The Global City - Book Review
Originally published in 1991, Saskia Sassen’s The Global City sparked debates across disciplines and fields. Arguing that the forces of technological/telecommunication innovation, globalization, and the decline of Fordism combined to deepen dependences on “global cities” such as New York and Tokyo. The dispersal and decentralization that the telecommunications boom was to usher in actually contributed to a centralization process in several global nodes internationally.
What are Producer Services?
Producer services came to dominate urban economies while their employees gentrified various communities across each metropolitan area (of note, Sassen compares/contrasts the three cities repeatedly noting that similar processes unfolded simultaneously with remarkably similar though far from identical results – this especially true when Sassen discusses Tokyo whose economy displayed far greater government intervention, a notable lack of immigration replacing it with migration from rural Japanese areas.. there are other differences …). However, with this growth came polarization.
Producer services require the labor of wage work for their various professional and personal lifestyles. If Fordism, though flawed, maintained a manufacturing sector with a workforce that achieved reasonable levels of compensation, the shift in recent economies skews this arrangement that depends not only on the poorly compensated wage labor upon which it stands but also the exploitation of a class of white-collar workers who have given up job security and protection in return for high wages and a certain lifestyle ideology conducive to their interests.
What are the primary themes in The Global City?
Global Cities embraces four primary themes. First, the “territorial decentralization of economic activity” failed to distribute business and profits more broadly. Rather, global cities find themselves increasingly serving as powerful international financial centers, “the more globalized the economy becomes, the higher the agglomeration of central functions in a relatively few sites, that is, in global cities.” Second, Sassen places great importance on how these economies order cities internally. Here Sassen shifts to a focus on markets and the financial industry. The shift in the late 1970s from transnational primarily American banks to financial industry investments serves as only one example. Sassen does not discount the importance of corporations or banks but notes the striking shift in investments altered various social, political, and spatial structures. Third, questions regarding the effect of global cities on the various national networks in which they situate themselves provide another avenue of inquiry. This insight also requires reflection on how global cities interact with the nation-state (Chicago emerges as a key city in this part of the discussion). Finally, Sassen examines “the impact of these new forms of, and conditions for, growth on the social order of the global city.”
Other views of the development of global cities
Other scholars such as Peter Marcuse and Ronald van Kempen (Globalizing Cities: A New Spatial Order?) have suggested that fundamentally cities’ spatial order remains continuous in many respects. Sassen’s emphasis on economic changes argues that though this growth remains connected to a declining manufacturing base (thus an economic continuity that posits regulations (deregulation) and economic change benefitted the financial industry while penalizing the manufacturing sector) that it has altered the spatial dynamics of global cities. Though as with other scholars, Sassen designates the early 1970s as the shift away from Fordism towards a new economic reality, Sassen also notes the importance of the 1982 debt crisis which brought numerous changes to the industry while increasing the “concentration in and orientation toward major financial centers … “
According to Sassen, a key to this transformation rests on the proliferation of and investment in financial instruments which have maximized the movement of capital, increasing the activity of “investors and borrowers around the world”. (note pages 33-34 of the second edition features a debate between Global Cities and her previous work The Mobility of Capital) In relation, foreign direct investment of the 1970s frequently found its way to Latin America, however, the 1980s ushered in a period in which the U.S. became a central recipient of such investment with Japan as the primary supplier. Mike Davis addresses this investment’s effects on Los Angeles and its outlying communities in City of Quartz. For Davis, the results have been anything but positive. With this increased foreign investment, demand for producer services (accounting, business law, etc) also rose deepening the tendencies toward global city economic agglomeration.
Consolidation of infrastructure financial markets into places like New York City=
During the 1980s, markets seemed to have wielded a rhetorical and economic strength not previously accorded. However, Sassen expands on this idea “while financial markets continue to fulfill traditional supply and demand functions, a second type of activity has grown immensely in the major financial markets. It is the often highly speculative buying and selling of instruments and the experimentation with new ones.) In relation, this has meant that financial centers have become the key location for “intermediation functions”. The complexity of the financial markets requires a “vast infrastructure of financial centers with highly specialized services.” Thus, what she labels as the “organizational complexity” of internationalized finance can only be supplied by the dense “social connectivity” of urban networks, and the accumulation of firms and markets preset in urban “financial centers” like New York.
As noted, though Global Cities focuses extensively on markets, financial instruments, transnational credit flow and the like, it also attempts to examine the spatial consequences of these developments, “Different types of economic growth promote different types of social forms.” If post-WWII Fordism generated a large middle class through industrial employment that encouraged consumption which in turn fed economic growth of the period. Modern economic value lay in the creation and control over scientific knowledge, meaning that the beneficiaries of this new paradigm resemble not the expansive post-war middle class of the 1950s, but the technocratic college-educated professional (one whom Sassen points out makes a significant amount of money but agreed to less security, and have virtually no control over their companies, “This book also suggests that high-income gentrification and the type of conspicuous consumption associated with it serves a strong ideological function of securing the alliance of these workers to a system for which they produce immense profits in exchange for relatively low returns and new claims.
It is this level of consumption that differentiates these workers from the middle class of the 1950s and 60s “While their earned income is too little to be investment capital, it is too much for the basically thrifty savings oriented middle class.”) Women especially have benefitted from new developments, ironically, also gentrifying communities in each city as job opportunities previously denied or non-existent surfaced to enable their influence to be felt economically and socially. Women have replaced the suburban middle-class ideal with a more urbane ideal. Likewise, Sassen points out, more so in New York and London than Tokyo, that immigration has produced a sort of low-cost gentrification as older decaying neighborhoods have been inhabited and refurbished by England’s and America’s newest residents.
Yet, for such positives, Sassen also notes the negative polarization that has led to a polarized city or that some might call layered. For Sassen, gentrification hardly merits as new but the scale under which it unfolds is (again of note, the influx of the aforementioned professional class affects neighborhoods in several ways as well). Gentrification’s manifestations differ in each of the three cities: New York’s bears witness to the rise of an “informal market” for both labor and goods, Japan’s unmoored rural workers such that a system that once offered some protection offers less creating a mobile but impoverished workforce and London’s government privatized numerous services once supplied by the municipality itself.
Conclusion
In regard to immigration, Sassen argues that rather than taking jobs from Americans, immigrants have been ideally situated to take advantage of casualization and similar economic processes. Jobs are not created for immigrants, the jobs were already there. With that said, the ability of immigrants and others in these global cities has diminished, “the growing inequality in the bidding power for space, housing, and consumption services mean that the expanding low wage workforce that is employed directly and indirectly by the core sector has increasing difficulty living in these cities. This may reduce the effective supply of such workers and lead to the impoverishment of significant sectors of the population, something that indeed happened over the last decade in all three cities.”
