States And Markets Flashcards by Grace Francis

What was the fundamental question regarding the state?

How far stayed should intervene in economic processes

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How does state intervention impact cities?

What type of industry thrives
Wages and salaries
Provision of housing and public services
Rules and regulations on land use and construction

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Two dimensions?

National/ international

City level

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How can the state affect economic growth internationally and nationally?

The protection of certain industries

Trade- tariffs, imports/ exports

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How can the state effect housing and urban physical form at city level?

Planning regulations to restrict developers and dictate land use
Incentives- eg provision of affordable housing

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State definition?

The interlinked administrative, legal, bureaucratic and coercive systems through with a political community is governed

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Market definition?

A system of exchange based not on reciprocity and redistribution but on rational self instead governed by supply and demand forces

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Capitalism definition?

A system of production based on private ownership and the pursuit of profit in a market economy

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Socialism definition?

A system characterised by public ownership and the means a production, a limited role for markets and a planned economy

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Key thinker- AS

Adam Smith 
Invisible hand 
Key text- The Wealth of Nations 
Laissez faire economies 
Minimal state intervention

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Mercantilism definition?

State role in advancing a nations profit making activities abroad

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Key thinker- DR

David Ricardo
Theory- Comparative advantage- focus only on industries they are most competing at
Govts should not protect industries
Free international trade benefits everyone
Industry should triumph over agriculture in UK

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Key thinker- KM

Saw contradiction in capitalism as it’s fundamentally opposed to the labourers 
The state was an instrument of the ruling class 
Cities in capitalist economies of sites of class struggle- between bourgeoisie and proletariat

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Key thinker? JK

John Keynes
Rejected free market economy
Believed capitalism could be improved without socialist revolution
Advocated increase in aggregate demand to promote full employment
Resulted in public spending financed by taxation and borrowing

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Key thinker? RP

Rejected comparative advantage
Creation of the centre and periphery through free trade which disadvantages the periphery due to agriculture not creating wealth
Developing countries must protect their industries

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Key thinker? JJ

Jane Jacobs
Key texts- The economy of cities and the Wealth of Nations
Innovation is key for economic life
Expanded by import replacing
Both there economic processes are related and functions of city economies

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Developments prior to WW2?

Late 19th and early 20th century considered high point of free trade
Ended with the outbreak of WW1- many argue due to capitalist competition
The Great Depression, rice of racism and communism resulted in protectionism
Unemployment over 25% US 1933

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Post WW2

Keynes influences US and Europe and more interventionist forms of capitalism
Resulted in full employment, welfare state, high tax and more social spending
‘Long boom’ provided money for developments- eg Sheffield’s Park hill complex

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Interventionism in 3rd world cities?

Protecting infant industries in order to catch up

Urban growth soared- workers flooded for jobs in steel, automobiles and aircraft

How does this link with urban planning?

High state intervention coincided with age of high modernism in planning

Urban development in socialism east?

Stalin- Man of Steel 
Committed to make Russia an industrial power 
Rapid urban growth 
No. Cities with more than 100,000
31 in 1926 
221 in 1970

China pre-reform

Industrialisation without urbanisation
Anti urban bias in policy making- cities seen as sites of production not consumption
Service sector discouraged
Urban population controlled by Hukou system

Two instruments of Chinese state control?

Danwei and Hukou

Danwei?

Work units in urban areas
Supervised by state
Provided housing and basic services
Sites of state surveillance eg OCP

Hukou?

Household registration system Restrict rural to urban movement Population divided into agricultural and non agricultural Peasants couldn’t survive in cities due to danwei only provided to those with urban Hukou

Crisis of the 70’s in global north

``` Global recession De industrialisation Public debt Urban decay NYC associating with drugs, crime, ghettos and homelessness despite huge municipal spending- Went bankrupt in 75 ```

Crisis of 1979’s in global south?

Economic stagnation Hyperinflation due to excessive borrowing Slowing of growth and agricultural stagnation

What is ISI?

Import Substitution industrialisation | An economic policy which advocated replacing imported goods with domestic production

What created the urban bias in developing countries?

By 1970’s state protection of industries was considered to be corrupt and inefficient

What was the urban bias in developing countries?

The idea that the state favours city dwellers therefore farmers are forced to sell there food cheaply but have to pay high prices for manufactured goods

What did the urban bias result in?

``` Class conflict between rural and urban class Promoted neo-liberal revolution 70’s ```

What is neo-liberalism?

Ideology that believed that human well being can be best advanced by liberating individual entrepreneurial freedoms. Characterised by strong private property rights, free markets and free trade

Neoliberal revolution?

Influenced by Hayek and Friedman Election of Thatcher and Reagan Privatisation and rolling back the state Deregulation Purge of Keynsians out of The World Bank and IMF

Neoliberal policy implemented in global south

Structural adjustment Reduces role of the state Implemented in Latin America and Sub Saharan Africa

What does neoliberalism mean for cities?

Many large cities boomed due to private investment but created vast inequality NYC became divided Manhattan ‘sealed off’ to business elites Urban planning authorities replaced with municipal development corporations to encourage competition

What happened in the cities of the global south following neoliberalism!

Industrialisation Went into reverse Public sector jobs evaporated Rise of informalisation

Neoliberalism and housing UK

Right to buy | Regeneration of inner cities through market led development

Neoliberalism and housing Global south

Self help housing solutions | Enabling markets to work through deregulation and institutional reforms

Example of private led enterprise zones?

London docklands

Unemployment in Sheffield?

As high as 30% in some areas following the collapse of the steel industry

The new left in UK cities?

London and Liverpool Emphasis on public spending Conflicted the Cons govt Govt fought back against rebellious councils Rates act 1984- capped the amount councils could tax and spend

New urban governance?

``` Late 80’s: 90’s Increasingly marketized Compulsory competitive tendering Rise of public- private partnerships Out of town retail developments- Meadowhall ```

Hong Kong?

Economic freedom No import tariffs, no sales tax, no VAT Govt owns all land 1/5 of pop live below the poverty line 2011

Shock therapy in USSR

Implemented radical neoliberal program to bring Russia into global market Collapse of monotowns Mass unemployment Shrinking cities

China 1978 reforms?

Loosened state control Special economic zones Looser regulations around land and labour to attract private investment Gradual relaxation of Hukou system Creation of private housing market Danwei housing sold to tenants- steep rise in house prices

What were structural adjustments policies?

Designed to boost agricultural exports in line with the comparative advantage of most African states instead of promoting industry