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(specifically central-place theory), social physics (specifically the market potential approach),
cumulative causation, and localized external economies make perfectly good sense in terms of a
rigorous economic model. They don't come out exactly the way their originators presented them, but the
basic insights stand up quite well.
Moreover, it turns out that all four traditions are really different aspects of the same story different ways
of looking at the same thing. This may not be too surprising an insight about traditions 2, 3, and 4.
Consider first a snapshot of my model economy at a point in time, which is to say with some given
distribution of manufacturing across space. We will, of course, find that some locations are more
desirable for manufacturing than others. And we will not be surprised to find that the desirability of
sites can be measured by a market potential index that is rather more complicated than the ones used by
the social physicists but still recognizably related.
Next consider how the economy evolves. Manufacturing will move toward more desirable sites and
away from less desirable ones, but in so doing it will change the market potential map, typically
reinforcing the advantage of already-favored locations. Thus market potential becomes part of a story of
circular and cumulative causation.
Finally, the clustering of production that results from this dynamic process can be seen as the
consequence of a kind of pecuniary external economy, not really inconsistent with Marshall's
description.
What may seem more obscure is how central-place theory could fit into the same scheme. Indeed, it
does not fit quite as easily, partly because central-place theory is often expressed as if central places
served only the demands of an evenly spread farm population. If you think about it, of
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