03. Target analysis
04. Means analysis
05. Promoter analysis
06. Political economy
07. Welfare economy
08. Order analysis
09. Order conception
10. Order dynamics
1 The question of the economic theory
2 The question of the teaching of the economic policy
3 The question of the political economics
4 The question of the welfare economy
5 The question of the order theory
6 Economic complementary sciences
4 The question of the welfare economy
The economic theory sees itself as a positive thus not as a normative discipline. It wants to explain events and not judges. It wants to explain what actually happens and not which developments are desired. If the economic theory of the hypothesis assumes that businessmen generally make their decisions profit-oriented, then this shall be regarded as an observation of an actual behavior at first and also nothing is said about how this has to be assessed.
Superficially it seems as if this identification just does not apply to the teaching of economic policy. The politician wants to carry out changes because he is convinced that the present relations lead to unwanted and mostly also to unjust results. So he starts out consciously from an assessment: anyone who wants to change does insinuate silently that the current conditions are unsatisfactory.
At first this only applies to the politician, not necessarily for the teacher of the economic policy. For him the behavior of the politicians is a predefined fact which he examines in the same way as the pure economic theorist understands the behavior of the producers and consumers as a predefined fact.
Even if the aims of the politicians are regarded as a predefined fact for the teacher of the economic policy, the economic policy teaching wants to advise the politician on which way he can carry out his targets. Well, it is part of the tasks of the economic policy teaching, that this branch of science judges the individual measures of the politicians e.g. to point out that certain action has to be regarded as unwanted.
On closer inspection assessments of single targets of the economic policy even take place in the context of this discipline. Taking the target of the monetary stability as example, the adherence to the target of the monetary stability is considered as necessary and measures which hurt this target are judged as dangerous.
If we ask why the biggest part of the economic policies teacher
judge the conscious driving to inflation (and thus a responsibility to the objective of price stability) as undesirable, so we come e.g. on the finding of the neoliberals, that means that economic growth is at risk for inflation or that inflation alignment of production to the consumer wishes hazardous because with the rise in prices at the same time - at least temporarily - the price ratios are distorted and thus no longer reflect the scarcity relationships correctly.
However, at such a consideration the monetary stability is not so very regarded as a target but as a means at all. Nothing is said about whether the goal of monetary stability is pursued for its own sake, so it has an intrinsic value, it will only be noted that monetary stability is required in order not to jeopardize super ordinate objectives. And such a philosophy does not differ from the assertion put forward by Keynes that to achieve full employment the increase of deficit-financed expenditure of the State is necessary.
Of course one can wonder, why in connection with the monetary stability is spoken about targets, although obviously monetary stability is only striven because of unwanted effects on other, primary targets. This is related to the central bank, which the task of monetary stability was applied and is not able to determine the price level.
It can only indirectly have influence on the price level by the fact that it changes either the amounts of the banknotes or the interest rate at which it grants private banks loans.
So that we, however, can speak about a means which uses the central bank it must be ensured that the central bank has also immediate access to the variable described as a means. This is not the case and the price level can be influenced only indirectly, so one speaks here about a target of the monetary stability although no intrinsic value is awarded to this target as this is the case at other aims normally.
Even though the economic policy teaching centrally judges the measures of the politicians and gives advice how to reach certain targets; nevertheless one can classify the object of this discipline as positive and explanatory. As we have seen above, the target means relations derive socio-technically from the cause effect connection of the economic theory. Once again: There exist the same facts if the economic theorist explains the change in the occupation by a change in the demand of goods and if it is noticed in the economic policy teaching that for an increase of the occupation an increase in the goods demand is necessary. For the realization of a target it requires a certain means and this observation says no more than you explained already in the economic theory about this connection.
However, if it is that way, the teaching of the economic policy also must be described as a discipline which confines itself to explanatory, not to normative statements. It seems only externally as if the recommendation of a means represents an assessment for the attainment of a target. The deficit in the national accounts budget is not seen as a value in connection with a Keynesian job creation scheme. For this question no statement is given at all. It is noticed merely that the reduction of unemployment as a target will be achieved by the fact that the state finances its expenditure in deficit.
However does an assessment play a role in the political advice in the background anyway? Can’t you ask a responsible scientist to give advice only to politicians who trade according to his moral concepts? And don't we get reviews this way finally?
