Recapturing Democracy

Neoliberalization and the Struggle for Alternative Urban Futures

Mark Purcell

• Publisher: Routledge
• Year: 2008
• eBook ISBN: 9781135919252
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

Recapturing Democracy is a short yet synoptic introduction to urban democracy in our era of political neoliberalism and economic globalization. Combining an original argument with a number of case studies, Mark Purcell explores the condition of democracy in contemporary Western cities. Whereas many scholars focus on what Purcell calls "procedural democracy" – i.e., electoral politics and access to it – he instead assesses "substantive democracy." By this he means the people's ability to have some say over issues of social justice, material well being, and economic equality. Neoliberalism, which advocates a diminished role for the state and increasing power for mobile capital, has diminished substantive democracy in recent times, he argues. He looks at case studies where this has occurred and at others that show how neoliberalism can be resisted in the name of substantive democracy. Ultimately, he utilizes Henri Lefebvre's notion of "the right to the city," which encompasses substantive as well as procedural democracy for ordinary urban citizens.

CHAPTER 1
THE “TERROR” OF NEOLIBERALIZATION¹

THE WASHINGTON COMPETITIVENESS COUNCIL

In the spring of 2001, Boeing announced it was moving its corporate headquarters from Seattle to Chicago. While much of their manufacturing activities remained in place, the loss of the Boeing headquarters was widely viewed in the State of Washington as a warning: if we don’t make the region more attractive to business, more and more companies will follow Boeing’s lead. State government acted swiftly. In the summer Democratic Governor Gary Locke created the “Washington Competitiveness Council,” an appointed body whose mission was to evaluate current policy and recommend ways to make the state better able to attract capital investment. The 35-member council brought together captains of industry, representatives from state and local government, and two labor leaders. Over several years, it produced an agenda that had two principal components. The first stressed the importance of creating general agreement in the public sphere—a “common sense”—that Washington State must make itself as competitive as possible in the global economy. It stressed the need to “improve public understanding of the importance of a healthy business climate to the future of Washington’s economy” (Washington Competitiveness Council 2002, p. 4). The value of local competitiveness, it felt, should be an accepted necessity in policymaking. The second component followed the first by proposing a concrete set of policy recommendations. In order for the state to remain competitive, they found, government should simultaneously get out of the way and actively intervene. It should get out of the way by reducing taxes and fees; “streamlining” environmental, labor, and planning regulations; and creating a customer-friendly ethic in regulatory agencies. It should actively intervene by significantly increasing public spending in several ways: improve transportation, telecommunications, and water infrastructures; fund innovative R&D activities; and restructure public education to produce a more competitive workforce. Without such action, the Council warned, “Washington will fall behind other states and regions that are investing massively in these areas” (Washington Competitiveness Council 2002, p. 19). While the council’s recommendations were only advisory, it was extremely successful at turning its recommendations into real policy. Where possible, the Governor issued executive orders to realize the council’s agenda. More often, policy change required legislative action, and the legislature was accommodating. The council’s first report in 2001 made 99 policy recommendations, and over the course of two sessions the legislature passed 46 bills that advanced the council’s agenda (Washington Competitiveness Council 2003, 2004).

Of course these policy changes were favorable, in general, to the profits of the firms represented on the Council. They were proposing policy changes that significantly benefited their bottom line. But the Council’s activities were far from covert. It did not meet in smoke-filled back rooms, hidden from public view. It met in open forums at universities, convention centers, and at the state capitol. Its activities and reports were widely publicized. Graft and secret influence were not driving the agenda. Rather, there was broad consensus in the public sphere that government and business should work together to meet the needs of business. That extraordinary argument was the basis of the Council’s mission, and it was taken to be self-evident. Far from hiding his relationship to the council, the governor trumpeted it loudly as an important civic undertaking. He was always clear that keeping the state economy competitive was a central responsibility of his office. His official website stressed his accomplishments in this area:

Gary Locke has led efforts to make Washington a place where businesses want to locate or expand. He’s cut more than $1 billion in businesses taxes, worked to expand and promote exports, advanced workforce training, and invested in rural economic development.

The governor made it clear that “we must improve our competitive edge to ensure a healthy business climate” and that “in a rapidly changing global economy, the state must keep pace with changes necessary to keep and improve its competitive edge.”

GLOBALIZATION AND NEOLIBERALIZATION

The story of the WCC will come as no surprise to anyone who has followed research in political economy over the past two decades. A great deal of excellent work has documented in meticulous detail how, over the past 35 years or so, the global political economy has been subjected to a massive reorganization. One shift has been a complex rescaling of economic activity and political control, often labeled “globalization.” The second shift is tightly tied to the first: a concomitant change in the content of political-economic thinking, what I call “neoliberalization.” There has been a massive amount written about globalization, and there is a smaller but still-large body of work on the project of neoliberalization. Therefore, before I discuss the challenges neoliberalism poses to democracy, it is important to be clear about how I understand both elements of this dual shift.

