Economics
 Economics comes from the Greek word Oikonomia. –
Oikos(means a household) + Nomos(means management). So, it
means household management.
 Aristotle described economics as a household management
that means the problems of food, shelter, clothing, education,
treatment etc. for family members and the process of solving
these problems by earning money.
 Adam Smith (1723 -1790), the founder of economics,
described it as a body of knowledge which relates to wealth.
 Accordingly to him if a nation has larger amount of wealth, it
can help in achieving its betterment. He defined economics as:
 “The study of nature and causes of generating of wealth of
a nation”.
 "Economics is the study of purposeful human activities
in pursuit of satisfying individual or collective wants"
(which would amount to a "descriptive" definition);
 or
"Economics is the study of principles governing the
allocation of scarce means among competing ends"
(which would be a more "analytical" definition).
 However, economics itself consists of many different
subfields and specializations (e.g. micro-economics
(study of individual behavior) and macro-economics
(study of aggregates, like total income or employment
of a region or country), economic development, labor
economics, urban economics etc.). Most of these
subfields have found their way into the discourse in
Economic Geography.
Geography:
The word geography comes from two Greek roots:
“geo”, which means earth and “graphos”, which means
description.
When we think of Geography, we often use the following
words or concepts: location, site, place, access, spatial,
regional, distance, separation, proximity, speed,
mobility, transportation, resources, communication,
agglomeration etc.
A quick and simple definition of Geography thus may
be: "the study of the way in which society organizes
itself in space".
Geography is that field of study which primarily
concerned with variation from place to place
rather from time to time and let us to understand
the relationship among places along with
integrated theme.
Therefore geography is the study of spatial variations
on the earth surface. Here earth surface refers to
milieu (social environment) in which human life
exists, ie.
 the lower portion of the atmosphere which people
breathe; the outer part of the lithosphere, upon
which people walk and from which minerals are
extracted and hydrosphere where people fish and
sail.
 Finally geography is the discipline that analyzes
and explain variations in activities over space. So
its better name is spatial science.
Economic Geography:
 Our attempt to combine the definitions of Economics and
Geography may become a little messy, but let us try:
 "In Economic Geography, we study the (locational,
organizational and behavioral) principles and processes
associated with the spatial allocation of scarce (human,
man-made and natural) resources (which are also
distributed spatially) and the spatial patterns and (direct
and indirect, social, environmental and economic)
consequences resulting from such allocations.
 Let's try a shorter version: "Economic geographers study
the principles governing the spatial allocation of resources
and the resulting consequences.
Economic geography is the study of spatial variation
on the earth surface of activities related producing,
exchanging and consuming goods and services.
It provides/gives a conceptual understanding of the
changing fortunes of the world economy.
 Economic geography is a branch of geography that
deals with the relations of physical and economic
conditions to the production and distribution of
commodities.
 Economic geography is the branch of geography
that deals with the relation of economic conditions
to physical geography and natural resources.
Scope/Subject Matter of Economic
Geography
 Most of the geographers have defined the scope and
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method of economic geography in terms of three basic
questions, as under:
(i) Where is the economic activity located?
(ii) What are the characteristics of the economic activity?
(iii) To what other phenomena are the economic activity
related?
To these three later studies have added two more:
(iv) Why is the economic activity located where it is?
(v) Would it not be better located elsewhere, to better
satisfy certain economic and social criteria?
 And more recently an answer has been given that these
are the result of economic behaviour. This changing
nature and change in emphasis on content of study
shows that economic geography has proved the
importance in various periods of its growth. Therefore,
it is necessary to discuss the nature and scope of
economic geography both from traditional to modern
point of view.
 As early as in 1882, the German scholar, Gotz had
defined economic geography as “a scientific
investigation of the nature of world areas in their
direct influence of goods”. Although, Gotz initiated the
concept of economic geography but his influence was
limited to Germany only.
 The abstract principles of that time could not be
related to economic geography because they were not
in their developed form. Economic geography owes its
growth as an academic discipline to the interest of the
British people in commerce. It is interesting to note
that George Chisholm, the father of modern economic
geography, had wanted an intellectual interest to the
study of geographical facts relating to commerce.
