MARKET GEOGRAPHY is a subfield of ECONOMIC GEOGRAPHY that focuses on the spatial nature of market forces. It derives its rationale from the central place theory, first argued in 1933 by German economic geographer Walter CHRISTALLER in his book on central places in southern Germany. Central place theory is fundamentally concerned with the patterns through which wholesale, retail, service, and administrative functions, plus market oriented manufacturing, are provided to consuming populations.
As such, it complements the theory of agriculture production originally formulated by J.H. von Thunen and the theory of location of industry, which has its roots in the work of Alfred Weber. The increasing dominance of market-based economic functions has established a clear linkage between the workings of market forces and spatial distribution of economic activities. Though location-market linkage is in the agriculture, manufacturing, trade, and transportation sectors, it’s more pronounced in the sphere of production and finance.
GEOGRAPHY OF MONEY AND FINANCE
Ron Martin (1999) claims the emergence of an economic geography of money and finance as a subdiscipline, with four identifiable lines of inquiry: 1) Marxist theorization of the geographically uneven and crisisprone tendencies of the capitalist space economy; 2) specific studies of spatial organization and operation of particular financial institutions, services, and markets; 3) studies of dynamics through which the world’s major financial centers are molding global geographies of money (such as LONDON, NEW YORK, and TOKYO); and 4) studies of services to link regional financial flows and regional industrial development. He demonstrates that financial systems are inherently spatial in terms of “location structure” and “institutional geographies” that influence the way money moves between locations and communities as well as “regulatory spaces” and the “public financial space of the state,” including the cooperation and competition within the international monetary system. He notes that the money “has a habit to seeking out geographical discontinuities and gaps” to reinforce, rather than reduce, uneven regional pattern.
David J. Porteous (1995) offers a theoretical viewpoint that highlights the significance of “information externalities” and “an information hinterland” to account for urban agglomeration of financial activities. He also explains “spatial switching” as a reversal of the rank order of importance of rival financial centers within national economies, for example, Montreal/Toronto and Melbourne/Sydney. Gordon L. Clark (1993) stresses the importance of U.S. and British geography of pension funds and reveals why this source of capital has such strong influence upon global economy. Clark and other scholars (1997) have attempted an analysis of the “spatial logic” of the financial industry.
David Harvey (1982) stresses the importance of time and geographical space to argue that contradiction in the primary or productive circuit of capital could be dampened down by foreign direct investment to secondary and tertiary circuits. These circuits export wider financial instability in new forms through the creation of fictitious credit money in advance of actual production and consumption—thereby producing the “system’s instability.” On this platform, Harvey identifies different types of crises, including “sectoral switching crises” (where fixed capital formation is switched to another sphere, such as education), “geographical switching crises” relating to different geographical scales, and “global crises.” Harvey considers the further dimension of “GEOPOLITICS” at each scale to suggest that crisis tendencies are not resolved in an orderly manner but involve competitive struggles influenced by discriminatory institutional practices, circuits of money, and cost reduction according to financial, economic, political, and military power.
Stuart Corbridge (1993) suggests limitations of Keynesian measures of financial debt in the consideration of the geography of commercial bank lending in Latin America, the Caribbean, Eastern Europe, and the THIRD WORLD. Others have explored the “world of paper and money” with the following aims: to describe the economy of international money, to link this economy with the distribution of social power, to show some of the ways in which the world of money is discursively constituted through social-cultural practices, and to show how the world of money is constructed out of and through geography. Authors follow neo-Gramscian regulatory theory and operate within four spatial frames: the global monetary economy, the national space of Britain, the regional space of south of England, and the concentrated urban space of the city of London.
The book Money/Space is a critique of the rise and fall of “Thatcherism” and “Reaganomics,” which marked unprecedented growth of the financial services industry, followed by the rise of disintermediation, a wave of financial innovation, and then more sophisticated forms of risk management. One chapter gives attention to “geographies of financial exclusion” in Britain and the UNITED STATES and suggests that “financial citizenship” is needed as a means of exerting pressure on governments to reform their financial system. The impact of changing geopolitics upon the circulation of capital is enlarged by other scholars. Iain Black (1989) has reconstructed highly fluid spatial mobility of finance within a London-centered political economy during the INDUSTRIAL REVOLUTION and a more contemporary analysis of metropolitan London responses to the financial revolution of the 1980s.
