IVAN TUROK
and demoralisation. Research shows a sig- over the last three decades has become an
nificant relationship between overall inequal- explicit policy concern because poorer groups
ity and persistent poverty at the country are consistently held back by their social
level. Unequal societies are prone to devel- backgrounds and restricted opportunities,
oping a section of the population who are despite a core government objective over the
trapped in poverty for long periods, damag- last decade to shift the focus from inequality
ing their well-being and their children’s of income to opportunity, i.e. meritocracy
prospects (OECD, 2008; Irvin, 2008). Such rather than equality (Irvin, 2008). The latest
cumulative impacts are major social concerns, policy response aims to widen access to edu-
implying deep-seated problems requiring cation for individuals from the earliest years
fundamental responses. through to university and beyond, and to
give poorer parents some additional support
The full consequences of persistent pov- (HM Government, 2009). Policy-makers
erty may be apparent in lack of change across have been less inclined to address the under-
generations, or social immobility.When chil- lying structural obstacles to social progress.
dren ‘inherit’ much of their economic status
from their parents, this creates a perception of There is far less agreement about equality
unfairness and lack of opportunity. Countries of outcomes than opportunities, especially
with a high transmission of disadvantage for economic development (International
from one generation to the next may also be Institute for Labour Studies, 2008). From a
less productive than those where people have meritocratic perspective, inequality is actu-
a more equal chance to succeed, as they waste ally fair and beneficial if it reflects individual
the skills and talents of those from deprived skill and effort, but detrimental if it results
backgrounds. Research suggests a relation- from inherited wealth or unjustified discrim-
ship between equality of opportunity, social ination based on factors such as race, gender,
mobility and equality of outcome:“the more disability or place of residence, for reasons
unequal a society is, the more difficult it is to explained above. Market economists also see
move up the social ladder, simply because inequality as providing incentives to indivi-
children have a greater gap to make up” dual enterprise and risk-taking, which is
(OECD, 2008: 204).This is salutary for those deemed to underpin an efficient and pros-
who assert that everyone has a fair chance of perous economy, and improve society as a
success and that individual effort is the key. It whole through higher incomes and opportu-
justifies the state trying to narrow the gap in nities for all. Critics counter that individual
life chances and reduce inherited inequality effort does not necessarily generate wider
by creating a high-quality education system, benefits, especially if it is associated with
taxing inheritance and investing in vulnerable opportunistic behaviour, greed and excess
communities. (Irvin, 2008; Toynbee and Walker, 2008).
Creativity and innovation in modern econo-
Almost everyone agrees that equality of mies are delicate phenomena that depend less
opportunity is important, both for economic on individual initiative than on a combina-
and moral reasons. This corresponds well tion of trust, cooperation, state support and
with most notions of equity and fairness, private risk (Hutton and Schneider, 2008).
namely that people should have an equal Even the founder of free-market economics
chance to reach their potential in life. Adam Smith argued that economies do not
However, equality of opportunity is hard to work well if guided by self-interest alone –
measure and difficult to achieve – not least they need to be steered by a broader frame-
because of the powerful influence of parental work of social values, rules and conventions,
resources, knowledge and ongoing support or ‘moral sentiments’ that people internalise
on their children’s opportunities and capabili- in judging how to behave (Smith, 2002).
ties. In the UK, the decline in social mobility
78
INCLUSIVE GROWTH
The important point is that the dynamics require more comprehensive support on the
of poverty vary in different contexts and the grounds of need.
main policy challenge is persistent poverty
and inequality, for individuals and across gen- Causes of poverty
erations. A high level of inequality seems to and inequality
have corrosive social consequences, although
it is possible there are some economic advan- It is clear from the above that the causes of
tages from limited inequality if it reflects poverty can be wide-ranging and complex,
rewards to individual talent and endeavour, depending partly on whether the reference
rather than inheritance. Government policy point is the household, community, region
should be concerned above all with helping or nation, and their particular circumstances.
people to escape from poverty in ways that Interpretations are frequently contested
can be sustained, and preventing others from because of the significant issues at stake and
falling into poverty.This includes support for the difficulties involved in untangling the dif-
young children to limit their life chances ferent factors at work. Separating the causes
being curtailed at an early age. Policies of of poverty from the symptoms and conse-
amelioration and mitigation are necessary to quences is not straightforward,especially when
limit the worst effects of poverty, but they the processes are subtle and feedback effects
don’t provide lasting solutions. occur.This gives considerable scope for ide-
ological and political differences to emerge.
The analysis of poverty dynamics also Yet understanding what lies at the root of the
requires a spatial dimension. ‘Place’ can be problem is clearly important for formulating
enabling or disabling for the poor, reinforc- effective policy responses that go beyond
ing or counteracting other forces in all kinds palliatives to offer lasting solutions.
of ways. For example, the opportunity struc-
tures of neighbourhoods can work together The simplest kind of explanation is where
to facilitate upward mobility or they can trap poverty is a temporary phenomenon affect-
people in environments with poor access to ing individuals or areas. People may experi-
jobs and amenities. Neighbourhoods that ence poverty for a short period as a result of
seem just as poor on the usual deprivation unforeseen events, such as redundancy, illness
indicators can actually have contrasting tra- or an environmental hazard (fire or flooding)
jectories because of their different locational removing their livelihood. Localities may
assets. Some function as escalators assisting experience a temporary downturn because
people to gain a foothold in the labour of difficulties afflicting a major employer or
market or housing system because they are unseasonal conditions disrupting tourism,
well located, have good schools or other food supply or energy production. National
facilities, or have strong outward-oriented economies may witness periodic recessions
social networks. These areas may appear to as a result of business cycles, volatile currency
be poor because of the steady influx of low- movements or stock market fluctuations.The
income residents and the departure of people consequences typically include higher unem-
as they become better off. Other places func- ployment and lower earnings, with the scale
tion as poor enclaves – they are more isolated of the problem often accentuated by the
from opportunities and their services suffer spread of uncertainty and loss of confidence
under pressure from the concentration of among investors and consumers.
poor households (Robson, 2009). Policies
need to be more sensitive to the role differ- The second type of explanation attributes
ent places perform within the urban system. poverty to the characteristics of individuals
Escalators have potential for reducing pov- and households. People may be particularly
erty that might be enhanced, while enclaves vulnerable to poverty because they lack
79
IVAN TUROK
relevant skills and capabilities, or are unable consider these more consequential than
to work through sickness, disability or old causal. For instance, long-term unemploy-
age. Governments are tempted to define ment may damage people’s confidence,
poverty as being the result of personal defi- undermine their motivation and reinforce
ciency, absolving them of responsibility. their sense of exclusion, but attributing their
Unemployment is treated as if it is voluntary economic status to poor attitudes would be
– there are plenty of vacancies available, but misleading. Primacy must be afforded to the
people lack a work ethic (e.g. HM Treasury, conditions shaping the opportunities for indi-
2001). Some groups experience discrimina- viduals and communities, including shifts in
tion in the labour market because of gender, industries and occupations and the geogra-
ethnic or religious backgrounds. People’s phy of jobs. Economic decline and restruc-
risk of poverty varies at different stages of the turing are powerful drivers of unemployment
life course, with children and older people and low income, varying in scale and com-
being particularly vulnerable in countries position across localities and regions.
with low levels of social protection. Adults De-industrialisation in many advanced and
with large numbers of dependants are also at middle-income economies has eroded the
risk, especially single parents. The biggest prospects for less-skilled male manual work-
increase in poverty over the last two decades ers. Meanwhile, highly qualified profes-
has occurred among working-age adults sional, managerial and technical workers
without jobs, along with their children have enjoyed strong growth in earnings and
(OECD, 2008). The implications of this investment income, thereby widening ine-
important link between poverty and jobless- quality (OECD, 2008). Natural population
ness are discussed later. growth and in-migration have also enlarged
the supply of labour in some places, harming
Analyses focused on individual character- the job prospects of local residents.
istics are generally better at describing the Underlying these processes may be pervasive
incidence of poverty (who is affected) than at differences in the socio-economic position
explaining the origins or scale of the prob- of different sections of the population, rein-
lem.There are essentially two kinds of more forced by selection mechanisms that restrict
general explanation – cultural and economic. disadvantaged groups escaping from poverty
Cultural analyses typically attribute poverty to in significant numbers. Other obstacles faced
the attitudes, behaviour and agency of the indi- by the poor may relate to mundane matters
viduals and groups at risk. For example, young such as low transport mobility or lack of
men may be put off going to college or getting vocational training facilities. A full analysis
a job by peer pressure and socialisation in of poverty needs to be context specific
deprived areas, or the availability of easier and reflect the combined effects of different
sources of income. Marginalised communities forces, individual and structural, cultural and
may suffer from depressed expectations and a economic.
weak social fabric, with households prone to
domestic disputes, family breakdown, teenage Traditional responses:
pregnancies and behavioural problems among social protection
children, thereby lowering educational attain-
ment and repeating the cycle of poverty. In Governments have conventionally responded
the UK policy discourse, the notion of an to poverty by extending social protection.
‘underclass’ has been replaced by a supposed Programmes are funded out of general taxa-
culture of low aspiration among deprived tion and distribute resources either through
communities (HM Government, 2009). welfare benefits (cash transfers) or in-kind
Economic and structural analyses acknow
ledge cultural dimensions of poverty, but
80
INCLUSIVE GROWTH
welfare services. Cash is paid to people who difficult to reverse when the labour market
cannot support themselves because of unem- subsequently recovered and whole commu-
ployment, sickness, old age or caring respon- nities were scarred by the experience (Audit
sibilities. Child support grants, disability Commission, 2008).
allowances and basic pensions tend to be
universal and given without testing individ- The poverty response of many cash-
ual incomes. Other benefits are means-tested strapped governments in the global South has
to target the poor and limit the cost to the been to limit welfare payments to bare sub-
state, although this can stigmatise recipients sistence level and confine them to depend-
and reduce take-up. They include subsidies ants such as children and pensioners. In
towards the cost of food, clothing, housing, practice, the income may still be spent across
utilities or public transport. Some unemploy- the whole family, thereby diluting the bene-
ment benefits and pensions are more gener- fits for target groups. Restricting social grants
ous than basic state provision, on condition to children can also encourage poor women
that recipients contributed financially while to have more children, thereby complicating
they were working. their ability to get a job and become self-
reliant. Some states add conditions to benefit
Benefit payments put money into people’s receipt in order to address the health and
hands and are therefore the most direct means educational effects of poverty. In some South
of easing the burden of income poverty. American countries parents only receive
Having control over the resources, people can grants for their children if they attend school
meet their particular needs and preferences and get regular health checks.
without outside influence. Raising benefit
levels may be a good way of injecting spend- This begins to address a concern that
ing power into the economy during a reces- grants neglect the root causes of poverty and
sion because the poor tend to spend more of therefore provide no lasting solution. They
their income on goods and services than the alleviate the condition, but don’t lift people
wealthy, and spend it fastest since they need it out of poverty in a sustainable way by increas-
most (Elmendorf and Furman, 2008). ing their employability or entrepreneurial
skills, for example. Nor do they prevent
A drawback may be that welfare recipients people from falling into poverty in future by
are less inclined to seek work, depending on counteracting the triggers, such as educa-
benefit levels, their duration and prevailing tional failure or loss of employment. This is
wage rates. Means-testing can worsen the not to underestimate the importance of an
disincentive effect because of the high mar- income safety net for people who are desti-
ginal tax rates faced when moving into work. tute because of the obvious benefits for their
Targeted benefits can therefore create a pov- health and well-being. Scandinavian countries
erty trap and reinforce exclusion, instead of a have addressed the tension between out-of-
stepping stone towards inclusion and inde- work poverty and welfare dependency by
pendence. More than a million people in the creating generous benefit systems that are
UK were transferred on to Incapacity Benefit time-limited, with a condition that recipients
during the 1980s and 1990s in response to actively seek work and the state acting as
rising unemployment (Brown et al., 2008). employer of last resort.