We will see in the next chapter about the method quarrel in economics that a positive, explanatory science also carries out assessments and that the demand of Max Weber for an unbiased science only refers to quite certain assessments. Quite generally one will be able to find sufficient room within the old daily discussion of the parties for a piece of unbiased advice, too, when one declines the advice of dictators for conscience reasons.
With regard to the welfare theory quite contrary to the teaching of economic policy at first glance it seems as the welfare theory as well is understood like the economic theory as an explicative discipline. Discovering the regulation reasons of the welfare of a population is the task of the welfare economy. It seems formally that it is here just the same method like e.g. in the growth theory in which the regulation reasons of the economic growth are searched for.
There is nevertheless an essential difference between the two knowledge disciplines. If the growth theorist examines the question, on which causes a rapid growth or also the sudden non-appearance of a growth has to be traced back he comments in no way on the question how this change has to be judged. If on the other hand the welfare theorist tries to prove that just in a market economy the best conditions for an optimization of the overall welfare are met, an assessment is always connected. They want to express that posed by a market-based regulation than satisfactory effects start from this.
If the demand formulated by Max Weber for an unbiased science is assumed now, then you have to ask whether the occupation with welfare problems is compatible with the general principles of scientific work. We will show in the next chapter as the traditional welfare economy tries to solve this contradiction. At this point we want to confine ourselves to the fact that the welfare economy surely includes much less from any assessment than this can be said by the pure economic theory and also by the teaching of the economic policy.
5 The question of the order theory
Another approach faces us in the order theory. While the everyday politics pursues single, concrete targets and serves particularly the elimination of mismanagement, the regulatory policy is for the coordination of the interests of the individual and single actions. The modern social systems stand out by the fact that you act on the principle of the division of labor and that the individual members of the community are specialized. Here it is necessary to fix the rights and duties of each person. What are the responsibilities of each individual and what tasks come to the State.
Particularly in a market economy it requires a coordination of the interests of the individual. The production is not carried out according to a central plan but results from thousands of individual decisions of the businessman and the private households.
However, it would be wrong to think that only a market-based society system requires coordination, coordination is necessary in every major system, even in the so-called centrally planned economy in which the Control of production is carried out according to a central plan. However, since the dictator is never able to the formation of the central plan and to make the allocation of individual responsibilities to the individuals as well as the control over the fulfillment of the obligations, the dictator needs at the forefront of the centrally planned economy a large army of officials and bureaucrats who steer the economy. The head of government or head of that authority then is essentially limited to the definition of some fundamental decisions.
Every order is a set of rules while in the principle the measures of the everyday politics consist of individual decisions. The transitions are flowing. Every law represents an order from the view of the single citizen, which regulates the individual actions of the citizens who appears again and again on one side. At the same time they are mandatory for all citizens almost always for a lot of people, according to the principle.
It is the great fault of the traditional teaching of the central economy that this coordination need was not seen. It has acted as if it was just the will of the political leader given in state planned economies, as if to bend all the bureaucrats and citizens one hundred percent to the will of the dictator.
Just because the state planned economy stands out by the fact that everything is regulated from above and the danger of an abuse that only very few liberal decisions are granted to the single citizen is here much higher than in a free market economy. In a market economy it therefore requires with this primarily lower control because everybody shall do exactly what is in its own interest.
An order defines the highest values, which must be true within a community and provides a variety of incentives that the individual citizen as well as the government officials and politicians do not infringe these values. We already indicated above, that an order is to delineate the liberties one each against each other. The freedom of others is always the largest fine of its own freedom.
And it is therefore not enough, as the older liberalism has submitted to shake off by a single act, the state constraints. Rather, it requires a continuous monitoring that this order will not leave again. Both the politicians and the individual economy subjects have a heavy interest in turn to limit the competition in its favor which shall guarantee this liberty.
These incentives can on the one hand, in the positive sense as an incentive, provide a reward in the event that the individual is behaving as it is in the interest of all. However, these elements are in order the majority of cases of negative incentives, disincentives to prevent abuse their individual freedom and act, which prevents the coordination of individual interests.
Just as there was a fatal error if the trailer went out a centrally planned economy of the error, a state planned economy needs no coordination, as well it would be wrong if we were to assume, in a free market economy, the individual must do whatever is in its interests and there is next to the well-being of individual citizens at all no overriding common good of all. Every social system requires an order and the characteristic of every order just consists that it is fixed in an order what is forbidden and which obligations are required.