Globalization as Selective “Glocalization”

Over the past three decades, both the global economy and the nation-state have been significantly rescaled. During the postwar era (up to about 1970), political and economic co-ordination were contained to a significant degree at the national scale. The scale of state sovereignty was successfully constructed as fundamentally national, and that scale took on a leading role in organizing both political and economic life (Agnew 1994). National economies tended to interact with each other at arm’s length (Dicken 1998). To be sure, non-national scales were also important during this period, but the national scale enjoyed an extended period as the hegemonic scale for co-ordination of both political control and economic activity. The current era has seen a strategic erosion of that hegemony. To a much greater degree than previously, non-national scales are being promoted as alternatives to the national scale. These alternative scales are both supra-national and sub-national, and they affect both economic activity and state control. As a result, many in the literature use the term “glocalization” rather than globalization, in order to more accurately describe this rescaling process (Swyngedouw 1992; Courchene 1995; Robertson 1995).

Both the national scale and its emerging alternatives are assumed here to be socially constructed. That is, they do not exist as fixed entities, each assigned a characteristic set of processes. Instead each scale and the relationships among scales are contested and continually reproduced. Research in geography on the “politics of scale” has argued that scale is always fluid. Scales and scalar relationships can become fixed, but that fixity is never permanent, and it is always realized through a political project (Smith 1993, 1995; Swyngedouw 1992, 1997; MacLeod and Goodwin 1999b; Marston 2000; Brenner 2001). If scales are produced through struggle and conflict, the extent and content of each scale, as well as its relationship to other scales, must be the result of particular groups achieving a configuration that best suits their agenda. Scale, in other words, is best seen not as a neutral container that exists outside politics, but as a strategy, as a way to pursue a political agenda. In this light, the political-economic literature has developed an overarching argument that the glocalization of scalar relationships is a conscious strategy to advance the agenda of neoliberalization.

Economic Glocalization

The rise of the transnational corporation and the increasing internationalization of economic production and finance since 1970 have significantly expanded the scale at which capital investment, economic production, and information flows are functionally integrated. Capital flows and economic production are much more likely to extend across national borders than before. That “globalization” of its operations has been an important strategy on the part of capital to achieve two goals. The first is mostly economic: to seek out new areas for investment that could help reverse the declining rate of profit that developed in the industrialized economies due mostly to high wages earned through successful labor organizing. Globalization can be seen, therefore, as a contemporary manifestation of an age-old capitalist strategy: a restless effort to incorporate new territories into the capitalist relation in order to secure new spaces that offer greater returns on investment (Hardt and Negri 2000). The second goal of globalization is more fully political. Under the postwar “Keynesian” policy regime, labor achieved a strong political position: unions had a formal role in macroeconomic policymaking. Labor reproduction and demand stimulation were the main concerns of policymakers. National government tightly regulated capital in a variety of ways. Against the strength of labor, capital’s primary bargaining leverage was its mobility, and so transnationalization of investment was a way to give this threat very sharp teeth (Bowles and Gintis 1986, pp. 57–8). Capital has thus “jumped scales” beyond the national as one way to overcome the limitations and contradictions of the predominantly national-scale regime of the Keynesian era (Smith 1993).

The other aspect of economic glocalization is the increasing tendency for economic coordination to be organized at more local and regional scales. Commentators have stressed the growing importance of regional economies as important functional nodes in the world’s economic geography (Storper 1997; Scott 1996, 1998). The rising importance of regions is associated with a move toward industrial production that relies on “flexible specialization,” whereby very large firms give way to a proliferation of smaller ones (a process known as vertical disintegration) that must coordinate their activities (Piore and Sabel 1984; Christopherson and Storper 1989; Sabel 1994; Saxenian 1994; Hirst and Zeitlin 1989; Scott 1988). As more industries move toward vertical disintegration and flexibility, interfirm cooperation becomes increasingly crucial to economic production. The need for cooperation encourages firms to cluster geographically in a given region and to develop a regional-scale organization that allows (usually urbanized) regions to function as nodes in the global economy (Scott 1996).² This economic regionalization is important because it has made the economic fortunes of regions relatively more independent of their national economies. A regional economy is now more able to grow when the national economy is stagnating, or stagnate as the national economy grows. A region’s economic networks are no longer just national, but global. That emerging independence of regional economies has intensified inter-region competition for capital investment. No longer are regional economies a function of, and protected by, their national economy. Increasingly they must hustle in the global economy to ensure their economic fortunes.

