Economic Geography

 Economics is the study of how individuals, businesses and nations make things, buy things, spend money and save money. Goods – stuff we make, Services – things we do for others  Economies are defined by who makes the decisions about how things work.  Basic questions – what should be produced, how should it be produced, who should get what is produced?

Traditional Economy  Economic Decisions – made based on custom or beliefs handed down. Individuals do not choose.  Production – custom and tradition. New ideas discouraged and change happens slowly.  Private property – owned by village or family.  Trade – little trade with outside.  Goal – survival; basic needs

Free Enterprise/Capitalist/Free Market  Private Property – individuals own property and can use as they see fit.  Role of Government – people can have any type of business and attract customers as they think best – govt provides money system, etc.  Supply and Demand – determines prices and production  Goal – make money

Communist/Command Economy  Role of Government – decisions on production, distribution, and use of resources made by government. Develop a “plan”  Private Property – government owns all land, factories, farms, and resources  Cooperation – everyone cooperates and shares equally in what is produced (govt runs)  Major Goal – equality among all; classless society

Socialist/Mixed Economy  Role of Government – use power to end poverty by providing public services  Economic Decisions – Major decisions by government, others made by individuals  Private Property – major industries are owned by government, other property is private  Major Goal – fairness. Basic needs met by government for free or low cost but there is still room for profit

A note on economic types…  In the real world, no nation is able to follow any one economic system. Most countries have a blend of each.  Countries can be place on a spectrum to show how actively government intervenes in the economy.

Where would you classify each economic system? Government control and ownership Central Planning Maintaining govt control Elimination of classes Private ownership Profit motive Competition Supply and Demand Individuals Decide

 Time to practice….more scenarios….  What type of economic system does each nation have and where would it go on the economic spectrum?

Where do you think these nations might go?  Cuba, Norway, Hong Kong, USA Government control and ownership Central Planning Maintaining govt control Elimination of classes Private ownership Profit motive Competition Supply and Demand Individuals Decide  What about North Korea or Japan

Some Visuals - What type of system is represented?

What do economies actually do? Or Types of economic activity Traditional  Subsistence Agriculture – growing enough to feed ones own family. Slow or no economic growth  Cottage industries – things made by hand in spare time or off season. All others All others  Commercial agriculture – large scale, a few crops, meant to sell for money not to feed family.  Commercial industries – factories and large scale manufacturing using equipment and technology

 Natural resources 1. Renewable – can be replaced. Examples? 2. Non-Renewable – cannot be replaced. Examples? 3. Inexhaustible – never run out. Examples?  Education/Skills  INFRASTRUCTURE 1. Transportation 2. Communication 3. Technology – all kinds So what do economies need to develop????

So what does Physical Geography have to do with all this?  Resources are definitely linked to geography  Infrastructure – how hard is it to create and do you have the resources?  What about climate, landforms, etc.

Patterns and Processes – what can you start to see  Are there patterns related to physical geography?  Patterns related to political geography – especially forms of government?  Patterns related to population – remember population describes “who” not just “how many”?

So now we have a system….  We have classifications of various economic systems, but we haven’t actually made a thing or exchanged a service.  So, economies are not only defined by the TYPE, but by levels of activity…somehow we know a nation of farmers is different from a nation of engineers….

Levels of Economic Activity  Economic activities are divided into levels based on the approximate level of development they represent.  The levels represent how goods are produced as well as the employment structures of different societies.

Levels, Part 1  Primary: Economic activities that gather or collect natural resources directly. –Examples: Farming, fishing, forestry, mining  Secondary: Economic activities that process natural resources after they’re gathered. –Examples: Manufacturing, oil refining, food processing, etc.

Levels, Part 2  Tertiary: Often called “service industries”; this level includes providing services directly to people as well as selling processed goods. –Examples: Teaching, government, restaurants, retail stores, entertainers, etc.  Quaternary: Provide information, management, and research services by highly-trained persons. –Examples: Researchers, economists, university professors, etc.

 Time to practice……classifying levels of economic activity.  And a little thinking….which types of economic activity are you most likely to see in the United States? Haiti? Norway? Afghanistan?  So…what conclusion can you draw about levels of economic activity and how people live?

Mental Map Activity Using a blank sheet of paper (or Inspiration), you are to make a mental map depicting how a natural resource will pass through all the economic levels. You are to: 1) Pick the Natural Resource 2) Draw a visual representation of what the primary, secondary, and tertiary level of economic activity would look like (i.e. pick axe and a man for mining, employee at MacDonald's selling a hamburger) 3) On the Quaternary Square, depict what kind of decisions would be made in the realm of research or management