They were written-off on the basis that
their age, manual skills and location gave The other main type of government
them little chance of regaining employment. response to poverty – welfare services – has a
Without support, their morale and skills more direct bearing on the contributory fac-
deteriorated, their physical and mental health tors. Quality provision in health, education
suffered, and a range of wider social problems and child-care can both treat some of the
became ingrained. These conditions proved effects of poverty and improve individual
capabilities. This can benefit society as a
81
IVAN TUROK
whole through better educated and healthier spatial development policies that seek to steer
citizens. For example, social housing can give productive investment towards lagging areas,
people stability and security, and enable them on the grounds that this will hold back
to focus on improving other aspects of their national economic growth. It was strangely
lives, including building a livelihood. Quality silent on direct measures that local and
public services can also help to redistribute national governments can take to accelerate
resources because they retain the support of economic development, in cities and else-
middle-income groups, who would other- where, presumably because this goes beyond
wise opt out to the private sector. Com- basic public goods. In line with the New
prehensive education systems can offset the Economic Geography, the assumption was
gap in life chances between people from dif- that growth would emerge naturally through
ferent social backgrounds by helping to level the concentration of population and lower
the playing field. There may be a degree of barriers to trade between places, even if this
paternalism involved in the state assuming it takes generations.
knows what forms of spending are best for
children and families, rather than giving Welfare-to-work
grants. In the global South, basic services such
as water, sanitation, electricity, schools and An alternative approach to inclusive growth
clinics are vital to tackle extreme hardship in has emerged in some countries, partly in
informal urban settlements and rural areas.As recognition that welfare programmes may
well as transforming child mortality and life not provide sufficient basis for improved
expectancy, they can prevent the spread of living standards, especially if people are
disease and improve skills and resilience. trapped in unfavourable circumstances with-
out opportunities to enhance their position.
The 2009 World Development Report Paternalistic systems may also result in some
provided a novel formulation of these argu- welfare recipients developing lifestyle habits
ments in advocating an approach to ‘uneven and expectations that cannot be accommo-
but inclusive growth’ that placed universal dated indefinitely. A more active, resourceful
basic services centre-stage (World Bank, and self-reliant citizenry is generally health-
2009). The top priority in the global South ier,especially where state capacity is restricted
was to provide essential services throughout and people ultimately have to support them-
the country to create the conditions for selves. Governments need the practical ideas
growth. A vital objective of this ‘neutral’ and hands-on involvement of local commu-
national policy was to unify each country by nities to develop relevant projects and pro-
improving living conditions and reducing grammes that can build skills and competences,
territorial disputes. The Report argued that improve livelihoods, provide work experience
growth is inevitably unbalanced and focused and address other barriers to economic and
in the major cities as a result of agglomera- social progress.
tion economies. Responsive social services in
rural areas can equip people with the com- A broader motivation is the traditional
petences to access urban employment, while separation of social policy from economic
preventing others from being pushed into considerations, in effect relegating it to a
migrating for the wrong reasons, namely lower status and making it difficult to develop
poor local facilities. Lagging regions would an integrated approach. Social programmes
benefit from urban prosperity through remit- may be viewed as remedial, introduced after
tances and circular migration. Improvements the event to compensate people and places
in transport connectivity would facilitate left behind by economic change or palliatives
economic integration between cities and chasing the symptoms of poverty around
their hinterlands.The Report was critical of
82
INCLUSIVE GROWTH
different public agencies without getting to choose paid work, using a minimum wage and
the heart of the problem.They may be treated tax credits. A third component is to align
as pure costs or deductions from the resources organisations responsible for providing wel-
generated by the productive economy, rather fare benefits with those delivering employ-
than as investments that can prevent the ment and training services to ensure an
occurrence of poverty or contribute to long- integrated approach, perhaps with a focus on
term economic performance through, for supporting particular target groups, such as
example, ensuring the production and main- single parents or people with disabilities.
tenance of a healthy, educated and motivated
workforce. An additional element in some countries
is to decentralise programmes to the local
Welfare-to-work is intended to give level in order to allow for more flexible
employment greater priority in tackling pov- tailoring to local labour market conditions
erty and inequality. It is consistent with a and individual needs. Area-based initiatives
large body of research showing that involun- can also enable more effective outreach
tary unemployment is the main determinant into disadvantaged communities and stronger
of social exclusion in advanced economies, engagement with employers to persuade
where paid jobs are the principal source of them to make vacancies available to target
income, daily routine, social status, personal groups and to assist with subsequent job
identity and social interaction outside the retention and progression. Decentralisation
family (Gordon and Turok, 2005). Conse- also offers the potential to connect public
quently, employment offers the best route health, social care, training and anti-poverty
out of poverty because it provides a secure programmes because of their common interest
livelihood, meaning, dignity and structure to in getting more people engaged in meaning-
people’s lives.Work enables people to realise ful activity that builds confidence, self-esteem
their potential, is good for their health and and well-being.
well-being, and is where they meet most of
their friends and partners. More people seek- An important limitation of welfare-to-
ing employment also benefits the economy work is the assumption that sufficient jobs
through increased labour supply. Some gov- exist to absorb people coming off welfare. It
ernments regard welfare-to-work as a more is partial in emphasising the supply-side of
politically acceptable way of redistributing the labour market and neglecting the level
resources than unconditional grants, since the and composition of labour demand.At worst
participants will be contributing to society. it shifts the responsibility for unemployment
on to the individual by implying that if they
One element of welfare-to-work is an look harder and moderate their wage expec-
active benefits regime, requiring recipients tations they can find work. Evidence shows
to take deliberate steps to improve their that the policy has been least effective in
employability (through participation in work depressed local labour markets, where needs
experience, vocational training or drug reha- are greatest (Sunley et al., 2005). It was intro-
bilitation schemes) and actively look for duced as a standard national programme in
work. Efforts to shift benefit claimants from the UK, in the interests of scale and consist-
passive recipients to active jobseekers can be ency, but this has prevented adaptation in line
harsh and punitive (‘workfare’). Elsewhere, with different local conditions.
the ethos is more supportive, with an empha-
sis on positive encouragement to cooperate A second weakness is the risk of creating a
rather than negative sanctions for lack of group of ‘working poor’.This seems to have
compliance. A second part of the package is been an outcome in the USA during the
making ‘work pay’ and ensuring that low- 1990s when people in the lowest decile of
income households have a real incentive to the distribution saw their incomes stagnate
or fall, despite sizeable employment growth
83
IVAN TUROK
(Convery, 2009). Similar concerns have to vary between places and at different points
emerged in the UK over the last decade, in time, depending on economic and demo-
where half of all poor children now live in graphic conditions, industrial and occu-
households with someone in work (Lawton, pational structures, and levels of education
2009; Tripney et al., 2009). Another striking and skills.
UK finding is that around 70 per cent of
people who get a job subsequently return There is a good case for putting full and
to benefits within a year (Convery, 2009). rewarding employment at the heart of inclu-
Welfare-to-work programmes are insuffi- sive growth strategies because of the wide-
cient to ensure that work is a genuine route ranging benefits for society and the economy.
out of poverty by improving job advance- An employment focus can draw diverse
ment to more rewarding positions, and free- interests together around a common agenda,
ing up entry-level jobs for the next cohort of including the business sector, trade unions,
job-seekers and school leavers. Additional community groups, health professionals,
measures are required to support progression, social services and organisations responsible
including stronger workplace regulation and for education, training and economic devel-
a higher minimum wage to protect workers opment. A more rounded approach than
in this precarious section of the labour market. welfare-to-work is required, with policies to
Such measures are likely to be more success- strengthen labour demand as well as supply,
ful if integrated with the wider policies creating more and better jobs paying wages
outlined in the conclusion. that lift workers and their families out of
poverty. Employment can be made a cross-
Conclusion: Towards a broader cutting priority, using the full range of public
approach sector powers as purchaser, investor, legislator
and service provider. Public sector action is
It has been argued that the pursuit of eco- required to support people and places mar-
nomic growth through market mechanisms ginalised by market processes. Governments
can militate against social justice objectives. can encourage labour-intensive forms of
Furthermore, the prevailing social policy growth through public works programmes,
orthodoxy is an inadequate response to the subsidise temporary work placements to give
challenges of uneven and unequal develop- people relevant experience and become
ment. Rising unemployment, poverty and employers of last resort when other options
inequality require a broader and bolder are exhausted. National regulation of the
approach.This is particularly apparent in cur- labour market is important to protect vul-
rent circumstances to prevent the economic nerable workers from insecure and unreason-
difficulties from being translated into deep- able conditions. Health policies can support
seated social problems that are much more responsive work-related services to prevent
complex to resolve. The goal of inclusive accidents, stress and other ailments from
growth is meaningful, but it needs a more causing people to lose contact with the
precise definition since this policy arena is labour market and falling into long-term
hotly contested and ambiguities abound. sickness.
There are crucial differences between aiming
to reduce absolute and relative poverty, and Countries such as the UK have not tradi-
between equality of opportunity and out- tionally been very successful at ensuring an
come. Different definitions of the issue imply inclusive labour market with equal opportu-
different kinds of anti-poverty strategy. The nities for people from different areas and
detailed composition of policy is also bound social backgrounds, partly because of the
centralised nature of economic and social
84 policy. Local and regional development can
help to overcome these weaknesses and
INCLUSIVE GROWTH
promote more dynamic and effective inter- Heidenreich, M. and Wunder, C. (2008) ‘Patterns
ventions. Being rooted in place allows for of regional inequality in the enlarged Europe’,
greater sensitivity to local needs and circum- European Sociological Review, 24(1), pp. 19–36.
stances, and a richer understanding of shift-
ing conditions. Decisions taken locally are Hildreth, P. (2009) ‘Understanding “new regional
closer to many economic realities and better policy”’, Journal of Regeneration and Renewal,
targeted to opportunities for productive 2(4), pp. 318–336.
investment, business development, enhanced
skills, recycled land, improved infrastructure HM Treasury (2001) The Changing Welfare State:
and other activities that add value and Employment Opportunity for All, London: HM
enhance long-term growth and development Treasury.
prospects. It is often easier to encourage dif-
ferent stakeholders to cooperate at this level HM Government (2009) New Opportunities: Fair
because their common interests are more Chances for the Future. Cm 7533, London: HM
apparent. Harnessing the active participation Government.
and energy of communities has most poten-
tial at this scale. The integration of social, Hutton, W. and Schneider, P. (2008) The Failure
economic and environmental aspects of of Market Failure: Towards a 21st Century
development can also be simpler because the Keynesianism, London: National Endowment
need for coordination is more apparent and for Science,Technology and the Arts.
bureaucracies tend to be smaller.
International Institute for Labour Studies (2008)
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Local Authorities and the Regeneration of the
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Britain and the United States, London: Polity.
Brown, J., Hanlon, P., Turok, I. et al. (2008)
‘Establishing the potential for using routine Jackson, T. (2009) Prosperity Without Growth: The
data on Incapacity Benefit to assess the local Transition to a Sustainable Economy, London:
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Layard, R. (2006) Happiness: Lessons from a New
Convery, P. (2009) ‘Welfare to work – from special Science, London: Penguin Books.
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London: IPPR.
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Harding, A. and Turok, I. (eds.) Changing Government.