The presence of prohibitions stands the target of a liberal order not in the way. Even if individual acts such as robbery and murder are forbidden, generally remains a variety of alternatives, between which the individual can choose. Not the bans but the commandments are the enemy of the liberty.
Whether the order theory an explicative or normative discipline appears, an ambivalent character of this theory proves with regard to the question. On one side we notice that the liberalism and the scientific socialism have begun both around stand up for the introduction and the receipt of a certain order. You do not confine yourself to it to describe certain connections between order and behaviors and between the individual organizational elements, but they defend the system described by them and propagated firmly.
Every order concept also contains, however, a variety of observations on the other side which say nothing about if certain actions are desired and how to judge certain results but which hypotheses can be build and which can be checked empirically for their degree truth.
If e.g. Adam Smith voiced in favor of a liberal market economy in which has to decide the particular about its interests, then Adam Smith did not come to the declared belief of a market economy only due to an ethical attitude. He was convinced also deeply that the market like an invisible hand can just manage the coordination of the interests of the individual much better than every planning starting out from the state. Science has to be obviously proved in the principle very well while there is no possibility however in the context of an empirically oriented science as people have to behave and the results of the market have to be judged like themselves, to check the validity of interdependencies.
6 Economic complementary sciences
Altogether, our previous considerations dealt with approaches which are assigned to economics in the narrower sense. But also not economic disciplines deal with economic and political-economic questions.
Here economic history would have to be mentioned first. The economy historian also deals with entrepreneurial or political activities. Unlike the economic theorist the economy historian is not that much interested in general legitimacies. He rather wants to find out the behaviour of outstanding personalities, how the concrete, historical events and actions can be explained and how these have influenced lastingly the complete events of a country and a particular time period.
His sources are therefore also less economic theories although of course he cannot disregard the knowledge of economics completely at the explanation of certain actions. In a very first line he refers to the literary sources which verify the actions and motives of the agents. If he reports about effects, then it is primarily the events which in turn can be verified with historical sources, and less theories that represent, what effects actually could be expected.
This difference in the approaches gets particularly clear between economic theorist and economy historian. If the economic theorist examines the behaviour of the entrepreneurs under competition conditions, he speaks about profit maximization. The entrepreneurs were eager to align all of its important decisions by whether they lead to an increase or a reduction of the total profit and the entrepreneurs in general would only make such decisions that lead to an increase in profits, or at least not to a reduction profits.
The economy historian, however, operates motive research. He examines, which motives have led famous researchers as e.g. Zeiss or Nobel to invent new technical methods and to apply them in practice. Here it is not talked of profit motive and greed, but of the desire to give people new opportunities for development.
Although it appears at first sight as stood the theses of economic historians in sharp contrast to the assumptions of economic theorists, and as would the results of historical research lead to a falsification of profit maximization hypothesis. In reality the research results of both knowledge disciplines are not in a clear contradiction to each other. It is rather different approaches.
The economic theorist does not want to do any motive research. For the description of a free enterprise process the question due to which motives a single person became finally an entrepreneur is not of importance at all. The decisive factor is only that intense competition among entrepreneurs is forcing them to take advantage of all possible chances of winning. An entrepreneur, who again and again has given away possibilities to win, is very soon driven out of business and forced to bankruptcy. The profit maximization hypothesis therefore does not refer to a possible motive, but refers to an incentive system prevailing in the competition.
He must always expect that his possible rivals save costs because of new technology and that therefore they can offer their goods at lower prices and this way more and more customers leave those entrepreneurs who do not participate in this competition. If there is fierce competition then it is not about a little more or less profit, in reality it is about all or nothing. Who does not seize every chance of winning, is in danger to completely withdraw from the market because of losses.
How strong the points of contact between economic history and economic science are in the narrower sense, also depends on the scientific method that is engaged by the individual researcher in his studies. The pure theoretical method was, for example, found at Carl Menger, a main representative of the neoclassical economy, which set out from the conviction that in the context of economic sciences, it is about the investigation of universal laws the same way as in the natural sciences.
Gustav Schmoller, the head of the (recent) historical school, however, was convinced that economic actions like all human behaviours in no way follow similar laws like those of natural events. The human has a free will, therefore, it could never be predicted with absolute certainty how the individuals will behave. Therefore one could not explain economic events, but only make the attempt to understand human action afterwards.
