Johann Heinrich von Thünen | |
|---|---|
 Johann Heinrich von Thünen, age 57 | |
| Born | (1783-06-24)24 June 1783 Canarienhausen in present-dayWangerland,Friesland |
| Died | 22 September 1850(1850-09-22) (aged 67) |
| Nationality | German |
| Academic background | |
| Alma mater | University of Rostock |
| Influences | Albrecht Thaer |
| Academic work | |
| Discipline | Economic theory |
| School or tradition | Classical economics |
Johann Heinrich von Thünen (24 June 1783 – 22 September 1850), sometimes spelledThuenen, was a prominent nineteenth-centuryeconomist and a native ofMecklenburg-Strelitz, now in northernGermany.[1]
Even though he never held a professorial position, Thünen had substantial influence on economics.[2] He has been described as one of the founders ofagricultural economics andeconomic geography.[2][3] He made substantial contributions to economic debates on rent, land use, and wages.[2][3][4][5]
Johann Heinrich Von Thünen was born on 24 June 1783 on his father's estate, Canarienhausen.[6] His father was from an old feudal family, and died when Thünen was two.[6] His mother remarried a merchant and the family moved toHooksiel.[6]
Thünen expected to take over his father's estate, which led him to study practical farming.[6] In 1803, he published his first economic ideas.[6]
He was influenced byAlbrecht Thaer.[6]
He married in 1806.[6]
Thünen was a Mecklenburg landowner, who in the first volume of his treatiseThe Isolated State (1826), developed the first serious treatment of spatial economics andeconomic geography, connecting it with thetheory of rent. The importance lies less in the pattern of land use predicted than in its analytical approach.[7]
Thünen developed the basics of the theory ofmarginal productivity in a mathematically rigorous way, summarizing it in the formula in which
where R = land rent; Y = yield per unit of land; c = production expenses per unit of commodity; p = market price per unit of commodity; F = freight rate (per agricultural unit, per mile); m = distance to market.
Thünen's model of agricultural land, created before industrialization, made the following simplifying assumptions:
The use which a piece of land is put to is a function of the cost of transport to market and the land rent a farmer can afford to pay (determined by yield, which is held constant here).
The model generated four concentric rings of agricultural activity. Dairying andintensive farming lies closest to the city. Since vegetables, fruit, milk and other dairy products must get to market quickly, they would be produced close to the city.
Timber and firewood would be produced for fuel and building materials in the second ring. Wood was a very important fuel for heating and cooking and is very heavy and difficult to transport so it is located close to the city.
The third zone consists of extensive fields crops such as grain. Since grains last longer than dairy products and are much lighter than fuel, reducing transport costs, they can be located further from the city.
Ranching is located in the final ring. Animals can be raised far from the city because they are self-transporting. Animals can walk to the central city for sale or for butchering.
Beyond the fourth ring lies the wilderness, which is too great a distance from the central city for any type of agricultural product.
Thünen's rings proved especially useful to economic history, such asFernand Braudel'sCivilization and Capitalism, untangling the economic history of Europe and European colonialism before theIndustrial Revolution blurred the patterns on the ground.
Ineconomics,Thünen rent is aneconomic rent created by spatial variation or location of a resource. It is "that which can be earnedabove that which can be earned at the margin of production".
In the second volume of his great workThe Isolated State, Thunen developed some of the mathematical foundations of marginal productivity theory and wrote about the Natural Wage indicated by the formula√AP, in whichA equals the value of the product of labor and capital, andP equals the subsistence of the laborer and their family.[8] The idea he presented is that a surplus will arise on the earlier units of an investment of either capital or labor, but as time goes on the diminishing return of newer investments will mean that if wages vary with the level of productivity those that are early will receive a greater reward for their labor and capital. But if wage rates were determined using his formula, thus giving labor a share that will vary as ageometric mean: the square root of the joint product of the two factors,A andP.
This formula was so important to him that it was a dying wish of his that it be placed on his tombstone.
InThe Isolated State, he also coined the termGrenzkosten (marginal cost) which would later be popularized byAlfred Marshall in hisPrinciples of Economics.
