Von Thunen Method and Plan Of Work

Johann Heinrich von Thünen Theory, Method and Plan of Work

In dealing with von Thiinen, the first thing that strikes one is his method. It appears in the very name of his book, the Isolated State — which he at first planned to call the Ideal State.

Contrary to the usual procedure, then, the examination of this writer's thought will be begun with some discussion of his method of thinking. His method was a contribution. Indeed, the book is one of the best illustrations of the abstract-deductive or "exact" method to be found down to this very day. The first section of the first volume is headed "Postulates," the second, "The Problem"; then come various changes in the postulates, and finally a comparison of the isolated state with the actuality. It is the method of "successive approx­imations," which von Thiinen explains is necessary in order to segregate and measure the influence of the particular forces in a complex.

Not only is the method abstract and deductive; it is character­ized by a use of mathematical formulae, these involving, however, only arithmetic or simple algebra. No use is made of geometrical figures. (It must be noted, however, that the later parts, which deal with labor, are not so purely abstract and deductive, and in dealing with the effects of climate, and the like, some modifica­tion of the method may be observed.)

It is von Thünen's plan first to reduce the problem stated in his title to its simplest elements. Accordingly, he says: Let us imagine a very great city set in the midst of a fruitful plain, through which no navigable river or canal doth flow. The plain itself consists of like land, which is everywhere equally adaptable to cultivation. Far removed from the city, the plain ends in an uncultivated waste which separates this state from the world without. There is no other city than the great one set in the center of the plain, and it furnishes all artificers' products, while the means of life are drawn entirely from the surrounding plain. Metals and salt are produced near the city (p. 1). "Now the question arises: how will agriculture shape itself under these conditions, and how will the greater or less distance from the city affect tillage if it is carried on with the greatest skill and care?"

Under these assumptions, the conclusion is drawn at once: "In general it is clear that in the vicinity of the city such prod­ucts must be raised as have a great weight in proportion to their value (Werth) or are very bulky, and whose cost of transporta­tion to the city would be so significant as to prevent their pro­duction in farther regions; so also with perishable products which must be fresh for use" (p. 2). Products of higher specific value would be drawn from greater distances. "On this ground alone, pretty sharply drawn concentric circles will be found about the city within which this or that crop will form the chief product." In the first circle, for example, garden truck and milk would be chief products.

In this circle, the land is the chief object of economy, while labor is relatively less important: "The price of milk must rise so high that the land for milk production can be of so much use through the production of no other thing. As the land rent (Ackerpacht) in this circle is very high, so increased labor is here little regarded. To gain the greatest amount of fodder from the smallest area is the problem" (p. 3).

The estate of Tellow is made the basis for the greater part of his calculations, its prices and expenses being taken for granted by von Thiinen. A large part of the book is a study of how the economy of this estate would vary with distance from the imag­inary city and with changes in prices and taxes. It is assumed that the gross product may be estimated in grain and that the price of livestock will vary with the price of the grain, — which is really true, says von Thiinen, of a state not surrounded by others which are uncultivated and merely engaged in grazing (p. 205). Further, it is assumed that the farm expenditures are made up of fixed percentages of money and of grain, this being done to simplify the determination of the effects caused by a change in grain prices.

All the various assumptions are adopted consciously, and the attempt is made to indicate what would be the result were they removed (p. 209 f.). As to equality of soil, he points out that one could also have assumed a fixed price for grain and various degrees of fertility in a second isolated state; but this is unneces­sary, for formulae already developed enable the solution of such problems as, for instance, what rent will a farm of any given productiveness yield when grain is worth a given price per bushel. As to water transportation, it merely operates to make points accessible to it virtually so much nearer the city by reduc­ing freights. And, with numerous little towns, each must be thought of as possessing its contributory territory, thus making it necessary for the central city to draw its supplies from greater distances and so increasing transportation costs. The price of grain in the small towns would depend upon the market price in the capital city (p. 214).

While he did not fully realize the limitations of his method, von Thiinen was partly aware of them. He wrote: "Just as a geometer reckons with points lacking in extension and planes without thickness, though neither actually exists; so we may take all adventitious circumstances and contingencies away from an active force, and only so can we recognize what share it has in the phenomena which lie before us " (p. 215). He believed that it would be possible to draw up a chart for an entire land in­dicating the circles of different products; but while the same principle which controls the industry of an isolated state would be at work, the actual phenomena, he saw, would be quite differ­ent on account of the "endless number of other relations and circumstances " (p. 215). In fact, von Thiinen never overcame all the difficulties which beset the attempt to introduce the com­plexities of life into his abstract state.