Approaches to Economic Geography

Towards a geographical political economy

Ray Hudson

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317620464
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Negocios en general

The last four decades have seen major changes in the global economy, with the collapse of communism and the spread of capitalism into parts of the world from which it had previously been excluded. Beginning with a grounding in Marxian political economy, this book explores a range of new ideas as to what economic geography can offer as it intersects with public policy and planning in the new globalised economy.

Approaches to Economic Geography draws together the formidable work of Ray Hudson into an authoritative collection, offering a unique approach to the understanding of the changing geographies of the global economy. With chapters covering subjects ranging from uneven development to social economy, this volume explores how a range of perspectives, including evolutionary and institutional approaches, can further elucidate how such economies and their geographies are reproduced. Subsequent chapters argue that greater attention must be given to the relationships between the economy and nature, and that more consideration needs to be given to the growing significance of illegal activities in the economy.

The book will be of interest to students studying economic geography as well as researchers and policy makers that recognise the importance of the relationships between economy and geography as we move towards a sustainable future economy and society.

1 Setting the scene

Steps towards a geographical political economy

DOI: 10.4324/9781315753249-1

Introduction

There have been great changes in the ways in which economic geography has been thought about and practised over the last 60 or 70 years. There were several phases in this process of change, though this claim needs to be qualified as the literature to which I am referring is mainly, though not exclusively, that of the Anglo-American world. Increasingly these changes also reflected the interaction among economic geographers and other social science disciplines, as spatiality became of increasing concern to their practitioners. This also involved engagement with other disciplines in other cultures and languages (for example, there were important influences from French and Italian social scientists). With these qualifications in mind, we can identify five phases. First, there was the shift from the descriptive geographies that had been dominant until the 1950s and the rise of spatial analysis, location theory and spatial interaction models in the 1950s and especially the 1960s. Then towards the end of the 1960s there was the brief rise and fall of behavioural approaches based on a critique of the unrealistic assumptions about individual behaviour and knowledge on which locational theories were based. The critique of both location theory and the behavioural approaches that developed in reaction to it centred on their preoccupation with, and idealised conception of, markets and exchange relations and/or the shallow conception of social process that they encompassed. As a result, they had limited explanatory power and for this reason economic geographers began to search for more powerful explanatory frameworks in the latter part of the 1960s and to engage with processes and relations of production as well as exchange and consumption. Crucially, they also sought to explore more powerful conceptions of social structure, the dominant social relationships that define particular types of economy, and relate social process to spatial form and in particular to deepen understanding of why economic geographies in capitalism take the forms that they do. Around this time social scientists more generally were re-discovering the traditions of classical political economy and more specifically the work of Karl Marx and a Marxian approach to political economy, with its focus on the totality of the production process and processes of capital accumulation and combined and uneven development. The next development in economic geography became part of this movement, a much more significant one, marked by the ascendance of various strands of political economy, initially and predominantly Marxian. From the 1980s onwards this in turn spawned the emergence of a plethora of approaches critiquing political economy, particularly its Marxian variants. Some of these were seeking to elaborate a more nuanced political economy approach – for example, emphasising the need to appreciate the relationships between structure and agency, giving greater attention to knowledge, learning and motives in accounting for economic behaviours (in a way harking back to the behavioural critiques of the 1960s), or giving greater emphasis to evolutionary and institutional issues. At the same time, however, the advocates of both the New Geographical Economics and New Economic Geography focused on these issues while cutting connections to the systemic concerns of political economy (Hadjimichalis and Hudson, 2014). Others were challenging political economy perspectives in other ways and seeking to espouse alternatives to it – for example feminist approaches and what we might describe as the somewhat inchoate world of ‘post-isms’, which themselves became subject to challenge. That said, there were points of constructive engagement between political economy and feminism and some parts of the post-isms literature. For example Coe et al. (2007) note that during the late 1980s and early 1990s, the political economy approach manifested itself in the post-Fordism debate. This focused both on the ways in which capitalist economies are regulated through institutions and also on the transactional relationships between firms in industrial districts, in new industrial spaces and in new high volume production systems (Hudson, 1989a; 1994a). The net result of these successive changes is that contemporary economic geography – indeed human geography more generally – is characterised by a plurality of approaches co-existing side by side. Different approaches have not so much displaced and killed off others but rather interaction and dialogue among them has led to their selective modifications so that economic geography today is characterised by a rich mixture and diversity of approaches, a fragmented form of ‘engaged pluralism’ (Barnes and Sheppard, 2010). I will return to these issues in the final chapter.