Andrew Leyshon’s (1997, 1998) analyses keep abreast of the growth of geographical treatments of money and finance. In one analysis, he links such contributions to the concept of a “geo-political economy,” explores the “geo-economics of finance,” and reflects upon wide unease over the geographies of financial exclusion. His other analysis draws upon Viviana Zelizer’s theory of the social meaning of money, then reviews geographical analysis of the social and cultural construction of financial centers.
GEOGRAPHY OF INDUSTRY
The heart of market geography lies in the spatial patterns and physical landscapes that industry creates. As spatial division of labor disperses industry, such as automobile manufacturing, into a thousand pieces—tire factory here, engine plants there, electronic ignitions and engineering plant somewhere else—it is increasingly difficult to knit together the production function into discrete units called factories. To make matter worse, these webs of production overlap and interconnect in surprising ways that can never be entirely untangled.
This immense geography of production is in constant motion, rendering moot all fixed ideas about industry location patterns. Industrialization drives sectors and places along divergent paths of growth, and disrupts all established geographic habits. That divergence and instability are essential to the uneven development of the industrialized world.
But the movement alone does not capture the creative (and destructive) powers of modern industry. Successive industrial revolutions have built up the great cities, transport systems, and landscapes of production that surround us; industry does not locate in a known world so much as it produces the places it inhabits. This jagged process of industrial development repeatedly outruns prediction and liquidates the geographies of the past; generating endless novelty that makes market geography such a lively and challenging subfield of inquiry.
As the world moves toward the more informationrich forms of production and products, like computer software and video games, there are more products that come in small packages, like CDs, and fewer bulky objects like steel girders. But production is, in all cases, an act of human labor; it involves work, plain and simple. This means that securing a labor force is a prime task of any industrial operation and critical to its locational calculus. Firms must recruit labor either by locating near to where workers live or by attracting them from long distances; this matching of labor demand and supply is the base point for market geography. Different kinds of work demand different kinds of capacities from workers and provide varying levels of wages and other rewards, and here lies an elemental force for spatial differentiation of industrial activities or spatial divisions of labor.
Today’s market economies produce millions of different commodities for sale and employ hundreds of millions of people. They are immensely complex systems of production, made up of an extraordinarily large number of pieces. Those bits and pieces constitute “the division of labor” and are the basic building blocks of the industrial system and of market geography. Without the division of labor, there would be no differentiation of economic activities, no factories to site, and no localization of industries. The pied and dappled geography of modern economies comes about precisely because of the wide variety of work being done at different places.
Yet the division of labor is not infinite. Work today is mostly collective labor, where each person is responsible for a part of the whole. These collectivities range from small groups, such as fabric cutter, to whole garment factories, to entire commodity chains. A basic concept of the study of industrial geography is, therefore, a social division of labor.
The term industrial location was largely replaced by spatial division of labor in the lexicon of economic geographers during the 1980s. The former had come to mean the optimal siting of production units according to their specific needs for inputs, in the tradition of Alfred Weber, or the optimal spatial allocation of sellers according to a highly abstract calculus of access to customers, in Christaller’s (1935) central place theory. Industry was assumed to conform to preexisting patterns of people and resources on land.
Doreen Massey (1984) turned this around. For her spatial division of labor signified a view of industrial pattern that recognized powerful forces for spatial differentiation coming out of industry itself and projected onto the landscape. The power of industry and market created a dominant force that effectively shaped the spatial concerns and in the process created a market geography where market is a senior partner and geography became a junior partner.
A survey of literature in the subfield of market geography indicates that research since 1954 can be divided into three categories, on the basis of approach and methods: qualitative interpretation, usually with substantial numerical evidence and sometimes making use of case-study technique; quantitative classification, in a more or less descriptive sense, with qualitative elaboration and explanation and involving a specific procedure applicable to different areas and time periods; and formulation and testing of specific hypotheses and models. These approaches have been applied, with varying degrees of intensity, to most facets of market geography.