Miami: Mistress of the Americas

Chapter 5: The Birth of a World City

c h a p t e r 5 The Birth of a World City Miami’s economic transformation resulted from more than the internal machinations of the city’s business elite. It was also part of a much bigger story. Around the world, processes of globalization had accelerated since the late 1970s and were drawing certain cities into a global orbit, linking them to worldwide financial and economic networks.1 These included such cities as Milan, Dublin, Hong Kong, Singapore, Frankfurt, Toronto, Sydney, and Miami. Globalization also further enhanced the position of major cities with already strong international orientations, like New York and Paris. There have, of course, been globally oriented cities earlier in history, like seventeenth-century Amsterdam or Victorian London. What is different about the emergence of world cities in the latter part of the twentieth century is that they are greater in number and that they form a large and complex urban network that underpins the world economy. Modern world cities are a by-product of globalization. And globalization itself is based on a timely combination of telecommunication and transport advances and a near worldwide turn to free markets—both ideological and in terms of government policies. The latter was especially important in allowing the free flow of capital and trade across political borders. Urban areas that actually emerged as world cities had certain { 95 } qualities that other cities lacked. They had the ability to take advantage of globalization and to assume a position of international regional centrality. Modern world cities like Miami share several features. First, global capital uses them as basing points in the geographical organization of production and markets. As such, world cities together form a global urban network with a hierarchical nature. At the apex of this hierarchy we find the leading global cities of New York, London, and Tokyo. It is not accidental that each of these three primary global cities is located in its own continental time zone, together accounting for twenty-four-hour coverage of global finance. All three are home to the world’s biggest stock exchanges and financial markets, and a wide range of headquarters of the world’s biggest firms. Second, world cities are major sites for the concentration of international capital; they perform like valves in the global circulation of capital. Very large amounts of money flow in from a variety of international places and considerable flows of money leave for other destinations. This not only reflects the role of stock markets , but also flows of foreign direct investment, trade financing, and capital flight. Some of that money ‘‘sticks’’ around, for example in the form of high salaries to specialized professional workers , or in real estate investment. Third, world cities have a disproportionately high degree of command and control in the international economy, often expressed by the presence of big multinational (regional) headquarters . It is also shown by the sectors that dominate the economies of world cities: finance, transport, communications, and producer services such as accounting, consulting, advertising, and legal services. These sectors typically support and coordinate international economic activities. As command and control centers, world cities form a network that functions as the spinal cord of the global economy. The higher up a city is positioned, the greater its influence on the world economy. { 96 } c h a p t e r 5 Finally, world cities tend to be the destination of large numbers of domestic and international migrants. They contribute to the economic growth of these cities and especially to the development of their global linkages. It is often suggested that there are about forty or fifty world cities today, depending on the precise criteria. Even though all function together in global networks, substantial variation among them remains. In reality, very few have truly global reach and most have more regionally defined roles. The majority, even if they share certain common characteristics, tend to have specialized functions (port cities, immigration centers, stock markets, distribution centers, certain producer services, and so forth). In most studies, Miami is included as a second- or third-tier world city with an important status as a linchpin between North and South America. Miami’s birth and early growth as a world city occurred sometime in the early 1980s. Quite apart from the internal workings of the urban growth machine just discussed, there was an international logic that drove Miami’s rise—and it had...