Oskar Engländer · 1926
Engländer’s article develops a general theory of economic location through criticism of Alfred Weber, a reconciliation of industrial and agricultural analysis, and a concluding dispute with Andreas Predöhl. Its central concern is how spatial separation and the costs of overcoming distance shape production, consumption, prices, and competition. In a closing note, Engländer presents the article as a retrospective methodological and critical introduction to his Theorie des Verkehrs und der Frachtsätze (1924).
Against Weber’s division into transport orientation, labour orientation, and agglomeration, Engländer distinguishes relations between individual locations of supply and demand from competition among multiple locations. Transport geometry supplies the initial framework:
Der Verbrauchsort und die günstigsten Lagerstätten der Erzeugungsgüter (Materialien) bilden die Standortsfigur.
English translation: The place of consumption and the most favourable deposits of the production goods (materials) form the locational figure.
The explanatory problem nevertheless exceeds the search for a processing point between given sources and a given market. When several sources compete, their relative advantages depend on prices as well as distances. Location theory must explain prices and locations together rather than treating source prices as fixed external data. Nor can it simply exclude social conditions, since wage differences already presuppose an economic organization.
Engländer retains Weber’s distinction between ubiquitous and localized materials but gives it an economic, territorially qualified meaning. Natural presence alone does not make a material location-free; availability on equal terms within the relevant area is decisive.
Damit werden alle Ubiquitäten zu regionalen, das heißt die Frage, ob ein Stoff als lagerfrei oder lagergebunden anzusehen ist, ist immer nur für ein bestimmtes Gebiet zu beantworten.
English translation: Thereby all ubiquities become regional ones; that is to say, the question whether a material is to be regarded as free of deposits or as bound to deposits is always to be answered only for a particular area.
He further distinguishes materials necessarily obtained from one source from those available at several competing sources. The latter case exposes the limitations of a purely geometrical explanation:
Nehmen wir mehrere Lager desselben Rohstoffes, der mit einem anderen Rohstoffe eines einzigen Lagers zu einem Verbrauchsgute für einen einzigen Verbrauchsort zu verarbeiten ist.
English translation: Let us take several deposits of the same raw material, which is to be worked up, together with another raw material from a single deposit, into a consumption good for a single place of consumption.
For resources available in given quantities, source prices and supply territories emerge jointly: lower prices at a deposit can compensate for greater freight costs. Demand distributed across an area also changes the problem. Processing need not converge on a single point; different locations can serve distinct market territories. Freight schedules can influence processing locations themselves, not merely the selection of material sources.
The treatment of labour and agglomeration extends this analysis of competing locations. Labour is generally immobile for an individual production operation, although workers can change residence. Low wages may therefore reflect a location’s disadvantages rather than constitute an independent attraction for industry. Engländer considers Weber’s cheap-labour orientation particularly applicable to constrained forms of home industry. Agglomeration brings increasing returns, but these must be compared with the additional transport costs of reaching a larger market.
The reconciliation of Weber and Thünen rests on shared analytical conditions: immobile productive inputs and production or consumption distributed over an area. The distinction between industry and agriculture belongs to application rather than the foundations of pure theory. Thünen’s spatial ordering can also explain industrial processing, as when nearby milk supplies reach consumers fresh while more distant supplies are processed into butter. Engländer separates product weight per unit of land or material from cultivation intensity. Consumption also requires spatial explanation: distance affects both the quantity and composition of purchases.
His economy-wide construction connects primary production, successive processing stages, market boundaries, urban demand, and agglomeration. It offers an explanatory framework rather than a literal map. Historical investments, natural differences, institutions, imperfect decisions, and uneven transport networks complicate its geographical expression. Capitalism transforms transport, extraction, and enterprise scale throughout the spatial economy, although many locational principles would also operate under communal planning.
Finally, Engländer rejects Predöhl’s reduction of location theory to technical substitution among productive factors. Differences in location rents need not signify different quantities of land services, and equal prices at market boundaries do not establish technical substitution. The unifying principle is instead the economic consequence of distance. The article’s positive contribution is to integrate location and price formation while preserving production, consumption, and competition as distinct but interdependent objects of explanation.
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