States And Markets Flashcards
What was the fundamental question regarding the state?
How far stayed should intervene in economic processes
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
Two dimensions?
National/ international
City level
How can the state affect economic growth internationally and nationally?
The protection of certain industries
Trade- tariffs, imports/ exports
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
State definition?
The interlinked administrative, legal, bureaucratic and coercive systems through with a political community is governed
Market definition?
A system of exchange based not on reciprocity and redistribution but on rational self instead governed by supply and demand forces
Capitalism definition?
A system of production based on private ownership and the pursuit of profit in a market economy
Socialism definition?
A system characterised by public ownership and the means a production, a limited role for markets and a planned economy
Key thinker- AS
Adam Smith Invisible hand Key text- The Wealth of Nations Laissez faire economies Minimal state intervention
Mercantilism definition?
State role in advancing a nations profit making activities abroad
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
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
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
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
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
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
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
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
