Actions

Economic geography: approaches and challenges

From Baripedia


The history of trade is part of a long history of globalization from the 15th century. We are not just going to talk about the market economy, a part of the economy is not regulated by the market. Economists and sometimes economic geography are obsessed with the market. In our daily lives, a huge part of production, consumption and economic exchange is regulated other than by the market. Much emphasis will be placed on the forms of regulation of the economy that are not those of the market economy, i.e. donation for donation and redistribution. The economy is embedded in social and cultural and often economic behaviours are explained by factors that are other than economic, the explanation may be outside the economy.

A certain number of theories will be tackled such as the theory of the opening up of economic circuits, the geography of comparative advantages and increasing returns, spatial inequalities in development or the environmental question. Economic geography is sometimes reduced to a description of the world, we will develop a cultural approach that is a current of economic geography for fifteen years.

What is economic geography?[edit | edit source]

Definition by disciplines[edit | edit source]

There are several ways to define economic geography. One way is to place economic geography at the crossroads of two disciplines with geography on one side and economics on the other. Nevertheless, there are canonical definitions:

  • Geography is a science that is interested in the organization of space to the special dimension of societies. It is a social science that deals with space and its organization.
  • Economics is a science that deals with the production, circulation and consumption of rare goods.

How can we cross economic geography, production and consumption of rare goods as well as the question of the organization of space?

Definition by object[edit | edit source]

Geography has an object, it is a geography of economics. There is economics, production, consumption, the exchange of rare goods, and we are going to make a geography of it by looking at the spatial dimension of economics, how the spatial dimension of the economy is organized, that is, where production takes place, where consumption takes place, through which the exchange of rare goods takes place. It means locating economics, production, consumption and trade.

When it comes to economic geography, there are very varied explanations:

  • orthodox economics ;
  • economic heterodox: neo-Marxism, school of conventions ;
  • non-economic: anthropology, economic sociology ;
  • cultural turning point in economic geography: paying attention to cultural elements.

Economic geography is a geography of the economic world.

Definition by approach[edit | edit source]

Economic geography would be geography through economics, that is, adopting economic reasoning, explaining geographical facts using economic reasoning. It is making an economic interpretation of geography by using economic theories to explain geographical facts. Will be borrowed from the economic model of homo oeconomicus and try to see what are the laws of its spatial behavior.

Homo oeconomicus behaves in terms of supply and demand, but also in space. This behaviour can be modelled and quantified so that its consequences can be studied by aggregating individual behaviours. In a homogeneous space populated by homo oeconomicus who all follow the laws of rationality, fully informed, selfish tending to maximize their profit, their spatial choices, where they live, produce, consume will follow certain laws and that these laws will emerge spatial structures. Economic geography, by studying homo oeconomicus, will see how the spatial behaviours of human beings result from large forms of spatial organizations. They are experiments of the mind, namely economic models, whose spatial components we try to see.

Three main questions will be asked:

  • question of location - spatial economy - Von Thünen, Weber, Christaller : can we model the location of agricultural, industrial and service activities? In theory, based on the rational and fully informed reasoning and behaviour of the homo oeconomicus, we can verify the models of Von Thünen, Weber and Christaller.
  • Theories of trade - international economy - Ricardo : economists think a lot about trade, but very often they do not emphasize the spatial dimension of these exchanges. These theories will question the meaning of the exchanges and the spatial structures that will result from these exchanges. With Ricardo, it will result in a specialization.
  • The new economic geography - Krugman: this theory is based on the relaxation of certain hypotheses about the homo oeconomicus model, particularly with regard to the hypothesis of pure and perfect competition and increasing returns.

This economic geography will borrow reasoning, reflection methods and models from economics to explain geographical phenomena such as cities. These two broad definitions, a definition by geography and a definition by economics coexist.

Definition by the history of science[edit | edit source]

Professor Staszak does not agree with the previous definition. The reasoning a posteriori tries to put order in the history of science and what it came to, however, the history of science does not result from projects conducted at their end. School definition companies, disciplinary trends, tend to put order where there is none. One can for example reflect on the difference between geography and sociology in logical terms by a method, or an epistemology. One has the impression of creating meaning, but this is often an illusion. Rather than trying to define economic geography by trying to define an object or a method, it is more relevant to focus on the fact that today there is a subfield of geography which is economic geography.