Here the economist moves into the proximity of the methods used by the historian and just for these reasons it was spoken of the historical school in connection with these researchers. We still will deal with this historical philosophy very detailed in the next chapter in which it is spoken about the method quarrel in economics and explain which consequences this procedure had for the success of economics.
The economic law counts in second place of the not economic disciplines which deal with economic objects. The part of jurisprudence which refers to economic rights also starts out basically from the same studies object as economic sciences.
The majority of government activities must be brought into a legal form. This applies to the laws which pass the parliaments, for the ordinances which are disposed by the state bureaucracy on the basis of these laws and to the decisions of the courts, with which they administer justice.
Laws and ordinances constitute the rights and duties of the government agencies and the individual citizens of a community of states. If we can assume also that under normal conditions the vast majority of citizens comply with the laws and the government particularly respects their limits laid down in the constitution, we must always expect that law will be broken sometime, also otherwise quite responsible citizens are not perfect and sometimes commit violations of the law.
In a constitutional state every citizen to whom has been done wrong has the right to invoke the courts and to let clarify, whether there is a violation of the law and to ensure that justice is administered. And whenever contraventions of the law violate general jurisdiction seriously, the public prosecutors always have the duty ex officio to pursue the contraventions of the law even, if the citizens injured by breach of law would not take any legal action.
The individual laws and ordinances are partly very narrowly connected with each other; by the very same action several laws can be broken now and then. Primarily, the laws mustn't contradict themselves. There are several reasons for that in reality very often it must be ascertained in the first place through courts, whether laws are broken in detail and, if necessary, which rights were violated.
Firstly, with the increasing complexity of the social systems a job sharing and specialization became necessary also in politics with the consequence that the individual laws are worked out by different ministries, also in the parliaments the parliamentarians specialize with the consequence, that the general overview is lost now and then and the is a risk that the laws partly contradict themselves.
Secondly, most governmental entities are part of superior communities. In the Federal Republic the municipalities subordinate themselves to the federal States, the federation is in turn the European community. All states are finally a member of UNO, which is the international community. Here is to be calculated with the risk that inferior and superior bodies of laws partly contradict due to ignorance. So e.g. the constitution of the federal state Hessen particularly provides the ban on a lockout, in turn the constitution at least in opinion of most employment law experts allows limited measures. So it has to be clarified here, whether the constitution precedes in doubt or whether the state law must be respected in every case.
Thirdly, the increasing complexity of the matters of fact to be regulated in the laws also contributes of course that in the laws very well important real facts are overlooked. This is especially true because we live in an open society in which changes permanently arise so that in the drafting of the specific laws by no means always, even in the majority of the cases, it cannot be gone back to already proven regularities.
The main task of jurisprudence also therefore consists in paying attention to it, that the individual laws yield a counter-saying free complete system, so that the individual laws fit in the frame sketched out by the constitution and do not contradict themselves mutually. The task of the jurisdiction, however, consists in checking how far a specific right is violated, which laws have to be used and, then which measures become necessary in the individual case for the restoration of the right.
Since most means carried out by the state are carried out in the form of laws and ordinances as said, economics and jurisprudence, as far as it deals with the economic law, start off from the same studies object. So e.g. the teaching of the economy and social policy deals with the national insurance which is regulated in a body of laws of its own.
The philosophy of both knowledge disciplines is different, though. In the context of economic and social policies it is, how shown, about the question of whether the targeted means are suitable actually to help to realize the objectives, for which these laws are enacted, and what negative side effects have to be expected on other policy objectives.
The jurist, however, has to check at the writing the necessary body of laws, whether the primary laws, first and foremost the limitations fixed in the constitution were observed. With this the legal scholar has to check primarily whether the law in question also adheres to the equality before the law and whether the legal certainty is not perhaps violated. Namely if there is disagreement about how certain legal facts are to be interpreted, on one hand the risk arises that parallel court cases are decided by different courts differently and right therefore the principle of equality before the law is violated. And on the other hand just because of the uncertainty how single laws have to be interpreted arises an additional uncertainty at the individual economy subjects which manifests in an increase of the production costs and a decline of the productivity.
Although the philosophies of the economy and jurisprudence specialists are different, both also require the knowledge of the respectively other discipline. At the check of the question whether a determined to be checked action legally contradicts a law, also the question must be settled, whether the aim of the law was violated by this action. Every economy law, however, purports to achieve a quite certain effect in the reality and, if obviously this effect is just prevented by certain actions, this knowledge has to be taken into account also at the legal review.