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Green, D. (2008) From Poverty to Power, Oxford: rural development’, Journal of Peasant Societies,
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Smith, A. (2002) The Theory of Moral Sentiments,
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Sunley, P., Martin, R. and Nativel, C. (2005)
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86
7
The Green State
Sustainability and the power of purchase
Kevin Morgan
Introduction alternative narratives that view and value
things differently. Will the sustainable devel-
Nothing has done more to spark new imag- opment narrative fill this vacuum or will the
inaries of local and regional development neo-liberal narrative reinvent itself after a
in the past generation than the notion of period of contrition?
“sustainability”. Despite its fuzziness as a
concept, or perhaps because of it, the princi- The answer will depend on a whole series
ple of sustainable development has resonated of imponderables, not least the influence of
around the globe, being equally applicable in the Green State – that is, a polity that strives
the global North as it is in the global South. to take sustainability seriously. To explore
Indeed, if there is one grand narrative that these issues in more depth the chapter is
has the scale and scope to compete with structured as follows: section two argues that,
neo-liberalism, it is surely sustainable devel- notwithstanding its fuzziness, sustainability
opment, which is still a relatively new idea in can be regarded as a new developmental nar-
terms of mainstream politics. rative because it brings with it a new set of
values; section three explores the return of
By comparison, the neo-liberal narrative the state, and the prospects for a “green” state;
has both a longer lineage and a narrower and section four draws on the above argu-
focus, concerned as it is to substitute the ments to explore the world of public food
market for the state wherever it is profitable provisioning, a litmus test of sustainability.
to do so. Whatever its shortcomings, the
neo-liberal narrative has dominated the intel- From needs to capabilities:
lectual imagination of elites for many years, sustainability as a new
shaping the way they viewed and valued the developmental narrative
world, be it economy, society or nature.
As a concept that embraces economy and
But with the credit crunch climacteric society as well as the environment, it is worth
triggered by a fatal amalgam of financial remembering that sustainable development is
greed and light touch regulation the political a relative newcomer to mainstream political
credentials of the neo-liberal narrative have debate.Though it had some currency in the
been seriously damaged, at least for the
moment, spawning new opportunities for 87
KEVIN MORGAN
environmental movement, the concept was example – the concept of sustainable devel-
introduced to an international audience by opment will mean different things in differ-
the pioneering Brundtland Report in 1987. ent places because it is the concrete context
This is the source of the celebrated defini- that will determine the weight given to the
tion of sustainable development as “develop- social, economic and ecological dimensions
ment that meets the needs of the present of the concept.As a context-dependent con-
without compromising the ability of future cept, sustainable development needs to be
generations to meet their own needs” understood as a spatial concept because it
(WCED 1987: 43). is grounded in the material circumstances
of people and place, which is why local
In the Brundtland conception, this defini- and regional context is so important to the
tion contained two key concepts: (1) the politics of sustainability.
concept of ‘needs’, in particular the essential
needs of the world’s poor, to which over- Since the concept was launched, some
riding priority should be given; and (2) the interpretations have given more weight to the
idea of limitations imposed by the state of environmental dimension,while others cleaved
technology and social organization on the to the social dimension. Proponents of eco-
environment’s ability to meet present and logical modernization, for example, claim
future needs. While the concepts of social that capitalism can be rendered ever more
needs, ecological limits and inter-generational sustainable through a progressive ‘greening’
equity commanded most attention, the process that helps to secure the twin goals of
Brundtland Report contained equally strong economic growth and environmental pro-
messages about democratic governance, call- tection, a position that is totally at odds with
ing for greater public participation and more “the radical green demand for a fundamental
devolved decision-making in resource man- restructuring of the market economy and the
agement. But the strongest message of all liberal democratic state” (Carter 2007: 227).
concerned the “quality of growth” because: More radical schools of thought incline to a
post-materialist interpretation of sustainable
Sustainable development involves more development, challenging the restless pursuit
than growth. It requires a change in of consumption for its own sake and asking
the content of growth, to make it less whether growth is actually necessary for
material- and energy-intensive and prosperity ( Jackson 2009).
more equitable in its impact. These
changes are required in all countries as However, the most important critique of
part of a package of measures to main- the Brundtland conception albeit a sympa-
tain the stock of ecological capital, to thetic critique came from Amartya Sen, the
improve the distribution of income, architect of the capabilities approach to
and to reduce the degree of vulnera- development. Although he welcomed the
bility to economic crises. new prominence given to the idea of sustain-
able development, Sen asked whether the
(WCED 1987) conception of human beings implicit in it is
sufficiently capacious:
A perennial criticism of the Brundtland
Report is that its definition of sustainable Certainly, people have ‘needs’, but they
development is too vague to be of any prac- also have values, and, in particular, they
tical benefit. But this is to miss the point cherish their ability to reason, appraise,
because it is essentially “a normative standard act and participate. Seeing people in
that serves as a meta-objective for policy” terms only of their needs may give us a
(Meadowcroft 2007: 307). Like other nor- rather meagre view of humanity.
mative concepts – democracy and justice, for
(Sen 2004)
88
TH E GR E E N STATE
Sen’s capabilities approach harbours radical suddenly enrolled for crisis management
implications for development studies, which duties, especially to bail out the banks and
have a tendency to conflate ends and means, socialize their losses. But this is wholly con-
reducing human development to economic sistent with the neo-liberal narrative, where
growth (Morgan 2004). The capabilities the state is allotted a limited ‘nightwatchman’
approach enriches our understanding of role other than in times of crisis, when it is
development, particularly as regards the social called upon to restore order.The neo-liberal
dimension, because it defines the expansion state, in other words, tends to be much
of human freedom as both the primary end more active in practice than it is in theory
and the principal means of development. Sen (Harvey 2005).
identifies a number of substantive freedoms
that are intrinsically significant ends in them- The ‘return of the state’ has to be qualified
selves, and not merely of instrumental sig- in one important respect because, in many
nificance for economic growth, though they ways, it never really disappeared – at least not
are important in that respect as well. These in practice. Even in the US, where anti-state
substantive freedoms include “elementary ideology is most rife, the actual role of the
capabilities like being able to avoid such dep- state – federal, state and local – has always
rivations as starvation, under-nourishment, been greater than neo-liberal ideology is
escapable morbidity and premature mortality, prepared to acknowledge.
as well as the freedoms that are associated
with being literate and numerate, enjoying If neo-liberalism failed to roll-back the
political participation and uncensored speech state as much as it might have desired, it was
and so on” (Sen 1999: 36). spectacularly successful in devaluing the state
and demeaning the public realm.As a result it
The capabilities perspective, with its stress created the impression that the national state
on the social dimension of sustainability, is has been rendered relatively powerless by
also a good antidote to partial definitions of globalization, which would penalize states
sustainable development – as when human that stepped outside the narrow parameters
beings are considered to be no more than of the neo-liberal consensus. These (alleged)
their living standards or when sustainability external pressures on the state were paral-
is reduced to mere environmentalism.When leled by very real internal pressures, particu-
the partial view of Brundtland is supple- larly when the public sector was subjected
mented with the broader perspective of Sen, to the narrow commercial logic of marketi-
we have the makings of a more capacious, zation, what one critic described as a
more judicious conception of sustainable Kulturkampf against the very notion of serv-
development – a conception that requires ice and citizenship, the hallmarks of the
human beings to be actively involved in public realm (Marquand 2004).
shaping their own destiny, a process that can
be fostered by a state that takes sustainability This is the political context in which the
seriously. ‘return of the state’ is taking place, a process
that began not with the credit crunch crisis
The return of the state? but, rather, with the climate change crisis. As
the greatest market failure of all time, the cli-
The ‘return of the state’ was perhaps the only mate change crisis created a new ecological
predictable aspect of the credit crunch crisis vocation for the state (Stern 2006). Where
of 2008/09. Having been defined as part neo-liberals want to shrink the state, ecolo-
of the problem for so many years by the gists want to transform it into a Green State.
architects of neo-liberalism, the state was Only the state, they argue, has the systemic
capacity to induce more sustainable forms of
production, consumption and regulation; and
only states, especially when acting in concert,
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KEVIN MORGAN
can counter the ecological damage wrought Public food provisioning:
by globalization (Eckersley 2004). Like sus- promoting sustainability
tainable development, the Green State is a through the power of purchase
normative concept because it is essential, in
this view, to have a conception of what the States have a number of powers at their dis-
state ought to be doing: it is, in other words, posal to promote sustainable development,
“a green ideal or vision of what a ‘good state’ the most important of which are the powers
might look like” (Eckersley 2005: 160). of taxation, regulation and procurement. Of
these, the power of purchase tends to be the
This normative turn in state theory chimes most neglected, not least because it is often
with the compelling philosophical argument perceived as a lowly ‘back office’ function,
of Martha Nussbaum, who argues that states which is truly paradoxical since public pro-
should be held responsible for furnishing curement is potentially one of the most pow-
the social basis for key human capabilities, erful levers for effecting behavioural change
and she identifies ten universally applicable among its private sector suppliers.The public
capabilities to which all men and women sector constitutes an enormous market in
have a right “by virtue of being human” virtually every country, accounting for up
(Nussbaum 2000: 100).This normative-based to 16 per cent of GDP in developed coun-
capability approach rejects the utilitarian tries and as much as 20 per cent of GDP in
preference-based approach of neo-classical developing countries. Although the power
economic theory because of its desiccated of purchase has been deployed for strategic
conception of human beings. As Nussbaum ends usually for military purposes the story
says, “we have to grapple with the sad of public procurement is largely a tale of
fact that contemporary economics has not untapped potential (Morgan 2008a).
yet put itself onto the map of conceptu-
ally respectable theories of human action” Politicians are belatedly waking up to
(Nussbaum 2000: 122). this untapped potential because many states
are turning to the power of purchase to pro-
As the state plays such a big role in these mote their pet projects, including sustainable
ecological and capability theories, it is sur- development. Although many sectors have a
prising that so little attention is paid to its special significance in the sustainability
skills and powers. All the evidence suggests debate – especially high CO2-emitting sec-
that the state’s political capacity – to regulate tors like energy and transport, for example
the economy, deliver public services and – the agri-food sector has a unique status
procure goods and services, for example – despite the neo-liberal belief that it is just
needs to be substantially enhanced if it is to like any other “industry”. Quite apart from
fashion more sustainable forms of develop- its umbilical link with nature, the exception-
ment. The following section explores this alism of the agri-food sector stems from the
theme of state capacity with respect to public fact that we ingest its products. Food is
food provisioning, a theme that is germane therefore vital to human health and well-
to the concerns of this chapter in two ways. being in a way that other sectors are not, and
First, the prosaic world of public food provi- this is the reason why every state attaches
sioning – in schools, hospitals, care homes, such profound significance to it. Because of
prisons and the like – is an intrinsically sig- its unique role in human reproduction, food
nificant end in itself from a capability per- is the ultimate index of our capacity to care
spective. Second, the barriers to public food for ourselves, for others and for nature
provisioning are a microcosm of a larger (Morgan 2008b).
political paradox, which is that states often
fail to deploy one of the greatest powers at The agri-food sector looms large in the sus-
their disposal – the power of purchase. tainability debate because green campaigners
90
TH E GR E E N STATE
believe it has the potential to offer multiple reform in four countries which have been at
dividends: the forefront of the debate.
