Alfred Weber's Theory: The Weber Model, Globalization And Industrialization

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Alfred Weber is a German economist who created the Weber Model. Today that model gets used in determining where a big industry will settle, and not only that but it discusses agglomeration and how that helps the industries that have clustered together in a certain spot- such as Silicon Valley industries. Together the Weber Model, industrialization and globalization all tie together because they all affect each other.
When an economy is no longer based in the agricultural aspect and enters into a manufacturing and export oriented direction then the economy in which they have moved into is considered to be industrialized. With industrialization it improved the standard of living in a society in many ways.Through industrialization it has created
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From Weber’s locational theory one can look and pull out the labor costs and transportation costs. In Figure 5.6 it explains in little detail about how China is competing with America. China is able to bring the cost of their currency down, and because of that ability, China is able to export cheaper than the United States. Because of what China is doing with their money, they have cost many American’s jobs in the manufacturing industry. China is to host more industrial jobs because China has lower wages, and that is the second part to Weber’s locational theory, labor costs. The other countries located in Southeast Asia include Malaysia and the Philippines all have cheap labor costs. As for Mexico it has many similarities to the China situation and other countries such as Malaysia and the Philippines. While it does not lower its currency rate as to compete with the United States, it does have cheap labor costs much like the Southeast Asian countries.While not in entirety, Weber’s locational theory can be used to explain why the industrial jobs are moving to Southeast Asia and Mexico. Looking at the second part and third part of Weber’s theory which is labor costs, and cost of transportation it is explained; these countries are able to export and produce these products much cheaper than the United States would be able …show more content…
With Southeast Asia and Mexico receiving a lot of the United States industrial jobs begs the question; will it lead to economic development in the less developed countries or will it cause maldistribution of wealth? With these two countries receiving most of the industrial jobs, it is safe to categorize them into vertical integration. They are taking the manufacturing jobs that have put many Americans out of jobs and are able to sell that product and receive a bigger profit, meanwhile the countries buying from Mexico and Southeast Asia are able to buy these products for less.Globalization will lead to less developed countries becoming more accomplished in their economic development. Such countries as Africa, Asia and Latin America have made their economies kept from the world. Though since opening their market places such as China have raised their GDP 23 to 46 percent and with India 19 to 30 percent (Bardhan, Pranab, Scientific America) while it has created problems for the developing countries; they since have made it so where they depend on their own economic institutions instead of the outside forces. From the 1993 prices located from the World Bank, it is shown that the extreme poverty in less developed countries have declined dramatically. It really shows in the East, South and Southeast

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