Global Cities, Post GFC – Space or Flow?

In the 2015 Catalyst program ‘Future of Australian Cities, Julian Bolleter claims that Australia will need to build a new Sydney every ten years for the next ninety years, to keep up with the expected growth in population. This raises several questions, but perhaps foremost amongst them are: where are all these people coming from, and how will we cope? To immediately rule out several misconceptions, the concern here is not about an explosion in the birth rate or the number of refugees we are taking in, nor is it about dealing with the widespread settlement of people in poorly serviced, remote, non-arable spaces.

It is primarily about big cities taking in large numbers of external (mostly highly skilled) migrants from overseas, as well as young, educated, professional internal migrants from rural and suburban areas, moving to the inner cities in pursuit of jobs and lifestyle. Whether from without or within, people are moving to where the employment and lifestyle opportunities are concentrated, in the biggest and richest global cities around the world. And the concentration of these people, as I mentioned last week in referring to Richard Floridas’ ‘creative class’, attracts money, capital, business, and economic growth. The money follows the people, who follow the money, who follow the people, etc …

Saskia Sassen notes that cities have changed from natural sites of trade (near harbours, plantations, mines, etc) into sites of finance, communications, and specialized services. Foremost amongst these are the Global Cities, the hubs of investment activity that serve as critical, strategic, infrastructure nodes providing specialized, complex skills and resources – legal, technical, and particularly financial – to the global economy. This is similar to what Manuel Castells calls the Space of Flows. His basic premise is that place has become less important relative to the flow of capital, information and people, and that power now diffuses through a global network of people and capital, rather than residing in one institution, such as a corporation, government, or state. He does note though, in keeping with Sassen, that ‘nodal’ centres appear in the global network. These are concentrations of specialised, sub-contracting services in leading cities around the world, which control the flow of activity and workers as needed (flexibly) to suit demand. In either theory, the urban form is shaped by the flow of capital and demands for mobility and profit, not the living requirements of urban residents.

The flow of such capital and human resources into global cities, and away from other cities and spaces, reduces the capacity for citizens in either location to democratically construct cities they way they would like. Global cities attract and distribute finance and services, but are subject to the distortionary pressures of dealing with the great influx of the world’s workers and their consumption practices. Sassen notes that:

the Global City generates a sharp rise in the demand for both high-level talent and masses of low-wage workers. What it needs least are the traditional modest middle classes so central to the era when mass consumption was the dominant logic; larger cities with more routinized economies do continue to need them” (p98).

This transformation of a city into a space for the rich that drives out the middle classes can be glimpsed in the intense escalation in housing prices in places like Sydney. Whilst driven in part by the Australian national hobby of real estate speculation and permissive taxation, the feverish rise in prices is also due in part to the continuing interest of foreign investors (particularly Chinese investors) in buying up new housing stock. Now, as Jason Twill notes, we are not only facing a situation where the older, urban poor are being priced out of gentrified inner city communities, but young, educated people are being priced out as well. In other countries, this has led to a rejuvenation of ‘second-tier’ cities that accept the ‘refugees’ from the Global Cities (e.g. Portland, Philadelphia in the US), but as Twill notes, Australia only has a few cities for such people to move to. Australia’s future ‘Creative Class’ is in danger of fragmenting.

Meanwhile, cities in developing countries away from the metropole are forced into increasing levels of competition over lowering taxes, to attract finance, services, and knowledge workers; and many fail to attract the resources that they need. Trevor Hogan notes that there are now over 25 cities in the world with more than 10 million people each, and that a number of such large cities in the Asian region are experiencing what he calls ‘informal hyper growth’, with large, rapidly-growing youthful populations, high immigration from rural to urban areas, and a poor citizenry working mostly in a non-organised informal economy. He notes that 40-60% of residents live in home-made housing in unplanned, fragmented, sprawling settlements with inadequate infrastructure, social services, transport connections, and poor urban governance. Such environments – well outside the rich nodal centres of the space of flows – present an enormous challenges to urban planners around the world.

How can we attract the resources to the areas that need them – and away from the global cities that become distorted by the overabundance of capital and people – in a post GFC globalised world, where large companies and agglomerations are criticised (rightly) for having more collective power than the world’s governments? As Florida and Sassen note, space is still as important as ever – and largely inescapable for the poor – so what can we do to redirect the flow? In an era of resurgent protectionism, rather than restricting the movement of needed capital and people, perhaps we should pay more attention to its distortionary effects, and think about the kinds of agreements and regulations we might need to better and more equitably direct what is needed to where it actually needs to go?

Posted in Opinion, Research, SOC208 - Cities, Communities and Families, UOW, Urban Studies.