. But the laws, IT IS KNOWN, ARE LONG TO BE DONE, AND ONCE
INTO OPERATION, THEY IMPOSE PROCEDURES, TERMS, LIMITATIONs appraisals, controls,
without and end. And while time is wasted on bureaucracy and talking, the city needs
initiatives and facts, with many people coming for work, and people being in a hurry to get
settled. In the meantime, let’s build up all these factories, these offices, these houses, and
we’ll talk about the rest later.