One ubiquitous political sound bite in the U.S. nowadays is that the government should "live within its means," and it is frequently compared to a U.S. household.
Comparing the federal government to a household is misguided.
A household obtains revenue for the purpose of procuring its needs for existence and that also, largely, determines what a household spends. Furthermore, the budgeting of any individual household does not directly affect the finances of its neighbors.
A state is not a household.
Not only does a state appropriate and expend wealth, but these and other actions determine the value of its currency and assets as well as the level of demand, both domestically and globally. I have written previously about how the existence of the state is primarily as a tool of cultivating regional boundaries for the uneven development of prices and wages. Such unevenness is necessary for capitalist profitability.
The primary purpose of U.S. government spending the past few decades has not been to fund government programs. It has been to inject demand into a global economy faced with a crisis of overproduction. Whether this is a wise strategy or not, U.S. deficit spending has almost single-handedly kept the entire global economy afloat. When the U.S. tried to reverse course in the late 1970s and early 1980s, it precipitated a massive Third World debt crisis that threatened to undermine the entire world economy. So Keynesian deficit spending was resumed. Likewise, Clinton's austerity measures in the 1990s ended with an East Asian financial crisis that started to snowball out of control and necessitated a bailout by the U.S. (Furthermore, all the effort to balance the budget amounted to nothing in the long run...)
One can argue that the situation of the past few decades, in which the U.S., for the most part, (and someone at all times) played the role of deficit-spender, is neither ideal nor effective nor sustainable. And I would tend to agree, myself. On the other hand, those who propose to drastically reduce government spending in order to balance the budget must not take such a myopic view of the economy and realize that such a decision could be accompanied by dramatic consequences, including deepening economic crisis. At the very least, be prepared!
Sunday, July 31, 2011
Inside Job
I managed to not see Inside Job (the 2010 documentary) until a couple nights ago. Well, I guess I'm only a year behind, and for me that's pretty good. Naturally, I want to write about my reaction to the film.
The film did a fairly good job at demonstrating the lack of separation between private and public, business and government. Although this is in keeping with Marx's contention that the state is merely a tool of the capitalist class and not an independent entity, Inside Job suggested that this state of affairs is a sort of perversion rather than the norm. In fact, just restricting one's attention to the United States, there has never been a time when business interests were independent from the state. The country was founded by elite land owners, and has been run by people with business connections ever since. That is the inherent nature of a state, not a perversion of it.
The film also showed how these business interests cut across the boundaries of individual presidencies. It does not matter who is in office, Republican or Democrat, liberal or conservative. That is more of a symbolic matter. Behind the illusion of different personalities and disparate ideologies, there lies the same corporate elite making all of the decisions.
The primary argument of the documentary is that the root cause of the financial crisis can be traced back to the period of deregulation of the financial sector inaugurated by Reagan.
First, I think it is important to note that deregulation began under Carter's presidency, not Reagan. Volcker, who they noted was a VP for Chase Manhattan bank (but failed to mention was the chairman of the Federal Reserve from 1979 into the 80s, and thus responsible for many of policies they decried), was appointed by Carter. Once again, individual presidencies do not matter. It was the VP of a major bank who was really calling the shots.
Second, it is also necessary to remember that financial deregulation was a response to global economic stagnation which set in at the end of the 1960s. It's not like the economy was doing great before hand. Yes, Keynesian strategies prevented any major recessions from occurring, but they did not resolve underlying stagnation (thus, "stagflation") or contribute to any growth. Therefore, financial deregulation cannot be held as a root cause; it itself is a symptom of a broader crisis of overproduction.
This is all in keeping with a general pattern regarding periods of economic stagnation. Such periods are always characterized by a shift in focus from productive activities (which no longer yield good returns) to high finance. And the shift toward financialization is always the nail in the coffin, the thing that leads to ultimate collapse before global economic and political structures are eventually reorganized. It is representative of the attempts of the wealthy elite to try to get as much out of the system as they can before it finally implodes.
