What’s the link between Economics and Geography?

What does Economics have to do with Geography?

For anyone thinking of studying Geography and Economics at University, or related subjects such as Land Economy, this is a question you will often come across. Isn’t Geography just about maps? As a former Geographer I am well familiar with these comments and questions. Though what surprises me more than peoples’ poor and unoriginal humour is their ignorance on this important and rather obvious link.

Geography, relating to the study of physical features as well as of human activity, is absolutely central to a practical understanding of how any economy functions.

Every economy is comprised of people operating in a particular setting. Similarly, the study of economics and economic principles is central to understanding and predicting how individuals and groups are likely to rationally respond to various economic incentives. Economic Geography, the marriage of both, focuses on drawing out the human aspect of labour rather than mostly focusing on mathematical theories and equations. It helps us study how communities function, how cities operate and how the global system communicates across nodes.

“Economic geography is understood as the field of study that deals with the uneven distribution of economic activities in space.” (Boschma and Frenken, 2006).

Labour geography emerged as a sub-discipline of economic geography in the 1970s, and is a discipline I would like to provide you with some background about in this post. It’s significant insofar as it re-configured orthodox economic thinking by analysing the geography of capitalism through the eyes of labour rather than capital (Herod, 1997; Coe, 2013). This labour geography places workers’ agency and vested interests in shaping the geography of capitalism at its core (Herod, 2001), and is different from a geography of labour which is descriptive of labour processes and patterns as influenced by capital. Gregory et al’s (2009) labour market definition is ‘the geographical arena in which labour power is bought and sold’, functioning as ‘social spaces with multiple divisions between various interest groups’ (Dimeglio et al, 2013).

Traditionally, labour markets have been dominated by two visions in mainstream economics (Herod, 2001). The first is neoclassical economics, analysing how firms make location decisions in order to generate accumulation, which treats labour as a commodity operating within a free market (Herod, 1997). Second is a Marxist vision that emphasises the human character of labour through its labour theory of value and explores class struggle as a motor of history. Here the labour market is a site of struggle rather than free-exchange (Coe et al, 2013).

During the 1970s and 1980s, various academics such as Walker and Storper (1981; cited in Herod, 1997) critiqued the aspatial nature of labour markets that dominated economic analysis, and their sole focus on capital’s ability to mould the geography of capitalism. Increasingly, space was given greater attention in economic debate (Herod, 1997).

Herod, labour geography’s founding father, questioned where the role of workers was in all these economic analyses (Castree, 2007). Breaking away from dominant notions where capital was the ultimate creator of the geography of capitalism, Herod placed workers centre stage by highlighting their agency, and interest, in moulding economic landscapes to ensure their self-reproduction and survival (Tonkin, 2000). He argued that labour, like capital, has agency. Workers have the capacity and motivation to actively mould economic landscapes. One can see then that labour geography provides an important understanding that despite our existence within a global capitalist system, place still matters, to employers and employees, since our lives are rooted in place in terms of consumption, production and labour (Kelly, 2011).

Like any other discipline, labour geography also has its own shortcomings. However, the key contribution that should be celebrated is how it provides an opportunity for economic geographers to truly capture the human value of economic forces as inherently social constructions. For example, the socio-spatial nature of labour markets is crucial for understanding how they are influenced by, and how they impact upon, regional economics as well as national and social institutions. The aim is that this will contribute towards building more inclusive societies and designing effective public policy (Herod, 2003).