class 4.1 Flashcards
NEOLIBERAL PARADIGM
Neoliberalism is an economic and political paradigm
“Neoliberalism is in the first instance a theory of political-economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade.
The role of the state is to create and preserve an institutional framework appropriate to such practices” (Harvey, 2005, p. 3
ARRIVAL OF NEOLIBERALISM IN THE UK
UK was facing major economic challenges in 1970- 80s
Decline in manufacturing, coal mining, textiles
Margaret Thatcher elected in 1979 to solve the economic crisis
Promises to deliver economic transformation through neoliberal reforms
Neoliberalism solidified as dominant international economic paradigm in the 1990s.
NEOLIBERAL POLICY AGENDA
Privatization of public enterprises
Tax cuts (particularly at the higher end of income spectrum)
Deregulation of financial sector and other industries
Accelerated pace of international trade Growth in the finance and business services sectors
WHAT DOES NEOLIBERALISM MEAN FOR CITIES?
Local assets become global assets
* E.g. REITs – Real Estate Investment Trusts
Internationalization of urban development
Increasing visibility of FIRE sectors – finance, insurance, real estate – driving urban economic growth
THE NEOLIBERAL CITY
Cities aim to attract global investment.
Cities compete to attract workers.
Mega-projects influence a city’s status and generate revenue.
Private sector actors play a major role in planning and development.
NATIONAL URBAN SYSTEMS
The 20th century sees the emergence of national urban systems:
“The network of cities within a particular country that are linked together by flows of people, goods, money, and information.” (André Sorensen, 2017).
JAPAN’S NATIONAL URBAN SYSTEM
Stands out for its scale.
Evolution begins during the Edo period, and intensifies with industrialization in the 20 st century.
Rapid population growth through the 1950— 60s.
Region is targeted for infrastructure investment, and industrial growth.
Region around Tokyo and Yokohama grows into a megalopolis.
Tokaido region is now home to 2/3 of Japan’s population.
CAUSES OF JAPAN’S NATIONAL URBAN SYSTEM
Historic development of an urban system
Population growth
Industrialization
Rural-urban migration
Regional infrastructure investment
Political lobbying
CAUSES AND CONSEQUENCES OF JAPAN’S NATIONAL URBAN SYSTEM
High manufacturing output
Declining urban areas outside the megalopolis
Land asset bubbles & unaffordability
Rural-urban migration Urban sprawl
Environmental pollution
High national debt
GLOBALIZING NATIONAL URBAN SYSTEMS
Japan plays a major role in global trade – exports ~$700B in goods per year.
Tokyo is also one of the largest financial centres in the world.
Japanese banks play a significant role in financing domestic manufacturing.
Also play a major global financial role.
TSE is the 3rd largest stock exchange in the world.
what is the impact of globalization on cities
Weakened role for the central state in managing the economy because of privatization, deregulation, and digitization.
Other territorial units and actors become key.
Cities are sites of production for globalization.
Global cities are the “origin and the propagator” of globalization – Saskia Sassen
SASKIA SASSEN’S GLOBAL CITY
To understand the economic and social changes happening in cities, we need to consider them in the context of the global economic system.
Growth of global financial markets, international trade, foreign direct investment.
Central thesis: globalization gives major cities a key role in managing and controlling global networks of economic activity.
As business functions become more dispersed, more companies are needed to perform these functions.
GLOBAL CITIES
Global cities become disconnected from regional and national economies – this differentiates these networks from major cities in colonial urban systems.
emergence of global cities
Companies provide services globally, so networks of affiliated cities emerge across borders.
We see the emergence of a transnational urban system.
SASKIA SASSEN’S GLOBAL CITY
“…these cities function in four new ways:
first, as highly concentrated command points in the organization of the world economy;
second, as key locations for finance and for specialized service firms; which have replaced manufacturing as the leading economic sectors;
third, as sites of production, including the production of innovations, in these leading
industries;
fourth, as markets for the products and innovations produced” (Sassen, 2001, p. 3).
URBAN INEQUALITY IN GLOBAL CITIES
Workers who don’t have the skills that these particular sectors demand are on the losing side of a growing inequality gap.
We see job growth at two ends of the spectrum – low wage retail/hospitality/industrial work, and high paid professional jobs.
IMPLICATIONS FOR URBAN GROWTH
Financial and specialized services have restructured the urban economic and social order of global cities.
Densification of central business districts is a symptom of this.
financial industry is central in Re Shaping Urban Form
Banking reforms of the 1980s create an expanded role for financial service sector in global cities.
Emergence of new financial instruments – mortgage securities, REITs, municipal bonds – creates a larger financial system.
Small and medium businesses play as significant a role as large corporations.
what effect does globalization have on regional cities in national urban systems?
What is the effect on other cities within national urban systems that were once centres of industrial capacity prior to the 1980s?
Sassen argues that what is good for the global city may be bad for other cities in a national urban system, and indeed for national economies.
People move to global cities seeking opportunities, creating a brain drain from regional cities (particularly in de-industrializing regions).
This can worsen economic inequalities with regions that aren’t benefitting from globalization.
DOREEN MASSEY’S WORLD CITY
Looks at how these patterns have played out in London.
Considers the consequences of neoliberal urbanization for national economies and other regional cities.
She argues that London’s rhetorical position as a global city legitimizes its prioritization in national economic policy and
infrastructure investment. Result is an “urban hierarchy” between London and regional cities in the UK.
REGIONAL INEQUALITIES IN THE UK
Response to regional inequalities has been to focus on the perceived failure of regions to succeed under the neoliberal paradigm.
Blame is not assigned to global economics system that prioritizes investment in global cities.
The global city becomes “the golden goose.”
GLOB AL CITIES LIKE LONDON BECOME COLONIAL SPACES
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Massey argues that London trades on its colonial heritage to project an image of power.
New neoliberal order “cannibalizes” the imperial trappings of old Britain to brand itself as the modern incarnation of an elite history
GLOBAL CITIES AND NEOLIBERALISM
Sassen argues that the rise of global cities is central to the spread of neoliberalism.
Global cities are created from these principles, and are bargaining chips within the system.
This pattern persists even as urban and regional inequalities deepen.