When was economic geography born?

The tradition of the census, from Colbert to colonial and vidalian geography: describe the distribution of wealth[edit | edit source]

The term "economic geography" was not used until the end of the 19th century, but this does not mean that it was not used. To give a date of birth to economic geography, it is possible to go back to Louis XIV and Colbert when for the first time, a State, the French State in this case, took care of the accounting of wealth. The question of accounting defines taxes and war. There was a time when States felt the need to count and locate their wealth leading to the production of accounts, statistics and maps. We are not trying to explain, but rather to describe. A geography is being developed that attempts to describe, map and account for wealth for productive purposes.

Descriptive geography is an invention of the state that grew in the 19th century with colonization. Geographers are asked to produce information on the wealth and potential of colonies in terms of raw materials, but also demography. A colonial geography produces information about the colonies in the idea of exploitation. This geography still exists today with the aim of identifying wealth, its spatial distribution, factors of production for better development, better production, but also enrichment. It is a geography that produces many atlases, tables and statistics.

The new geography and its borrowing from the space economy: explaining the organization of space[edit | edit source]

The second current is more recent emerging in the 1960s with the idea that the economic space can be explained. There are laws to look for like laws that explain the market, the prices or the exchange. Geographers using these laws could perhaps explain phenomena such as the organization of space. Until the 1960s, geography was very descriptive. In the 1960s, the descriptive approach was decried as unscientific. There would be common structures because there are laws on the spatial behaviour of human beings. The purpose of economic geography is to identify those universal structures of space that are related to economic behaviour. This geography is no longer descriptive, but is only intended to find laws.

Marxist Criticism and Third Worldism: Accounting for Inequalities and "Development[edit | edit source]

In the 1970s, a protest movement was set up against this objective geography. Marxist-inspired geographers will say that economic geography must be used for liberation, development and justice. We must see how the organization of the economic space is linked to class struggle, oppressive structures and explanations provided by Marxism. A contesting geography will emerge that will show how capitalist oppression passes through spatial structures and an explanation that passes through dialectical materialism.

Postmodernism and the cultural shift[edit | edit source]

In the 1990s, postmodernism refuted Marxist, Third World and more rationalist critiques such as the theory of homo oeconomicus. For postmodernists, there would be an illusion in wanting to explain everything by a single theory. Postmodernist theory challenges great narratives. It is the idea that there was knowledge produced in the West that claimed to have universal validity. The world is in fact fragmented and fragmented between societies that are characterized by their own and incommensurable discourses. To explain how ancient Greece works, one cannot use Marxist theory. Postmodernists insist on the contextualisation of knowledge. The postmodernist shift is linked to the cultural shift since it leads to refer to the specificity of each of these situations and the impossibility of reducing each situation to a single model. All four traditions are still alive.

The challenges of economic geography[edit | edit source]

Scientific stakes[edit | edit source]

Human beings and societies are not put in a prior space. Space is something we make and produce. Space is not a container because space is always already social, it is a social production. We live in a space full of meaning and meaning, heterogeneous, polarized and structured. These characteristics are those of the companies that produced it. Professor Staszak refuses the idea that space would be something in which the economy would take place since it is the economy that produces space. This type of stance has led to a reassessment of the importance of space in the social sciences. Space is not a neutral container in which events would take place, but it is part of the nature of societies and their activity.

There is the idea that space as such is:

  • an economic stake: it is something that can be sold such as, for example, real estate, transport or tourism ;
  • an economic product: infrastructure, land speculation, zoning of activities. The economy is a great tool to produce space;
  • a determinant of the economy: choice of specialisations, situation rents, transport costs.

