4 THEORIES OF RESOURCE GEOGRAPHY

Peerzada Raouf Ahmad

epgp books

   

 

 

 

CONTENT: –

 

–   INTRODUCTION

–   NEO-CLASSICAL THEORY

–   FUNCTIONAL THEORY

 

 

LEARNING OUTCOMES

  •  Understand the link between culture and natural resources
  •  Explain the resource utility in terms of human needs
  • Criticise the neo-classical theory in light of functional theory in resource

 

KEYWORDS

 

Hypothesis, nomothetic approach, objective supply, knowable supply, mineral resource economics

 

 

INTRODUCTION

 

A theory is a list of related laws, which together explain a broader concept. A law is a statement which explains how a particular part of the universe works. For example, “every action has an equal and opposite reaction” is one of Newton’s laws of motion.

 

Newton’s laws are part of the theory of classical mechanics.

 

Sometimes — such as in the theory of evolution — the laws contained in a theory are facts. Other times — such as in the theory of creation — the laws within are errors. Untruths. Wrong answers. Whether something is a theory or a law has no bearing on whether or not it is a fact.

 

If we’re not yet sure whether a law is a fact or an error, then that law is a hypothetical law. A theory composed entirely of hypothetical laws is a hypothetical theory. Anything that is hypothetical is also a hypothesis, much like how your douchebag boss is simultaneously a human being and a douchebag.

 

Every science has a goal, i.e. to understand and explain the real-world phenomena. Development theories are the vital for a scientific understanding of process that controls the human spatial relation with humans and also with the nature. Few would deny the fact that the last few decades have been one of the greatest periods of intellectual changes in the trends of geographic development. Most of these changes, the questioning of the past approaches, looking at old problems with new eyes, have been of a methodological nature involving, in virtually every instance, the substitution of quantitative approaches to problems formerly treated in descriptive ways. Today an apparently new perspective has been opened under the impact of so-called quantitative revolution. Statistical methods have been introduced to attain a desired level of objectivity, and search for models and theories and proceed apace. The works of Hartshorne may be considered the last in the chain of traditional writers in geography. The traditional concept developed by Hartshorne came under attack by 1950 this was mainly due to the growing trend of scientific analysis in social science. A growing number of geographers became aware that mathematics and statistics could be applied to geographical problems. These provide precise tools to test theories and analyze data. The process of intellectual change led geographers to concentrate less and less on describing the differences between particular areas or places and more and more on the study of uniformities and the production of theories about the spacing of phenomena on the earth’s surface. Such an emphasis on Nomothetic approach is in the right direction. Besides, during the last few decades the focus has also changed to make the concept of the systems of much greater significance, along with that of models and theories. The search for generalizations based on the whole rather than on individual parts is, therefore, a complementary (Ackerman 1963). The Association for Geographical Studies method of modern science known as systems analysis. Since all systems, whether physical or human or a combination of both, consist of a set of objects and the relationships binding these objects together into some organization, it is not surprising that the approach is especially useful in dealing with functional aggregates. Indeed, now the main focus of scientific enquiry has moved away from the study of objects or substances to the study of relationships and organizations. System analysis is a better way to analyze the scientific linkage between several geographical variables. The system approach doesn’t replace the analytical approach but instead it is a continuation of it by making the analytical analysis more inter disciplinary. It maintains a new trend in the subject, models, theories and hypothesis are the guiding light to establish geography as the scientific study of spatial attributes between human and nature.

 

Definition

 

A theory is defined as “a system of ideas explaining something”; or “a system of ideas based on general principles independent of the facts or phenomena to be explained”; or “a scientific statement or a group of scientific statements”. In order to understand the meaning of theory, the difference between a ‘simple’ and a ‘scientific’ statement needs to be made clear. Consider these two statements, for instance:

 

1.  Delhi lies across the river Yamuna.

 

2.  One finds the big cities generally located across the rivers in the world of the above two, the former is a ‘simple statement’, whereas the latter may be called a ‘scientific statement’, because the ‘scientific statements’ are based on generalizations, derived from a number of simple statements (facts). After searching out some relationship / order, we state it or express it in the form of scientific statements. Generalization, law and theory forms the order of scientific research. Thus, the theories are the highest order scientific statements or the universal statements. They state some rule of action, behavior, process or development.