access to nutritious food is vitally Values for money: public food
important to human health and well- provisioning in Europe
being – a health dividend;
locally procured food can help to fash- School food reformers have been in the van-
ion new markets for small farmers, guard of public food reform in Europe largely
growers and producers – a local eco- because a moral panic about childhood obes-
nomic dividend; ity focused political attention on the diets of
more sustainable food chains help to children. One of the key aims of school food
contain climate change by reducing reformers has been to persuade local author-
the carbon footprint of the agri-food ities to serve healthier school meals by using
sector – an ecological dividend; fresh, locally produced ingredients. However,
more localized food chains allow con- this seemingly simple and unpretentious
sumers to reconnect with producers – a ambition encountered a whole series of
cultural dividend; regulatory barriers, the most important of
less intensive and more welfare- which was EU public procurement regula-
conscious agri-food systems promote tions that prohibited the explicit use of local
animal welfare – an ethical dividend; food clauses in public sector catering con-
more fairly traded food chains enable tracts. Although these regulations applied
consumers in the global north to equally throughout the EU, member states
express their solidarity with producers interpreted them very differently. Perhaps the
in the global south – a political divi- biggest contrast of all was between Italy and
dend (Morgan 2008b). the UK, arguably the opposite ends of the
food culture spectrum in Europe.To under-
Some or all of these dividends are being stand these radically different interpretations
sought by local food campaigns in Europe of common EU regulations, we have to
and North America.Although some of these understand the political values that govern the
campaigns have attracted criticism for cater- procurement process as well as the cultural
ing exclusively for an elite of high-income, values that attach to food in Italy and the UK.
quality-conscious consumers, and for pri-
vileging the local/green agenda over the The quality of school food in the UK
global/fair agenda, these are not irredeema- declined precipitously after the neo-liberal
ble features of the local food movement reforms of the Thatcher governments in the
(Morgan 2008b). As we will see, public food 1980s.These reforms transformed the school
reformers in Europe have consciously tried food service from a compulsory national
to overcome these problems by focusing on subsidized service for all children to a discre-
better food for all, particularly in school can- tionary local service. The most debilitating
teens, and by combining locally produced part of these reforms was the abolition of
seasonal food with globally sourced, fairly nutritional standards and the opening up of
traded food (Morgan and Sonnino 2008). public contracts to private sector competi-
tion under a process called compulsory com-
Local food movements are not confined petitive tendering. While these provisions
to the rich countries of the global North, succeeded in creating a new low-cost cater-
though the latter dominate the “alternative ing culture, they also exacted a heavy toll
food” debates in the developed countries.To on the quality of the food and the skills of
get a more textured understanding of local the caterers.
food movements, let us examine public food
91
KEVIN MORGAN
Nothing less than a school food revolution associations given the fact that Italy, unlike
is now underway in the UK, following a the UK, had maintained the links between
popular backlash against the neo-liberal products and places. Far from being a symp-
reforms. While new and demanding nutri- tom of primordial tradition, this food culture
tional standards were introduced by the has been continuously fashioned by modern
Labour government in 2006, catering man- state interventions designed to help public
agers are struggling to overcome a public bodies to purchase high-quality local food.
procurement culture in which low cost was While the UK was abolishing nutritional
allowed to masquerade as best value (Morgan standards in the 1980s, Italy was promoting
and Sonnino 2008). the Meditteranean diet into its public cater-
ing system. This was reinforced by Finance
If public sector practices are slow to Law 488 (1999) which encouraged schools
change, the political rhetoric around public and hospitals to utilize ‘organic, typical and
procurement has been transformed because traditional products as well as those from
of its potential for promoting more sustaina- denominated areas’.The City of Rome, one
ble forms of development. Launching a new of the leading school food services in Italy,
public sector food procurement initiative, now seeks ‘guaranteed freshness’ from its
the sponsoring department said: suppliers, rewarding them for abbreviating
the time and space between harvesting and
If we are what we eat, then public consumption (Morgan and Sonnino 2008).
sector food purchasers help shape the
lives of millions of people. In hospitals, The interplay between culture and poli-
schools, prisons and canteens around tics has allowed public bodies in Italy to
the country, good food helps maintain practise local food procurement without fall-
good health, promoting healing rates ing foul of EU procurement regulations.
and improve concentration and behav- Although it is illegal to specify local products
iour. But sustainable food procurement that can only be supplied by local producers
isn’t just about better nutrition. It’s (because this offends the EU principle of
about where the food comes from, non-discrimination), it is possible to use cer-
how it’s produced and transported, tain quality marks – such as fresh, seasonal,
and where it ends up. It’s about food organic, certified – that allow public bodies
quality, safety and choice. Most of all, to purchase local food in all but name.These
it’s about defining best value in its EU regulations worked to the advantage of
broadest sense. Italy, with its strong links between produce
and place, and against the UK, with its place-
(Defra 2003) less foodscape.
As well as illustrating the multi-functional The fact that Italy and the UK interpreted
nature of sustainability, this statement also EU procurement regulations in such differ-
illustrates how far the vision of the state has ent ways clearly reflected their respective
changed from the neo-liberal heyday of food cultures – local and seasonal in the
Thatcherism, when lowest cost was the high- former, placeless and processed in the latter.
est goal.The injunction to define ‘best value But contrasting food cultures are only part of
in its broadest sense’ was a clear indictment the explanation. Equally important was the
of the old procurement culture, where it was fact that state power was utilized in Italy to
defined very narrowly. fashion markets, in this case for high-quality
certified products; while in the UK it was used
Italian public authorities have always to mimic markets, by forcing public sector
worked with a much broader understanding managers to compete with the private sector
of ‘best value’ because food is imbued with on the basis of price. Fashioning markets
deep cultural values and strong territorial
92
TH E GR E E N STATE
through national state action in the Italian children are covered today. As federal fund-
case had the effect of creating sub-national ing only covers the cost of the food, this pro-
economic development opportunities for gramme relies on partnerships with municipal
local and regional producer associations. governments, which have to meet the costs
of personnel and infrastructure. Since 2001 a
Even so, the school food revolution in the new emphasis has been placed upon basic
UK proves that neither food culture nor foods (such as fresh fruits and vegetables) and
public policy is set in aspic; on the contrary, the promotion of local food as opposed to
both can be rendered more sustainable if the processed food.
power of purchase reflects a range of values
rather than a single, narrowly conceived Programa de Aquisicao de Alimentos: the
economic metric. PAA (Food Procurement Programme) was
launched as a new federal programme in
Fome Zero: public food 2003 to assist the poorest farmers by pur-
provisioning in Brazil chasing directly from them. The publicly
purchased products help to build food stocks
Brazil has attracted enormous international that are utilized in state food programmes,
attention in recent years for its innovative such as school meals or food banks. PAA is
state policies to reduce hunger and enhance present in over 3,500 municipalities through-
food security. Fome Zero (Zero Hunger) is the out the country and in 2006 it helped to
umbrella strategy for more than 30 national maintain the income of more than 11,000
programmes designed to combat the symp- small farmers. The programme also helps to
toms and causes of hunger in the largest econ- reduce local price fluctuations by building
omy in Latin America. Launched in 2003, food stocks, providing stability for farmers to
Fome Zero was the social policy flagship of form cooperatives and associations, which is
President Lula’s Workers’ Party government, one of the requirements of PAA support.
which was elected in 2002.While some pro-
grammes were already established, the Lula To be effective, these federal programmes
government improved their quality, extended require a politically committed local govern-
their reach and added some radically new ment partner, which is especially important for
ones. Three of the most significant pro- a successful school meals programme because
grammes are the following (Rocha 2009). the council has to share the local delivery
costs and animate the service.
Bolsa Familia: created in 2003, the Bolsa
Familia (Family Grant) programme is a highly There is no better example of a committed
targeted, conditional cash-transfer scheme and local partner than Belo Horizonte, the fourth
it is the centre-piece of the government’s largest city in Brazil and the capital of Minas
social policy in terms of its coverage and its Gerais state. With the election of Patrus
impact on poverty. By 2007 it was reaching Ananias as mayor in 1993, the city govern-
all of its target of 11.1 million families, equiv- ment declared food to be a right of citizen-
alent to 45 million people or a quarter of the ship, and Belo launched a whole series of
total population. With 76 per cent of these food security programmes with citizen groups
transfers devoted to food, the programme in civil society, making the city a beacon of
helps poor families to improve their diets. urban food security in Brazil (Rocha 2001).
In a food-insecure world, Belo is also extolled
Programa Nacional de Alimentacao Escolar: the as a model for other countries, developed as
PNAE (National School Meals Programme) well as developing, because it is seen as “the
was launched in 1955, giving Brazil one of city that ended hunger” (Lappe 2009). Belo’s
the first national school food systems in the pioneering role in promoting urban food
developing world, and over 36 million security was officially recognized when its
mayor, Patrus Ananias, was promoted to the
93
KEVIN MORGAN
federal government as Minister for Social School Feeding Programme (GSFP) had
Development and Fight Against Hunger. three national objectives: (1) to reduce
hunger and malnutrition; (2) to increase
These national and local food security school enrolment, attendance and retention,
strategies suggest one thing above all – that especially of girls; and (3) to boost domestic
politics matters. Without the Workers’ Party food production. Although Ghana did
government, federally in Brazil and locally in extremely well to get such an ambitious pro-
Belo, the principle of food security would gramme off the ground – since other African
never have received such robust political sup- states failed to do so – the GSFP has proved
port. The big question surrounding Fome to be a very steep learning curve, especially
Zero concerns its political sustainability as regards governance and procurement.
because President Lula, with whom it is
closely associated, has to retire after two To implement the programme a wholly
terms despite his personal popularity. Food new multi-level governance system was cre-
policy experts like Cecilia Rocha believe ated at national, regional, district and com-
that the strategy will outlive the Lula govern- munity levels, a serious mistake because the
ment because food citizenship has taken new bodies had no legal mandate and co-
root in civil society and because food secu- existed with the legally constituted state
rity has been institutionalized, rendering it institutions which kept their distance. The
the responsibility of the state rather than of public procurement process has also failed to
governments (Rocha 2009). live up to expectations because it was diffi-
cult to calibrate supply and demand at a local
Home grown: public food level, not least because agriculture is domi-
provisioning in Ghana nated by small subsistence farmers, some of
whom have as little as 1.6 hectares of land
Ghana is to Africa what Brazil is to Latin each. Although the agricultural sector has
America, which is to say a pioneer of public been growing in Ghana, its development is
food provisioning. Despite occasional bouts stymied by a combination of inefficient
of political instability since 1957, when it farming practices and poor marketing outlets
won its independence, Ghana is now consid- for farm produce. A combination of supply-
ered to be one of the most stable and best side bottlenecks, weak procurement skills
governed states in Africa. Political stability and poor governance has meant that the
furnished the most important condition for GSFP has been more challenging than
the Home Grown School Feeding initiative, anyone envisaged.
a radically new development strategy that
aims to secure a double dividend of health While the UN was correct to say that the
and wealth by (1) providing children with home-grown model offers a new and more
nutritious school food, and (2) creating new sustainable development strategy for devel-
markets for local producers by purchasing oping countries, it was wholly wrong to sug-
the food locally instead of importing it from gest that it could provide “quick wins” in the
developed countries like the US in the form battle against hunger. The fate of the GSFP
of food aid. However laudable it might seem, ought to be of concern to every developing
imported food aid actually undermines the country because, despite its modest name, it
indigenous agri-food sector in developing is about so much more than just school food:
countries, making it less likely that they can on the contrary, it embodies the entire drama
feed themselves (Morgan and Sonnino 2008). of development in microcosm. Learning to
design a home-grown school feeding system
Launched in 2006 with support from the involves a whole series of other learning
UN and the Dutch government, the Ghana curves – in governance,procurement and rural
development, for example.The home-grown
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TH E GR E E N STATE
model therefore needs to be understood as a depend on its organizational capacity, its
learning-by-doing exercise in which the end political values and, above all, the balance of
product, the provision of nutritious food, is power in civil society – a combination of
just one part of a much larger process internal and external factors that will vary
(Morgan and Sonnino 2008). from country to country.