Social issues[edit | edit source]

The topicality of economic geography and its renewal has also responded to a demand from society and urgent questions that arise. At least four issues have gained critical importance since the 1990s:

  • globalisation: the societal debate questions globalisation as a creator or destroyer of jobs, a generator of wealth, the impacts of the opening up of markets, etc. These are political issues which determine the choice of societies and which concern the impact of globalisation to be measured qualitatively and quantitatively. Economic geography is attentive to the variety of phenomena in space, on the other hand, globalization is a geographical phenomenon of change of scale, opening of space, reduction of obstacles and opacity of space. If economics has answers to give on the theoretical level in the framework of a realistic epistemology where we are less concerned with the world as it should be than as it is, geographers have been well placed to respond to what makes globalization specific and its consequences especially spatial. There has been enormous concern and even greater concern following the 2008 financial crisis.
  • Inequalities in development: this was a very important issue on the political and social agenda in the 1970s. At the time we were talking about third world countries. In the 1950s and 1960s, it was realized that decolonization did not result in an economic take-off of the former colonies. There were theories like Rostow's that foresaw the different predictable phases that would take place step by step to acquire development, industry and growth, but this did not happen. For a long time, the reading that prevailed was Marxist reading with forms of neo-colonialism that continued to exploit the countries of the South and that would explain their underdevelopment. These explanations lost their appeal with the collapse of the Soviet bloc and the progressive abandonment of the Marxist paradigm. This continues to be an important issue, because very threatening. Once we understand the reasons for inequalities in development, we give ourselves levers to understand where the inequalities in development are in poor and rich countries. To the question of whether globalisation is a positive or a negative phenomenon, there is no answer. On inequalities in development, there is no answer either, there is no general agreement. In the 1970s, there were still many debates, whereas today we accepted the idea that this existed and that there would no longer be any need to produce an explanation. It is not self-evident that such major inequalities in development are taking place between countries.
  • the spatial logics of production: in the Fordist era with mass production, mass consumption, standardized products, spatial logics are quite simple to grasp, particularly with Weber's model that helps understand how a factory will locate itself to limit transport costs. These spatial logics of production have changed with the post-Fordist modes of production that were set up in the 1980s when logistical, stock and just-in-time flow issues became more and more important. There was a new way of managing production that was introduced at the time of a wave of globalization with the question of the location of the plant. A kind of freedom of location was acquired that did not exist before. Until the 1950s, there was relatively little question of location because there were few choices; the factories could not move. Then it becomes a question, companies will ask themselves about localization. The logistics and production map dimension has become essential, resulting in relocations with major impacts.
  • environment, risks, resources and sustainable development: in the 1970s, with the Club of Rome, concerns arose that percolated into people's minds. The issue of natural resources, natural risks, population and the environment has acquired a new topicality with the theme of sustainable development. This is not only a problem of resource allocation in time, but also in space. From the 1990s onwards, there was a feeling that economic geography had lost its prestige in some societal debates.

Economic geography in full expansion[edit | edit source]

The economic sphere has expanded. As much as the geography of the economy is about the economy, over the past twenty years its field of application has expanded significantly. There were areas that were not economic, and they got into it. These logics are those of the success of the market economy and its extension. Sectors that were not market economies such as education, culture or health have become economic issues. The reasons for trying to bring the market economy into sectors that were not there are reflected in a better allocation of resources. The 1980s were the years when the state abandoned sectors of the economy it had in charge of the private sector. As the field of economics has expanded, the field of economic geography has also expanded.

For a long time it was believed that space was losing importance as transport costs and increasingly efficient telecommunications modes decreased. Never has it been so easy to transform tangible and intangible goods as it is today. Thanks to the First, Second and Third Transport Revolutions, we have the impression that the human being has freed himself from the problem of distance. This would therefore have meant the end of geography and economic geography, because space would no longer count and the question of the organization of space would no longer arise.

One communicates as easily with one's neighbour as with a colleague who lives on the other side of the world is a false assumption. Communication modes are different and adaptive. Far from making spatial logic disappear, the Internet makes it appear. The idea that the transport of information is easier today than in the past can be argued, but there has been such an increase in the quantity of information transported and in the complexity of the information transported that today it is a greater problem than in the past. The improvement in information transport conditions does not compensate for the colossal increase in our needs for information and complex information.

In the 1970s, universities were thought to be over. There was the idea that in the future we would be able to take courses at a distance. Material co-presence is a huge cost. The complexity of information is not just a speech. Information does not only come through words, but through other aspects. The inability to easily transport complex information explains some of the more traditional modes of communication that require moving through space. Offshoring requires control.

Economic geography in full revival[edit | edit source]

Economic geography has experienced a boom linked to these new challenges and these new demands, but this is also linked to epistemological and theoretical changes that are those of a cultural turning point in economic geography that was taken in the 1990s. For a long time, the world of economics was considered as an autonomous world which had its own logics as logics of rationality with Christaller's model for example which reduced space to a few explanations. This consensus crumbled in the 1980s and emerged from cultural approaches in the 1990s.