State Glocalization

The nation-state has also undergone a process of glocalization. As with economic coordination, the national scale has been destabilized as the dominant scale of state power (Jessop 2000). Important state functions and powers are being shifted to other scales, both supranational and sub-national. In some cases, shifts to larger scales have involved merely international coordination of specific policies whereby each nation-state operates as a sovereign unit within an agreement among nation-states. The UN, NAFTA, ASEAN, and the Kyoto Protocol are examples. In addition, there have been some moves towards truly trans- or supra-national state forms, under which national states partly coalesce into a larger “superstate.” The European Union is one of the few examples of an institution in which state sovereignties have the potential to dissolve into a truly supra-national state form (Leitner 1997; Balibar 1999). In both cases, however, both inter- and supra-national state forms have expanded the potential to coordinate policy at scales beyond the national. Of course such international coordination could be used to more tightly regulate internationalizing capital. However, it has so far been used much more frequently to aid capital mobility by developing free-trade policies that speed the flow of goods and capital across national borders. Such policies do much to intensify the political leverage associated with capital’s mobility.

The converse of state globalization has been a devolution of authority from the national state to its sub-national units (Jessop 1994a; Peck and Tickell 1994; Mayer 1994; Swyngedouw 1996; Ward 2000; MacLeod and Goodwin 1999b; Staeheli et al. 1997; Kearns 1995). That process has involved the transfer of functions, obligations, and expectations to local states at various scales, from province/state to municipal. While this is a complex and uneven process, one main outcome has been for the national state to weaken policies that redistributed wealth more evenly across the nation, protecting vulnerable regions from competition. It has instead preferred to stimulate entrepreneurialism by encouraging newly empowered regional authorities to compete among themselves. Erik Swyngedouw’s (1996) analysis of the redevelopment of regions in Belgium after mine closures shows how a nexus of new local-state (and quasi-state) institutions were created to assume responsibility for functions such as unemployment, education, economic development, and finance. The goal of the devolution, he argues, was to “produce competitive regional spaces” through institutional state forms that fit more closely the scalar structure of the changing economic geography in the area (1996, p. 1499). According to Swyngedouw, the political project was to shift state policy away from a national-redistributive project and toward a regional-competitive one. With devolution, each region could offer a different regulatory package, and attracting capital became an increasingly important driver of that policy, over and above social need.

As the Belgian example hints, a third shift accompanies this rescaling: a move from formal government to more informal “governance” arrangements. In addition to upscaling and downscaling, there has been a tendency toward outsourcing of state functions to non-state and quasi-state institutions. The state has increasingly privatized and semi-privatized its functions by contracting out services to volunteer organizations, community associations, non-profit corporations, foundations, and private firms, and by developing quasi-public bodies, such as QUANGOs, training and enterprise councils, appointed competitiveness councils (like the WCC), urban development corporations, regional development authorities, and public—private partnerships, to carry out the functions of formal government (Goodwin 1991; Krumholz 1999; Payne and Skelcher 1997; Walzer and York 1998; Watson 1995). That shift has helped increase the “flexibility” of policy-making: very often it is a way to undermine government requirements and protections, because those may cease to apply when a non-governmental agency takes control of a decision. The neoliberal goal here is to move governance out of the routinized channels of the formal state, because that had been the bastion of the Keynesian compromise. The result has been an increasing proliferation of ad hoc and special purpose entities, most of which are quite new. They have missions, rules, and procedures that are not well-established. Such “flexibilization” has created a much more open and unstable set of governing arrangements for urban political actors to navigate. While that increased openness is intended to benefit capital, it often leaves open significant opportunities that subordinate interests can exploit.

As with other processes of rescaling, the process of state rescaling has by no means been total. On the contrary, it has been markedly partial and uneven. The argument is not that the governing and coordination has been diminished; rather governing power has been partly “displaced” from its dominant location in the national-scale state and “replaced” in new institutional and scalar forms, both state and non-state (Jessop 1994b, p. 24). In short, state power has been partly glocalized, and the national-scale state no longer holds as dominant a position as it once did (Brenner 1997; Jones and Keating 1995; Amin 1994; MacLeod and Goodwin 1999b). As the analysis above begins to suggest, rescaling has not been absent of political-economic content. Rather, glocalization has been pursued as a conscious strategy to realize a particular agenda: a thoroughgoing neoliberalization of political economies (Swyngedouw 1997). Glocalization has been partial because it has been selective: neoliberals have pursued primarily those scalar shifts that augment the dominance of competitive free-market relations. In order to more fully understand neoliberal globalization, the next section examines that neoliberal agenda in more detail.

