Welcome to The Department of

Economics and Sociology

FACULTY OF
BUSINESS ADMINISTRATION AND
MANAGEMENT
 Economics

Economics comes from the Greek word Oikonomia. –

Oikos(means a household) + Nomos(means management). So, it
means household management.

Aristotle described economics as a household management that

means the problems of food, shelter, clothing, education, treatment

etc. for family members and the process of solving these problems
by earning money.
Adam Smith (1723 -1790), the founder of economics,
described it as a body of knowledge which relates to wealth.

According to him if a nation has larger amount of wealth, it

can help in achieving its betterment. He defined economics as:
 
“The study of nature and causes of generating of wealth
of a nation”.
L. Robbins defined as-“Economics is the science which

studies human behaviour as a relationship between ends and

scarce means which have alternative uses.”
This definition base on three basic characteristics of

human life: 
1. Unlimited wants (ends)

2. Limited resources (scarce means)

3. Alternative uses of resources

Finally we can say that Economics is that branch of

science, which deals with production, consumption and

distribution of wealth.
Descriptive" definition

"Economics is the study of purposeful human

activities in pursuit of satisfying individual or
collective wants”

Analytical"definition

"Economics is the study of principles governing the
allocation of scarce means among competing ends”

Different subfields and specializations

 Geography:
Greek words: “geo”, which means earth and
“graphos”, which means description.

When we think of Geography, we often use the

following words or concepts: location, site, place,
access, spatial, regional, distance, separation,
proximity, speed, mobility, transportation,
resources, communication, agglomeration etc.

Simple definition of Geography

The study of the way in which society organizes itself
in space.
Geography is that field of study which primarily
concerned with variation from place to place
rather from time to time and let us to
understand the relationship among places along
with integrated theme.

Therefore geography is the study of spatial

variations on the earth surface. Here earth
surface refers to milieu (social environment) in
which human life exists, i.e.
the lower portion of the atmosphere which
people breathe; the outer part of the lithosphere,
upon which people walk and from which
minerals are extracted and hydrosphere where
people fish and sail.
 Finally geography is the discipline that analyzes
and explain variations in activities over space. So
its better name is spatial science.
 Economic Geography:
 Our attempt to combine the definitions of Economics and
Geography may become a little messy, but let us try:

 "In Economic Geography, we study the (locational,

organizational and behavioral) principles and processes
associated with the spatial allocation of scarce (human,
man-made and natural) resources (which are also
distributed spatially) and the spatial patterns and (direct
and indirect, social, environmental and economic)
consequences resulting from such allocations.

 Let's try a shorter version: "Economic geographers study

the principles governing the spatial allocation of resources
and the resulting consequences.
Economic geography is the study of spatial variation
on the earth surface of activities related producing,
exchanging and consuming goods and services.

It provides a conceptual understanding of the

changing fortunes of the world economy.
Economic geography is a branch of geography that
deals with the relations of physical and economic
conditions to the production and distribution of
commodities.
Economic geography is the branch of geography
that deals with the relation of economic conditions
to physical geography and natural resources.
 Scope/Subject Matter of Economic Geography

Most of the geographers have defined the scope and method

of economic geography in terms of three basic questions, as
under:
(i) Where is the economic activity located?
(ii) What are the characteristics of the economic activity?
(iii) To what other phenomena are the economic activity
related?
To these three later studies have added two more:
(iv) Why is the economic activity located where it is?
(v) Would it not be better located elsewhere, to better
satisfy certain economic and social criteria?
More recently an answer has been given that these
are the result of economic behaviour.

This changing nature and change in emphasis on

content of study shows that economic geography
has proved the importance in various periods of its
growth.

Therefore, it is necessary to discuss the nature and

scope of economic geography both from traditional
to modern point of view.
As early as in 1882, the German scholar, Gotz had
defined economic geography as “a scientific
investigation of the nature of world areas in their
direct influence of goods”. Although, Gotz initiated
the concept of economic geography but his influence
was limited to Germany only.
The abstract principles of that time could not be
related to economic geography because they were
not in their developed form. Economic geography
owes its growth as an academic discipline to the
interest of the British people in commerce. It is
interesting to note that George Chisholm, the
father of modern economic geography, had wanted
an intellectual interest to the study of geographical
facts relating to commerce.
He thought that the primary use of economic
geography is “to form some reasonable estimate of
the future course of commercial development so
far as that is governed by geographical conditions”.

 In his treatment of the subject, however, Chisholm

emphasised commercial development, and
considered the physical features and climate in
relation to products mainly.
This emphasis on physical features and climate in
relation to products led others subsequently to
think of economic geography in terms of
productive occupations.