Several of the interviewees in Inside Job made a good point: the wealth that was created from the 1980s onward was imaginary: it was not rooted in material or creative processes; it was spun out of thin air (out of debt, actually). This is in keeping with my point in the last paragraph (that dependence on high finance is a last-ditch effort that is chosen when material/creative processes are declining in profitability), but it also illustrates a more general Marxist principle. Marx insisted that economic processes could not be understood apart from material productive relationships. When one forgets that profits, investment, monetary transactions, etc. only occur in relation to production - particularly the manufacturing sector - then one imbues statistics and economic indicators with a power they do not have. For, if material productive processes are faltering, it does not matter how much stock prices are rising or asset values increasing, or income growing. Because wealth can temporarily be spun out of thin air, but only temporarily.
The film did a fairly good job at demonstrating the lack of separation between private and public, business and government. Although this is in keeping with Marx's contention that the state is merely a tool of the capitalist class and not an independent entity, Inside Job suggested that this state of affairs is a sort of perversion rather than the norm. In fact, just restricting one's attention to the United States, there has never been a time when business interests were independent from the state. The country was founded by elite land owners, and has been run by people with business connections ever since. That is the inherent nature of a state, not a perversion of it.
The film also showed how these business interests cut across the boundaries of individual presidencies. It does not matter who is in office, Republican or Democrat, liberal or conservative. That is more of a symbolic matter. Behind the illusion of different personalities and disparate ideologies, there lies the same corporate elite making all of the decisions.
The primary argument of the documentary is that the root cause of the financial crisis can be traced back to the period of deregulation of the financial sector inaugurated by Reagan.
First, I think it is important to note that deregulation began under Carter's presidency, not Reagan. Volcker, who they noted was a VP for Chase Manhattan bank (but failed to mention was the chairman of the Federal Reserve from 1979 into the 80s, and thus responsible for many of policies they decried), was appointed by Carter. Once again, individual presidencies do not matter. It was the VP of a major bank who was really calling the shots.
Second, it is also necessary to remember that financial deregulation was a response to global economic stagnation which set in at the end of the 1960s. It's not like the economy was doing great before hand. Yes, Keynesian strategies prevented any major recessions from occurring, but they did not resolve underlying stagnation (thus, "stagflation") or contribute to any growth. Therefore, financial deregulation cannot be held as a root cause; it itself is a symptom of a broader crisis of overproduction.
This is all in keeping with a general pattern regarding periods of economic stagnation. Such periods are always characterized by a shift in focus from productive activities (which no longer yield good returns) to high finance. And the shift toward financialization is always the nail in the coffin, the thing that leads to ultimate collapse before global economic and political structures are eventually reorganized. It is representative of the attempts of the wealthy elite to try to get as much out of the system as they can before it finally implodes.
Several of the interviewees in Inside Job made a good point: the wealth that was created from the 1980s onward was imaginary: it was not rooted in material or creative processes; it was spun out of thin air (out of debt, actually). This is in keeping with my point in the last paragraph (that dependence on high finance is a last-ditch effort that is chosen when material/creative processes are declining in profitability), but it also illustrates a more general Marxist principle. Marx insisted that economic processes could not be understood apart from material productive relationships. When one forgets that profits, investment, monetary transactions, etc. only occur in relation to production - particularly the manufacturing sector - then one imbues statistics and economic indicators with a power they do not have. For, if material productive processes are faltering, it does not matter how much stock prices are rising or asset values increasing, or income growing. Because wealth can temporarily be spun out of thin air, but only temporarily.
Saturday, July 30, 2011
Why Afghanistan?
On Thursday's Daily Show, the guest was Peter Tomsen, a former U.S. Special Envoy and expert on Afghanistan. Now, there are probably many Daily Show interviews, and many other such interviews from other sources, that I could use to make the point I am about to argue, but I just happened to "feel like it" this time. So there was nothing particularly special about this interview.
The general point I want to raise is: such a distorted view of the world has been constructed and promulgated, that even the "experts" are often clueless and misguided. Never trust an expert. Or at least, never trust an expert just because they are an expert. Do your own research so that you can evaluate claims with reference to your own knowledge base.
The Peter Tomsen interview demonstrated the ineptitude of experts quite well. For example, he suggests that there has been so much interest in Afghanistan because it is located on a plateau, which gives its occupier strategic military advantage. Even Jon could see the ridiculousness of this proposition, it seemed from his jokes. It is, in fact, quite an outmoded understanding of geopolitical strategy.
