Urban and Regional Economics

Marxist Perspectives

M. Edel

• Publisher: Taylor & Francis
• Year: 2013
• ISBN:
  9781136461378
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This title discusses the treatment of urban and regional issues by Marx, Engels and other early Marxists, and examines recent controversies in these areas.

Urban and Regional Economics — Marxist Perspectives^*

MATTHEW EDEL

Queens College of the City University of New York

1. INTRODUCTION

This essay reviews Marxist approaches to urban and regional political economy. The focus is on issues that enter into orthodox urban and regional economics, such as location and urban concentration, regional growth and decline, rent and housing, segregation and internal colonization, urban services, and the role of local government. Although some of these issues were treated in early works by Marx and his followers, a self-conscious Marxist urban political economy only began to develop in the late 1960s, as a response to perceived weaknesses in mainstream urban studies, and to Marxist neglect of spatial and local phenomena. The new approaches reviewed here can best be understood in the light of these two critiques. Thus, Section 1 will review both the critique of neoclassical approaches, and the general principles of Marxist political economy.

1.1. The critique of orthodox analysis

Orthodox urban economics, like its Marxist counterpart, was greatly stimulated by the urban crises of the 1960s. Although there had been prior analyses of location, land use, transportation, and local finance, it was only in the 1960s that these were assembled into a formal, unified field of specialization [103, 322]. But as urban and regional economics evolved into a complex mathematical field, it seemed to ignore the questions of social policy and social criticism that had attracted scholars. Dissenters who doubted its policy-relevance, or objected to its assumptions of market optima, turned to alternative approaches, including historical materialism or Marxism.

Dissatisfaction with orthodox approaches was voiced along several lines. By the 1960s, neoclassical micro-economics, sometimes combined with Keynesian macro-economics in a ‘neoclassical synthesis’, had come to dominate the field, pushing to the margin or beyond alternative ‘institutionalist’ approaches as well as Marxism. The dominant approaches had proven useful for the analyzing of price phenomena and many allocative issues. Their central message, that market exchanges could increase consumer satisfaction and the efficiency of resource use, was widely held. (Indeed, by the 1960s discussion of the proper design for market socialism had begun to displace the exclusive emphasis on planning among Marxist economists.) However, there was also widespread concern with issues that neoclassical economics as an analytical tool (and the unrestricted market as a policy instrument) could not easily handle.

One area of concern was market failure. Certain market failures were widely recognized, and made the subject of separate theories, which then had to be linked somehow to the neoclassical model. Unemployment and inflationary states were treated by Keynesian models [201], and problems of pollution, co-location and the like by a theory of externalities [97]. But these models seemed to treat pervasive social phenomena as limited areas of exception. A later neoclassical argument, that all would be well if everything from air to zygotes were subjected to property rights, raised ethical issues of who should receive the new properties, or what it would mean to society if every aspect of life were treated as property.

A second concern was inequality, of power as well as of goods. Uneven income distribution, discrimination, gender domination, monopoly, manipulative advertising, international dominance and dependence, arms races and war were all important social concerns. Market theory could measure many of their costs or consequences, in relation to a presumed Pareto optimum, but it was not really a theory of their causes. Consumer sovereignty could not explain hidden persuasion, nor could measurement of the gains to the discriminator, monopolist or imperialist fully explain how such contravenors of the market got the power to do their damage. The market, in its pure form, merely reflected and perhaps amplified prior distributions of resources. Indeed there was even doubt within formal economics, raised by the Sraffa approach, about whether the solution to a general equilibrium market model required additional assumptions about the relative power of labor and capital, even beyond the assumption of an initial property distribution [25].

In addition, the need for social relationships, that complement and restrain market ties, and the issue of worker or consumer alienation, could not be treated by neoclassical economics [301]. By classifying these needs, the issues of power and inequality, as outside of the economic model, the field seemed to deny them their importance. But these were problems that the social sciences needed to confront. To make matters worse, exporting these problems to sociology and political science was impossible, because the orthodox paradigms of those fields (social exchange theory and social ecology, and pluralist political science) were based upon models of preference and competition derived from the neoclassical economic model.

