Joseph A. Schumpeter · 1910
Joseph A. Schumpeter’s review of Alfred Weber’s Über den Standort der Industrien. Erster Teil: Reine Theorie des Standortes, with a mathematical appendix by Georg Pick, originally appeared in 1910. The supplied version is a republication of undocumented date. Schumpeter combines strong praise for Weber’s achievement with a methodological qualification concerning the interdependence of economic quantities.
Dieser vortrefflichen Arbeit kommt unzweifelhaft eine dauernde Bedeutung und eine Stelle in der ersten Reihe der theoretischen Leistungen der letzten Jahre zu.
English translation: This excellent work is unquestionably entitled to a lasting significance and to a place in the front rank of the theoretical achievements of recent years.
Industrial location requires theoretical clarification before empirical explanation. To determine how far economic considerations account for the actual geographical distribution of industry, Weber first asks what distribution would arise under exclusively economic determinants:
Und Voraussetzung der Beantwortung dieser ist die Untersuchung der anderen Frage: Wie müßte jene Verteilung aussehen, wenn sie von keinen anderen als wirtschaftlichen Momenten bestimmt würde?
English translation: And the precondition of answering this is the investigation of the other question: what would that distribution have to look like if it were determined by no factors other than economic ones?
Weber’s first part develops this theoretical prerequisite, while a projected second part would investigate Germany empirically. Abstraction serves to distinguish the forces determining observed arrangements. Schumpeter emphasizes the intellectual labor concealed by apparently straightforward definitions:
Die erste Aufgabe des Verfassers war deshalb die begriffliche Fassung, sozusagen die theoretische Appretur der in Betracht kommenden Momente.
English translation: The author's first task was therefore the conceptual formulation, the theoretical dressing, so to speak, of the factors that come into consideration.
The decisive definition identifies location factors through comparative production costs:
Jene Momente nun, welche für die Produktion an einem Standorte einen Kostenvorteil gegenüber der Produktion an einem anderen Orte begründen, nennt der Verfasser Standortsfaktoren.
English translation: Those factors which establish a cost advantage for production at one location as against production at another place the author calls location factors (Standortsfaktoren).
Weber narrows the investigation to general, natural-technical factors and distinguishes regional from agglomerative effects. For Schumpeter, these classifications exemplify the theorist’s task of deciding which elements to combine, which differences to disregard, and which interactions to make foundational.
Transport orientation supplies the initial benchmark. Given material deposits, consumption and labor locations, freight rates, and wages, and assuming labor remains available at the stipulated wages, location becomes a problem of minimizing chargeable ton-kilometers. Schumpeter defends these assumptions as useful simplifications: relaxing them can complicate the analysis without yielding proportionately important results. Geometry and mathematical analysis sharpen the minimum problem, while Pick’s appendix extends its treatment beyond the simplest cases.
Labor costs then enter as a force capable of displacing production from its transport minimum. Moving toward cheaper labor can reduce production costs while increasing transport expenses. Weber’s curves of equal additional transport costs, the isodapanes, make this trade-off analytically tractable. Schumpeter notes implications for economic development and competition between handicraft and large-scale industry, but chiefly emphasizes the explanatory framework.
Agglomeration introduces another source of displacement. Concentration generates savings that must be weighed against transport and labor advantages at alternative locations. The calculation becomes harder because concentration may alter material sources and because savings per unit depend on the scale of agglomeration. Mathematics and carefully chosen simplifying assumptions are especially valuable here.
The analysis of overall orientation considers production processes distributed across several locations and the mutual influence of separate processes. These complications refine the framework without overturning its principles. Schumpeter regards this resilience as evidence that abstract reasoning can illuminate concrete economic organization.
His concluding reservation concerns sequential causal explanation. Weber determines industrial distribution under specified assumptions, but this remains a first approximation. A fuller theory would show how economic quantities determine one another, rather than treating some as independently given and tracing their successive effects. Railway tariffs, for example, cannot ultimately remain external data, nor can a distinction between primary changes and secondary repercussions provide a final explanation.
The review thus joins substantive admiration to a demand for methodological advance. Weber makes industrial geography amenable to disciplined economic analysis; Schumpeter locates its further development in general interdependence rather than isolated causal chains.
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