Webers View on Theory

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Webers View on Theory
Factual Materials
Pure Theory
Realistic Theory
2
The Four Stages of the Productive and
Distributive Process

• Securing the place of the location and the fixed
  capital for equipment
• Securing the materials and the power and fuel
  sources
• The manufacturing process itself
• The shipping of the goods

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Cost involved in each stage of the productive and
distributive process

• Profit, the interest rates of the fixed and
  operating capital of the different stages, and
  the power, the cost of labor, transportation
  costs, the general expenses and the cost of land.
• Which of these elements vary according to
  location and thus represent general regional
  factors of location?
• Labor costs and transportation costs
• Agglomerative or deglomerative factors

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Weberian Model Least Cost Approach

• Assumptions
• Uniform or isotropic plain in a single country
• One finished product at a time is considered
• The raw materials are fixed at certain locations
  (known) and the point of consumption is also
  fixed and known.
• Labor is fixed geographically but its
  availability is unlimited.
• Transportation costs are a direct function of
  weight of the item and the distance shipped.

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Factors Shaping Weberian Spatial Outcomes

• Transportation sets the general regional pattern
  of manufacturing
• Weight and Distance Material Index
• Then, consider spatial variations in the cost of
  labor
• Coefficient of Labor
• The final determinant is agglomeration economies

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Raw Material Classes

• Spatial Distribution of Availability
• Ubiquitous raw materials -- Air
• Localized raw materials -- Coal
• Weight Loss during Processing
• Pure raw materials water
• Gross raw materials Iron ores

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Transportations Costs

• The cost of collecting raw materials (RM)
• The cost of distributing the finished products
  (FP)
• The total transportation cost (TTC)
• TTC RM FP

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Case 1 Bottled and canned soft drink
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(No Transcript)
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Case 2 Copper Ore
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(No Transcript)
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Further Elaborations of Weberian Models

• Isotim a line of equal transport cost for any
  material or product
• Isodapane a line of equal total transport cost

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Cont

• Critical Isodapane isodapane which signifies the
  outer limit for alternative locations
  (alternative to the location with minimum
  aggregate transport costs) in a Weberian
  locational triangle or other polygon. Its
  specification is dependent on the savings (labor
  cost, scale- or agglomeration economies)
  associated with such an alternative beyond the
  critical isodapane, savings are not sufficient to
  compensate for the additional transport costs.

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Finding Critical Isodapane

• Total transportation cost is minimized at Point
  T, 4. As we move away from T, total
  transportation costs increase. At Point L, labor
  costs are 2 per unit less than at T. Then where
  do you want to locate your firm? Find a critical
  isodapane, too.

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Transportation Technologies and Critical
Isodapane t1
1
L
2
3
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Transportation Technologies and Critical
Isodapane t2
L
1
2
3
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Weber was Misunderstood!

• Contemporary spatial economists have focused on
  Webers technical approach, Locational
  Triangle.
• Why?
• The partial reading of Webers works by the first
  spatial economists who discovered him
• The development of Operational Research
• Spatial economists do not even bother to re-read
  Weber

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Post-Weberian Trends

• The Divisibility of the Industrial Process of
  Production and Distribution
• Locational Factors and Diversification
• Locational Factors and Division of Labor Between
  Industries

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Divisibility of the Industrial Process 1

• In the first five chapters, Weber assumes that
  the activity connected with the productive and
  distributive process of an industry is a uniform
  and indivisible thing which can only as a whole
  be drawn to and from the material deposits and
  the place of consumption by locational forces and
  which goes on entirely independent of the
  activities of other industries. (p.173)

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Divisibility of the Industrial Process 2

• This indivisibility of the productive process and
  its independence of the productive processes of
  other industries do not in fact exist (p. 173) ?
  As a result, such processes were very seldom all
  located in the same place.
• Productive Process as a heap of little balls
  which have been rolled together at one place by
  the locational factors but which may be
  redistributed by those factors

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Divisibility of the Industrial Process 3

• Once Weber rejects the hypothesis of the possible
  indivisibility of productive and distributive
  processes and the divisibility of the
  manufacturing process, the agglomeration of these
  processes, or parts of these processes, affects
  their costs (economies of agglomeration).

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The Diversification of a Plant

• Weber p.196
• We have proceeded thus far on the assumption that
  the various processes of industrial production
  are independent of each other without any
  relationship to one another. This is not the
  case. They in fact interact upon one another in
  various ways.
• Different processes may be gathered within a
  single plant, thus leading to a local linking of
  independent industrial processes initially
  located at some distance

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Division of Labor Between Industries 1

• Weber studies the emergence of auxiliary
  industries which are responsible for part of a
  divisible productive processes.
• Reasons and conditions for auxiliary industries
• Location of auxiliary industries

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Division of Labor Between Industries 2

• Reasons and Conditions for Auxiliary Industries
• The complete technical equipment which is
  necessary to carry out a process of production
  may in highly developed industries become so
  specialized that minutes parts of the process of
  production utilize specialized machines and that
  even quite large-scale plants are not able to
  make full use of such equipment. Such specialized
  machines must then, together with their own parts
  of the process of production, be taken out of the
  single large plant and must work for several of
  them, i.e., become the basis of independent
  auxiliary industries (128-129)

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Division of Labor Between Industries 3

• The Location of Auxiliary Industries 1
• Wrapping material manufacturinga logic of
  exchange the location of the main industry will
  be the same as that of the auxiliary industry, to
  the extent that such location will make it
  possible to minimize transportation costs
• Industry of Investment Goodsa logic of
  production location near the main industry
  becomes a precondition for the production and
  sale of equipment goods. These industries make up
  a technical whole composed of mutually dependent
  parts.

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Division of Labor Between Industries 4

• The Location of Auxiliary Industries 2
• The production and sales of auxiliary industry
  seem to depend on whether it is located near the
  customer companies or not. In such conditions,
  agglomeration is not only a way of reducing
  production and distribution costs owing to
  economies of agglomeration in particular, but it
  becomes a pre-condition for production.
• The geographical concentration of the main
  industry will make it possible to reach the
  technical minimal point of concentration which is
  required for the emergence of an auxiliary
  industry