Finally, the neoclassical economic model and its Keynesian amendment were in many ways atemporal and ahistorical. They dealt in instantaneous processes or in short period of time. Although long-term changes could be modelled as series of short steps, this did not seem a useful way of treating long-term historical change. Models focused on the approach to equilibrium seemed particularly inadequate for treating those discontinuous breaks in history that involved changes in institutions or economic systems.

Given these complaints, it is not surprising that critiques of neoclassical economics, and a search for different approaches, emerged in a number of fields. The urban studies field, and its regional counterpart, was no exception. Beginning in the 1960s, neoclassical urban models and their counterparts (urban social ecology and pluralist political science) were criticized for internal inconsistencies and for lacunae. Like other critics, urban scholars argued that orthodox approaches falsely assumed a social consensus, and posed questions without consideration of distribution, class and monopoly power. Orthodox approaches presented outcomes as the ‘natural’ results of technological change or abstract market forces, while the critics argued for recognition of greater causal complexity, including the importance of special interests or segregatory splits in society.

Many examples were ad hoc, but they were nonetheless telling. For example, urban renewal, which had been touted as necessary for efficiency of growth, was shown to promote specific power interests or segregation [94]. The demise of street rail systems, presumed due to inefficiency, was traced to the monopoly power of bus companies [355]. The growth of suburbs was linked to financial or real-estate monopolies, or to national programs for social control, rather than to autonomous consumer choice [338]. Local governments which had been described as reflecting the interests of a plurality of groups were restudied with an eye to power elite domination [91]. The very definitions of such phenomena as crime were shown to reflect class prejudices [144].

A critique of land-use models argued that, first, any neoclassical model depended on debatable assumptions of rationality, foresight, and individual independence of preferences. These models also took as given and implicitly natural a distribution of capital and ‘human capital’ that was itself an outcome of class conflict [180]. Furthermore, neoclassical spatial models were prone to error, on their own terms, because of technical market failures. Urban co-location, external diseconomies, public goods and the like were admitted, even by the orthodox, to be the essence of urban life [103].

Eventually these ad hoc critiques led to a desire for an alternative approach. That such an approach should be based, at least in part, on ideas drawn from Marxism, was the argument of three notable works, which appeared in the 1970s, by David Harvey, a British geographer [180], Manuel Castells, a French-trained Spanish sociologist [53], and David Gordon, a US economist [145].

Harvey’s early essays were centered on questions of distribution. Even when the market ‘worked’, Harvey argued, it reinforced unequal power relations. He also criticized the harmony tacitly implied in ‘Pareto optimality’, and urban sociology’s shared ‘moral order’. It was, he argued, more useful to use the notion of conflict ‘to analyze disequilibrium in a city system’ than to assume equilibrium [180, Part 1].

Harvey then began to move toward an alternative formulation, based on the earliest ‘Marxist’ urban analysis, Engels’ description of Manchester [112]. Manchester, a city with few regulations or formal plans, had been built by market forces if any city ever was. Its land-use pattern ‘fit’ the standard urban economic models of a concentric city with the poor living near the center and the rich on the edge. But, Engels had argued, this free market outcome was also interpretable as a strong, if automatic, display of power. He described the rich as living

... in free, wholesome country air, in fine, comfortable homes, passed every half or quarter hour by omnibuses going into the city. And the finest part of the arrangement is this, that the members of the money aristocracy can take the shortest road through the middle of all the labouring districts without ever seeing . . . misery that lurks to the right and left . . .

I know very well that this hypocritical plan is more or less common to all great cities; I know, too, that the retail dealers are forced by the nature of their business to take possession of the great highways; I know that there are more good buildings than bad ones upon such streets everywhere, and that the value of land is greater near them than in remote districts, but at the same time I have never seen so systematic a shutting out of the working class from the thoroughfares, so tender a concealment of everything which might affront the eye and the nerves of the bourgeoisie [112, pp. 46–7; cited in 180, pp. 132–3].

Markets, in other words, ratified and hid power relationships. Harvey applied similar considerations to orthodox models of ghetto location, arguing that the market forces they identified ratified discriminatory power relationships. He also began a discussion of the use of Marx’s theories of rent to study class and power influences on urban land use [180, Part 2]. Harvey’s analysis is developed further in [181–184, 186].

