Beyond the City Limits: Urban Policy and Economics Restructuring in Comparative Perspective

6. Postindustrialism with a Difference: Global Capitalism in World-Class Cities

CHAPTER 6 Postindustrialism with a Difference: Global Capitalism in World-Class Cities H. V Savitch Since the 1970S scholars have noted a profound transformation in the content and character of capitalism. Spurred by Immanuel Wallerstein's 1974 volume depicting a world capitalist economy, scholars began to identify world-class cities as nodes for corporate distribution, exchange, and communication IGottmann 1974i Hill 1984). World-class cities came to be seen as command posts in a global economy, which contained the wellsprings of finance, the synapses of communication, and the production centers for information and culture. New York, London, Paris, Tokyo, and Sao Paulo increasingly became great seats for corporate headquarters , radiating a web of electronic conduits and air corridors across the globe. At the same time as capitalism was transforming, so too were world-class cities. The great migration of capital to these cities, and 15 0 Copyrighted Material Postindustrialism 151 capital growth within them, became a crucible for determining how economics and politics would interact. As the force of economic restructuring met the object of the state, political economy became the lens through which scholars viewed the interaction. In its simplest and most abstract form, economic restructuring is the process through which the productive base of society changes. Those changes have enormous consequences for demographic distribution, social class, physical form, and the politics of the city. More specifically, the transformation of world-class cities involved a shift from the production of goods (manufacture and assembly) to the use and manipulatidn of knowledge (information, finance, management, services) (Bell 1976; Fainstein chapter, this volume). White-collar workers suddenly replaced blue-collar workers, office towers sprung up where factories once stood, and fancy boutiques took the place of corner taverns. So dramatic were the changes, it was likened to the industrial upheaval a century earlier, and the phrase "postindustrial revolution" came to signify a watershed forthe twentieth century (Sternlieb and Hughes 1975; Bell 1976). From one perspective, the postindustrial revolution looked uniform , unrelenting, and clear-cut. After all, world-class cities were restructuring and the state was responding to economic imperatives (Miliband 1969; Poulantzas 1973; Offe 1972; Habermas 1973; O'Connor 1973). Scholars became interested in the role of the state, who actually ran it, how it served capital, and why state action took so many twists and turns (Block 1977; Saunders 1979; SkocpolI98o). From another perspective, the postindustrial revolution was complex, variable, and dilatory. To be sure, world-class cities were changing. But these cities were changing at different rates, they were treating social classes differently, and they were shaping the urban landscape differently. What accounted for these differences? For one, capital was not one huge monolith that could trounce world cities. Capitalists were a competitive lot and, while they were powerful, they also could be played off against one another by clever politicians and technocrats. Second, capitalists could not come and go as they wished. Not all capitalism is mobile. Postindustrialism has placed an enorCopyrighted Material 152 LIMITS AND POSSIBILITIES mous amount of capital (buildings, real estate, communication networks) in select cities. The more vested that capital became, the more political leverage those cities could exert on its occupants . For world-class cities, postindustrial investment is a twoway street-made by financiers, who are often anxious to set down stakes, and agreed upon by public officials who pursue different interests (Gun and King 1987)· Third, and this is crucial to the argument, when "the state" controls something of great value, it is not always helpless. States may enjoy a significant measure of autonomy. But that autonomy is variable and depends upon political structures and cultural conditions within a particular nation. The capacity of the state visa -vis the influx of capitalism is contingent upon its ability to organize regional governments, raise taxes, transfer resources, intervene in the marketplace, and govern through strong institutions . By the word state, I mean that entity responsible for the maintenance of order, the promotion of social norms, the exercise of political discretion, and the execution of public policy (Benjamin and Elkin 1985). The complexities that go into the making of public policy, however, cannot be captured by the concept of a single state. More often than not, public policy is the outcome of innumerable pressures and pulls from various parts of the body politic. States-especially pluralist, capitalist states-rarely act as a unitary, cohesive force. They are multidimensional and their different dimensions act...