The irruption of culture in the economy is linked to the fact that fewer and fewer material goods are being sold and more and more symbolic goods are being sold. In other words, there are more and more symbols in the goods that are sold and the material goods. We make fewer and fewer objects and more and more ideas and that in the objects we make, the utilitarian component is less and less important than the symbolic component which is more and more important. Culture has undoubtedly become the first economic good of the rich countries. There is a phenomenon of tertiarization of industry, while industry is turning more and more to symbol manipulation. This does not necessarily mean that these cultural industries must be analyzed in a new way. When we speak of a cultural turning point, it is the economists themselves with three major trends:

  • a "built-in" economy (Polanyi[1943], Granovetter[1985] and the new economic sociology) (in the social, in space)  it is the idea of marking a break with the modes of thought of economists who considered the world of economics as a world apart that one could consider, model and theorize while making abstraction of the context in which it was found. It was economic empowerment. It was possible to understand the functioning of a society by cutting it off from its political functioning or from its spatial functioning, but also from its place in space. Polania and Granovetter have shown that the economy is very deeply embedded in the social and political, there is no need to distinguish the social, political and economic fabric. When we look at the real functioning of the economic and the social, the economy is deeply embedded in the economic and the social. Basically, we couldn't understand it because we were working on a fiction that was free from its social embedded character.
  • heterodox economists (post-autistic economics): there has been the development of heterodox economists who accept and have developed other ways of doing business. These heterodox economists have taken into account the social, the political with the school of conventions, institutional economics, the idea of the market as fiction in particular. This has led to the development of new economic currents taken into account by geographers who have tried to understand to what extent it can be theorized in the framework of understanding space.
  • variety of production and consumption cultures, forms of capitalism ("realistic" epistemology): to understand consumption and production patterns, we must look at reality in the space of the variety of behaviours.

There are essentially three main directions:

  • Space is fundamentally involved in economic processes (Los Angeles school, French school of proximity): the two schools started from the same question which is that whereas transport has never been so cheap, whereas goods are produced more and more material, the economy has never been so concentrated in space with the emergence of industrial districts. The paradigmatic example is the Silicon valley south of San Francisco where Sanford University is located. This district has become the world's hypercentre for production and research in the field, raising the question of why they have all put themselves in the same place. One of the answers is that this information is so sensitive and complex that we need to see each other. Industrial districts are places where a type of production will be concentrated with quite particular production structures. The term Specialized Production District (SPL) is also used. In spatial planning policies, we try to bring out industrial districts. It was this mystery that led to the school's proximity to Los Angeles and French to develop. It is a direction in research that is all the more important because it has a direct impact on development policies.
  • the non-economic components of the economy (modes of regulation, institutions, corporate cultures, consumer cultures, etc.): geographers began to work on objects that were considered as economic objects such as the shopping mall that cannot be understood if it is reduced to an economic object. The shopping mall has become a form of place of sociability.
  • the new geographical economy: Krugman proposes a new theory of international trade and inequality. Unlike the previous two, Krugman is in the liberal economy model. In the major assumptions of the liberal economy, he will drop the hypothesis of pure and perfect competition by emphasizing increasing returns that allows a better understanding of inequalities in development.

Examples[edit | edit source]

San Paolo[edit | edit source]

Geoeco exemple sao paolo plateforme 1.png

A platform has been installed on this building. San Paolo is a huge agglomeration. This building is located in a historical centre. The presence of an internet café probably attests that people do not have internet at home. The internet café shows the potential to be in contact with the whole world for almost no cost, but at the same time it is not.

With this urban landscape, there are like three economic spaces that cohabit:

  • the space of the street;
  • the space of globalization;
  • the space manifested by the office towers and the heliport.

There are incompatibilities between these three types of spaces. Things can't work at the same time. All these scales work at the same time.

