The internal dynamics of extractive economies differ significantly from those of productive economies. Each develops very different patterns of location, residence, growth of economic infrastructure and environmental effects, and these affect the subsequent developmental potential of the affected regions (Bunker 1985: 22-27). While the specific characteristics and dynamics of particular extractive or productive economies need to be analysed individually, it is nevertheless possible to outline some general characteristics and tendencies in each.
One important difference is the effect that space has on extractive and productive processes. Bunker points out the increasing flexibility which productive enterprises have with regards to their location in space. They
typically locate in close proximity to each other, in order to build a social and physical environment shared by multiple enterprises. In this way, the costs of transportation, communication and energy transmission are shared by multiple enterprises, with the added effect that new enterprises can start up without needing to cover the total costs of the infrastructure they require. Because of their close proximity, the labour force at these multiple production sites is able to move easily between enterprises. The combined advantages of shared labour pools and shared infrastructure increase the ability of such production systems to adapt to changing technologies and markets. When individual enterprises suffer from technological or demand changes, they tend to do so at different times and different rates. This allows the infrastructure to which a declining industry contributes and the labour which it has employed to remain for subsequent enterprises.
In contrast to productive economies, extractive economies are largely fixed in geographical space and they must be located in close proximity to the natural resources they exploit. Since these resources are randomly distributed, their proximity to other enterprises occurs only by chance, and becomes less likely as the most accessible resources are depleted (Ibid. 24). This leads to isolation of extractive enterprises from one another making it impossible to share labour pools and infrastructure. Moreover, when extractive economies are far removed from existing demographic and economic centres, the costs of labour recruitment, subsistence, shelter, and infrastructural development substantially increases. Such cases may also involve migration of labourers, who are dependent on imported foodstuffs and other materials which are provided by the employer, thereby enhancing the control which the employer has over the labour force (Ibid. 26). Finally, as the resource is exhausted or no longer in demand, the infrastructure specific to the requirements of resource removal and transport lose their utility, as does the labour force which establishes itself at these extraction sites. The changes brought about in the distribution of population and in the physical environment, therefore, seldom serve any purpose to subsequent economies. When this point is reached, the economy of the exporting region is severely disrupted, resulting in a series of demographic and infrastructural dislocations.
Bunker also points out that the dynamics of scale in extractive economies function inversely to the dynamics of scale in productive economies (Bunker 1985: 25). In industrial systems, the unit cost of commodity production tends to fall as the scale of production increases. This is brought about primarily through the substitution of human energy for non-human energy. The falling unit costs accelerate production-consumption linkages, which permits the concentration and accumulation of infrastructure, and allows for expanded production systems.
Industrial production therefore benefits from techniques which increase the
productivity of human labour through, for example, the use of fossil fuels. By contrast, in extractive systems unit costs tend to rise as the scale of extraction increases. This is because, as the scale of extraction increases, the amount of resource available for further extraction decreases. As resources become depleted, additional amounts of any extractive commodity can only be obtained by exploiting increasingly distant or difficult sources (Ibid. 25). Likewise, as extraction becomes increasingly difficult, the productivity of its labour progressively diminishes. This is particularly applicable to non-renewable resources, such as minerals and oil, but also applies, for example, to industrial agriculture where increasingly intensive techniques lead to soil erosion, nutrient depletion, and water pollution. The increasing cost of extraction eventually gives new locations or industrial substitutes competitive advantages over the original extractive enterprise. Unlike regional industrial economies, which can adjust to their own obsolescence by directing labour and capital to new products, extractive industries cannot unless there happens to be another resource in the vicinity which is in demand by external markets. Regardless, any new resource would eventually face the same predicament of depletion and exhaustion. As extractive resources become depleted, rising unit costs, further dispersion of labour and investment, and intensive ecological disruption eventually seriously reduce or eliminate these economies.
The ratio of labour and capital to value is also very different in extractive and productive processes. Bunker points out that extractive processes frequently entail a much lower ratio of both labour and capital to value than do productive processes (Ibid. 23). This means that the majority of value in an extractive economy is in the resource itself, and therefore profit occurs in the exchange itself rather than in the sector. Thus while extractive processes may initially produce rapid rises in regional incomes, this may be followed by equally rapid collapses when the depletion of easily accessible resources requires additional inputs of labour and capital without corresponding increases in volume. The rapidly rising cost of extraction once again stimulates a search for substitutes or new sources for extraction, and eventually leads to severe disruption of the extractive economy.
The implications of resource value and depletion become more pronounced when one considers the very different production times in extractive and productive economies. To avoid confusion, it should be noted that what is sometimes considered production, as in “producing” a certain quantity of oil, is actually more correctly termed, “extraction” (Martinez-Alier 1987). Actual production of natural resources takes place prior to its extraction by human labour, and in cases such as minerals, oil or top soil, production is over a time frame much longer than humans normally use. Bunker points out that if production is the incorporation of energy into matter, then industrial production,
in contrast to natural resource production, starts and ends at the same time as the labour that defines it (Bunker 1989: 591). From this perspective, it becomes apparent how resources which take thousands or millions of years to regenerate are traded, through international trade, for things that get produced on an on-going basis, resulting in a form of unequal trade. Furthermore, the additional value created when extracted materials are transformed by labour is generally realised in the industrial centre rather than at the peripheral origin of raw materials. These various differences in the internal dynamics of extractive and productive processes, and the uneven energy flows between them, provide an important understanding of geographical uneven development.