The salience of things like geographical features, or even oil, is not what it used to be. What matters now is having neocolonial control over other governments so that they willingly "open" their markets to foreign investment and create projects that enable or require the involvement of multinational corporations. (In Afghanistan, for example, whether intended or unintended consequence, the infrastructural devastation cause by all of the wars has actually allowed some corporations to profit enormously from reconstruction efforts.) I have argued before that "Islamic extremists," such as the Taliban, are only threatening to the United States when they refuse to cooperate with the U.S. and its corporate interests. Otherwise, the U.S. is all to happy to openly or covertly support Islamist groups. It is clear, then, what the true strategic interest is.
Probably the most laughable and blatantly false thing that Tomsen said was that the Pakistani government has control over the ISI. Expert on what now?
The general point I want to raise is: such a distorted view of the world has been constructed and promulgated, that even the "experts" are often clueless and misguided. Never trust an expert. Or at least, never trust an expert just because they are an expert. Do your own research so that you can evaluate claims with reference to your own knowledge base.
The Peter Tomsen interview demonstrated the ineptitude of experts quite well. For example, he suggests that there has been so much interest in Afghanistan because it is located on a plateau, which gives its occupier strategic military advantage. Even Jon could see the ridiculousness of this proposition, it seemed from his jokes. It is, in fact, quite an outmoded understanding of geopolitical strategy.
The salience of things like geographical features, or even oil, is not what it used to be. What matters now is having neocolonial control over other governments so that they willingly "open" their markets to foreign investment and create projects that enable or require the involvement of multinational corporations. (In Afghanistan, for example, whether intended or unintended consequence, the infrastructural devastation cause by all of the wars has actually allowed some corporations to profit enormously from reconstruction efforts.) I have argued before that "Islamic extremists," such as the Taliban, are only threatening to the United States when they refuse to cooperate with the U.S. and its corporate interests. Otherwise, the U.S. is all to happy to openly or covertly support Islamist groups. It is clear, then, what the true strategic interest is.
Probably the most laughable and blatantly false thing that Tomsen said was that the Pakistani government has control over the ISI. Expert on what now?
Race and Double Standards
The other night I was out with a group of people that I did not know that well. I am not sure how the topic of race came up (it seemed out of the blue).
One woman said, "If you just say what race a person is, people call you a racist." She pointed to bartender, saying, "hispanic,' and then, "I'm racist!"
She continued. "You can only say your own race - that's okay - but not anyone else's."
Some other comments followed this, including one man who, in the midst of insisting that stereotyping should be more acceptable, argued: "Some things are just fact. See, I could say, 'Black people generally come from Africa,' and then someone would say, 'Oh you're racist.'"
First, in response to the man who likes to stereotype I would say, you just demonstrated the problem with stereotyping. The example is far from cut-and-dry. For example, if you are talking about African Americans, most generally have some European ancestory; a significant number, in fact, have more European ancestory than African. So what does it mean, then, to say "Black people come from Africa.." ? The statement assumes racial purity, and more neatly separates "black" from "white" (genetically, geographically... ) than is truly the case. It also ignores an entire chunk of African American, nay, American history pertaining to slave mistresses, interracial marriage, the "one drop rule," "passing," etc. etc.
But really I would like to focus on the woman. Her first claim that to simply recognize race constitutes "racism" in our society is a misconception shared by many others. To the contrary, "color blindness" is a strategy often employed to maintain racial inequality by making it an "off limits" topic and therefore rendering it impossible to address. Obviously people in this society are going to be conscious of race because it has social significance. Racial consciousness is not a bad thing. One of my favorite definitions of "racism" is something along the lines of: racism is to knowingly benefit from a system of inequality and do nothing to change that system.
What is a problem is when consciousness of race takes the form of stereotypes. And I just touched on this above.
The woman's second point is even more contentious. I have often heard white people complain about double standards in terms of what one is allowed to say. The "N" word is one notorious example. I think that was what the woman was eventually getting at.
Ohhh the irony of white people complaining about double standards. They have enjoyed better jobs, better pay, better access to public services, the ability to take out loans and buy houses in whatever neighborhood they want... and they are upset about not being able to say the "N" word?
... Or the fact that they can't be the ones to decide who does and doesn't get to say it? The thought of black people having control over one tiny area of life - over one little word (a word that was used to abuse them, no less) - drives these people nuts!