 He thought that the primary use of economic
geography is “to form some reasonable estimate of the
future course of commercial development so far as that
is governed by geographical conditions”.
 In his treatment of the subject, however, Chisholm
emphasised commercial development, and considered
the physical features and climate in relation to
products mainly.
 This emphasis on physical features and climate in
relation to products led others subsequently to think
of economic geography in terms of productive
occupations.
 Jones and Darkenwald (1950) state that, “Economic
geography deals with productive occupations and
attempts to explain why certain regions are
outstanding in the production and exportation of
various articles and why others are significant in the
importation and utilisation of the things.”
 On the other hand, Ellsworth Huntington (1940),
however, considers that all sorts of materials,
resources, activities, customs, capabilities and types of
ability that play a part in the work getting a living are
the subject matter of economic geography.
 Bengston and Van-Royen (1957), in his book
Fundamentals of Economic Geography, have stated
that:
 Economic geography investigates the diversity in basic
resources of the different parts of the world. It tries to
evaluate the effects that differences of physical
environment have upon the utilisation of these
resources.
 It studies differences in economic development in
different regions or countries of the world.
 It studies transportation, trade routes and trade
resulting from this different development and as
affected by the environment.
Approaches to the Study of
Economic Geography
 The approaches to study economic geography can
be divided into three categories:
 1. Traditional Approaches
 2. Philosophic Approaches
 3. Modern Approaches
1. Traditional Approaches:
 These are the approaches which are common in
geography and frequently used in economic
geography. These are:
 (i) Regional Approach,
 (ii) Commodity or Topical Approach, and
 (iii) Principles Approach.
(i) Regional Approach:
 The term ‘region’ is very popular in geographical literature
and refers to a suitable areal unit, e.g., a climatic region, a
natural region, an industrial region, an agricultural region,
an administrative or political region and so on. A region is
having common geo-economic characteristics, a resource
base, economic development and to some extent
similarities in culture and demographic structure.
 Therefore, several geographers have chosen this region
approach in economic geography. An advantage of the
regional approach is that it gives a better knowledge of
different parts of a unit, their relationship to each other
and to the unit as a whole.
ii) Commodity or Topical
Approach:
 This approach provides a systematic description and
interpretation of the world distribution pattern of a
commodity (wheat), or an industry (cotton textile
industry), or a human occupation (fishing). It analyses
the whole sequence of their development, and catches
them on their march to progression or retrogression.
 This topical or commodity approach is very popular.
The systematic economic geography, if we choose this
appellation, is the legitimate child of this very
conception.
(iii) Principles Approach:
 In every sphere of human activity certain fundamental
truths or principles hold good: indeed, they provide the
rock-foundations upon which the varied and varying
superstructures rest. The concepts of Economic Geography
are through and through permeated with the same spirit
whether we talk of Regional Economic Geography or
Systematic Economic Geography.
 Economic regions are based on certain fundamental
principles; and similar is the case with the extraction of
minerals (coals, iron ore or diamond), or the localisation of
industries (metal fabricating or textile industries), or the
exchange of commodities.
2. Philosophic Approaches:
 The 1990s research in economic geography may be
characterised by three
approaches. These are:
 (i) Positivism,
 (ii) Structuralism, and
 (iii) Humanism.
major
philosophic
(i) Positivism:
 It employs the scientific method to interpret and
understand issues in economic geography. The
scientific approach is based on empirically verifiable
and commonly agreed upon evidence through
replication of analytical results.
 It involves informed hypothesis testing leading to
empirical generalisations and law-like statements. GIS
(Group Information System) is central to analytical
and positivist approaches to geography in general and
with especially numerous applications in economic
geography.
(ii) Structuralism:
 In economic geography, structuralism, posits that what
we see in the world does not reveal the causes of what
we see.
 The structure of the economy cannot be directly
observed, and we should therefore, develop ideas and
theories that will help us understand what we see and
experience. While there is no way to directly test such
theories, we can debate about them to achieve better
understanding.
