Globalization is the embodiment of the "Central Place Theory" on a global scale. It is a concept in the study of economic geography which seeks to illustrate why human settlements are centrally located in a hierarchy from higher order centers such as Urban Metropolis to lower order; Cities, Towns, Villages, and Hamlets. If you can extrapolate the effects and impacts of the “central place theory” on a global scale you will understand the rise of populism within the rural-urban divide and the widening gap between rich and poor.
The theory was first developed by the German geographer Walter Christaller in 1933 after he began to recognize the economic relationships between cities and their hinterlands (areas farther away). He mainly tested the theory in Southern Germany and came to the conclusion that people gather together in cities to share goods and ideas and that they exist for purely economic reasons.
One of the impacts of the "central place theory" is the ever concentration of capital and specialization of goods and services in higher order centers to the extent that some lower order centers will disappear and ceased to be economically viable over time as population tends to move to where there are more opportunities. In a global context this in true in part for countries that are considered failed states and hence the rise the global refugees and the displacement of a significant portion of the world’s population.
"The primary purpose of a settlement or market town, according to central-place theory, is the provision of goods and services within a uniformly defined market area. Movement across market boundaries are uniformly easy in any direction, transportation costs vary linearly, and consumers act rationally to minimize transportation costs by visiting the nearest location offering the desired good or service....The determining factor in the location of any central place is the threshold, which comprises the smallest market area necessary for the goods and services to be economically viable. Once a threshold has been established, the central place will seek to expand its market area until the range—i.e., the maximum distance consumers will travel to purchase goods and services—is reached. “
As higher order centers become more specialized and specialization increase growth and production of goods and services lower order centers are often times consumed into the market area of higher order centers by the expansion of the threshold due to lower transportation cost.
"In addition, the threshold is an important concept in Christaller's study. This is the minimum number of people needed for a central place business or activity to remain active and prosperous. This then brings in the idea of low-order and high-order goods. Low-order goods are things that are replenished frequently such as food and other routine household items. Because these items are purchased regularly, small businesses in small towns can survive because people will buy frequently at the closer locations instead of going into the city. High-order goods though are specialized items such as automobiles, furniture, fine jewelry, and household appliances that are bought less often. Because they require a large threshold and people do not purchase them regularly, many businesses selling these items cannot survive in areas where the population is small. Therefore, they often locate in large cities that can serve a large population in the surrounding hinterland."
When the threshold is extended beyond borders as globalization seeks to lower the cost of goods and services and technology increases specialization transforming urban metropolis into City State. With the rise of the City State being the high order centres and seamless movement of capital and economic resources across borders, some lower order towns and villages around the globe which are resource deprived or otherwise will cease to be viable as population moves to urban centres within viable states or become refugees or displaced within fail states.
Acknowledgment to My former Economic Geography Professor at Ryerson University:
Dr. Ken Jones is the Dean of the Ted Rogers School of Management at Ryerson University. Dr. Jones has earned an international reputation for his expertise in retail research and business geomatics. He founded and directed the Centre for the Study of Commercial Development (CSCA), a world-renowned not-for-profit research centre at Ryerson’s Ted Rogers School of Management that provides information and analysis to Canada's commercial and retail industries. In his current role as Dean, Ted Rogers School of Management, Dr. Jones leads Canada’s largest undergraduate business school. Located on Bay St., in the heart of Toronto's business community, the Ted Rogers School of Management at Ryerson is recognized for its innovative programs and for producing students who are immediately able to contribute to Canadian business.
Professor Jones holds an M.A. and Ph.D. from York University and has published extensively, including three books that have examined the contemporary retail environment in Canada: Specialty Retailing in the Inner City; Location, Location, Location and The Retail Environment. Ken has contributed chapters for a variety of university texts and has been published in many professional journals. These works have discussed issues associated with retail site selection methodologies, market area analyses, retail corporate concentration, e-commerce, and future trends associated with Canadian retailing. In addition to his activities as a researcher, Ken has been a consultant to numerous retail chains, financial institutions, and shopping centre developers on aspects of store network planning, sales forecasting, market area evaluation, and site evaluation.