Conclusions Finally, public food provisioning strategies
serve different priorities in different coun-
The central argument of this chapter is that tries. If cultural and ecological values are the
food is one of the most important prisms priorities of provisioning strategies in Europe,
through which to explore local and regional food security is the overriding priority in
development because of its unique role in Brazil and Ghana. But in all these cases, the
human health and well-being. It was also power of purchase is now informed by values
argued that the public provision of food is that are more capacious than the neo-liberal
a litmus test of the state’s commitment to template, where low cost masquerades as
sustainability because, insofar as it addresses best value.
human health, social justice and environmen-
tal integrity, it embodies the foundational References
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conclusions emerge from the analysis. Cambridge: Cambridge University Press.
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new developmental narrative to the extent Building Cities and Citizenship, Washington:
that it incorporates social and economic as Cities Alliance. Available at: http://www.cit-
well as environmental values. The capability iesalliance.org/ca/sites/citiesalliance.org/
perspective helps to keep the social and eco- files/Anual_Reports/AR09_FullText_0.pdf.
nomic dimensions in the frame because it
identifies a set of capabilities that are essential Defra (2003) Unlocking Opportunities: Lifting the
for fully human functioning – an approach Lid on Public Sector Food Procurement, London:
that focuses on what people are actually able Defra.
to do and to be, a more compelling metric
than the conventional metric of per capita Eckersley, R. (2004) The Green State: Rethinking
income. However, sustainability will mean Democracy and Sovereignty, London: MIT
different things in different contexts, which Press.
is why it is important to understand it in
spatial terms.The significance of spatial con- Harvey, D. (2005) A Brief History of Neoliberalism,
text – between North and South at the global Oxford: Oxford University Press.
level and between localities and regions at
the national level – helps to explain why Jackson, T. (2009) Prosperity Without Growth?,
different people in different places produce London: Sustainable Development Commission.
such variable interpretations of what sustain-
ability means for them. Keil R. (2007) “Sustaining modernity, moderniz-
ing nature: the environmental crisis and the
Second, politics matters. State steering survival of capitalism,” in R. Krueger and
played a critical role in each of the country D.C. Gibbs (eds) The Sustainable Development
case studies – reinforcing the traditional food Paradox, London: Guilford, 41–65.
system in the case of Italy, reforming it in the
others.The influence of the Green State will Krueger, R. and Savage, L. (2007) “City-regions
and social reproduction: a ‘place’ for sustain-
able development?”, International Journal of
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Morgan, K. (2004) “Sustainable regions: Sen, A. (2004) “Why we should preserve the
Governance, innovation and scale”, European spotted owl”, London Review of Books, 26 (3),
Planning Studies, 12 (6), 871–889. February.
Morgan, K. (2008a) “Greening the realm: Stern, N. (2006) The Economics of Climate Change,
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World Commission on Environment and
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Fair: The New Geopolitics of Care, BRASS Oxford: Oxford University Press.
Working Paper 50, Cardiff University.
Further reading
Morgan, K. and Sonnino, R. (2008) The School
Food Revolution: Public Food and Sustainable Morgan, K. and Sonnino, R. (2008) The School
Development, London: Earthscan. Food Revolution: Public Food and the Challenge of
Sustainable Development, London: Earthscan.
Nussbaum, M. (2000) Women and Human
Development, NewYork: Cambridge University Nussbaum, M. (2000) Women and Human
Press. Development: The Capabilities Approach,
Cambridge : Cambridge University Press.
Rocha, C. (2001) “Urban food security policy:
The Case of Belo Horizonte, Brazil”, Journal Sen, A. (1999) Development as Freedom, Oxford:
for the Study of Food and Society, 5 (1), 36–47. Oxford University Press.
Rocha, C. (2009) “Developments in national
policies for food and nutrition security
in Brazil”, Development Policy Review, 27 (1),
51–66.
Sen, A. (1999) Development as Freedom, Oxford:
Oxford University Press.
96
8
Alternative approaches to local
and regional development
Allan Cochrane
Introduction the countries of the global South as much as
those of the global North (see e.g. Charbit et
Traditionally, and certainly until the 1980s, al. 2005, Hall and Pfeiffer 2000). From the
regional policy was understood in terms that perspective of the World Bank, it is regional
started from the identification of ‘distressed’ uneven development that fosters growth –
or otherwise economically disadvantaged and they offer a policy approach in which
regions, and local economic development what is described as ‘unbalanced growth’ is
was similarly framed within a discourse of somehow coupled with ‘inclusive develop-
economic decline or decay. Policy tended to ment’ (World Bank 2008).
focus on the attempt to attract new indus-
tries, even to encourage relocation from Successful cities and regions are under-
more prosperous to less prosperous regions. stood to be those which are competitive, in
Since the mid-1990s, however, emphasis has the sense that they are able to respond effec-
been placed on self-help, looking for ways in tively to the opportunities generated by the
which regions might be able to generate workings of the global economy.Competitive
growth and prosperity through the initiative places are generally said to have ‘entrepre-
of locally based actors, businesses and public neurial’ political leadership, as well as a flex-
agencies. Similarly, a more positive interpre- ible and educated or creative labour force,
tation of the potential role of cities has able to support the requirements of a (new)
become noticeable as a policy driver in recent knowledge economy. This vision of devel-
years (Cochrane 2007). opment somehow manages to incorporate a
belief in the ability of government and part-
In this context, over the last couple of dec- nership agencies to shape development while
ades, local and regional development has at the same time leaving them with little
increasingly been framed in terms of ‘com- policy option.They are required to find some
petitiveness’, in what has persuasively been way of fitting in with the inexorable require-
described as the ‘new conventional wisdom’ ments of global markets.
(Buck et al. 2005). This ‘new conventional
wisdom’ is globally fostered through organi- Within this understanding of the problem,
sations such as the OECD and the World instead of being victims of wider structural
Bank and is seen as suitable for application in forces, regions and city-regions become more
or less active participants in shaping their
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ALLAN COCHRANE
futures.Within what is seen to be an increas- city networks (see Peck (2005, 2010) for a
ingly globalised world, they are given the critique).
responsibility of carving out their own eco-
nomic and social spaces.And all this seems to The ‘smart growth’ movement is another
have been reinforced by the shift of public US export that has found proponents in
policy emphasis to city-regions (see e.g. Europe and elsewhere, with its emphasis on
Charbit et al. 2005, Harrison 2007,Ward and compact development,green space and the use
Jonas 2004). of market mechanisms as drivers of change. It
promises a means of squaring the circle of
Moving beyond competitiveness sustainability and economic growth while
in practice being fundamentally incorpo-
However, competitiveness is ultimately an rated into the competitiveness agenda. It has
unconvincing way of capturing the process become a selling point for those metropoli-
by which different forms of local and regional tan regions taking it up as a planning model
development are generated.At best the label- (see e.g. Krueger and Gibbs 2008). Keil
ling of places as ‘competitive’ is a retrospec- powerfully describes the way in which sus-
tive one – in other words, instead of tainability has been mobilised as a political
explaining what is happening, it starts from strategy, ‘as one of the possible routes for
outcomes and labels ‘successful’ places ‘com- neoliberal renewal of the capitalist accumula-
petitive’. Because they are successful, the tion process’, enabling ‘prosperous develop-
argument runs, they must have been com- ment with rather than against “nature’’’ (Keil
petitive. In other words, the ‘new conven- 2007: 46). Sustainability is re-imagined as
tional wisdom’ identified by Buck et al. providing the necessary underpinning for
(2005) must, as they note, be seen as a politi- successful ‘market-based’ capitalist develop-
cal or ideological project, as much as a real- ment (see also Krueger and Savage 2007,
istic assessment of development processes While et al. 2004b).
(see also Bristow 2005, this volume).
Similar points could be made about a
Even within a competitiveness paradigm range of policy approaches that seem to
there has been some significant variation, offer ways of meeting the challenges of neo-
so that, for example, Florida (2002) called liberalism in different contexts. The shift in
on rather a different vision identifying the the political rhetoric of the World Bank and
context within which he argued creative other global agencies, for example, that
industries might be expected to flourish. has seen the problem of the global ‘slums’
His celebration of a creative class even re-imagined, in terms that emphasise their
appeared to open up the possibility of pro- entrepreneurial potential and refer to the
gressive engagement by suggesting that possibility of ‘empowering’ their residents, is
bohemianism was an attractive feature in quite remarkable (see Cities Alliance 1999,
encouraging development. In practice, how- Robinson 2010). However, here, too, it is
ever, Florida’s approach generated its own impossible to miss the extent to which this
still sharper emphasis on competitiveness, remains a policy of adaptation or a reposi-
ranking cities by the extent to which they tioning within a competitive environment –
exhibited the features supposedly needed the tools may be different, but the broad
for success. It became another template framework of assumptions remains that of
apparently capable of global application in a the ‘new conventional wisdom’.
world of fast policy transfer, with Florida
himself marketed as a guru whose ideas were In their review of the international expe-
eagerly consumed and propagated through rience, reviewing a set of case studies from
North America and Western Europe, Savitch
98 and Kantor (2002) suggest that even in terms
of the global market-place, those localities
ALT ERNAT IVE APPROACHE S TO LOC A L AN D R EGION AL D EV E LOPMEN T
where a more social-democratic and less it would never be able to meet the needs of
neo-liberal agenda has been pursued tend to local residents. Instead it was important to
have better outcomes for local populations. move actively into trying to manage or
So, there may be scope for some variation at shape the local economy, generating welfare
the edges but there seems little seriously to through such intervention and not just acting
challenge the main economic and political as a ‘safety net’. The Enterprise Boards (and
drivers. In the following sections, therefore, particularly the Greater London Enterprise
an attempt will be made to consider some of Board) saw themselves as having the task of
the strategies that seek more directly and influencing economic change through the
explicitly to challenge the dominant model. negotiation of planning agreements with
enterprises (including a range of worker co-
Developing alternative operatives) in which it invested or otherwise
models I – the New Urban Left supported. The Greater London Council
(GLC) developed a series of major plans and
The competitiveness logic has taken such a strategies for the London economy – most
hold on contemporary policy discourse that notably in the form of the London Industrial
it is sometimes hard to remember the rela- Strategy, but also in strategies for the labour
tively recent history of radical initiatives market and the finance sector (GLC 1985,
which quite explicitly sought to develop GLC 1986a, 1986b). In Sheffield similar
alternative approaches. It has almost become initiatives were developed with the aim of
a forgotten history, and certainly one on working with businesses and trade unions to
which no public policy professional with an develop employment that would guarantee
interest in promotion is likely to draw explic- security for city residents and encourage
itly (although see Peck (2011) for a recent investment in training.A plan was developed
discussion). This section focuses on the spe- for the reclaiming and reuse of the Lower
cific experience of the UK, but it is worth Don Valley, previously a major centre of
noting that similar issues were being raised large-scale steel production and heavy engi-
by urban social movements in other European neering (see e.g. Blunkett and Green (1983)
countries and other cities across the world and Lawless and Ramsden (1990) for discus-
(see e.g. Castells 1978, Fisher and Kling sions of Sheffield’s approach to public
1993). policy).