(iii) Humanism:
 It is a part of critique of positivism.
 Humanistic economic geographers object to both
positivism and structuralism on the basis that these
approaches view people as responding mechanically to
spatial and structural forces.
3. Modern Approaches:
 In economic geography, three approaches have
been developed during last three decades that can
be considered as modern approaches. These are:
 (i) System analysis,
 (ii) Behavioural approach, and
 (iii) Institutional approach.
(i) System Analysis:
 A system is a set of identified elements so related that
together they form a complex whole. System analysis is
an approach or methodology rather than a philosophy
or scientific paradigm.
 Economic geographers utilise the system concept in
order to better understand the component elements of
some part of reality, and the relations between them.
The use of such a conception stresses the study of the
whole as well as of the parts. Thus, the world economy
can be regarded as a set of interlocking parts and subsystems.
(ii) Behavioural Approach:
 Incorporation of the behavioural science outlook in
geography is known as behavlouralism. In economic
geography behavioural approach now has become very
common. Economic geographers study the overall results
of economically-oriented behaviour as they appear in the
landscape. In economic geography, the study of decisionmaking process is an important aspect.
 The type of decision-making, which is the concern of
economic geography, can be classified as problem-solving
or behavioural decision-making with such results as new
locations for shops, farms or factories.
 Similarly, the studies of consumer behaviour, movement or
trip behaviour, etc. are considered to be important. The
decision-making process and other aspects of behavioural
analysis.
(iii) Institutional Approach:
 Ron
Martin (2003) has emphasised the need of
institutional approach in economic geography. He stated
that the form and evolution of the economic landscape
cannot be fully understood without giving due attention to
the various social institutions on which economic activity
depends and through which it is shaped.
 In other words, economic activity is socially and
institutionally situated and it cannot be explained by
reference to atomistic individual motives alone, but has to
be understood as enmeshed in wider structures of social,
economic and political rules, procedures and conventions.
It is the role of these systems, both formal and informal,
which is the focus of an institutional approach to economic
geography.
Classification of Economic Activity
 The complex environmental and cultural realities
control the economic activities.
 Production patterns are rooted in the spatially
variable
circumstances
environment.
of
the
physical
 Resource disparity gives economic prospects in
some regions and countries and employment
opportunities.
 The recognition of resources or ability to exploit
them is effected by technological development.
 Political decisions may encourage or discourage
economic activity (subsidies, protective tariffs, or
production restrictions).
 Production is controlled by economic factors of
demand, whether that demand is expressed
through a free market mechanism, government
instruction, or the consumption requirements.
Categories of Activity
A. Production
The main sectors of the economy do not stand alone. They are connected
and integrated by transportation and communication services and
facilities not assigned to any single sector but not common to all
Primary Activity
 Those parts of the economy involved in making natural
resources available for use or further processing.
 They are mining, agriculture, forestry, fishing and hunting,
and grazing…
Secondary Activity
 Economy involved in the processing of raw materials and
altering or combining materials to enhance utilities and
value.
They are:
 Handicraft production,
 Woodenware,
 Copper smelting…
 Textile and chemical industries,
 Manufacturing and processing industries
 Construction industry, and
 power production…
Tertiary Activity
 It includes wholesale, and
retail trade, associated
transportation and
governmental services.
 This part fulfill the
exchange function, provide
market availability of
commodities, and bring
together consumers and
providers of services.
Quaternary Activity
 It includes research with
gathering and dissemination of
information,
 It also is administration of the
other economic activity levels,
often considered as a specialized
subdivision of tertiary activities.
 They are ‘white collar’
professionals working in
education, government,
management, information
processing, and research.
Quinary Activity
 A sometimes separately recognized subsection of tertiary
activity management functions involving highest-level
decision making in all types of large organization.
 Also the most advanced form of the quaternary sub-sector.
