Globalising cities and their de-globalising hinterlands: Book review

Global cities at the ‘core’ of the national economy generate deep and de-stabilising patterns of under-development in the ‘periphery’

Scott LaveryCities have long played a critical role in the development of global capitalism. In renaissance Europe, merchants in Genoa, Venice and Florence extended their power by integrating their urban economies into trade flows emanating from the Orient. During the 19th-century Pax Britannicathe City of London emerged as the pre-eminent metropolitan hub of global capitalist activity. British merchant banks oiled the wheels of global commerce whilst the Bank of England and the Treasury zealously protected the monetary foundations of the City’s global power. Since the 1970s, increasingly ‘footloose’ capital flows turbocharged the expansion of urban financial districts stretching from Manhattan to Tokyo. Consultants, legal services and creative industries increasingly clustered in powerful metropolitan centres. The development of capitalism and the rise of the ‘global city’ are closely intertwined historical processes.

Since the 1980s, a large body of literature within economic geography has examined how globalisation shapes processes of urban development. The newly published Globalizing Cities Reader (2nd edition) offers a panoramic overview of this research field, and is an invaluable resource for those interested in the evolving relation between cities and capitalism. The first half of the book introduces ‘classic’ contributions from some of the pioneers of ‘global cities’ research. Chapters from Fernand Braudel, John Friedmann, Saskia Sassen, Manuel Castells and Peter Taylor place ‘global city’ formation in a long-term historical perspective. The book then presents detailed case studies of contemporary ‘global city’ formation in New York, London, Istanbul and Shanghai and numerous other urban centres.

The chapters in the second half of the book examine how global city formation has reconfigured transnational and urban governance, regulation, culture and politics. The editors, Xuefei Ren and Roger Keil, helpfully contextualise each contribution within the wider field.

One of the central themes throughout The Globalizing Cities Reader is the central importance of studying the complex network of relations which link together global cities. For ‘global city’ researchers, globalisation erodes the sclerotic structures of the nation state. Chapters from Castells (Ch. 21), Scott (Ch. 31) and Sassen (Ch. 40) exemplify this approach. Globalisation diffuses power to the local, urban and transnational levels. ‘Global cities’ consequently emerge as crucial spaces which coordinate the ‘flow’ of goods, services and information. As chapters from Beaverstock (Ch. 22), Smith (Ch. 60) van Meeteren (Ch. 62) and others argue, actors within these cities increasingly form cross-border ‘networks’ and generate new geographies of connectivity.

This ‘relational’ approach to global city formation is undoubtedly of great utility. But there is a risk that analytically privileging inter-urban ‘network’ formation overlooks one of the key relations in the contemporary period: the relation between ‘global cities’ and democratic politics. In order to interrogate this relation, we need to move beyond the research paradigm advanced in the Globalizing Cities Reader and enter into the terrain of politics and political economy.

All cities, no matter how outwardly ‘global’, are embedded within distinct national contexts. London may exemplify the ‘global city’ par excellencebut its internationalised character is uniquely tied to the history and politics of the UK. The UK’s common law system and its post-imperial status as a commercial ‘entrepôt’ together make the City an attractive site for capital in-flows. But the City’s ‘internationalised’ status must also be constantly defended from domestic democratic incursions. Attempts to defuse popular anger over banker bonuses in the aftermath of the 2008 crash represent one example of this process; attempts to shape a ‘bespoke’ deal for financial services after Brexit another.

The problem for global cities is that they tend to unleash oppositional forces which can actively subvert the foundations of their power. The case of the UK is again instructive here. The rise of the City has generated substantial economic activity and tax revenues. However, as evidenced in a growing body of political economy analysis, the dominance of the City has also bedevilled British capitalism with a ‘finance curse’. States which host large financial centres experience upwards pressure on their real exchange rates, which can undermine industrial production. This can decimate regionally concentrated manufacturing centres. Large financial sectors also foment ‘brain drain’ from non-financial sectors and peripheral regions to the financialised core. Bank lending becomes skewed towards commercial and residential property, limiting investment in industrial production and sapping regions of investment. Global cities at the ‘core’ of the national economy generate deep and de-stabilising patterns of under-development in the ‘periphery’.

This process has important political implications. Globalising cities actively produce de-globalising hinterlands. These consist of those regions which are closely linked to but effectively excluded from the benefits generated by the metropolitan ‘core’.

The de-globalising hinterland has emerged as a – and perhaps the – defining political force within the contemporary era. The election of Trump, the UK’s vote for Brexit and the rise of ‘populist’ movements of the right and left in Europe are the clearest expressions of this dynamic. These movements partly derive their potency from the deep geographical antagonisms which characterise contemporary capitalism. In the UK, the mobilisation of voters in the de-industrialised periphery of Northern England and Wales was critical to the ‘leave’ vote; in the US, disaffected rustbelt voters helped to deliver the White House keys to Trump; in the EU, support for the National Front is concentrated in France’s neglected ‘Nord’ whilst Alternative für Deutschland’s base of support is concentrated in struggling Eastern Germany.

History tells us that we ignore the politics of the de-globalising hinterland at our peril. In the 1930s, ‘tariff wars’ broke out as Western states sought to defend powerful domestic producer groups and agriculture. In the 1970s, the US fatally undermined the Bretton Woods order as it sacrificed the dollar’s gold peg in response to domestic pressures. The Globalizing Cities Reader tells us a lot about the complex relations between powerful metropolitan centres. But it tells us less about the relation between powerful ‘global cities’ and the increasingly volatile internal peripheries which surround them. Addressing this gap is an important task, both intellectually and politically.

This article was first published by the In The Long Run blog and is reproduced here with permission.

Dr Scott Lavery is Leverhulme Early Career Fellow at SPERI and thanks the Leverhulme Trust for their financial support.