Notes unit6

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Notes unit6

  1. 1. NOTES: UNIT 6: “ECONOMIC 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 activityEconomic Systemspatterns of production and consumption and the location of economic activities withineach system• subsistance economic systems• commercial/market economic systems• planned/command economic systemsDistribution?most countries show combinations of each system* dual economies -- rural versus urbanTechnology Systems affect geography of economic development and systemsCharacteristics of Each System1. Subsistanceagricultural, rural, technologically underdeveloped regions; intensive ag vs. extensiveag (pastoralism); one crop plantation economies--specialization based on colonialrelationships2. Marketcomplex, advanced economies, hierarchically & spatially linked in patterns ofconsumption, production, exchange of goods & services• profit• specialization even in ag.• interdependenceEconomic 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 policiesweight 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--clusteradvantages)• intervening opportunity?• distance decay and accessibility?
  2. 2. Location of agricultural activities in a market economy: von ThunenAgriculture in the Global Economic Systemrevolutionary phases: subsistance-->market orientedFour Kinds of Economic Activities: primary, e.g., secondary, e.g.,tertiary, e.g.,quaternary, e.g.,Primary economic activities are those that use natural resources directly.Secondary economic activities use raw materials to produce or manufacturesomething new and more valuable. Examples of secondary economic activities includemanufacturing steel, processing wheat into flour, milling lumber into plywood, ironsmelting, chemical industries, power production, and construction.Tertiary economic activities are those activities which provide services, personal andprofessional services such as doctors, teachers, dry cleaners, and secretaries as well asretail and wholesale services such as store clerks, truck drivers, and fast-foodproviders.Quaternary. In modern economies some individuals process, administer, anddisseminate information. Such activities are termed quaternary which is used todescribe "white collar" professionals working in education, government, management,information processing, and research.Location of Economic Activities? Geographers are concerned with the spatialorganization and location of economic, transportation, and communication systemswhich produce and exchange the great variety of commodities (raw materials,manufactured goods, capital, and services) which constitute the world economy.• Primary economic activities are located at the site of the natural resourcebeing exploited, for example, iron mining at the site of the iron deposit.• Secondary economic activities locate either at the site of the resource orclose to the market for the manufactured/processed good depending uponwhether which affect the location of economic activities (labor costs, energycosts,availability of capital, land, resources, and expertise). In the case oflumbering, the finished product is cheaper to ship than the raw materials solumber mills are located close to forests to minimize costs (and maximizeprofit). In the case of flour and bread, it is cheaper (and easier) to ship wheatthan the finished product,bread. Consequently, bakeries are located close toconsumers in cities, again, to minimize costs.• Tertiary economic activities locate where services are required, that is,wherepeople are.• Quaternary economic activities are not tied to resources, the environment, oraccess to a market. With improvements in telecommunications, these economicactivities can be located anywhere. Factors which do tend to affect thelocation of "high-tech" economic activities include access to universities andresearch centers and to a pool of highly trained and skilled workers, availabilityof venture capital, proximity to places with high quality of life attributes(scenery, recreation, climate, quality education system) and access toexcellent transportation and communication networks.Patterns of Economic Development
  3. 3. Development can be defined as the extent to which the resources of an area havebeen brought into full, productive use. Carefully look at the patterns of economicdevelopment shown on maps. Note that most less developed nations are located in the"southern" part of the world and that most developed nations are in the "northern" halfof 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 peripherybut there is no single reason to explain the level of economic development in mostcountries.3. Planned Economiescentral planning to achieve government-determined objectives; govt agencies controlsupply/price; decide where to locate industries and crops to grow on social (not profit)criteriaEconomic Developmentprocesses of change:• changes in structure of regions economy• changes in forms of ec. organization• changes in availability/use of technologyEconomic development uneven• core-periphery patterns• resources uneven• imperialism/colonialism• result: world systemCharacteristics of “Slow World” Periphery | LDCs...VS Characteristics of DevelopedVersus Less Developed CountriesLess Developed DevelopedPer capita incomes are low, and capital isscarce.Per capita incomes are high and capital isreadily available.Wealth is unevenly distributed withinindividual countries, e.g., Colombia, 2.6%of population owns 40% of the nationalwealth.Wealth is comparatively evenly distributed,e.g., Canada, 10% of population owns 24%of national wealth.Primary industries dominate nationaleconomies.Manufacturing and service industriesdominate national economies.High proportion of population engaged insubsistance agriculture.Farming is commercial, efficient, andmechanized.