In the course of these changes in theoretical approach and inter-disciplinary engagement there have often been associated shifts in methodologies and the substantive foci of interest of economic geography, with varying emphases on different aspects of the economy and its geographies. These have generally been positive developments. The former included the increased use of a range of qualitative as well as quantitative approaches, generating a range of different types of evidence, while the latter included shifts in emphasis from production back to consumption, from territories to flows, and, in some ways reminiscent of an earlier era, a return to a concern with the importance of the specificity of places but in the context of their location as nodes within global networks. Picking up on what had been a somewhat neglected dimension of Marxian political economy, there was also a growing awareness of the significance of the natural world for economic processes (and vice versa), a renewed emphasis on the materiality of the economy and economic processes as material transformations. This in turn had epistemological implications as critical economic geographers had to engage with more traditional forms of theory developed in the realms of the biological and physical worlds (and also dominant in parts of the social sciences, notably but not exclusively mainstream economics) as well as critical theories of the social world (Horkheimer, 1937). In addition, there was a somewhat belated recognition of the persistence of non-capitalist social relations and the significance of the informal and illegal as well as the legal economies within capitalism. In short, the end result has been a more diverse and heterogeneous view of the constitution of ‘the economy’. This, as well as the changes in theoretical perspectives, has implications for the ways in which spatial development policies have been conceived, as will be clear from several of the chapters in what follows.

There are several excellent accounts that comprehensively set out the history of this shifting terrain and the current and recent scope of economic geography (for example, Clark et al., 2000; Coe et al., 2007; Leyshon et al., 2011; Sheppard and Barnes, 2000) and it is not my intention to seek to emulate them. My aims and ambitions here are much more modest. In the Preface I have sought briefly to locate the present volume in terms of earlier work, in particular Producing Places (Hudson (2001a). What I am seeking to do here is sketch out the subsequent trajectory of my own thought and practice of economic geography, a partial and selective pathway on what could be described as a journey towards an as yet unknown endpoint, but one that I hope will be of interest as an example of how individuals are both influenced, and to a small degree possibly influence, these broader movements in the evolution of a discipline.

In summary, this journey has been one that has sought to contribute to a more nuanced and subtle theoretical approach to economic geography. More specifically, it has been – and remains – an attempt to deepen understanding of geographies of diverse capitalist economies by elaborating a concern with the spatiality of political economy, with deepening understanding of the spatiality of uneven development, elaborating but never abandoning key insights from Marxian political economy. As such, it can be regarded as a project to elaborate a geographical political economy. The next section very briefly outlines some of the foundational Marxian concepts. Building from these, it is an approach that can be briefly characterised as follows (see also Chapter 2). First, it seeks to recognise both systemic and structural constraints and the ways in which people individually and collectively are both shaped by and reproduce these constraints. Class relations are pivotal but can take a variety of forms and inter-relate with other social relations such as those of ethnicity, gender and place. Second, it recognises the variety of socio-spatial forms that capitalist development can take through the social construction of institutions such as markets and a variety of regulatory mechanisms. Third, it acknowledges that such development is a product of what came before it but without necessarily being able to identify a discrete starting point (‘there is no point of departure’: Massey, 2014, 254, drawing on Althusser), and follows open ended though not unconstrained pathways to unknown end points. Fourth, it recognises that capitalist economies embrace diverse sets of non-capitalist social relations that can and do, in specific ways in particular time/space contexts, have an important bearing on the capitalist mainstream. Fifth, and finally, it recognises the complex reciprocal relations between economy and environment, between biophysical and social (perhaps best thought of as bio-social) processes. Whether seeking to develop such an approach does so in ways that are helpful is of course for others to judge.

Marxian political economy: what makes capitalist economies capitalist?¹

Value analysis and modes of production

In contrast to the approach of location theories, with their focus on deducing spatial pattern from an impoverished conception of social process, political economy approaches seek a more holistic understanding of the economy and its geographies focusing on generative social processes and the relationships of individuals to society, the economy and the state (Routledge, 2011, 177). Among the various approaches to political economy, Marxian political economy provides a powerful entry point into analyses that seek to understand capital, capitalist economies and their geographies. It seeks to uncover the critical social relationships that define and shape economies and their geographies and provides the conceptual basis for understanding the economy and its spatiality, crucially recognising that analyses at different levels of abstraction are critical in this task.

At the most abstract level, the Marxian concept of mode of production seeks to reveal the essential ‘inner logic’ of particular types of economic organisation, characterising these via specific combinations of social relations and forces of production (such as factories, machines and tools). It insists that while the latter are important the former are decisive (thereby dismissing from the outset any simplistic notion of technological determinism). In the capitalist mode of production the key defining social relationship is the class structural one between capital and wage labour. This is a contradictory, dialectical and necessary relationship: capital and labour are mutually defining, the existence of each pre-supposing the other. Capital needs to purchase labour-power² – that is, the capacity of people to work for it – and organise the labour process and work in particular ways, deploying particular combinations of variable (workers), fixed (for example, factories and machinery) and constant (for example, raw materials) capital. This is because living labour is the only source of new value – that is surplus-value – created in production and embodied in commodities. Conversely, labour needs to sell its labour-power (its capacity to work) for a wage in order to survive and reproduce itself. As such, it is alienated labour. The capitalist mode of production is thus structured around the wage relation and commodity production, with labour-power bought and sold in a competitive market as if (although as will become clear it isn’t) it was simply another commodity.

