Economic GeographyLocation of agricultural activities in a market economy: von ThunenEconomic Geography Goals: -to understand how people earn their living -that livelihood systems vary spatially -how economic activities are interrelated and linked the how and why of variations in the spatial patterns of economic activity I. Economic Systems patterns of production and consumption and the location of economic activities within each system • subsistance economic systems • commercial/market economic systems • planned/command economic systems Distribution? most countries show combinations of each system * dual economies -- rural versus urban Technology Systems affect geography of economic development and systems II. Characteristics of Each System 1. Subsistance agricultural, rural, technologically underdeveloped regions; intensive ag vs. extensive ag (pastoralism); one crop plantation economies--specialization based on colonial relationships2. Market complex, advanced economies, hierarchically & spatially linked in patterns of consumption, production, exchange of goods & services -profit -specialization even in ag. -interdependence Economic location decisions based on… · accessibility to material inputs (raw materials) · labor with particular skills · processing costs (land, taxes, energy) · relative pull of market · transfer costs at other locations (transportation) · local government policies weight gaining versus weight losing (weight, bulk, perishability, fragility) Goal: Maximize profit -comparative advantage (skill labor, environment, resources) -specialization and complementarity -trade -->networks -->interdependence (agglomeration effects--cluster advantages) -intervening opportunity? -distance decay and accessibility? Location of agricultural activities in a market economy: von Thunen Agriculture in the Global Economic System revolutionary phases subsistance-->market oriented Four Kinds of Economic Activities primary, e.g.,secondary, e.g., tertiary, e.g., quaternary, e.g., location of activities in each sector? Four Kinds of Economic Activities Primary, Secondary, Tertiary, Quaternary Economic Activities Economic activities can be categorized into four types. Primary economic activities are those that use natural resources directly. Secondary economic activities use raw materials to produce or manufacture something new and more valuable. Examples of secondary economic activities include manufacturing steel, processing wheat into flour, milling lumber into plywood, iron smelting, chemical industries, power production, and construction. Tertiary economic activities are those activities which provide services, personal and professional services such as doctors, teachers, dry cleaners, and secretaries as well as retail and wholesale services such as store clerks, truck drivers, and fast-food providers. In modern economies some individuals process, administer, and disseminate information. Such activities are termed quaternary which is used to describe "white collar" professionals working in education, government, management, information processing, and research. Location of Economic Activities Geographers are concerned with the spatial organization and location of economic, transportation, and communication systems which produce and exchange thegreat variety of commodities (raw materials, manufacturedgoods, capital, and services) which constitute the world economy. Primary economic activities are located at the site of the natural resource being exploited, for example, iron mining at the site of the iron deposit. Secondary economic activities locate either at the site of the resource or close to the market for the manufactured/processed good depending upon whether which affect the location of economic activities (labor costs, energy costs,availability of capital, land, resources, and expertise). In the case of lumbering, the finished product is cheaper to ship than the raw materials so lumber mills are located close to forests to minimize costs (and maximize profit). In the case of flour and bread, it is cheaper (and easier) to ship wheat than the finished product,bread. Consequently, bakeries are located close to consumers in cities, again, to minimize costs. Tertiary economic activities locate where services are required, that is,where people are. Quaternary economic activities are not tied to resources, the environment, or access to a market. With improvements in telecommunications, these economic activities can be located anywhere. Factors which do tend to affect the location of "high-tech" economic activities include access to universities and research centers and to a pool of highly trained and skilled workers, availability of venture capital, proximity to places with high quality of life attributes (scenery, recreation, climate, quality education system) and access to excellent transportation and communication networks. Patterns of Economic Development Read the textbook, pages 269 on, to understand differencesin economic development. Development can be defined as the extent to which the resources of an area have been brought into full, productive use. Carefully look at the patterns of economic development shown on the world map. Note that most less developed nations are located in the "southern" part of the world and that most developed nations are in the "northern" half of the world. People talk about this in terms of the North/South split . Other people (the authors of the text) see this in terms of core/periphery relations. This pattern may be explained by a number of different factors including -resource poverty -overpopulation -former colonial status -location in relation to the core vs the periphery but there is no single reason to explain the level of economicdevelopment in most countries. 3. Planned Economies central planning to achieve government-determined objectives; gov't agencies control supply/price; decide whereto locate industries and crops to grow on social (not profit) criteria III. Economic Development processes of change: a. changes in structure of region's economy b. changes in forms of ec. organization c. changes in availability/use of technologyEconomic development uneven core-periphery patterns resources uneven imperialism/colonialism result: world system