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 activity
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
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
relationships
2. 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?

2. 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.,
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.
Quaternary. 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 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 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

3. 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 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" 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 economic development in most
countries.
3. Planned Economies
central planning to achieve government-determined objectives; gov't agencies control
supply/price; decide where to locate industries and crops to grow on social (not profit)
criteria
Economic Development
processes of change:
• changes in structure of region's economy
• changes in forms of ec. organization
• changes in availability/use of technology
Economic development uneven
• core-periphery patterns
• resources uneven
• imperialism/colonialism
• result: world system
Characteristics of “Slow World” Periphery | LDCs...VS Characteristics of Developed
Versus Less Developed Countries
Less Developed Developed
Per capita incomes are low, and capital is
scarce.
Per capita incomes are high and capital is
readily available.
Wealth is unevenly distributed within
individual countries, e.g., Colombia, 2.6%
of population owns 40% of the national
wealth.
Wealth is comparatively evenly distributed,
e.g., Canada, 10% of population owns 24%
of national wealth.
Primary industries dominate national
economies.
Manufacturing and service industries
dominate national economies.
High proportion of population engaged in
subsistance agriculture.
Farming is commercial, efficient, and
mechanized.

4. Populations are rural; but cities are
growing rapidly.
Populations urban, cities growing slowly.
Birth and death rates are high and life
expectancy is low. There tends to be a
high proportion of children.
Birth and death rates are low and life
expectancy is high. High proportion of
people over 60 years old.
Inadequate or unbalanced diets resulting
from a low consumption of protein; hunger
and malnutrition common.
Adequate supplies of food and balanced
diets; overeating sometimes a problem.
Diseases, especially infectious and
parasitic diseases, common. Health care
poor.
Low incidence of disease; good medical
services available.
Overcrowding, poor housing, few public
services, bad sanitation--poor social
conditions.
Social conditions generally good.
Poor educational facilities, high levels of
illiteracy--low levels of scientific and
technological development.
Education opportunities excellent, high
literacy, advanced science and technology.
Women may be held in an inferior position
in society.
Women are increasingly treated on equal
terms with men.
Geography of Global Economic Change
postindustrialism
changes in percent of pop. engaged in certain occupations
internationalization of finance
technology
growth of consumer markets
Developing A World System: Global Economic Interdependence
Change from from industrial to post-industrial. Change in scale: New International
Division of Labor (NIDL)
Consequences?
• many manufacturing and processesing jobs have moved from the US overseas to
cheaper 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 and
interdependence).
This has caused major geo-economic restructuring. End result has been a global world
economy.
• Most powerful economic entities in the world are transnational corporations
(TNC's), also known as multinational corporations. Exxon, Shell, Hitachi, GM,
Nestle's 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. Together they produce 70% of global foreign investment.
• This money flows into the developing world, especially into NICs--newly
industrialized countries like Taiwan, Singapore, and China. The investment
has 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 liberalization
and privatization, e.g., China. These countries are in the process of creating
market 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--financial
services and agriculture. What happens on the stock exchange in Tokyo affects the
economies of the US and Germany, and visa versa. Banking is a 24 hour, world-wide
operation. With an ATM card you can get money in almost any nation in the world
instantly. And think about where your food comes from--an integrated global agrifood
system.
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. Together they produce 70% of global foreign investment.
• This money flows into the developing world, especially into NICs--newly
industrialized countries like Taiwan, Singapore, and China. The investment
has 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 liberalization
and privatization, e.g., China. These countries are in the process of creating
market 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--financial
services and agriculture. What happens on the stock exchange in Tokyo affects the
economies of the US and Germany, and visa versa. Banking is a 24 hour, world-wide
operation. With an ATM card you can get money in almost any nation in the world
instantly. And think about where your food comes from--an integrated global agrifood
system.
The result of this global economic change is an uneven pattern of world development.
Be sure to put this information into a spatial context!