Oskar Engländer, Standort (1926)

Oskar Engländer’s encyclopedia article develops a general theory of economic location encompassing consumption, agricultural production, industrial processing, and transport. Its seventeen sections proceed from a single producer supplying dispersed consumers to competing production and consumption centres, multiple commodities, processing locations, immobile resources, and agglomeration. The organizing claim is that location belongs within economic theory because transport costs connect spatially situated supply and demand:

Die Lehre vom Standort ist die Lehre von der örtlichen Bedingtheit in der Volkswirtschaft.

English translation: The theory of location is the theory of spatial conditioning in the economy.

Engländer consequently treats market areas, procurement areas, prices, rents, and processing sites as interdependent outcomes. His principal distinction concerns supply conditions: “cost goods” can be supplied beyond the quantity demanded at a price covering production costs and otherwise obtainable profit; goods of given quantity must find buyers for a fixed supply; a third category expands only at increasing cost. The same apparent spatial arrangement can therefore conceal different causal relationships and respond differently to freight changes.

Sections 1–3 establish this distinction through a single production or storage point with an unrestricted market area. For a cost good, maximum sales distance equals a buyer’s willingness to pay for one unit, less the origin price, divided by the freight rate. Quantities purchased decline with distance, while groups with different willingness to pay generate overlapping sales patterns. Under the stated assumptions, sales distances vary inversely with freight rates; sales across an area vary inversely with their squares. A fixed supply reverses the direction of determination:

Beim Kostenerzeugnis ist zunächst der Preis da, und nach ihm richtet sich abgesetzte Menge und die Absatzweiten, beim Gute gegebener Menge ist zunächst die Menge da, und nach ihr bestimmen sich Preis und Absatzweiten.

English translation: For a cost product, the price is given first, and the quantity sold and sales distances depend on it; for a good of given quantity, the quantity is given first, and the price and sales distances are determined by it.

Thus cheaper transport does not simply enlarge a fixed-supply good’s market proportionately: the origin price rises, partly offsetting the extension of its reach and redistributing consumption between nearer and more distant buyers. Increasing-cost production occupies an intermediate position because output can expand, moderating the price increase.

Sections 4–6 introduce competition and concentrated consumption. Competing supply points divide territory where delivered prices coincide. Equal production costs yield a perpendicular boundary between two producers; unequal costs produce a hyperbolic boundary. Lower freight rates favour the cheaper producer’s territorial expansion, whereas higher freight rates protect the more expensive producer. With fixed stocks, however, prices emerge together with the allocation of markets. Where consumption is concentrated at a point, freight changes affect purchases only when delivered prices cross buyers’ valuation thresholds; proportional responses cannot simply be assumed.

Sections 7–8 reverse the spatial problem: a consumption centre draws supplies from surrounding land. Producers receive the same market price but different net receipts after freight. Nearer producers earn location rent, while, under unrestricted procurement, the marginal distant producer merely covers costs and normal profit. Engländer distinguishes quantity intensity, quality intensity, scale enlargement, and expenditure on reducing shipment weight. Proximity generally encourages quantity intensity, but does not by itself increase quality intensity. Spatial differences in wages or other input prices can alter this pattern, even making production unprofitable immediately around the consumption centre. Competition between consumption centres introduces scarcity rent alongside location rent and can make cheaper transport raise prices in the smaller centre while lowering them in the larger.

Sections 9–12 extend the analysis to multiple commodities and goods sharing a productive resource, especially land. Freight affects commodity substitution through weight, price per unit of weight, buyers’ rankings, and the possibility that several lower-ranked units together outweigh one higher-ranked unit. Engländer makes these displacement effects conditional rather than universal. For competing land uses, differences in weight yield, cost, durability, and handling can generate concentric production zones. More intensive cultivation near the market is an important result, but not an exceptionless law.

Sections 13–15 integrate industrial processing into this framework. Engländer distinguishes localized inputs from inputs obtainable everywhere at equal prices. Weight gain through processing favours the consumption site; weight loss favours the raw-material source. Several localized inputs can produce an intermediate processing site determined by the weights transported and the geometry of sources and destinations. Crucially, freight levels and tariff structures have different effects:

Eine gleichmäßige Aenderung des Frachtsatzes hat, was von Bedeutung ist, auf die Form und Lage der Verarbeitungslinie keinen Einfluß.

English translation: A uniform change in the freight rate has, importantly, no influence on the shape and position of the processing line.

Distance-degressive or value-based tariffs, by contrast, alter the relative burdens of routes or commodities and can shift processing locations. Multiple deposits require the simultaneous determination of procurement territories and, for fixed supplies, prices. Engländer incorporates land, mines, water-power sources, and generally labour into the theory as immobile inputs. His distinctive move is to treat wage differences under given labour supplies as outcomes determined together with market territories, rather than simply as independently given causes of industrial location. Migration relocates the labour supply itself.

The final sections distinguish agglomeration derived from favourable markets, resources, or transport terminals from advantages generated by concentration itself. These latter advantages attract production only insofar as they outweigh additional freight costs, usually reinforcing an existing concentration. The conclusion situates spatial specialization within reciprocal exchange: geographically separated production and consumption require corresponding countertransactions, while money quantity and circulation velocity frame aggregate price movements. The article’s significance lies in this unified treatment of agricultural and industrial location through supply conditions, valuation, transport, and endogenous prices—not merely through the search for the cheapest production site.