The West Indies – Théodore de Bry[edit | edit source]

Geoeco exemple théodore de bry 1.jpg

This engraving of Theodore de Bry shows the arrival of Christopher Columbus in the West Indies. The engraving dates from 1590 about a hundred years after the arrival of Christopher Columbus imagining this encounter. The three caravels of Christopher Columbus appear, the men who land, the urgency is to place a cross since there is the question of evangelization, and then there is power, the army and the flag. The natives are naked because they are savages and it is hot, others flee. The natives give presents.

There is an economic exchange. There are two attitudes among savages with those who run away and those who offer gifts. There is an exchange of wealth that does not pass through the market. There is a unilateral exchange that raises the question of the logic of this exchange. Why is he offering Columbus? They make Christopher Columbus their debtor in exchange for life. The idea is that we try to coax potential attackers by offering them something. Christopher Columbus left to short-circuit the Silk Road and arrive directly in China from the west. The purpose of the trip was purely economic to feed the Hispanic coffers by diverting from the Silk Road. It is possible to make an analysis in terms of economic geography.

Introduction to regional geography – Paul Claval[edit | edit source]

Geoeco exemple ouvrage paul claval 1.jpg

Paul Claval was one of the important thinkers of economic geography. We have the impression that there are two very different types of organization of space. At the bottom of space, we feel a human presence and a very marked artificialisation. The very marked quadrige is not nature, it is an organization of space made by human societies. In the north we do not find this grid, moreover, it is not the same color. At the bottom they are cultivated fields and at the top they are forests.

One has the impression that two cultivated spaces are taken in photography giving the impression of two photos, all the more so as the boundary between the two, there are two rectilinear spaces. Nevertheless, it is only a photo that relates the same space where there is simply a very strong opposition between two different types of economic production.

One of the first explanations may be the climate. The transition from one climate to the other is gradual, there is no reason why it should correspond to such a limit. This image represents the border between the United States and Canada. The explanation is in the political system. We are in a place where there is normally no reason to produce grain because the cost of labour and the nature of the soil is such that it is not profitable. Canada has stopped producing wheat, unlike the United States, which continues to produce grain at a loss. Their interest would be to stop producing wheat and import it. The reason for such production is because it is subsidized. The state will pay the different price.

The reason is not related to a state of mind, soil nature or cold, to the north it is only forest because wheat is not subsidized. There are several reasons why a country cannot give up its agriculture because a country must be food self-sufficient, because wheat is a weapon, because rural areas are an issue from an identity point of view. There was a time when geography was the constraints of the natural environment. Geography is present in this line which opposes two different structured spaces. There are two different legal and political systems that take place in opposite ways in globalization. Because of its power, the United States is able to impose free trade without applying it itself, unlike Canada. The primary factor explaining this opposition is a strictly economic factor, which is the subsidies paid.

The market in Martinique[edit | edit source]

Geoeco exemple marché martinique 1.png

It's a tourist market. We are in an old market structure that is a metal structure with corrugated posts. It is a late 19th and early 20th century structure which was certainly originally a local market set up by the French administration. The spread of the market economy by the French administration resulted in the establishment of a market to centralize trade at one place with periodicity and control of weight and measures.

If we look at these products, we notice that the different stands present comparable products, but also organized in the same way. You can see that all these shops seem to sell exactly the same thing. Something does not seem rational which on the one hand is selling "made in china" in a Martinican market, on the other hand, the commercial structure of these businesses which all sell the same thing presented in the same way.

The reason why the arrangement is such is probably not because each of these economic actors is selfish, fully rational, informed and seeks to maximize its utility independently of its neighbours. Maybe these actresses are not rational, informed, maybe they seek something other than their utility, maybe they don't decide alone. We have to inject something that is not the homo oeconomicus model into this place of sale, which is the market.

A first explanation is that we are at an early stage of economic development where there are few models, there has not yet been a time for diversification where everyone sets up a different model. Another explanation is that the vendors are not competing to resolve the conflict between these two people. The sharing of the clientele does not depend on the merchants, the clientele will be distributed randomly by the choice of the clients. Competition is cancelled in order to avoid conflicts, but also to maintain prices at a certain level. A third type of explanation would be to say that these stores are owner-owned and the saleswomen are employed, the economic system is such that the saleswomen have no incentive to sell and they are not motivated to make a profit.

In terms of economic geography, two elements are interesting: the transition from one market to another and the explanation of the stands which are all exactly the same.

Annexes[edit | edit source]

References[edit | edit source]