What then do we mean by commodities, commodity production and values? A starting point in beginning to answer these questions is the Marxian conception of value analysis, grounded in its particular and precise definition of value as social labour. Commodities simultaneously possess attributes as use values and as exchange values. As materialised human labour, they have use values, qualities that people find useful, which reflect specific concrete aspects of labour. At the same time, labour within capitalist relations of production also takes the form of undifferentiated abstract labour. In the capitalist mode of production the exchange value of a commodity is defined as the quantity of socially necessary labour time – that is, the amount of undifferentiated abstract labour needed under average social and technical conditions of production – required for its production. These concepts of abstract labour and socially necessary labour time are central to understanding the driving rationale of capitalist production: production for exchange and profitable sale through markets. Production finds its rationale in and is socially validated ex post by market exchange and the successful sale of goods and services, linking processes of production, exchange and consumption within the economy. The purpose of production, however, is the realisation of exchange values via sale in markets. Conversely, failure to sell at a price that realises a profit (via realising the surplus-value embodied in the commodity) spells a potential crisis for an individual firm as a result of competition from other firms producing the same or similar competitive commodities and expanding their market share as a consequence. But if the problem of realisation becomes generalised over the economy, capitalist production more generally may slide into crisis and this raises questions about how such crises may be temporarily resolved.

The moment when capital returns to the monetary form, a result of successful sale unlocking the surplus-value embodied in commodities, is critical. From the point of view of capitalist enterprises, there is a strong imperative to minimise the time taken for surplus-value to be realised and capital to return to the fungible money form, at which point it can again be invested in search of further profit. As a result, the various infrastructures that facilitate and permit the circulation of capital and its flow from one form to another – ranging from the means of transport and communication to credit and financial mechanisms and structures – are crucial. These infrastructures both require capital investment, fixing it for a time in particular forms, and as a result help shape the landscapes of capitalist economies. Thus these forms of fixed capital become necessary in order to facilitate the circulation of capital.

What then happens to the surplus-value following successful sale of commodities, once surplus-value has been realised as corporate profit and again become potential investible capital? The answer to this question is linked to the way in which the more general development of the economy and the capital accumulation process is conceptualised in terms of circuits of capital of various types (Palloix, 1977). Capital is above all a process of circulation and it circulates in the form of money and of commodities of various sorts. In terms of the key circuit of productive industrial capital – key because it is where surplus-value is produced – (see Hudson, 2001a, 14–47 and chapter 9), part of the newly expanded capital may be deployed as variable capital (used to acquire additional labour-power), part to acquire additional constant capital (for example, additional raw materials), part to expand fixed capital (in the form of additional machinery, or extra factory space, for example) and possibly part as interest payments or rent for the acquisition of land or in relation to money borrowed to further augment the scale of production. Furthermore, some of the realised surplus-value may be invested in ‘fictitious commodities’, forms of money capital and monetary and financial instruments that are not in themselves productive of surplus-value but can be highly profitable because (for a time) they can make claims on surplus-...

Table of contents

• Cover Page
• Half-title Page
• Series Page
• Title Page
• Copyright Page
• Table Of Contents
• Preface
• Acknowledgements
• 1 Setting the scene: steps towards a geographical political economy
• 2 Conceptualising economies and their geographies: spaces, flows and circuits
• 3 ‘The learning economy, the learning firm and the learning region’: a sympathetic critique of the limits to learning
• 4 From knowledge-based economy to … knowledge-based economy? Reflections on changes in the economy and development policies in the north east of England
• 5 Re-thinking change in old industrial regions: reflecting on the experiences of north east England
• 6 Global production systems and European integration: de-regionalising, re-regionalising and re-scaling production systems in Europe
• 7 Life on the edge: navigating the competitive tensions between the ‘social’ and the ‘economic’ in the social economy and in its relations to the mainstream
• 8 Thinking through the relationships between legal and illegal activities and economies: spaces, flows and pathways
• 9 Cultural political economy meets global production networks: a productive meeting?
• 10 Critical political economy and materials transformation
• 11 Resilient regions in an uncertain world: wishful thinking or a practical reality?
• 12 The future of economic geography and economic geographies of the future
• References
• Index