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his Prague days. He died 1942 in a concentration camp in Theresienstadt. Whether
Weber knew Launhardt without citing him is unknown. At least I was able to check
that Launhardt's topic referring to his solution of the problem right in the intro-
duction has been in the library in Heidelberg since it appeared 1885.
The second stage of the topic extends the firm location problem in three ways:
1. First, for each input it allows firms to choose among different sources that sell
the respective inputs at different, exogenously given prices.
2. Second, labour is introduced as a further input, with a wage rate exogenously
varying across space.
3. Third, many firms instead of one are introduced, interacting due to the fact that
joint locations generate cost savings by agglomeration economies. These
economies are assumed, not derived from technologies and market structures.
On the one hand, as a model of a decentralised market the approach lacks the
essentials: endogenous prices and quantities. On the other hand, as an optimisation
problem the whole exercise is ill-posed, because it lacks an objective for the entire
ensemble of interacting firms. If the deficiencies were fixed and numbers were
given to all the exogenous functions and variables, a multi-firm location problem of
this kind would still be difficult to solve even on a modern computer, not to speak
about Weber's tiresome verbal casuistic.
Weber's work does in my opinion not deserve the attention it got in the litera-
ture. Though it is often cited, I am not aware of any surviving strand of literature
that really built on him. Given what I said, this does not come as a surprise. The
theory of firm location in the business literature refers to Weber in the context of the
triangle (Hurter and Martinich
1989
), but in this case it is Launhardt, not Weber
who deserves the attention.
7.6
L ¨ sch
The German literature on spatial economics culminates with the work of August
L¨sch, putting an idea that was first brought up the geographer Walter Christaller
(
1933
) on a firm theoretical footing.
August L¨sch was born 1906 in W¨rttemberg, graduated in economics in
Freiburg and got his doctoral and habilitation degrees in Bonn under Schumpeter's
supervision. In 1945, immediately after the war ended, he died from starvation and a
scarlet fever infection. His unwillingness to cooperate with the Nazi administration
prevented him from having an academic career before 1945 (Zottmann
1949
).
The first edition of L¨sch's
Die r
aumliche Ordnung der Wirtschaft
appeared in
1940 (L¨sch
1940
). This monumental work stands below Launhardt in terms of
theoretical level and rigour of its argument, but its theoretical ambitions are much
wider, and to some extent the author was able to fulfil them. L¨sch's choice of the
subject may have been influenced by the prominent position that the subject
achieved from Weber's topic and from the writings of the Historical School, but
L¨sch's own approach is neither related to Weber's nor does it build on Th¨nen or
Launhardt.
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