Economic Base is the impetus of growth, or at least the sustenance, of a city or region.  Typically communities are exporting something that they’re well suited to cultivate/produce/extract/develop.  Some places’ economic base exploits its geography or location; a beachside tourist town’s export is it’s ability to import tourist’s money.  A port city’s location allow’s it to act as a middle man in the shipment of goods, goods go in and out, the port city get’s a cut, but at some effort ie. loading and unloading the stuff.  Some cities really on government spending – bureaucracy or military, and other cities/regions are able to attract retirees and their pension act as the external stimulus.

Export Base Theory states that the growth of Cities and Regions is entirely dependent on the export (Basic) Sector of the Economy.  This prompts several questions; is a completely isolated city (no trading partners) possible?  I’ve read that at ancient Rome’s port of Ostia, the boats routinely arrived full and departed empty, did Rome only import and not export?  Was ‘Order’ Rome’s export, or was Rome simply using it’s legions to extort it’s empire for goods and raw materials?  This harkens to the United States with our perpetual trade deficits.

A Simplified Kaynesian Income Determination Model for Economy ´Y´ shows the math behind #ExportBaseTheory

Y $ = C + X – M +/- O  where; C=Consumption, X=Exports, M=Imports, O=Other (savings, investments, taxes, gov payments)

The Employment Multiplier Effect.  A dynamic number that Mayors everywhere are aware of. Theoretically, the exogenous money brought in by the ‘Basic Sector’ or export sector permeates out into the community.  Factors here include the nature of the basic sector jobs, how much do they pay what types of people do they employ; but these jobs do cause a whole host of Non-Basic or Service Sector job whose existence is directly correlated to the Basic Sector jobs.  Employment multiplier ratios typically range from 2.0 to 4.0.

In Classifying Cities by Economic Base; Geltner,Miller,Clayton refer to Glenn Mueller’s classification of cities into nine different groups; Farm, F.I.R.E. (Finance, Insurance & Real Estate), Government, Manufacturing, Military, Mining (including Oil/Gas), Service, Transportation, Diversified.  Mueller derives these categories by use of SIC (Standard Industrial Classification) Codes, but I’ll save this for another writing.