 

Structure of a Formal Theory

 

The scientific theory includes terms, calculus and statements. These forms the part of scientific approach to the study of phenomenon.

       The various words that constitute the specific vocabulary of a theory are its ‘terms’. The terms are the building block of a scientific understanding. Two terms axioms and derived are the most essential for a scientific understanding. The ‘axioms’ are the primitive terms that are basic, original and not derived, e.g. ‘point’ or ‘line’ in geometry; and ‘river’, ‘plain’, ‘settlement’, ‘market’, ‘desert’, ‘road’, etc. in geography. The derived terms, on the other hand, need further definition, as they may have several connotations. They are formed from the primitive terms (RANA n.d.).

 

 

NEO-CLASSICAL THEORY

 

Ever since the growth of capitalist economy in a slow manner the issue of natural resource became a vital concern for the bourgeoisie, this need perpetuated in the academic circle and finally became the part of state`s agenda. Between 1890 and 1920, resource conservation on the public domain became a national issue in the United States(Barnett (1963)). President Theodore Roosevelt defined conservation as “the application of common sense to common problems for the common good”(Roosevelt 1909). This and other amorphous views of resource conservation would attract the interest of economists looking to better define the issues and inform public policy.

 

 

L. C. Gray (1913)

 

“The primary problem of conservation” writes L. C. Gray for The Quarterly Journal of Economics in 1913, “is the determination of the proper rate of discount on the future with respect to the utilization of our natural resources”. And about the discount rate Gray said “‘the crutch of common sense’” and called for “the economist to develop the theoretical basis upon which the solution of the ultimate problems of conservation must depend”. Despite the open questions, Gray was convinced about present-period overproduction, an example of what economists would later call market failure. He championed “the creation of high values … through the socialization of those resources which are not used, and of those which, on account of their relative abundance, are being used in an exploitive way” (Gray (1913)).

 

Gray’s article, the beginning for twentieth-century conservation economics, contained three important and enduring precepts:

 

Fixed, objective supply. “Minerals afford a tolerably clear-cut type of resources which are absolutely limited in supply and no restorable. It is necessary to make a definite choice between present and future. Normally, when once used, the supply is exhausted practically for all time…. This is absolutely true in the case of coal, petroleum, and natural gas”(Gray (1913)).

 

    Knowable supply. “The nation has reached the point where it is possible to make a rough inventory of its mineral resources. Society is confronted by the same choice that accumulation imposes on the individual: a choice between present satisfaction and future satisfaction”. Neoclassical economics take Gray’s cue and derive an objectivist theory of mineral resources that remains in the mainstream today.

 

Harold Hotelling (1931)

 

In a 1931 essay in The Journal of Political Economy,Hotelling applied differential calculus to derive the optimal allocation of a fixed resource over time. He began by noting that standard economic analysis was “plainly inadequate for an industryin which the indefinite maintenance of a steady rate of production is a physicalimpossibility, and which is therefore bound to decline”(Hotelling 1931). A fixed, objective, knowable supply was the starting point for Hotelling, as it was for Jevons and Gray. Hotelling showed that if the total resource base was known, fixed, and homogeneous; if capital investment was fixed; if the deposits were mined in order of (objectively known) least cost; if the most efficient extraction method were used; if resource prices were known in each time period—or just if profit-maximizing automatons had perfect knowledge—the resource would be produced and sold at a net price (marginal revenue minus marginal cost) that rose at the rate of interest over time. This price premium—a depletion value or resource rent, also called Hotelling rent, Hotelling’s Rule, and user cost—was a revenue stream that only a fixed (exhaustible) supply could command.

 

Ludwig von Mises

 

in Nationalokonomiewhich was expanded into Human Action, Ludwig von Mises briefly addressed the theory and political economy of mineral resources. Mises starts from the fixity feature of minerals that cannot be synthetically produced in human time frames but only found, as it were. From this basis, Mises goes on to conclude:

 

1.  Exhaustibility is causal for human action in a local sense (“Every single mine or oil source is exhaustible; many of them are already exhausted”). But holistic notions of aggregate supply and future availability are of academic concern and “do not matter for the present-day conduct” of mineral entrepreneurship.

 

2.   Acting man faces a variety of mineral-resource opportunities, meaning that choices are made at any one time between developing certain deposits and no other “sub marginal” deposits.