However, the teacher of the economic policy also has to take into account at his recommendations to the politics, that certain measures which perhaps are considered right and desired within itself, nevertheless can and may not be carried out on the other hand, since a law forbids these measures. A convinced supporter of the Keynesian teaching still may be so convinced that the aim of the full employment presupposes a high deficit in the national accounts budget; if the valid constitution particularly forbids a new national debt, the economist also has to respect these limits at his political consultations. Indeed, he can indicate that this part of the constitution contradicts economic necessities; he also can support that according to the rules provided by the constitution this section of the constitution is changed. However, As long as such a constitutional amendment has not been carried out, these limitations must be adhered to also by the economist.
The economy ethic and economic philosophy is mentioned in third place of non-economic sciences relevant for our question. Economy ethic and economic philosophy are in the principle different from economic sciences in the narrower meaning, by the fact that economics sees itself as a positive discipline, explaining the economic events while the economy ethic is examining normative problems.
Now we had seen that some parts of the narrower economics meet very well also normative statements and this applies particularly to the welfare economy as well as to the order theory. Both disciplines do not confine themselves to the clarification of facts as indicated already, but furthermore judge very well the described economic systems.
And as moral concepts the economy ethic actually cannot be justified empirically, the economy ethic always starts out from a metaphysical bases. No matter how much it may be noticed that ethical norms are broken by people again and again, from this fact alone it can never be deduced, that these norms shall therefore be given up and have no more value. Conversely, from the assessment that people in the majority act egotistically, can be already derived that these behaviours are therefore also good in the ethical meaning. Likewise it can be noticed that the liberalism assesses the liberal decision of the members of a national community highly. The most important activity of the liberalism is that liberals also try to prove that liberal social systems reach the welfare of the people so much better than ever so very - meritorious behaving - dictators.
Thirdly, just for these last reasons a difference between the economy ethic and the parts of economics, which meet normative statements, can be seen in that the economy ethic tries primarily to work out these ultimate, straight no longer provable basic maxims. Controversially the welfare economy as well as the order theory views these ultimate maxims as given, not further justifiable on the bottom of empirical sciences. Therefore they concentrate on the question, which evaluated conclusions can be drawn from these maxims for the economic tasks.
Fourthly, economy sociology as well as economic psychology also deals with economic social systems as well as economic behaviours. These two disciplines therefore deal superficially with the same studies object as the economics in the narrower meaning. Economic theory and economic sociology are analysing e.g. the market society systems and examine the observable regularities in economic daily life. In the same way applies that even just the microeconomic part of economic theory (so the household theory and company theory) again has in common with the economic psychology the studies object, namely the economic practices within households and things.
The difference between economy theoretical philosophy and sociological philosophy is in that the economic theorist always analyses economic social systems for how far the economic basic tasks of the mastering of the scarcity in the material resources are accomplished and where the causes are located, if in the reality the economic social systems fail again and again. The sociologist, however, deals primarily with questions on which way the different economic systems organize social life, and how far these economically oriented subsystems are different of the other, primarily of the political as well as cultural subsystems of our society.
A similar work sharing could be suspected for economic theory on the one hand and business psychology on the other side. And such a work sharing is standing to reason, assuming the data wreath as part of the basic questions of economy developed by Walter Eucken. There Walter Eucken leads all economic activity of consumers and producers back on six predefined facts, predetermined sizes for each actor, which represent precisely data in this sense, which, although largely determine the behaviour of economic persons, - at least in the short term, thus in the respective period - itself can no longer be changed.
Walter Eucken counts the three factors of production as one of these 6 data: soil or nature, labour as well as capital, furthermore the needs as well as the applied production engineering and finally the order put by the State.
At such a philosophy it seems reasonable to take these six data of the economizing individuals also as data of the scientific analyses. This would mean for the present problem that the need structure of the individual economizing individuals for the economic theorist can be considered a predefined date and that it is not the task of the economic theorist to examine the legitimacies appearing in the need structure itself. The determining factors for the needs expressed by the consumers would rather be investigated by economic psychology and provided to the economic theorists.