 Jones and Darkenwald (1950) state that,

“Economic geography deals with productive
occupations and attempts to explain why certain
regions are outstanding in the production and
exportation of various articles and why others are
significant in the importation and utilisation of the
things.”
On the other hand, Ellsworth Huntington (1940),
however, considers that all sorts of materials,
resources, activities, customs, capabilities and types
of ability that play a part in the work getting a living
are the subject matter of economic geography.
Bengston and Van-Royen (1957), in his book
Fundamentals of Economic Geography, have stated
that:
Economic geography investigates the diversity in
basic resources of the different parts of the world. It
tries to evaluate the effects that differences of
physical environment have upon the utilisation of
these resources.
It studies differences in economic development in
different regions or countries of the world.

 It studies transportation, trade routes and trade

resulting from this different development and as
affected by the environment.
 Approaches to the Study of Economic Geography

The approaches to study economic geography

can be divided into three categories:

1. Traditional Approaches

2. Philosophic Approaches
3. Modern Approaches
 1. Traditional Approaches:

These are the approaches which are common

in geography and frequently used in
economic geography. These are:

(i) Regional Approach,

(ii) Commodity or Topical Approach, and
(iii) Principles Approach.
 (i) Regional Approach:

The term ‘region’ is very popular in geographical literature

and refers to a suitable areal unit, e.g., a climatic region, a
natural region, an industrial region, an agricultural region,
an administrative or political region and so on. A region is
having common geo-economic characteristics, a resource
base, economic development and to some extent
similarities in culture and demographic structure.
Therefore, several geographers have chosen this region
approach in economic geography. An advantage of the
regional approach is that it gives a better knowledge of
different parts of a unit, their relationship to each other
and to the unit as a whole.
 ii) Commodity or Topical Approach:

This approach provides a systematic

description and interpretation of the world
distribution pattern of a commodity
(wheat), or an industry (cotton textile
industry), or a human occupation (fishing).
It analyses the whole sequence of their
development, and catches them on their
march to progression or retrogression.
 (iii) Principles Approach:

In every sphere of human activity certain fundamental

truths or principles hold good: indeed, they provide the
rock-foundations upon which the varied and varying
superstructures rest. The concepts of Economic
Geography are through and through permeated with the
same spirit whether we talk of Regional Economic
Geography or Systematic Economic Geography.
Economic regions are based on certain fundamental
principles; and similar is the case with the extraction of
minerals (coals, iron ore or diamond), or the localisation
of industries (metal fabricating or textile industries), or
the exchange of commodities.
 2. Philosophic Approaches:

The 1990s research in economic geography

may be characterised by three major
philosophic approaches. These are:

(i) Positivism,
(ii) Structuralism, and
(iii) Humanism.
 (i) Positivism:

It employs the scientific method to interpret and

understand issues in economic geography. The
scientific approach is based on empirically
verifiable and commonly agreed upon evidence
through replication of analytical results.
It involves informed hypothesis testing leading to
empirical generalisations and law-like statements.
GIS (Group Information System) is central to
analytical and positivist approaches to geography
in general and with especially numerous
applications in economic geography.
 (ii) Structuralism:

In economic geography, structuralism, posits that

what we see in the world does not reveal the causes
of what we see.
The structure of the economy cannot be directly
observed, and we should therefore, develop ideas
and theories that will help us understand what we
see and experience. While there is no way to directly
test such theories, we can debate about them to
achieve better understanding.
 (iii) Humanism:

It is a part of critique of positivism.

 Humanistic economic geographers object to both

positivism and structuralism on the basis that these
approaches view people as responding mechanically
to spatial and structural forces.
 3. Modern Approaches:

In economic geography, three approaches

have been developed during last three
decades that can be considered as modern
approaches. These are:

(i) System analysis,

(ii) Behavioural approach, and
(iii) Institutional approach.
 (i) System Analysis:

A system is a set of identified elements so related that

together they form a complex whole. System analysis
is an approach or methodology rather than a
philosophy or scientific paradigm.
Economic geographers utilise the system concept in
order to better understand the component elements of
some part of reality, and the relations between them.
The use of such a conception stresses the study of the
whole as well as of the parts. Thus, the world economy
can be regarded as a set of interlocking parts and sub-
systems.
 (ii) Behavioural Approach:

Incorporation of the behavioural science outlook in

geography is known as behavlouralism. In
economic geography behavioural approach now
has become very common. Economic geographers
study the overall results of economically-oriented
behaviour as they appear in the landscape. In
economic geography, the study of decision-making
process is an important aspect.
 (iii) Institutional Approach:

Ron Martin (2003) has emphasised the need of

institutional approach in economic geography. He
stated that the form and evolution of the economic
landscape cannot be fully understood without
giving due attention to the various social
institutions on which economic activity depends
and through which it is shaped.
 Classification of Economic Activity
The complex environmental and cultural realities
control the economic activities.
Production patterns are rooted in the spatially
variable circumstances of the physical
environment.
Resource disparity gives economic prospects in
some regions and countries and employment
opportunities.
The recognition of resources or ability to exploit
them is effected by technological development.
Political decisions may encourage or discourage
economic activity (subsidies, protective tariffs, or
production restrictions).
Production is controlled by economic factors of
demand, whether that demand is expressed
through a free market mechanism, government
instruction, or the consumption requirements.
 Categories of Activity

