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Document Why? One hesitates to criticize an economist of Isard's eminence just as one hesitates to second-guess an Albert Hirschman. Yet it seems to me at least that Isard, for all his learning and acumen, failed to understand just what it was that had kept space out of the economic literature. Page 56 Location and Space-Economy was in large part a work of synthesis, assembling von Thünen and Weber, Christaller and Lösch into a manageable package. Isard's principal original contribution was to reformulate the problem of location as a standard problem of substitution: firms, he argued, could be viewed as trading off transportation costs against production costs just as they make any other costminimizing or profit-maximizing decision-a perfectly correct observation. But Isard's conclusion from this observation was that one could therefore simply view location as another choice variable in a general equilibrium competitive model, of the kind that was coming to dominate economic analysis. And this was simply wrong: to make any sense of the various approaches to location that he surveyed, one must take account of increasing returns and hence of imperfect competition. Isard never actually presented an example of a general locational equilibrium; this was no accident, because neither he nor anyone else at that time knew how to do so. In effect, Isard was saying to economists, ''Look! You can deal with space using the tools you already have!" But they couldn't and so his project was doomed to failure. Luckily for Isard and for the world, that was not the end of the story. The half-worked-out spatial models he provided made almost no dent in economic theory, but they were undeniably useful for a variety of practical purposes: a regional planner trying to decide where to build roads or ports may be willing to settle for a set of schematic or suggestive file:///D|/Export2/www.netlibrary.com/nlreader/nlreader.dll@bookid=409&filename=page_56.html [4/18/2007 10:30:21 AM]
Document Page 57 intellectual devices that fall well short of an intellectually satisfying or coherent structure, as long as it helps her frame her problem a bit better. Instead of a deep body of theoretical work, what Isard ended up creating was an eclectic applied field: regional science. Regional science is not a unified subject. It is best described as a collection of tools, some crude, some fairly sophisticated, which can help someone who needs an answer to practical problems involving spatial issues that will not wait until we have a good theory. I would argue that economists should give this kind of loose-jointed, do-the-best-you-can theorizing more attention and respect than we do. But at the same time, the kind of eclecticism that marks regional science is no substitute for a truly integrated theory; and Isard's great effort failed to achieve that integration. 2 The second big effort to bring space into economics was more modest in its goals, and correspondingly far more successful in its initial entry into the field; yet in the end it, too, failed. I refer to the "new urban economics" that flourished in the late 1960s and early 1970s. This was a literature that concerned itself with the internal spatial structure of cities. The canonical model was of a monocentric city, in which at least some fraction of the population was obliged to commute to an exogenously given central business district. The problem was then to determine simultaneously the pattern of land use and land rents around that central business district, a problem that generally reduced itself to the determination of an equilibrium bid-rent curve as a function of distance from the center. Does this sound familiar? Of course it does: it is pure von Thünen, with commuters instead of farmers. And the new models shared many of the virtues of the original von file:///D|/Export2/www.netlibrary.com/nlreader/nlreader.dll@bookid=409&filename=page_57.html [4/18/2007 10:30:22 AM]
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