 

3.  Because of #1 and #2, “the deposits of mineral substances and their exploitation are not characterized by features which would give a particular mark to human action dealing with them”. Thus, Mises rejects the notion of a special economic rent possessed by resources that he defines as fixed in the aggregate.

 

4.  The “geographical dispersion of natural resources” makes “the problems of transportation … a particular factor of production costs” and makes “institutional factors” important(von Mises 1966). Mises’s theory of minerals is thus opposed to that of Harold Hotelling. There is no unique “theory of exhaustible resources” ormineral-resource economics.The history of minerals to Mises points toward enough prospective abundance so that the macroeconomic does not impinge on the microeconomics of human action. The same marginal economic analysis applied, without a pronounced reservation demand on the part of the seller to differentiate minerals from other goods and services.

 

F. A. Hayek

 

In the Pure Theory of Capital, Hayek contrasted “wasting natural resources” (Hayek 1941) with the produced means of production. Both were considered capital, but only the latter were considered capital goods, a new and useful output created by the land-labor-capital triad. Hayek was wed to Hotelling-like fixity/depletionism when he stated that “mineral resources are inevitably exhausted by their use and cannot possibly render the same services forever”. But “forever” is outside of economic time, which ranges from the moment to years, decades, and even centuries when talking about a particular mineral form. To his credit, Hayek understood that a mineralresource firm had to continually find more (exhaustible) supply to remain a going concern. But he was in the Hotelling-world when he concluded: “If income is to bemaintained permanently at the higher level which the wasting natural resources make possible, these resources will, as they are exhausted, have to be replaced by produced means of production”.

 

 

FUNCTIONAL THEORY

 

THE FUNCTIONAL THEORY OF RESOURCES (A Dynamic Concept) There is great controversy about the meaning and definition of resources. The exponent of old and static school hold that natural phenomena are all resources. They are already in the realm of nature and are fixed or static. Resources are not made or created. Man, by his intelligence and skill, has simply developed some of those (natural) resources making them suitable for human use and the rest of the (natural) resources are still left undeveloped.

 

Resources are not made or created. Man, by his intelligence and skill, has simply developed some of those (natural) resources making them suitable for human use and the rest of the (natural) resources are still left undeveloped.

 

To this old school of thinker’s resource means nature. Natural things good or bad, effective or ineffective are all resources. To them the hydro-electric potentiality of the Congo river and the coniferous forest belt on the higher slopes of the Himalayas are all resources, even though, there is little chance of these being used under the present socio-economic condition of the countries concerned (viz., Congo and India). This view about resources without any reference to their functional aspects, —is not acceptable to modern thinkers. Prof. Zimmermann and other supporters of modern school hold that; resources bring human welfare.

  • Natural phenomena are not all beneficial to man. In nature there are floods, earthquakes, storms, poisons, etc. which hinder human progress and welfare. These are not to be” treated as resources.
  • Resources are not confined to that of the natural resources but it also includes the human aspect of resources. human with their skills, organization and mental abilities forms resources for the society at large.

FIGURE- 1(htt32)

  • Believe in functional aspect of resources i.e. the significance of a stuff is to be realized only in context of the function which it performs for humans. That the resources are not static but is dynamic.
  • Zimmermann(Zimmermann 1933)identified resource theory as the “stepchild” of economic analysis. “If [resources] were recognized at all, they were absorbed into the market process, acknowledged only in so far as they were reduced to working tools of the entrepreneur—land, labor, and capital—or recognized through their effects on cost and price, supply, and demand”.

 

What was needed was a theory of “human and cultural resources”, for Nature and culture have become so intertwined that little can be gained from an attempt to isolate the natural resources. Cultural and natural resources are inseparable and can only be considered together. He described his contribution as the functional theory of resources since “the concept of resources is purely functional, inseparable from human wants and human capabilities”.

 

Resources to Zimmermann were conditional things that are created and destroyed by changes in consumer demand. “Resources are dynamic not only in response to increased knowledge, improved arts, expanding science,” he wrote, “but also in response to changing individual wants and social objectives”. This was not a priori theory but empirical fact. “One has but to recall some of the most precious resources of our age—electricity, oil, nuclear energy—to see who is right, the exponent of the static school who insists that ‘resources are,’ or the defender of the dynamic, functional, operational school who insists that ‘resources become’”. Different resources were more than mere variety; they were potential substitutes. That was good news, given the cumulative nature of scientific discovery, which entails that “each invention gives rise to numerous others”. This interpretation of expanding, cascading invention, would be seized upon by later thinkers to bring the functional theory of resources to its grand conclusion— recognition of the vast potential of the earth to overcome, even overwhelm, the finiteness of Thomas Malthus and the diminishing returns of David Ricardo.

