Weber, Alfred (1868–1958)

The younger brother of the famed German sociologist Max Weber, Alfred Weber developed an enormously influential model of corporate location based on the minimization of transportation costs that powerfully shaped economic geography, particularly location theory, spatial science, and regional science, for decades to come. Weber's famous model was originally developed for the analysis of manufacturing, although it can be applied to other sectors such as services as well. It was very useful to the exploration of the influence of transportation costs in a rigorous way, and many economic geographers still work in this tradition.

Alfred Weber taught at the University of Heidelberg from 1907 to 1933, when he was dismissed by the Nazis. Although he stayed in the country during World War II, he played a significant role in the resistance movement of the German intelligentsia. Following the Nazi defeat in 1945, he was reinstated at his old university, where he remained until his death.

Weber's approach emphasizes the role of transportation costs in the location decisions of individual companies. He attempted to determine the patterns that would develop in a world of numerous, competitive, single-plant firms. Weber began by assuming that transportation costs are a linear function of distance, that producers face neither risk nor uncertainty, and that the demand for a product is infinite at a given price—that is, producers could sell as many units as they produced at a fixed price. Firms encountered costs of moving inputs, or backward linkages from suppliers and raw materials, as well as outputs, or forward linkages to clients in the market (Figure 1). The best location for a manufacturing plant is the point at which total transportation costs, that is, costs of transporting inputs plus outputs, are minimized.

The costs of moving supplies and materials vary according to their weight and the degree to which they are used in the production of each good, leading firms to be either resource or market oriented. Thus, firms for which the costs of moving inputs are greatest (weight-losing industries) tend to locate near the site of raw materials, such as mining companies, while those for which the costs of transporting goods to market (weight-gaining industries) are greatest tend to be market oriented, such as bottled-drink manufacturers (Figure 2). Weber modeled this process both mathematically and using physical weights and drew lines of equal [Page 3086]total transport costs called isodapanes. The optimal location, he further maintained, would also be influenced by spatial variations in labor costs and by agglomeration economies.

Figure 1 All firms must confront purchases of inputs (backward linkages) and sales of output (forward linkages), which are mediated over space by transport costs.

Source: Author.

Figure 2 Transport cost structure of raw material and market-oriented firms. Firms face the costs of moving raw materials (RM) and final products (FP), which when combined create total transport costs (TTC) that are minimized either at the site of inputs (A) or at the market (B).

Source: Author.

Despite its broad appeal, there are several developments that limit its applicability. First, not all firms need to minimize transport costs; given the rent-transport trade-off that all firms must make, some firms will accept higher transport costs and locate on the urban periphery to minimize rents. Second, the production process is much more complex than it was in the early 20th century, when Weber developed his model. Many plants begin with semifinished items and components rather than with raw materials. Producers’ goods seldom lose large amounts of weight; therefore, there is not much tendency toward material orientation. Weber's model has also been criticized for its unrealistic view of transportation costs as a linear function of distance. Because of fixed costs, especially terminal costs, long hauls cost less per unit of weight than short hauls do. Plants tend to locate at material or market points rather than at intermediate points, unless there is an enforced change in the transportation mode, such as at a port. However, with the expansion of the modern trucking industry and its flexibility in short hauls, the disadvantages of intermediate locations have been reduced.

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