  4. 4. Populations are rural; but cities aregrowing rapidly.Populations urban, cities growing slowly.Birth and death rates are high and lifeexpectancy is low. There tends to be ahigh proportion of children.Birth and death rates are low and lifeexpectancy is high. High proportion ofpeople over 60 years old.Inadequate or unbalanced diets resultingfrom a low consumption of protein; hungerand malnutrition common.Adequate supplies of food and balanceddiets; overeating sometimes a problem.Diseases, especially infectious andparasitic diseases, common. Health carepoor.Low incidence of disease; good medicalservices available.Overcrowding, poor housing, few publicservices, bad sanitation--poor socialconditions.Social conditions generally good.Poor educational facilities, high levels ofilliteracy--low levels of scientific andtechnological development.Education opportunities excellent, highliteracy, advanced science and technology.Women may be held in an inferior positionin society.Women are increasingly treated on equalterms with men.Geography of Global Economic Changepostindustrialismchanges in percent of pop. engaged in certain occupationsinternationalization of financetechnologygrowth of consumer marketsDeveloping A World System: Global Economic InterdependenceChange from from industrial to post-industrial. Change in scale: New InternationalDivision of Labor (NIDL)Consequences?• many manufacturing and processesing jobs have moved from the US overseas tocheaper wage regions.• more people in our nation are employed in service (tertiary and quaternary)jobs. linked economically with all regions of the world (think of profit,specialization, complementarity, trade, networks, intervening opportunity andinterdependence).This has caused major geo-economic restructuring. End result has been a global worldeconomy.• Most powerful economic entities in the world are transnational corporations(TNCs), also known as multinational corporations. Exxon, Shell, Hitachi, GM,Nestles and Nissan are all TNCs.• The TNCs are highly concentrated geographically in advanced economies, e.g.,Japan, US, Canada, and Western European nations like Germany and France.
  5. 5. Together they produce 70% of global foreign investment.• This money flows into the developing world, especially into NICs--newlyindustrialized countries like Taiwan, Singapore, and China. The investmenthas caused these nations to industrialize very rapidly.• At the same time, command economic systems have collapsed in many nations,e.g., Russia, Poland, and Hungary, while others have undergone liberalizationand privatization, e.g., China. These countries are in the process of creatingmarket economies.• New trade agreements and liberal trade policies e.g., European Union, NAFTA,GATT.The world economy is therefore becoming even more transnational.Two sectors of the economy have been especially affected by globalization--financialservices and agriculture. What happens on the stock exchange in Tokyo affects theeconomies of the US and Germany, and visa versa. Banking is a 24 hour, world-wideoperation. With an ATM card you can get money in almost any nation in the worldinstantly. And think about where your food comes from--an integrated global agrifoodsystem.The result of this global economic change is an uneven pattern of world development.Be sure to put this information into a spatial context!
  6. 6. Together they produce 70% of global foreign investment.• This money flows into the developing world, especially into NICs--newlyindustrialized countries like Taiwan, Singapore, and China. The investmenthas caused these nations to industrialize very rapidly.• At the same time, command economic systems have collapsed in many nations,e.g., Russia, Poland, and Hungary, while others have undergone liberalizationand privatization, e.g., China. These countries are in the process of creatingmarket economies.• New trade agreements and liberal trade policies e.g., European Union, NAFTA,GATT.The world economy is therefore becoming even more transnational.Two sectors of the economy have been especially affected by globalization--financialservices and agriculture. What happens on the stock exchange in Tokyo affects theeconomies of the US and Germany, and visa versa. Banking is a 24 hour, world-wideoperation. With an ATM card you can get money in almost any nation in the worldinstantly. And think about where your food comes from--an integrated global agrifoodsystem.The result of this global economic change is an uneven pattern of world development.Be sure to put this information into a spatial context!

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