The economic theorist then has to start out from the need structure of the individuals and to show in a model of thought, which logical conclusions for the course of the prices and amounts of goods finally have to be concluded of the needs investigated by the psychologists. In the same way the economic theorist confines itself to not examining the development in applied technology and to leave the question of the regulation reasons of applied technology to technical sciences.
Such a labour sharing between the single knowledge disciplines is extremely inexpediently since it basically hinders the scientific analysis extremely. Therefore it was also denounced by Hans Albert as model Platonism.
Such a procedure has the consequence that no economic theorist can take conclusive position for the concrete questions to science. He only can point out that the conclusions drawn by him have to be expected when it can be started out from a certain need structure (or also technique). Whether the assumptions about demand structure and technique actually correspond to reality, the economic theorist is no longer able say something about this case, he must point out that this question is rather the subject of another science (psychology in our example) and his statements are limited to that very specific results for the course of the quantities of goods and prices of goods can be assumed, if necessary structure and technology have assumed characteristics in turn.
And such a labour sharing is then unsatisfactory therefore because the psychologist or also technologist namely does not give a thought at all to function as a complementary science for the economic theory and to examine the actions of the consumers or the development in the techniques whether they develop as it is necessary for a success of the economic subsystem.
This, however, necessarily means that no systematic empirical verification of the developed hypotheses in economic theory is possible. Thus, the task of every economic science is questioned with that. The economic theory gets like any science, which seeks to analyse empirical situations, to knowledge only by formulated tentative hypotheses because of certain empirical observations in a first step, which must then be empirically tested in a second step.
The attempt then is made with several examinations, to falsify these hypotheses through cases found in which this hypothesis cannot be confirmed. Only then if it has not turned out well despite repeated attempts to disprove these hypotheses, it can be spoken of a temporary confirmation, the hypothesis becomes an accepted theory. But also in this case it only can be spoken about a provisionally verified theory, we always have to expect that we do not have a perfect knowledge at any time, we always must expect that the found results are only therefore correct because there were certain still unknown determining factors which will probably be given no more in future in an environment which is open and changing permanently.
Considering these relationships, it is much more expedient if every science only finishes their research when the formulated hypotheses are empirically verified for validity. Only the science which has formulated these hypotheses thus has the interest and ability, to the validity of these hypotheses.
In this sense, it is not appropriate that the economic theorist trusts that the psychologist him provides the hypotheses that are needed to answer the questions of economic theory. The task of verifying the individual hypotheses should rather come from the economic science itself, only this has an interest just to the hypotheses formulated by itself.
Though this conclusion not means that one and the same person always formulates hypotheses as an economic theorist and tests them also empirically. It is rather more expedient that hypothesis formation as well as hypothesis verification is carried out by different persons. Yes, the theorist is heavily interested in that his hypotheses are confirmed and the risk would consist in the case of a self-affirmation that the results are manipulated, and only such cases are examined empirically or are announced, which lead to a confirmation.
The competition between theorist and empiricist leads, though, automatically to that the empiricist is very well interested in that hypotheses are disproved. So the risk of the manipulation is crucially lower at this labour sharing. But there even is a labour sharing between the empiricists, which deal with economy theoretical hypotheses and such, which deal with psychological hypotheses.
Fifthly, the economic geography also deals with economically relevant questions. The economy geographer examines primarily the question in which working areas certain material resources are found, as the different qualities of work are distributed spatially and by which determining factors metropolitan areas of the production and consumption are to be explained.
Now at first it may be of minor importance how the raw materials stores are distributed spatially or in which working areas special trained workers are settled particularly. For the growth standard and for the future development opportunities of a national economy it is primarily of importance how many a country disposes of Energy sources or other raw materials, and how the educational level of its workers is compared with other countries.
If we are, though, interested in the distribution of the material resources beyond national borders, the spatial distribution of production factors gains a decisive importance. Since, without raw materials only few goods (predominating only services) can be made. In this case, the missing raw materials must be imported. The imports must be paid with foreign currency which is generally only then obtained if goods are exported to the same value and in turn this export itself presupposes that a country without essential material resources disposes of industry in which high-quality investment or consumer goods can be produced.
Even if we are less interested in the overall result of a national economy, but wonder at the distribution of the welfare on the individual working areas of a country, the distribution of the resources is of a decisive importance of course. The further question under which conditions an optimal working area can develop, thus can only be settled satisfactorily with knowledge of the spatial distribution of the factors of production.