 B. Exchange
 a)Increasing the value of commodities by changing
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their location
b)
Exchanging
services
and
ideas
by
telecommunication or face to face contact.
c) Satisfying the needs of people by changing their
location(Passenger transportation)
d)Warehousing and distribution function
e)Wholesale trade
f)Retail trade
 C. Consumption
 Use of commodities and services by human beings to
satisfy needs and wants.
Population and Development
Issues in the Developing World
 The well being of approximately three-fourths of
the world’s population- the poverty-ridden peoples
in the underdeveloped countries of Asia, Africa.
and Latin America- remains a significant and
growing world problem.
 It is indeed sobering that two centuries after the
Industrial Revolution, most of the world remains
poor, still suffering from inadequate standards of
living
 Issues
of population and development in the
developing world context are interrelated mainly
because of the circular relationship between
population and development.
 Population is
both the subject and the basis of
development. That is, development is directed at
improving the socioeconomic well being of population
and at the same time requires people for its technical
and manual labor power.
 It should be kept in mind that population, although
necessary to get the process of development moving
the forward direction, can also stifle development
meant to help itself.
 Regardless of the nature of the relationship, the
overriding issues of population and development in
the developing world involve poverty, unemployment,
underemployment, inequality, malnutrition, poor
sanitation, and many other social miseries.
 Dudley Seers(Meaning of development) has asserted
that a country can not be considered developed or
developing unless it has been able to reduce the levels
of poverty, unemployment, and socioeconomic
inequality affecting its population.
Poverty
 Poverty is defined as the lack of the minimum food and
shelter necessary for maintaining life. Generally poverty is
measured in terms of per capita income. Per capita GNP
figures are often criticized as being a poor measure of
poverty because of their inability to account for various
types of household level informal economic activities.
 More specifically, this condition is known as absolute
poverty. Today it is estimated that more than 35 million
Americans—approximately 14 percent of the population—
live in poverty. Of course, like all other social science
statistics, these are not without controversy. Other
estimates of poverty in the United States range from 10
percent to 21 percent, depending on one's political
leanings. This is why many sociologists prefer a relative,
rather than an absolute, definition of poverty.
 Absolute poverty/Extreme poverty
 Absolute poverty refers to a condition where a person
does not have the minimum account of income
needed to meet the minimum requirements for one or
more basic living needs over an extended period of
time.
 Extreme poverty, or absolute poverty, was
originally defined by the United Nations in 1995 as “a
condition characterized by severe deprivation of basic
human needs, including food, safe drinking water,
sanitation facilities, health, shelter, education and
information.
 According to the definition of relative poverty, the
poor are those who lack what is needed by most
Americans to live decently because they earn less than
half of the nation's median income.
 By this standard, around 20 percent of Americans live
in poverty, and this has been the case for at least the
past 40 years. Of these 20 percent, 60 percent are from
the working class poor.
 Relative poverty
 Relative poverty is the condition in which people lack
the minimum amount of income needed in order to
maintain the minimum standard of living in the
society in which they live. Relative poverty is
considered the easiest way to measure the level of
poverty in a individual country. Relative poverty is
defined relative to the members of a society and
therefore differs across countries.
Causes of Poverty
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Overpopulation
Unequal distribution of productive resource such as land and capital.
War
Disease
Economic structures
Lack of education
Parents leaving the family
Divorce
Teenage pregnancy
Domestic abuse
Employment abuse
Immigrant status
Minority status
Physical and mental illness and disability
Loss of job
Low wage rates
High medical bills
 Fraud
 Oppression
 Theft
 Disasters
 Fires
 Flood
 Poverty Imperative
 Lack of or inability to afford adequate health insurance
 Lack of awareness of government policy
 Industrial change
 Apathy
 Greed
 Dictatorships
 Globalisation
 Social Factors
 High taxation
 High growth rate of population
 Lack of job opportunities in secondary sector
 Lack of industrialisation
 Over dependence on agriculture
 Inflationary pressure
 Unemployment
 Drug abuse
 Income inequalities
 Accidents
Thank You All
ANUP KUMAR MANDAL
Assistant Professor
Department of Economics &
Sociology