The first half of the 1980s was the time of The emphasis of all these initiatives was on
the ‘New Urban Left’ or the ‘New Municipal the possibility of longer term investment that
socialism’ in the UK, with its promise of dif- would enable older industrial communities
ferent approaches to economic development to survive, through a process of repositioning,
(see e.g. Boddy and Fudge 1984, Cochrane rather than a simple (and ultimately hopeless)
1986, 1988, Gyford 1985, Lansley et al. 1989). defence of existing industry. It was argued
Several councils set up enterprise boards (most that the ‘New Right’ (or neo-liberal) policies
notably London and the West Midlands), of Thatcherism led to closure of industry
while others created larger employment or and the destruction of communities, without
economic development departments (most offering any prospect of revival. Aram
notably in Sheffield). Eisenschitz and Jamie Gough (1996) have
forcibly argued that while these initiatives
The arguments underpinning these devel- (which they label neo-Keynesian local eco-
opments were clear: if local government con- nomic development policies) might have mit-
tinued to restrict itself to operating as provider igated the effects of neo-liberalism, they also
of social services, picking up the pieces of made it easier for the ends of neo-liberalism
economic decline and unemployment, then to be achieved, because of the way in which
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ALLAN COCHRANE
they encouraged flexibility, sponsoring the powerful – ways. If the New Urban Left still
creation of new ‘competitive’ enterprises and saw its role as challenging forms of capitalist
fostering training programmes that fitted development, some of these approaches seem
workers for the new regime. to owe more to an understanding of the
world which emphasise the possibility of
But this was not how it was understood at building non-capitalist practices even within
the time.The local authorities taking the lead a broadly capitalist economy. Although they
in developing the new economic policies do not explicitly draw on the work of
became the focus of government attention, J.K. Gibson-Graham (1996), the underlying
which led to the abolition of the metro- assumptions about the possibilities associated
politan counties (such as GLC and West with the existence of multiple economic
Midlands). As a result the enterprise boards spaces are similar.
that survived became more narrowly focused
and began to redefine themselves as regional At their most generalised these approaches
investment banks working closely with other come together in the identification of the
financial institutions (see e.g. Cochrane and social economy as somehow distinct from
Clarke 1990).As Robin Murray noted, what the formal economy, or – at any rate – the
the supporters of the New Urban Left saw as commodified economy, the space of the
‘liberated economic zones have had their market. In a sense the social economy is
frontiers pushed back, their conduct ques- defined by what it is not (that is, not traded
tioned, and their lack of popular support in the market or provided by the state) but it
exposed’ (Murray 1987: 47). seems to carry a greater promise – of com-
munity action, collective working, self-help,
The economic initiatives of the New charitable activity, conviviality. In some ver-
Urban Left were not only rooted in a par- sions, it is identified as the ‘third sector’ to
ticular political moment – the new domi- distinguish it from the private and public
nance of Thatcherism, the failure of the sectors. Jamie Gough and Aram Eisenschitz
Labour Party leadership in the face of eco- (2006) describe it as ‘associationalism’.
nomic crisis and political challenge, commu-
nity and trade union resistance to cuts – but Ash Amin, Angus Cameron and Ray
also in a strong municipal tradition: this was a Hudson (2002) identify two justifications for
movement that saw the capturing of the local involvement in the social economy which
state and its mobilisation to achieve radical are relevant in this context.The first suggests
ends as opening up new opportunities (see that it is in the social economy where com-
Boddy and Fudge 1986). With the partial munity building and the development of
exception of London under the mayoralty of social capital takes place and the second that
Ken Livingstone in the early years of the it is within the social economy and through
twenty-first century, little remains of this engagement with it, particularly at local level,
vision, as the Labour Party has not only lost that social justice from below might be deliv-
its hegemony in urban local government, ered through forms of empowerment (Amin
but also any interest in pursuing a radical et al. 2002: 7).Amin et al. (2002) are generally
localist agenda. sceptical of the grander claims made
for the social economy in tackling social
Developing alternative models II exclusion. In particular, they note that (with
– the politics of localisation a few exceptions) little direct employment is
created through such initiatives, although
But this does not mean that there are no more indirect help is provided (e.g. through
alternatives to the new conventional wisdom training programmes). Success, they note, is
emerging in more informal – yet potentially the exception rather than the expectation
(Amin et al. 2002: 116).
100
ALT ERNAT IVE APPROACHE S TO LOC A L AN D R EGION AL D EV E LOPMEN T
Alongside this broad discovery of and economy but nevertheless good ‘at providing
engagement with the social economy, a series alternative forms of livelihood’ (Williams
of movements have developed in recent years et al. 2003: 152).
which have opened up new ways of thinking
about local economies and their linkages, The extent to which LETS can be main-
emphasising and celebrating localness and tained over time or generalised more widely
the features associated with it. They have remains questionable, however, precisely
drawn attention to the benefits of building because of their localisation within quite
trust and confidence at community level and specific networks of trust and reciprocity.
have deliberately focused on the small scale They tend to rely on what Roger Lee (1996)
and local as offering a way forward. Some has called moral geographies of localism. In
have even called for a process of ‘relocalisa- some cases, too, as Williams et al. (2003) note,
tion’ (Hopkins 2008). The important point the very success of LETS in opening up
here is that these are social movements, not opportunities for members may undermine
government initiatives. They have tended to their grander ambitions, because they may be
combine a commitment to self-help with a able more fully to move into commercial
strong desire to identify alternatives to domi- exploitation of the goods and services they
nant economic practices. offer. LETS are particularly attractive for
those who are self-employed in managing
Perhaps the best known of these in the UK their working lives, but the balance between
are LETS (Local ExchangeTrading Schemes), working in the social economy and the formal
but similar or related initiatives are to be found economy may change over time as (or if )
in other countries, including Argentina, their livelihoods become more secure.
France, Germany, Italy, Holland, Belgium,
Canada,Australia, the US, Hungary and New However, the underlying principles of
Zealand (see Aldridge and Patterson 2002, LETS also point to more radical (non- or
North 2005, 2006, 2008,Williams et al. 2003: anti-capitalist) possibilities. As Peter North
157–158). These schemes basically involve argues, one of the justifications for the
the creation of local associations whose mem- schemes is that:
bers are prepared to exchange goods and
services with each other in return for pay- Users of local currencies, irrespective
ment in a locally based currency. According of their values, will find they are struc-
to one survey conducted at the end of the tured into localized relations as the
1990s, the average membership of LETS economic signals produced by a local
in the UK was just over 71 members and currency steer rational economic
the average turnover was the equivalent of agents towards more readily available
£4,664 (Williams et al. 2003: 158).This sug- locally or ethically produced goods
gests that their economic impact is likely to and services, organic or environmen-
be relatively small, but Williams et al. (2003) tally benign food and the like, that has
conclude that modest impact can be identi- been produced under a local surveil-
fied, particularly in giving some people a lance that ensures only sustainable
base on which to build in developing more practices are used. Structuration occurs
secure employment but – more important – as users find that while there will
in providing additional work for some of always be people willing to spend local
those in more precarious forms of employ- currencies with them, to pass these
ment or self-employment. From this pers- local units on they will need to develop
pective, they can be seen as a form of a local supply chain that meets their
collective self-help, not a potential alternative needs and which also accepts the
to what is provided through the formal local currency. They will have to pay
close attention to the needs of and
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the quality of their relationships with relations to build an improved life in a low-
these other local traders, as there are oil, low-carbon economy. It is argued that
few pressures to compel anyone to what is needed is a vision focused on the
accept relatively unlimited local cur- local and the small scale as a means of ena-
rencies from someone who is not seen bling people to work together and live well
as a ‘good community member’ (per- together. Building resilience means rebuild-
haps as they are perceived to be pollut- ing trust through local social relations and
ing, exploiting others or unfriendly)… local economies. The politics of the move-
it is argued, local currencies actively ment is one that eschews any top-down
create local-scale, humane economies campaigning or political structures, instead
by rewarding those who build these favouring a network approach, and celebrat-
localized networks. ing the ‘viral spread’ of the idea community
by community, ‘town’ by ‘town’ (Hopkins
(North 2005: 225–226) 2008).
In this context, they can be seen as offering A narrow focus on the local, however,
the possibility of genuine political action, even in the context of these wider ambitions,
and many of the members identify political still raises questions about what is possible
commitment as a reason for involvement and what the constraints set by the wider
(Williams et al. 2003: 158).The core promise political, social and economic context might
is that (localised) trust can be translated be. In the context of their review of activity
into action.The building of relatively discrete in the social economy, based on a series of
local economies is seen as a means of local case studies, Amin et al. (2002) point
challenging the power of global economic out that the more successful initiatives are
processes, through practices of localisation. those that access resources beyond the local.
From this perspective, local currencies can be In the Tower Hamlets (London) case they
seen as working to localise social relations, note that ‘what is interesting is that while all
containing markets by limiting their spatial the projects…are ‘local’ in that they serve
extent. the needs of specific areas within the borough,
they rely on inputs from activists, networks,
Here, the overlap with the transition towns and other resources from outside the imme-
movement (which now involves communi- diate area’ (Amin et al. 2002: 113) They talk
ties in England, Scotland, Wales, Ireland about the importance of ‘non local localness’,
New Zealand, US, Australia, Italy, Chile, of initiatives that are ‘place based but not
Germany, Canada, Finland, Japan and place bound’ (Amin et al. 2002: 115).
Holland) highlights the extent to which a
wider vision of local and regional develop- This suggests that scaling up is important
ment may be possible. The transition towns not just so that lessons can be learned for
movement was born out of the belief that wider implementation, but also to ensure
globally the moment of peak oil production that place-based initiatives may be able to
was approaching or had already been reached. flourish. Thad Williamson, David Imbroscio
The implication of this is that the time has and Gar Alperowitz (2002) take a similarly
come for people collectively to plan for the strong line in the US context, actively seek-
lives that they would have to lead without ing to build forms of local dependency writ-
cheap oil. Although intertwined with con- ings (see Cox 1997).They outline and explore
cerns about climate change, the main driver a whole series of specific initiatives, drawing
is rather a different one – not focused on the on federal, state and local government, as
attempt to reduce carbon emissions to main- well as community-based and third sector
tain existing economic and social relations, agencies, to develop what they describe as a
but rather looking for ways of changing those new agenda aimed at delivering what they
102
ALT ERNAT IVE APPROACHE S TO LOC A L AN D R EGION AL D EV E LOPMEN T
call a ‘place respecting political-economy narrow economic criteria to consider other
in the face of the triple threat of sprawl, forms of well-being – and suggest that policy
internal capital mobility, and globalization’ makers should aspire to delivering ‘holistic,
(Williamson et al. 2002: 310). Like Amin et progressive and sustainable local and regional
al. (2002) they stress that it is only by calling development’ (Pike et al. 2007: 1262).
on resources from a range of agencies, for-
mally identified with a range of government There is also accumulating evidence that
levels and spatial scales, that it is possible to community-based initiatives can be success-
deliver ‘community centred, place stabilizing ful, not only in resisting change being
policies’ (Williamson et al. 2002: 310). In imposed by the drive of the property devel-
other words, for them, even the building of opment industry and government policy
such places requires a set of policy interven- commitments to ‘urban renaissance’, which
tions that are not simply local – community generally imply gentrification and the reshap-
-based self-help may be necessary, but it is ing of existing communities. Libby Porter
not sufficient. and Kate Shaw (2009) bring together a series
of case studies of community initiative and
Doreen Massey’s consideration of a global community action oriented towards eco-
politics of place takes the argument further. nomic development and regeneration (often
She points to the significance of the agree- in resistance to or engagement with state
ment negotiated while Ken Livingstone was policies oriented towards renaissance and
mayor of London which broughtVenezuelan gentrification) from a range of cities across
oil to London, while transport planning the world, which highlight both the scope
expertise was made available to Caracas as a within which action is possible and some
good example of how such a politics might of the limits placed on it. They question
develop in a reciprocal way (Massey 2007, approaches which suggest that urban regen-
2010). In practise, of course, the scheme was eration in practice is simply an expression
brought to an end with Livingstone’s defeat of neo-liberal power, highlighting the scope
in the 2008 mayoral elections, but the prin- for local action, while acknowledging the
ciple that the politics of local and regional limits placed on it. It is only by focusing
development are more than local is one that on the scope for action and initiative in
remains important. particular places and in particular contexts
that judgements about what is possible can
Possibilities and constraints be made.