 

Zimmermann’s functional theory was aligned with Joseph Schumpeter’s theory of creative destruction. Zimmermann wrote: Yet while changed or expanding wants create new resources, others are destroyed. Progress always means a net gain but seldom a pure gain. Creating the better, we must often destroy the good. Greatly influenced by the performance and heterogeneity of institutions, Zimmermann viewed resources as highly elastic.

 

Resources could be created, but they could also be immobilized by acts of man. In his words: The resources at the disposal of man evolve out of the working combination of natural, human, and cultural aspects—a combination which expands with every advance of human knowledge and wisdom and contracts with every relapse into the barbarism of war and civil strife. Zimmermann elaborated: A functional interpretation of resources … makes any static interpretation of a region’s resources appear futile; for resources change not only with every change of social objectives, respond to every revision of the standard of living, change with each new alignment of classes and individuals, but also with every change in the state of the arts—institutional as well as technological.

 

And again: “Laws, political attitudes, and government policies, along with basic geological and geographical facts, become the strategic factors in determining which oil fields will be converted by foreign capital from useless ‘neutral stuff’ into the most coveted resource of modern times”

 

Zimmermann cited and restated Mitchell’s point several times prior to Simon’s formulation: “Freedom and wisdom, the fruits of knowledge, are the fountainhead of resources”. “Man’s own wisdom is his premier resource—the key resource that unlocks the universe”. “The bulk of MAN’s resources are the result of human ingenuity, aided by slowly, patiently, painfully acquired knowledge and experience”(Jr 2007).

 

SUMMARY

 

–  Every science has a goal, i.e. to understand and explain the real-world phenomena. Although geography is ‘short on theories and long on facts’, yet development of theory seems to be vital both to satisfactory explanations and to the identification of geography as an independent field of study.

 

– Ever since the growth of capitalist economy in a slow manner the issue of natural resource became a vital concern for the bourgeoisie, this need perpetuated in the academic circle and finally became the part of state`s agenda. Fixity and depletion Between 1890 and 1920, resource conservation on the public domain became a national issue in the United States (Barnett (1963)). President Theodore Roosevelt defined conservation as “the application of common sense to common problems for the common good”.

 

– Resources are not made or created. Man by his intelligence and skill, has simply developed some of those (natural) resources making them suitable for human use and the rest of the (natural) resources are still left undeveloped.

 

you can view video on THEORIES OF RESOURCE GEOGRAPHY

 

References

  • https://www.google.co.in/searchq=zimmerman%27s+concept+of+resources&num=50&rlz=1C1CHBF_enIN754IN754&source=lnms&tbm=isch&sa=X&ved=0ahUKEwjbq9L5jsTVAhWHu48KHUjUCZQQ _AUICygC&biw=1282&bih=566#imgrc=ZffNhfNm0O2K-M:.

  • Ackerman, A.E. 1963. “Where is a research frontier”.
  • Barnett, H., & Morse, C. (1963). “Scarcity and growth: The economics of natural resource availability.” Gray, L. C. (1913). “The economic possibilities of conservation. .” Quarterly Journal of Economics,. Hayek, F. A. 1941. The pure theory of capital. Chicago: University of Chicago Press.
  • Hotelling, H. 1931. “The economics of exhaustible resources.” Journal of Political Economy. Jr, Robert L. Bradley. 2007. “Resourceship: An Austrian theory of mineral resources.”
  • RANA, LALITA. n.d. “MODELS, THEORY & SYSTEMS ANALYSIS IN GEOGRAPHY.” The Association for Geographical Studies .
  • Roosevelt, T. 1909. “Special message of the president transmitting the report of the National Conservation.”
  • von Mises, L. E. 1966. ” Human action: A treatise on economics.” Chicago: Contemporary Book.
  • Zimmermann, E. W. 1933. World resources and industries. . New York: Harper & Brothers.