Harvey also went beyond the discussion of spatial and economic effects of power and competition, to discuss their cultural consequences. He argued that the market system, even when it operates effectively, has a social cost. To suggest how competition divides and alienates people in cities, he once again drew on a quote from Engels:

Londoners have been forced to sacrifice the best qualities of their human nature, to bring to pass all the marvels of civilization which crowd their city . . . The brutal indifference, the unfeeling isolation of each in his private interest becomes the more repellent and offensive, the more these individuals are crowded together within a limited space ... the social war, the war of each against all, is here openly declared . . . people regard each other only as useful objects. [112, pp. 23–5; cited 180, pp. 133–34].

Using this example, Harvey related competition and the urban form it generated to social alienation [180]. He thus related urban issues to a critique of capitalist alienation in Marx’s [254] and Engels’ early writings and in such twentieth century critiques as [238, 245]. Similar arguments about capitalism and urban alienation were developed by Henri Lefebvre [220, 221] and Raymond Williams [406]. Harvey has returned to these themes in [185].

A second influential analysis was made in the introduction and design of an anthology by David Gordon [135], who distinguished ‘radical’ theory from ‘conservative’ and liberal’ versions of orthodoxy. He contrasted free market theories with those favoring some government intervention, and suggested conflict theories as the radical alternative. This formulation was pedagogically useful, but it led to problems. Some of the liberal’ theories were conflict theories, although they suggested conflict might have a mediated and mutually beneficial outcome. Thus, what was ‘radical’ about radical theory was not clear. (Harvey’s notion of analyzing disequilibrium to devise policies for equilibrium also failed to distinguish between unresolvable conflict and conflict leading to reform solutions within capitalism.) These ambiguities lent strength to the search for explicitly Marxist formulations, centered on the question of class conflict. Gordon’s own version of this attempted to relate specific institutions to a Marxist theory of stages of accumulation (see Section 3), which suggested that the implications of a reform might be different in different periods of accumulation [146–148].

A third major critic, Manuel Castells, examined both market solutions and pro-monopoly state solutions from a class perspective [53]. He argued that both the market and government intervention, rather than being neutral, reflected the relative power of different classes. In addition to examining land use and locational issues, Castells emphasized the provision of government social services as a crucial arena for conflict among classes, opening an important area for debate and analysis (see Section 5).

Castells also criticized using ‘the city’ as a unit of analysis, without disaggregating it in class terms [53]. This critique was directed primarily at orthodox urban sociology, which discussed urbanism as having many social consequences, often ignoring class or using ‘urbanism’ as a euphemism for ‘capitalism’. It also was directed at Marxists who had taken ‘the city’ as a social category, equivalent to class [220, 221]. But it also added to Harvey’s and Gordon’s argument that class had to be considered explicitly, along with ‘market’ forces, in urban economics.

Castells and Harvey also raised arguments over the notion of space implicit in the attempt to apply essentially non-spatial theoretic models to spatial problems. This led to long debates over the nature of space and the question of what is natural. (For summary see [152, 354, 356].)

Taken together, the critiques by Harvey, Gordon and Castells suggested the insufficiency of neoclassical or orthodox social science approaches for urban analysis. In particular, they emphasized the importance of class conflict as an important factor to consider, and suggested Marxist analysis as a means to consider class. Other authors carried on with the critical analysis, suggesting Marxist analysis might respond to the other neglected items noted above in the orthodox approach. (For a sampling, see the anthologies [6, 45, 66, 75, 81, 93, 145, 166, 167, 168, 269, 293, 295, 302, 303, 341, 379].)

Some of these works, still primarily criticisms of the orthodox approach, did not really show how far a Marxist alternative could be developed. Developing such an approach would be a long task, made difficult because there were few antecedents. Even neoclassical urban economics was itself a relatively new field. In the US, where that neoclassical work was advancing fastest, Marxism had undergone severe repression (particularly prior to the late 1960s), and a new generation had to learn and interpret it for itself. Marxism itself had developed as an essentially macroscopic system, so how to fit an urban or regional level of analysis into it would be controversial....