It sometimes appears as if the possibilities The extent to which local initiative can
faced by regions and localities are highly more fundamentally challenge the direction
restricted – either they learn to play the of change remains open to question, how-
competitiveness game within a globalised ever. As we have seen, some (such as those
(neo-liberal) economy or they are doomed associated with transition towns) believe it is
to decline. However, it is apparent that not all only local action linked through networks
of those being positioned in this way are pre- that can challenge the direction of change
pared to accept such a role.There continues associated with global capitalism; others,
to be substantial variation between places however, emphasise the need to work across
and ‘success’ may be defined in a range of levels, to construct a politics that is global and
different ways. Andy Pike, Andrés local, regional and national, reaching out to
Rodríguez-Pose and John Tomaney explore draw in other economic and political actors,
what some of these different ways of under- at the same time as also being drawn into
standing success might be – moving beyond their spheres of influence. And, of course,
there remain those who are sceptical about
the overall potential of local and regional
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action, if it is not set within some wider strategy’, Review of International Political
programme or agenda for change – part of a Economy, 3, 3: 434–458.
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Regeneration Strategies, London: Routledge. ing alternative forms of economic develop-
Robinson, J. (forthcoming 2011) ‘The spaces of ment at local level and beyond.)
circulating knowledge: city strategies and
global urban governmentality’, in McCann, E. North, P. (2008) Money and Liberation. The
and Ward, K. (eds) Assembling Urbanism: Micropolitics of Alternative Currency Movements,
Mobilizing Knowledge & Shaping Cities in a Minneapolis: University of Minnesota Press.
Global Context, Minnesota: University of (Widely framed discussion of experiments in
Minnesota Press. the development of alternative currencies, the
Savitch, H. and Kantor, P. (2002) Cities in the underlying tensions and possibilities.)
International Marketplace.The Political Economy of
Urban Development in North America andWestern Williamson, T., Imbroscio, D. and Alperovitz, G.
Europe, Princeton: Princeton University Press. (2002) Making a Place for Community. Local
Ward, K. and Jonas, A. (2004) ‘Competitive city- Democracy in a Global Era,NewYork:Routledge.
regionalism as a politics of space: a critical (A powerfully argued case for the centrality of
community as a basis for successful, fair and
sustained development.)
105
Section III
Concepts and theories of local and
regional development
9
Spatial circuits of value
Ray Hudson
Introduction value of a commodity in a capitalist economy
as given by market price, a Marxian political
Economic activity involves the production, economist would argue that it is necessary
circulation and consumption of value, typi- to distinguish between the use value and
cally embodied in material artefacts or in exchange value aspects of a commodity and
services. Such activity is inherently geograph- penetrate below the surface appearance of
ical, in two senses: first, it involves interac- price relations to uncover the real basis of
tions between people and elements of the value and so define value in terms of the
natural world to transform materials into socially necessary labour time required to
socially useful objects; second, it involves produce a commodity. However, the value of
flows of these objects, their constituent commodities produced by workers typically
components and the value embodied in them exceeds the value of their labour-power, their
between the various sites of production, capacity to work that they sell on the labour
exchange and consumption in which eco- market. The surplus labour that workers
nomic activities take place (Hudson, 2005). undertake forms the basis for the creation of
Value is a slippery concept, however, and it surplus value which in turn becomes the
can be defined in different ways depending source of profits, rents and wages and as such
on the particular social relations in which underlies the formation of market prices
economic activity is embedded and the places (Hudson, 2001). However, capitalist econo-
in which it occurs. In mainstream capitalist mies also encompass other definitions of
economic activities and discourses about value as activities are grounded in different
them value is typically defined as the market value systems to those of the dominant main-
price that a commodity can command. In stream – for example, in the ‘Third Sector’
other sorts of economies value is defined dif- value may be defined by the quantity of
ferently, for example, in terms of scarcity or embodied labour time, by an allocated price
the intrinsic worth of materials and things. or by what is seen as the intrinsic worth of
activities and things while within the family
Definitions of value also depend upon it may be defined in terms of love and respect.
theoretical perspective, however. While a Capitalist economies therefore are made up
mainstream economist would define the
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R AY H U D S O N
of a heterogeneous mixture of contested (MPE) conceptualises value and circuits of
forms and flows of value, linked by complex capital.The next section discusses the ways in
relationships and transfers between them. which these circuits are shaped spatially, espe-
cially as a result of corporate structures for
Value flows around circuits and networks organising the production process. One con-
of varying spatial reaches, and in the course sequence of this is the production of uneven
of such flows values are transferred between development and regional problems. Next,
firms and places (Hadjimichalis, 1987). In the therefore, I discuss the ways in which state
mainstream capitalist economies the domi- policies seek to respond to regionally uneven
nant flows of value are expressed in circuits development and their necessarily limited
of capital of varying complexity and extent. success in this endeavour.The following two
Moreover,capital seeks to penetrate the spaces sections discuss counter-tendencies and actions
of other value systems, so that it becomes that seek to create a greater degree of regional
dominant over increasingly extensive areas. It closure, in part via developing activities
does so in two ways. First, through processes grounded in different concepts of value and
of primitive accumulation and accumulation value systems and in part by seeking to con-
by dispossession.This involves the appropria- fine value flows within the boundaries of the
tion of elements of nature by capital and of region.The final section seeks to draw some
value produced under non-capitalist relations conclusions.
of production and their translation into
capitalist forms of value. Second, it does so Producing value: Marxian
through the extension of the spaces of sur- Political Economy (MPE)
plus value production and the intensification and circuits of capital
of capitalist relations of production within
them. Flows and transfers of value are there- Drawing on MPE, capitalist production can
fore intimately related to the production of be usefully thought of in terms of continuous
spatially uneven development and the politi- and repeated circuits, enabling the produc-
cal recognition of regional and local devel- tion of value and the creation of surplus
opment problems. While it has long been value to be located within them. In fact the
recognised that capital accumulation involves primary circuit of capital can be seen as
the growing reach of capitalist relations of encompassing three analytically distinct yet
production and the expansion of circuits of integrally linked circuits: commodity capital;
capital (for example, see Lenin, 1960, origi- money capital; productive industrial capital
nally 1917), in recent years there has been a (see Hudson, 2005: 21–37). Although at this
burgeoning literature of global commodity level of abstraction it is implicit, it is also clear
chains, value chains and production net- that such circuits have definite geographies,
works, signifying the emergence of new with different locations forming sites of pro-
forms of combined and uneven development duction and exchange, linked by flows of
in an era of neo-liberal globalisation. value and capital in the forms of money, com-
modities and labour-power. However, here
What I want to do in this chapter is sum- I want to focus on the circuit of productive
marise and reflect on these issues, on the industrial capital (Figure 9.1) as it provides
relationships between these new and older key insights to understanding the creation
geographies of value transfer, on the chang- and realisation of surplus value, of profits,
ing geographies of spatial transfers of value, and transfers of value and the dynamism of
and on the implications of these spatial cir- geographies of production within the social
cuits of value for local and regional develop- relations of capital. This circuit requires that
ment. The remainder of the chapter is
organised as follows. First, I briefly discuss
the way in which Marxian Political Economy
110
SPATIA L C IR C U ITS OF VALU E
Sale of commodities (as a pre-condition for their consumption)
realises surplus value as money
M′
M
M
Output for C′ M–C P C′–M′ Manufactured means
sale in P of production
markets C Labour-power
Raw materials from
nature
m = M′–M
= surplus-value
The labour process:
producing surplus value
Figure 9.1 The circuit of industrial capital.
Source: Adapted from Hudson (2005)
capital be first laid out in money form to supervision of the owners of capital or their
purchase the necessary means of production managers and representatives. Two things
(elements of constant and fixed capital in the happen in the moment of production. First,
forms of factories and buildings, tools, existing use values, in the form of raw mate-
machinery, manufactured inputs and raw rials, machinery and manufactured compo-
materials) and labour-power. The reproduc- nents, suitably revalued according to their
tion of labour-power – and so the successful current cost of production, are transferred to
reproduction of circuits of capital – is criti- new commodities. Second, surplus value is
cally dependent upon unwaged work in fam- created.This augmentation of value is possi-
ilies and community organisations, work that ble precisely because labour-power is the
is informed by different value systems to those unique fictitious commodity. For capital pur-
of mainstream markets.This is also indicative chases not a fixed quantity of labour but
of a more general point – that there are limits rather the workers’ capacity to work for a
to commodification within a capitalist econ- given period of time. In this time, workers
omy and that the reproduction of commodity create commodities that embody more value
relations depends upon the reproduction of than was contained in the money capital used
other forms of social relations. as wages to purchase their labour time. This
difference in value is the surplus value, the
Labour-power and the means of produc- additional new value created in production,
tion are then brought together in the pro- which, along with existing values transferred
duction process, in the workplace, under the
111
R AY H U D S O N
in the production process, is realised in thrown back into circulation. In others,
money form as profits on successful sale of however, the process of amortisation follow-
the commodity. ing sale can take years, even decades,
as capital is fixed in built and manufac-
It is, however, critical to note that the tured forms of great durability and duration.
exchange value of commodities is defined Moreover, realisation is by no means guar-
not by the absolute amount of labour time anteed for any commodity. Capitalist pro-
that they embody but by the socially neces- duction is an inherently speculative and risky
sary labour time required to produce them. process, with a constant danger that the
Socially necessary labour time is defined as circuit might be broken or interrupted in
the amount of undifferentiated abstract labour non-renewable ways.
needed to produce a commodity under aver-
age social and technical conditions of pro- Assuming that sale is successful, however,
duction. Since commodities sell in markets at the difference between the amount of money
a given price, the process of competition via capital advanced at the start of the round of
markets has important implications for the production and that realised at the end of
transfer of value between companies. Com- it is equivalent to the difference in the value
panies deploying production technologies of commodities at the beginning and the end
that require less labour time than the socially of the round.This is critical in understanding
necessary average and so yield better- the rationale and dynamism of capitalist pro-
than-average productivity thus benefit from duction. It also emphasises that the totality of
a transfer of value from those companies that production involves more than simply the
use technologies that give a lower-than- transformation of materials to produce goods
average productivity. This continuous inter- or services. It also involves a myriad other
corporate transfer of value is a critical source service activities associated with transporta-
of dynamism reshaping the corporate land- tion, distribution and sale, since the determi-
scapes of capitalist production and an ever- nation of socially necessary labour time is
present stimulus to individual companies contingent upon “socially necessary turnover
to engage in R&D activity in search of time”, the speed with which commodities
more effective ways of organising produc- can be distributed through and across space
tion and creating new products (Hudson, (Harvey, 1985). Furthermore, the meanings
2001: 147–185). with which goods and services are endowed,
the identities that they help create and
To summarise so far, capitalist production form, are of central importance as consumers
can be thought of as simultaneously a labour purchase commodities in the belief that
process, producing material use values, and a they will be useful to them, materially and
valorisation process, reproducing value and symbolically.
