Posted by: Dirk | May 26, 2007

von Thünen: spillovers and linkages

Fujita and Krugman (2004) had a little talk that was later published in the Papers of Regional Science. Fujita mentions that von Thünen already talked about concepts that we know today as spillovers and linkages. So von Thünen, who wrote in the 19th century, preceeded both Marshall (1910) and Hirschman (1958), which are normally mentioned as founders of these concepts. However, the citation that Fujita gives us is from the English translation of von Thünen’s isolated state published post mortem. The German reference should be Der isolirte Staat in Beziehung auf Landwirthschaft und Nationalökonomie. 3. Aufl. hrsg. von Hermann Schumacher-Zarchlin. – Berlin : Wiegand, Hempel, & Parey, 1875.

I will not reprint what Fujita already cited from von Thünen (see the link above), but will shortly cite the passages which Fujita didn’t mention (probably because his citation of von Thünen already covered 17 lines). On page 287 ff. von Thünen writes:

3.The number of buyers depends, in provincial towns, on the number of countrymen coming in to sell their products, or passing through on their way to the capital.
5. People aware of possessing an exceptional skill or talent will not wish to waste their time on other work, where they can achieve nothing outstanding, but will move to the capital, to devote all their energy to their particular skill; in return they will reap ample reward. [..]
6. The large town offers buyers and sellers far more guarantee of being able to buy and sell at current prices.

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