The Greenhut Festschrift: Does Economic Space Matter?

Abstract

This is a slightly abridged version of my Introduction to the Festschrift in honor of our esteemed international colleague and friend, Mel Greenhut. I have had the pleasure of editing it jointly with Jacques Thisse. The book is titled Does Economic Space Matter? and is now available in print from Macmillan Press, and also from St. Martin's Press. What the reader can expect from this book is a wellfocused discussion of one single question: if, why or in what sense “economic space” matters in economic theory. For this is exactly the question Mel raised in the 1950s and has since struggled with. Needless to say, however, sheer addition of one more analytical variable to the tool box of economics (which already appears complicated enough) may not help economics become sufficiently more realistic. Each contribution to the book therefore has been requested to seek more simplicity than complexity in demonstrating “yes” or “no” to Mel's pilgrimage to “spatial economics”. The book comprises three parts in twenty chapters beside a special foreword by our own esteemed colleague, Hisao Nishioka. I would like to introduce briefly only a small part of the book to give the readers a feel for it and the subject matter of economic space that it addresses.
And its message is that economic space does matter. As once observed by W. Warntz, ‘space is a tyrant and distances enforce his rule’. The tyrant has a variety of faces, however. It has a ferocious face as a public nuisance. It also has a beneficial face as a private shield to entry or trespassing. It has a face as a congestible public good possessing the combined properties of ‘rivalry in consumption’ and ‘nonexcludability in consumption’. It has a face as a noncongestible public good possessing no ‘rivalry in consumption’, but may nevertheless be provided exclusively. These multifaceted economic space require theoretical scrutiny, as demonstrated by the book.