In the midst of continued educational achievement gaps, income gaps, residential segregation, differential treatment by the justice system... white people are complaining about the "unfairness" of not being able to say a word that black people can say?
As they say, if that's all you have to complain about...
One woman said, "If you just say what race a person is, people call you a racist." She pointed to bartender, saying, "hispanic,' and then, "I'm racist!"
She continued. "You can only say your own race - that's okay - but not anyone else's."
Some other comments followed this, including one man who, in the midst of insisting that stereotyping should be more acceptable, argued: "Some things are just fact. See, I could say, 'Black people generally come from Africa,' and then someone would say, 'Oh you're racist.'"
First, in response to the man who likes to stereotype I would say, you just demonstrated the problem with stereotyping. The example is far from cut-and-dry. For example, if you are talking about African Americans, most generally have some European ancestory; a significant number, in fact, have more European ancestory than African. So what does it mean, then, to say "Black people come from Africa.." ? The statement assumes racial purity, and more neatly separates "black" from "white" (genetically, geographically... ) than is truly the case. It also ignores an entire chunk of African American, nay, American history pertaining to slave mistresses, interracial marriage, the "one drop rule," "passing," etc. etc.
But really I would like to focus on the woman. Her first claim that to simply recognize race constitutes "racism" in our society is a misconception shared by many others. To the contrary, "color blindness" is a strategy often employed to maintain racial inequality by making it an "off limits" topic and therefore rendering it impossible to address. Obviously people in this society are going to be conscious of race because it has social significance. Racial consciousness is not a bad thing. One of my favorite definitions of "racism" is something along the lines of: racism is to knowingly benefit from a system of inequality and do nothing to change that system.
What is a problem is when consciousness of race takes the form of stereotypes. And I just touched on this above.
The woman's second point is even more contentious. I have often heard white people complain about double standards in terms of what one is allowed to say. The "N" word is one notorious example. I think that was what the woman was eventually getting at.
Ohhh the irony of white people complaining about double standards. They have enjoyed better jobs, better pay, better access to public services, the ability to take out loans and buy houses in whatever neighborhood they want... and they are upset about not being able to say the "N" word?
... Or the fact that they can't be the ones to decide who does and doesn't get to say it? The thought of black people having control over one tiny area of life - over one little word (a word that was used to abuse them, no less) - drives these people nuts!
In the midst of continued educational achievement gaps, income gaps, residential segregation, differential treatment by the justice system... white people are complaining about the "unfairness" of not being able to say a word that black people can say?
As they say, if that's all you have to complain about...
Thursday, July 28, 2011
The Russian Revolution Was Not Engineered
Admid all the distortions and misinformation regarding the Russian Revolution/Communism, there is one to which I would like to give brief attention.
It is commonly held that the Revolution was initiated and engineered by the Marxist intellectual elite: essentially a coup instigated by militant academics. It was Lenin's return to Russia (aided by the Germans, who were purposely trying to destabilize the country [this claim is true]) that enabled the Revolution.
In fact, Lenin was only opportunistic. A small subset of revolutionaries, led by Lenin, were able to coopt, by force, what was actually a much larger movement. There had been repeated peasant uprisings and other such turmoil for a while before the Revolution of 1917, and Lenin did not have much, if anything, to do with any of these acts of resistance.
It is severely misguided to assume that without Lenin, or even without the Bolshevik party as a whole, the Revolution would not have taken place. The revutionary forces minus the Bolsheviks were so strong that it is hard to imagine that peace could be kept. Granted, I do not believe that, without the Bolsheviks, there would have been a communist utopia. Probably some sort of milktoast social-democratic variety of capitalism would have prevailed. And then there would have been some other justification for the Cold War (assuming Russia would still have been imperialist), other than the pseduo-ideological one.
The point, however, is that the Russian Revolution is reflective of real anger and real determination to affect change, felt by a significant portion of the population. People were fed up!
This came to mind as I was reading Langston Hughes' biography, in which he describes the way his eastern European classmates (a large demographic in his high school) reacted to the developments abroad. They fiercly supported the Revolution and celebrated when the communists and socialists made advances.
The Revolution was not only a power struggle between the Old Guard and an Intellectual Elite. It was, in the beginning, a movement of the people.