Neoliberalization

Those rescaling processes—the increasing threat of capital mobility, the intensification of inter-region and inter-urban competition, and the glocalization of both state regulation and economic production—have all worked in close cooperation with the rise of neoliberalism. The latter is in many ways the reassertion of an old neoclassical economic argument: society functions better under a market logic than any other logic, especially a state-command one. We should give firms and individuals freer reign, neoliberals argue, so that they can rationally maximize their private economic interests in open and competitive markets. In the postwar era, until about 1970, a “Keynesian” economic policy regime instituted strong union power, significant state control over the economy and regulation of capital, and a relatively large welfare state apparatus (Jessop 1993). Even as Keynesianism became dominant, opponents were building an argument for an alternative, a neoliberal ethic in which the state would play a minimal role in the economy and “the invisible hand” of market decisions would determine economic outcomes. The neoliberal argument that the market is far more “efficient” in allocating resources than the state or other institutions, true or not, resonated strongly in the 1970s era of stagflation and economic recession. It has since become the dominant assumption in policymaking.

In the neoliberal imagination, open and competitive markets not only produce the most efficient allocation of resources, but they also stimulate innovation and economic growth. Thus market logics and competitive discipline should be fostered in the economy, and they should even be extended beyond the economy, to institutions like the state, universities, hospitals, schools, and so on. Moreover, because state policies are the primary impediment to competitive markets, the state should “get out of the way” as much as possible. Those values have informed a wide-ranging policy agenda. Neoliberals have worked to reduce international trade restrictions and establish the dominance of a “free trade” ethic to support the globalization of production. They have dismantled the Breton Woods system of fixed exchange rates for currency and allowed money markets to operate much more freely. They have vigorously pursued “flexible” labor markets that are less encumbered by practices like collective bargaining, minimum wages, job security, health insurance, safety laws, and the like. They have pressed for the legal expansion of private property rights to promote the commodification and private ownership of social products such as material goods, land, ideas, and information.³

But we should not see neoliberalism only as a concrete economic policy agenda. As Harvey (2005) makes clear, the rise of neoliberalism constituted a successful ideological project to make competitive-market ideologies hegemonic. Wendy Larner (2000) and Henry Giroux (2004) have both emphasized the importance of understanding neoliberalism not just as a set of concrete policies, but as an ideology, a form of governmentality, and, as Giroux terms it, a “public pedagogy.” The hegemony of neoliberal ideas is important, because creating a dominant neoliberal “common-sense” helps establish unquestioned assumptions that make it very difficult to imagine, let alone achieve, alternative projects (Keil 2002). For example, in laying out their policy agenda, the Washington Competitiveness Council made very clear the need to continually “improve public understanding of the importance of a healthy business climate to the future of Washington’s economy” (Washington Competitiveness Council 2002, p. 4). That exhortation suggests two things: (1) proponents of neoliberalism understand very well the importance of Giroux’s “public pedagogy,” and (2) the dominance of neoliberal common-sense is not yet total. The WCC was concerned that not everyone in Washington State had accepted the importance of their project (although they were confident education could help them “understand”). While the project of realizing neoliberalism’s ideals is important, nowhere it is complete or permanent. Rather what we are seeing is an ongoing struggle to continually re-establish neoliberalism as the hegemonic logic for political argument (Gramsci 1971; Jessop 1997a). The more dominant this logic is, the easier it is to advance the neoliberal policy agenda. Much headway has been made in realizing that agenda, but we should not expect to see any pure manifestations of a neoliberal political economy. Rather, if we examine the concrete policy agenda of neoliberalism, what we see is a distinctly fitful advance and uneven geography: some places labor under a more nearly neoliberal regime, in other places neoliberalization is much less far along. It is that sense that I use the term neoliberalization, as an ongoing but never completed project to neoliberalize urban political economies (Tickell and Peck 2003).

Adding to that complexity is a nuance within the policy ensemble that has emerged under neoliberalization. While neoliberal doctrine propounds a minimal state and maximal markets, the discussion above suggests a more complicated agenda. “Neoliberalism,” Hardt and Negri (2004, p. 280) write, “is not really a regime of unregulated capital but rather a form of state regulation that best facilitates the global movements and profit of capital.” The state is not merely stepping back, rather it is dismantling ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Illustrations
• Acknowledgements
• Introduction
• Chapter 1 The “Terror” of Neoliberalization
• Chapter 2 The Many Faces of Democracy
• Chapter 3 New Democratic Attitudes
• Chapter 4 On the Ground in Seattle and Los Angeles
• Conclusion: You Can Hear Her Breathing
• Notes
• References