A. Production
The main sectors of the economy do not stand alone. They are
connected and integrated by transportation and communication
services and facilities not assigned to any single sector but not
 Primary Activity
 Those parts of the economy involved in making natural
resources available for use or further processing.
 They are mining, agriculture, forestry, fishing and hunting,
and grazing…
Secondary Activity
 Economy involved in the
processing of raw materials and
altering or combining materials
to enhance utilities and value.
They are:
 Handicraft production,
 Woodenware,
 Copper smelting…
 Textile and chemical industries,
 Manufacturing and processing
industries
 Construction industry, and
 power production…
Tertiary Activity
It includes wholesale, and
retail trade, associated
transportation and
governmental services.
This part fulfill the
exchange function,
provide market
availability of
commodities, and bring
together consumers and
providers of services.
Quaternary Activity
 It includes research with
gathering and dissemination of
information,
 It also is administration of the
other economic activity levels,
often considered as a
specialized subdivision of
tertiary activities.
 They are ‘white collar’
professionals working in
education, government,
management, information
processing, and research.
 Quinary Activity

 A sometimes separately recognized subsection of tertiary

activity management functions involving highest-level
decision making in all types of large organization.
 Also the most advanced form of the quaternary sub-sector.
B. Exchange
a)Increasing the value of commodities by changing their
location
b) Exchanging services and ideas by telecommunication or face
to face contact.
c) Satisfying the needs of people by changing their
location(Passenger transportation)
d)Warehousing and distribution function
e)Wholesale trade
f)Retail trade

C. Consumption
Use of commodities and services by human beings
to satisfy needs and wants.
Population and Development Issues in the
Developing World

The well being of approximately three-fourths of

the world’s population- the poverty-ridden
peoples in the underdeveloped countries of Asia,
Africa. and Latin America- remains a significant
and growing world problem.

It is indeed sobering that two centuries after the

Industrial Revolution, most of the world
remains poor, still suffering from inadequate
standards of living
Issues of population and development in the
developing world context are interrelated mainly
because of the circular relationship between population
and development.

Population is both the subject and the basis of

development. That is, development is directed at
improving the socioeconomic well being of population
and at the same time requires people for its technical
and manual labor power.
 It should be kept in mind that population, although
necessary to get the process of development moving the
forward direction, can also stifle development meant to
help itself.
Regardless of the nature of the relationship, the
overriding issues of population and development in
the developing world involve poverty,
unemployment, underemployment, inequality,
malnutrition, poor sanitation, and many other
social miseries.

Dudley Seers(Meaning of development) has

asserted that a country can not be considered
developed or developing unless it has been able to
reduce the levels of poverty, unemployment, and
socioeconomic inequality affecting its population.
 Poverty

Poverty is defined as the lack of the minimum

food and shelter necessary for maintaining life.
Generally poverty is measured in terms of per
capita income. Per capita GNP figures are often
criticized as being a poor measure of poverty
because of their inability to account for various
types of household level informal economic
activities.
Absolute poverty/Extreme poverty

Absolute poverty refers to a condition where a person

does not have the minimum account of income
needed to meet the minimum requirements for one
or more basic living needs over an extended period of
time.
Extreme poverty, or absolute poverty, was
originally defined by the United Nations in 1995 as “a
condition characterized by severe deprivation of basic
human needs, including food, safe drinking water,
sanitation facilities, health, shelter, education and
information.
According to the definition of relative poverty,
the poor are those who lack what is needed by most
Americans to live decently because they earn less
than half of the nation's median income.

 By this standard, around 20 percent of Americans

live in poverty, and this has been the case for at
least the past 40 years. Of these 20 percent, 60
percent are from the working class poor.
 Relative poverty

Relative poverty is the condition in which people

lack the minimum amount of income needed in
order to maintain the minimum standard of living
in the society in which they live. Relative poverty is
considered the easiest way to measure the level of
poverty in a individual country. Relative poverty is
defined relative to the members of a society and
therefore differs across countries.
 Causes of Poverty

Overpopulation
Unequal distribution of productive resource such
as land and capital.
War
Disease
Economic structures
Lack of education
Parents leaving the family
Divorce
Teenage pregnancy
Domestic abuse
Employment abuse
Immigrant status
Minority status
Physical and mental illness and disability
Loss of job
Low wage rates
High medical bills
Fraud
Oppression
Theft
Disasters
Fires
Flood
Lack of or inability to afford adequate health
insurance
Lack of awareness of government policy
Industrial change
Apathy
Greed
Dictatorships
Globalisation
Social Factors
High taxation
High growth rate of population
Lack of job opportunities in secondary sector
Lack of industrialization
Over dependence on agriculture
Inflationary pressure
Unemployment
Drug abuse
Income inequalities
Accidents
Thank You All
ANUP KUMAR MANDAL
Assistant Professor
Department of Economics
and Sociology