It is commonly held that the Revolution was initiated and engineered by the Marxist intellectual elite: essentially a coup instigated by militant academics. It was Lenin's return to Russia (aided by the Germans, who were purposely trying to destabilize the country [this claim is true]) that enabled the Revolution.
In fact, Lenin was only opportunistic. A small subset of revolutionaries, led by Lenin, were able to coopt, by force, what was actually a much larger movement. There had been repeated peasant uprisings and other such turmoil for a while before the Revolution of 1917, and Lenin did not have much, if anything, to do with any of these acts of resistance.
It is severely misguided to assume that without Lenin, or even without the Bolshevik party as a whole, the Revolution would not have taken place. The revutionary forces minus the Bolsheviks were so strong that it is hard to imagine that peace could be kept. Granted, I do not believe that, without the Bolsheviks, there would have been a communist utopia. Probably some sort of milktoast social-democratic variety of capitalism would have prevailed. And then there would have been some other justification for the Cold War (assuming Russia would still have been imperialist), other than the pseduo-ideological one.
The point, however, is that the Russian Revolution is reflective of real anger and real determination to affect change, felt by a significant portion of the population. People were fed up!
This came to mind as I was reading Langston Hughes' biography, in which he describes the way his eastern European classmates (a large demographic in his high school) reacted to the developments abroad. They fiercly supported the Revolution and celebrated when the communists and socialists made advances.
The Revolution was not only a power struggle between the Old Guard and an Intellectual Elite. It was, in the beginning, a movement of the people.
Wednesday, July 27, 2011
The History of U.S. Cities
I happen to have a personal interest in U.S. urban history, so I decided to write this post on a whim.
I really love U.S. cities, and among a number of reasons is the fact that, given the period of their existence, it is possible to see the progressive unfolding of (in many cases) about two centuries worth of history sedimented in its spatial organization, architecture, and demographic patterns. And this history also happens to be the history of capitalism. There is no greater visual historical map of capitalism than the typical U.S. city.
Beginnings
Many cities in the eastern half of the U.S. were founded during the birthing period of capitalism (18th to early 19th century). The settlement patterns at this point were, in general, much the same as they had always been for a good part of human history. Namely, that they were determined by the location of waterways, which supported the primary form of human and commodity transport. Nascent U.S. cities tended to be small, both in land area and population, as the country as a whole was sparsely populated (it was still a frontier country). Downtown cores sat adjacent to seas and rivers, with industrial zones extending along the waterways. Generally, the wealthy elite either resided in central downtown areas (usually a main street), or owned large plantations in the vicinity and frequented the downtown for its services. The working class populated the rest of the downtown and the industrial zones. The outskirts of town were rural/agricultural.
Transportation Transformation
The first depression of capitalism in the 1840s was largely overcome through investment in the railroad industry. The rapid construction of railroad lines in the U.S. was a boon for British investors, and also facilitated a wave of European immigration (cheap labor). The growth of U.S. cities in the mid to late 19th century proceeded according to the following patterns:
1. Expansion of industrial zones and working class neighborhoods along railroad lines.
2. Influx of European immigrants and, in northern cities, free blacks; consequent population growth
3. Movement of white middle and upper classes away from the downtown core, facilitated by the construction of streetcare lines.
4. Deterioration and overcrowding in the downtown area.
Second Stage of Capitalism and First Wave of Urban Revitalization
Capitalism experienced its second major depression, on a larger scale than the first, in the later 19th century. However, with some reorganization on a global scale (entailing more imperialism), the era that followed was a Belle Opaque for the industrial centers, with transformed energy sources in the form of automated engines and electricity. The automobile industry accelerated growth in many cities. In keeping with these changes, the early 20th century saw a number of developments:
1. Urban renewal projects (following the "City Beautiful" movement)
2. Building boom, modernist architecture (including skyscrapers in some cities)
3. Further movement of upper classes spurred by automobiles, development of suburbs
4. Solidification of segregation, often enforced through neighborhood restrictions based on race/ethnicity
Late Capitalism and Suburbanization
After the depression of the 1930s, capitalism entered its third and current stage. The transition to this phase was marked not so much by technological changes (although automation of the entire production process via assembly line techniques and the like was an important factor), but moreso by organizational changes, including but not limited to the rise of transnational corporations, increasing vertical and horizontal integration, and the movement of manufacturing plants into the suburbs and overseas (to take advantage of lower costs).
