Economic Geography

What goes round comes round: the new geographical
economics/new economic geography of the 1990s
In the 1990s, a number of prominent economists, perhaps most prominently
Paul Krugman, began to acknowledge the importance of space in the constitu-
tion of the economy and to alter the approaches of mainstream economics to
allow for this. Not surprisingly, this proved to be attractive to many economic geo-
graphers who had previously felt neglected and ignored by mainstream economists
and who seized the opportunity to engage in debate with them (see for example,
Clark et al. 2000) and equally worrying to others (see Amin and Thrift 2000 and
the subsequent debates in the pages of Antipode 2001).
It is worth emphasising that the critique developed of 1960s location theories
remains substantially valid for the New Economic Geography and the New
Geographical Economics of the 1990s, which remain essentially committed to
methodological individualism and thinly socialised explanatory accounts. Strictly
speaking, Krugman’s work and the work of others that it has inspired are not
neo-classical, firmly eschewing any notion of constant returns to scale and perfect
competition. However, that said, it retains a strong kinship with mainstream
economics by reason of its commitment to methodological individualism, full
information utility-maximising individuals and profit-maximising firms, and an
exclusive focus on socially disembedded relations of exchange. Indeed the rise of
technically more sophisticated versions of the neo-classical location theory
orthodoxies of the 1950s and 1960s is indicative and symptomatic of an attempt
to revive approaches that were then revealed as seriously flawed and limited in
their explanatory power and sophistication. As such, it raises interesting questions

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Ray Hudson
as to why such approaches are making a comeback of sorts in economic geogra-
phy (which I turn to briefly in the next concluding section of the chapter).