Location theory to discuss the determinants of the location of an industry or factory in the right location that is at the point of having the lowest costs (least cost). While the economy of a region (regional) discussed the interaction between various resources (human, natural, capital, technology and institutional) on the surface area to meet community development needs and the expected progress effectively and efficiently. Goals from both theory (the theory of the location of regional economic dah) although not the same but show similarities direction, often regarded as a step child (stepchildren) within the family of Economics, which means having a very close relationship between them.
Traditional economic theory ignored the spatial aspect. Although the classical economists was Adam Smith's pioneering yanq wrote many scientific works on a series of evolutionary developments in economic activity. Their formal analysis can be said to be static and without spatial structure; by Walter Isard said to be "a wonderland of no spatial dimensions." The validity of economic laws is absolute (absolute), means universally applicable, equal to all the places (countries) and the whole time. Not surprising that this statement has been attracting more reaction.
A manifestation of these reactions is of economists mashab (flow). history (historical) pioneered by Friedrich List (1841), his National System of Political Economy, which many followers came from Germany, which stressed that the theory is correct or not must be assessed by reference or trend in social reality, they understand the significance of the element of time explicitly incorporated into the theory in the unit price. Because of the location advantages include time savings that would reduce or suppress the delay delivery of the goods, then the spatial aspects of the area to be treated as an aspect of time.
Economists generally believe that they consider factor analysis equipment layout area is only a partial understanding. They tend to assume that the factors of non-economic have dominant effect on spatial patterns in the area of economic activity. The location of various natural resources is certain, while the consideration of non-economic considerations are considered as the determining factor in the decision where they live, work and carry out production activities.
In analyzing the economic implications of spatial dimensions there are at least three ways of view, two of which explicitly take into account the distance variable, while the third treated implicitly. First, a type of analysis assumes that the location of population, industry and resources is certain, as well as road transport chain and the assumption about the spatial structure is as a friction or a shift towards commodity flows between the points which are considered certain. in particular models of this kind are often dealing with the determination of the pattern of commodity flows and linkage equilibrium price.
Friction or linkages between the spatial structure is measured by the cost of transportation and spatial interaction. Although transportation costs reflect the influence of other variables such as volume and weight and density of traffic, but the transportation costs that change directly to the distance. In fact most of the level of transportation costs is less proportional to the distance (tapping rates). The level of transportation cost per ton / kilometer down to the unit distance is increased further. Because transportation costs limit the ability of goods produced at a site to compete with goods produced in another location, then there is a tendency that the flow of goods has decreased farther distances. Second, is to adopt a spatial analysis has been generalized to include the determination of spatial structure and spatial treated as a matrix for the placement of economic activity.
Lokasio approach emphasizes spatial heterogeneity of the system. Production, consumption and population spread. Spatial preference of most individuals, the savings of scale and agglomeration advantages encourage the concentration of productive activity and concentration of population in the centers of a limited number. So the cities and urban units is the relevant object of study in the economics of location and economic areas, because in a conglomeration of regional spatial population there and because of the growth of cities can be explained by the forces of economics and sociology in a systematic manner. On the other hand, the location of natural resources are geographically dispersed, so far apart, which need to be pursued is the minimization of transportation costs.
The balance of opposing forces between centralization and distribution, will determine the structure lokasio (spatial) economic and spatial structure of this economy can explain the formation of flow patterns of production factors and commodities between the optimal spatial structure. Third, is the type of analysis that concentrates on the linkages between the regions in the national economic system. Although geographical factors are not implicitly understood in economic analysis, in the sense that the areas given constraints as having a certain area, the distance variable has not received attention as it should. Areas to be treated as an integral part of a multi-sectoral economy, but because the cost of transportation and distance elements considered
as things that have an influence that can not be ignored in the relationship between regions, then the system is seen as a peripheral region of points which are spatially separated. partly because it ignores the spatial factors and partly because of economic problems in key areas such as regional growth, fluctuations and stabilization policy, and the theory of income determination, then the analysis can be categorized as, macro-regional economies. a valid approach to develop a growth model at the regional level, each region is treated as a whole in an open economy that allows the application of analysis of the flow of goods and people between regions.
According to the stages theory (Friedrich List, 1g46), that economic development will develop following a single evolutionary path, as follows:: Primitive cultures, where the tribes who traveled and self-sufficient families by farming.
- Feudalism, increases gradually with the narrowness of space life, primitive economy evolved into feudalism. In the Middle Ages, an order of government and exploitation mainly based on land ownership, regulating social and economic life of the king to slave.
- Capitalism. Feudalism ended in the Renaissance and Reformation produce industrial revolution. farmers leave their land and go into the cities to be proletariat.
- socialism and communism. Capitalism is considered as an intermediate stage only which will be replaced by socialism or communism, as capitalism replaced feudalism.
The theory of the stages can be used as a reference to determine the direction of future development, but acknowledged that not all predicted it happen. Although capitalism stricken by economic depression-depression that grew serious, the worst was the World Depression of the 1930s but can be overcome. Who would have thought that John Maynard Keynes has emerged and developed the theory of market economy which allows the use of fiscal and monetary policy to soften the business cycle and overcome the chronic lethargy.