During the economic upswing of this period, which lasted from the end of WW2 until about 1970, these organizational changes were accompanied by escalating racial tensions. Accordingly, many U.S. cities at this time experienced:
1. Race riots
2. Civil rights organizing
3. White flight
4. Manufacturing/population shift to the suburbs
5. The beginnings of urban decline
Racial tensions were fueled in part by population increases following WW2, northern migration of African Americans, and the movement of wealth and resources out of the cities (for example, manufacturing plants and offices were an important source of tax revenue) with the concomitant containment of blacks within. To make matters worse, black people were often prevented from owning their own property and were subject to exploitative rents and food prices charged by the suburban-dwelling property owners. However, riots only accelerated the process of white flight and further strained the dwindling resources of many cities.
Economic Stagnation and Urban Decay
By the 1970s, many U.S. cities were bereft of resources and political power, serving essentially as "garbage bins" for the nation's most impoverished people, and abandoned and neglected by everyone else. At this time, the global economy had entered into the period of stagnation which continues to characterize the economy today. Adding insult to injury, the conditions within cities began to deteriorate even further. For the next two decades, city dwellers faced problems of urban blight, a crack epidemic (and consequent imprisonment of a large portion of the young African American male population), and various "revitalization" projects that seemed to uproot, disturb, and harm local communities more than they "revitalized" anything.
Gentrification
When a large bubble was manufactured within the U.S. economy by the mid 90s, young professionals and new (often internet/tech-related) companies began to move back into cities to take advantage of the lower rents and property values. Furthermore, rapidly declining crime rates made these locations more attractive. The combination of temporary (and limited) economic growth along with the new migrations back into the city led to gentrification in circumscrbed neighborhoods, and in some cases, revitalization of entire cities (Washington, D.C. being a prime example).
However, this has been a heterogenous process and it is too early to tell what the lasting effects will be, particularly as the global economy still has not emerged from its longstanding period of stagnation. Stagnation generally ends with a transformation of the foundations of the economy, which in turns shapes the dynamics of city life. It is even possible that the old distinctions - urban/rural/suburban - may not be salient anymore as the spatial organization of economic processes undergoes yet another metamorphosis.
I really love U.S. cities, and among a number of reasons is the fact that, given the period of their existence, it is possible to see the progressive unfolding of (in many cases) about two centuries worth of history sedimented in its spatial organization, architecture, and demographic patterns. And this history also happens to be the history of capitalism. There is no greater visual historical map of capitalism than the typical U.S. city.
Beginnings
Many cities in the eastern half of the U.S. were founded during the birthing period of capitalism (18th to early 19th century). The settlement patterns at this point were, in general, much the same as they had always been for a good part of human history. Namely, that they were determined by the location of waterways, which supported the primary form of human and commodity transport. Nascent U.S. cities tended to be small, both in land area and population, as the country as a whole was sparsely populated (it was still a frontier country). Downtown cores sat adjacent to seas and rivers, with industrial zones extending along the waterways. Generally, the wealthy elite either resided in central downtown areas (usually a main street), or owned large plantations in the vicinity and frequented the downtown for its services. The working class populated the rest of the downtown and the industrial zones. The outskirts of town were rural/agricultural.
Transportation Transformation
The first depression of capitalism in the 1840s was largely overcome through investment in the railroad industry. The rapid construction of railroad lines in the U.S. was a boon for British investors, and also facilitated a wave of European immigration (cheap labor). The growth of U.S. cities in the mid to late 19th century proceeded according to the following patterns:
1. Expansion of industrial zones and working class neighborhoods along railroad lines.
2. Influx of European immigrants and, in northern cities, free blacks; consequent population growth
3. Movement of white middle and upper classes away from the downtown core, facilitated by the construction of streetcare lines.
4. Deterioration and overcrowding in the downtown area.
Second Stage of Capitalism and First Wave of Urban Revitalization
Capitalism experienced its second major depression, on a larger scale than the first, in the later 19th century. However, with some reorganization on a global scale (entailing more imperialism), the era that followed was a Belle Opaque for the industrial centers, with transformed energy sources in the form of automated engines and electricity. The automobile industry accelerated growth in many cities. In keeping with these changes, the early 20th century saw a number of developments:
1. Urban renewal projects (following the "City Beautiful" movement)
2. Building boom, modernist architecture (including skyscrapers in some cities)
3. Further movement of upper classes spurred by automobiles, development of suburbs
4. Solidification of segregation, often enforced through neighborhood restrictions based on race/ethnicity
Late Capitalism and Suburbanization
After the depression of the 1930s, capitalism entered its third and current stage. The transition to this phase was marked not so much by technological changes (although automation of the entire production process via assembly line techniques and the like was an important factor), but moreso by organizational changes, including but not limited to the rise of transnational corporations, increasing vertical and horizontal integration, and the movement of manufacturing plants into the suburbs and overseas (to take advantage of lower costs).
During the economic upswing of this period, which lasted from the end of WW2 until about 1970, these organizational changes were accompanied by escalating racial tensions. Accordingly, many U.S. cities at this time experienced:
1. Race riots
2. Civil rights organizing
3. White flight
4. Manufacturing/population shift to the suburbs
5. The beginnings of urban decline
Racial tensions were fueled in part by population increases following WW2, northern migration of African Americans, and the movement of wealth and resources out of the cities (for example, manufacturing plants and offices were an important source of tax revenue) with the concomitant containment of blacks within. To make matters worse, black people were often prevented from owning their own property and were subject to exploitative rents and food prices charged by the suburban-dwelling property owners. However, riots only accelerated the process of white flight and further strained the dwindling resources of many cities.
Economic Stagnation and Urban Decay
By the 1970s, many U.S. cities were bereft of resources and political power, serving essentially as "garbage bins" for the nation's most impoverished people, and abandoned and neglected by everyone else. At this time, the global economy had entered into the period of stagnation which continues to characterize the economy today. Adding insult to injury, the conditions within cities began to deteriorate even further. For the next two decades, city dwellers faced problems of urban blight, a crack epidemic (and consequent imprisonment of a large portion of the young African American male population), and various "revitalization" projects that seemed to uproot, disturb, and harm local communities more than they "revitalized" anything.
Gentrification
When a large bubble was manufactured within the U.S. economy by the mid 90s, young professionals and new (often internet/tech-related) companies began to move back into cities to take advantage of the lower rents and property values. Furthermore, rapidly declining crime rates made these locations more attractive. The combination of temporary (and limited) economic growth along with the new migrations back into the city led to gentrification in circumscrbed neighborhoods, and in some cases, revitalization of entire cities (Washington, D.C. being a prime example).
However, this has been a heterogenous process and it is too early to tell what the lasting effects will be, particularly as the global economy still has not emerged from its longstanding period of stagnation. Stagnation generally ends with a transformation of the foundations of the economy, which in turns shapes the dynamics of city life. It is even possible that the old distinctions - urban/rural/suburban - may not be salient anymore as the spatial organization of economic processes undergoes yet another metamorphosis.
Tuesday, July 26, 2011
U.S. Wealth Gap Increasing Amid Recession
Today at work I ran across an article on cnn.com about the widening gap between rich and poor in the United States. I am not going to link to it because now, 6 or however many hours later, I am unable to find the article.
Of course the fact that the income gap continues to widen does not surprise me at all. What I found amusing about the article (though still not surprising I suppose) was the amazement the author expressed that this could be occurring even in the middle of a big recession.
Even in a stagnant economy, there are still going to people who are able to figure out how to milk what they can out of the system. In fact, since the whole global political-economic structure supports the elite few at the expense of everyone else, many of the wealthiest people in the world are going to be protected from the effects of economic recession before the less well-to-do.
And as long as there are some people making massive profits, there will be masses growing poorer.
Of course the fact that the income gap continues to widen does not surprise me at all. What I found amusing about the article (though still not surprising I suppose) was the amazement the author expressed that this could be occurring even in the middle of a big recession.
Even in a stagnant economy, there are still going to people who are able to figure out how to milk what they can out of the system. In fact, since the whole global political-economic structure supports the elite few at the expense of everyone else, many of the wealthiest people in the world are going to be protected from the effects of economic recession before the less well-to-do.
And as long as there are some people making massive profits, there will be masses growing poorer.
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