producing surplus value, which is embodied
in commodities and,having been realised,flows In summary,the circuit of productive indus-
through the economy. It is also a process trial capital conceptualises commodity pro-
of materials transformation, although I do duction and consumption in terms of the
not have space to elaborate upon this here creation, realisation and flows of value. To
(but see Hudson, 2001, 2005, 2008). The the extent that realised surplus value is
smooth flow of capital around the circuit is advanced as capital, then the scale of accu-
thus necessarily interrupted as capital is fixed mulation expands. Thinking in terms of the
and materialised in specific commodified circuit of industrial capital also emphasises
forms (aircraft, automobiles, power stations, that commodity production is inherently
shoes and so on). In some cases the value and geographical in a double sense. First, material
surplus value that these commodities embody transformations are predicated on relation-
can be realised quite quickly and capital then ships between people and nature: that is, upon
112
SPATIA L C IR C U ITS OF VALU E
a social-natural dialectic. Second, space is phase of primitive accumulation now con-
integral to the biography of commodities, signed to the pages of history. Crucially it
which move between varied sites of produc- involves the replacement of non-capitalist
tion and consumption around the circuit: modes of production with the capitalist
that is, a socio-spatial dialectic as value mode of production as the dominant organi-
embodied in commodities flows between sational force in the economy and in this way
sites and nodes distributed over space. The the penetration of capitalist social relations
circuit of productive capital thus involves into spaces from which they were previously
complex relationships between people, com- excluded. Often this has been a violent proc-
panies, nature and space in processes of value ess, especially, although by no means only,
creation and realisation and in flows of value historically secured by military means and
through time/space. Conceptualising the physical force linked to processes of (neo)
production process in terms of successive colonialism but it is now more often pursued
journeys around the circuit of industrial cap- by more subtle means, such as Intellectual
ital aids understanding of developmental tra- Property Rights legislation and the force of
jectories within capitalism. In particular, it the rule of law (for example, see Prudham,
helps reveal what happens to the money 2007; Sneddon, 2007). In either case,
equivalent of the newly produced surplus however, the role of the (national) state in
value and the ways in which value flows underwriting the political construction of
through time as an integral part of the circuit accumulation by dispossession has typically
of industrial capital. However, analysis at this been central.
high level of abstraction reveals nothing
about the spatiality of flows of capital and At the same time, and often as a direct
surplus value, the locations from which and result of the effects of accumulation by dis-
to which value flows. Seeking to understand possession, capitalist social relations of pro-
these issues requires a different approach. duction and processes of proletarianisation
(that is, the transformation of people into
The spatiality of flows of value: workers dependent upon selling their labour-
geographies of capitalism, power in order to live) have increasingly
accumulation by dispossession penetrated spaces from which they were for-
and the spatial extension of merly excluded. This spatial extension has
circuits of capital been a critical formative moment in the
development of uneven development, with
Flows of money, commodities and value are transfers of value between locations, both
always flows over space as well as through within and between companies. Increasingly,
time. Moreover, with the passage of time the this has been a process cast at the interna-
spatial reach of circuits of capital has tional rather than simply intra-regional scale
expanded, albeit unevenly, increasingly (most recently and spectacularly into much
becoming global. In part, this spatial exten- of China), with the circuits of commodity,
sion has been effected through processes of money and productive capital successively
accumulation by dispossession (Harvey, becoming internationalised (Palloix, 1977).
2003).This form of accumulation refers to an
ongoing process of the appropriation of value The spatiality of these flows of value has
created under non-capitalist relations of pro- been decisively shaped by the changing con-
duction and its translation into capitalist con- figurations of geographies and systems of pro-
cepts of value and not simply to the initial duction and of exchange and trade. Unequal
early phase of global capitalist development, a exchange results from the exchange of com-
modities produced under capitalist relations
of production with products produced
under non-capitalist production relations
113
R AY H U D S O N
(Emmanuel, 1972). Increasingly, however, brand managers, out-sourcing the produc-
geographies of production and the spatial tion of non-core services, components and
extension of capitalist relations of production final products to other companies – some of
rather than those of exchange became deci- whom themselves are major brand owners –
sive in shaping the spatialities of flows of within hierarchically tiered supply chains.
value.This spatial expansion has also formed These chains are characterised by sharp ine-
an important strategy through which capital qualities in power among their constituent
has sought to counter tendencies to over- firms which shape the intra-chain magnitude
production and for the rate of profit to fall and direction of flows of value. The organi-
(Harvey, 1982). Initially capital reorganised sation of global supply chains involves com-
production on an intra-national scale (see, for plex transfers of value between both
example, Lipietz, 1977; Massey, 1984). companies and locations, with the dominant
Subsequently, the reach of flows of value was companies siphoning off monopoly rents as a
further extended as divisions of labour in consequence of brand ownership and with
production became organised on an interna- the dominant direction of net flows being to
tional scale (see, for example, Frobel et al, the lead companies and key centres of con-
1980; Lipietz, 1987) and intra- and interna- trol and finance.
tional divisions of labour became linked in
complex ways. More recently, the growing State policies, territorial
significance of strategies of outsourcing and development and global value
offshoring as supply chains became both flows: tensions between
more complicated and distanciated with the corporate and territorial
incorporation of a greater range of functions development logics
such as back-office activities and places into
globalised production systems.This has been Given that uneven development is inherent
registered in the burgeoning literatures on to capitalist economies as a result of capital’s
global commodity chains, global value need to create surplus value and transfer
chains and global production networks and value between locations according to the
their relationship to regional development dictates of dominant corporate imperatives
trajectories (see, for example, Gereffi and and priorities, there are clearly unavoidable
Korzeniewicz, 2004; Gereffi et al., 2005; tensions between the logics of territorial
Hudson, 2008; Smith et al., 2002;Wai-chung development and corporate profitability and
Yeung, 2009). growth, between the logics of place and
space, since companies wish to move value
The growth of distanciated supply chains, to maximise corporate advantage while those
spatially stretched over great distances, and with responsibility for the development of
the growing blurring of the boundaries cities and regions wish to capture value and
between manufacturing and services as a hold down value-creating activities in their
result of outsourcing back-office activities is place.This frequently leads to the apparently
an expression of important changes in the paradoxical outcome that factories and work-
organisation of capitalist production. The places are closed in one place not because
development of modern capitalism and the they are unprofitable but because they are
practices of major capitalist enterprises have less profitable than in another place.
increasingly emphasised the significance of
advertising, brand management and sym- In terms of mainstream state logic, those
bolic register of commodities and their responsible for seeking to manage the con-
socially ascribed meanings (see, for tradictions of uneven development and for
example,Williams, 1980; Pike, 2009). Many promoting local and regional development
major companies have in effect become
114
SPATIA L C IR C U ITS OF VALU E
seek to position places more favourably ministries, decisions about their content
within the spatial circuits of capital, accepting and the criteria to be used in administering
its concept of value.They employ a variety of them remained firmly at central level within
tactics in pursuit of this objective – attracting national states. Such policies often seem
inward investment, encouraging the growth more concerned with reshaping the contours
of endogenous enterprise and local small of profitable production spaces, or address-
firms and so on. In recent years there has ing national economic policy objectives,
been a growing emphasis on a neo-liberal than meeting the developmental needs and
conception of development, based on max- concerns of particular places. Furthermore,
imising global flows into and out of regions. implementation of such policies was often
This has further exacerbated the tensions seen to create vulnerable urban and regional
between a corporate logic that seeks to max- economies, ensembles of ‘global outposts’ at
imise profits by globalising value flows and a the extremities of corporate chains of com-
territorial development logic that seeks to mand and control (Austrin and Beynon,
maximise intra-regional flows and connec- 1979) and dependent upon decisions within
tions and the volume of activity within a distant national political capitals and the
given region. Companies seek to minimise offices of transnational corporations (Firn,
employment levels and wage costs per unit 1975). Despite attempts to encourage endo-
output and maximise surplus value produc- genous development and claims as to the
tion whereas those responsible for regional emergence of new forms of qualitatively dif-
development seek to maximise the quantity ferent embedded branch plants, such fears
and/or quality of jobs and the wage incomes remain (Hudson, 1994, 1995). For example,
that they bring. Nonetheless, those responsi- in 1998 Fujitsu and Siemens closed brand-
ble for regional development strategies typi- new state-of-the–art integrated circuit plants
cally see themselves as having no alternative in North East England, facilities that had
to seeking to work within the constraints been heavily subsidised via state regional
arising from this clash of logics. Thus they policy grants, as world market prices for
seek to create, enhance and capture value “in these products collapsed.
ways that are not easily replicable elsewhere”
(Rutherford and Holmes, 2007: 202). Counter-tendencies, I: Seeking
However, as the history of capitalist develop- greater closure of local and
ment makes abundantly clear, even if regions regional economies within the
succeed in enticing companies to locate and mainstream
create value within their boundaries, there is
no guarantee that capital will be invested There are clearly limits to the degree to
where surplus value is produced or indeed which any local or regional economy can
where it is collected. and, arguably, ought to be closed off from the
wider world economy and a key policy issue
There are also tensions within those parts is to optimise the balance between intra-
of the administrative apparatus of the state regional and extra-regional production, trade
concerned with local and regional develop- and value flows. In certain circumstances
ment as to whether the priority is enhancing increasing intra-regional transactions is per-
the strength and international competitive- fectly compatible with the mainstream logic
ness of the national economy through the of capital as it can cut both production and
use of local and regional development poli- transport costs and enhance profits. Rec-
cies or developing localities and regions per se. ognition of this underlay the creation of
While the administration of such policies major integrated chemicals and steel
was typically devolved to the regional level
within the structures of central government 115
R AY H U D S O N
complexes, for example, as by-products from (see, for example, Pike et al., 2007). This
one process became inputs to another proc- involves moving beyond that which follows
ess rather than valueless wastes. The same from the logic of capital and redefining what
logic underpins the concept of eco-industrial counts as ‘the economy’, admitting the valid-
development (EID), predicated on companies ity of differing concepts of value and proc-
collaborating for mutual economic benefit, esses of valuation and the outputs of goods
closing material loops via recycling, recover- and services that arise from them. While
ing or reusing wastes and enhancing eco- goods and services produced within the
efficiency via exchanging different kinds of social economy may be exchanged for
by-product, based on bilateral commercial money in markets, they do so at market
agreements, driven by concerns to minimise prices that reflect an ethical and moral com-
risks and wastes and maximise profits, and mitment and as such undercut prices in
retain flows of value within the local or mainstream markets. Nonetheless there is
regional economy (Scharb, 2001; Stone, competition within markets in the social
2002). It is, however, important to remember economy and uneven development among
that there are limits to EID and similar and flows of value between social economy
attempts to increase regional closure as at least organisations as a result (Hudson, 2009). In
some raw materials and components are typ- addition, however, social economy activities
ically imported into the region and some fin- may also be based upon different concepts
ished products exported so that flows of value and definitions of value that do not find
into and out of the region are unavoidable. monetary expression in the currencies of the
mainstream (for example, Time Dollars
There are also limits as to what can be defined in terms of the amount of time
produced for sale regionally because of the required to create a product or deliver a
size of regional markets and regional con- service). Such activities may also involve
sumption preferences. Nonetheless there is attempts to create localised flows of value
considerable scope in many regions to enhance (for example, via LETS – Local Exchange
intra-regional transactions and the resilience Trading Systems) detached from the domi-
of economies via public procurement poli- nant circuits of capital and the mainstream
cies. Consider, for example, the regionalisa- economy. More generally, these explora-
tion of food supply chains over much of the tions of alternatives signal a more general
European Union for schools, hospitals and concern with the developmental potential of
other public sector activities (Hadjimichalis the social economy and, more generally, of
and Hudson, 2007). Such developments the ‘Third Sector’.
create markets to sustain regional agriculture
and food-processing industries and increase Much of the recent impetus for this revival
the intra-regional retention of value. of interest in the social economy derives
from the perception in policy circles that a
Counter-tendencies, II: Creating localised social economy could offer a more
alternative concepts and effective way of dealing with localised prob-
localised circuits of value lems of social exclusion, poverty, unemploy-
ment and worklessness. Much socially useful
The chronic failure of state territorial devel- and environmentally enhancing activity that
opment policies to manage the mainstream was formerly disregarded or consigned to the
capitalist economy so as to deliver their margins is now being accorded much greater
claimed and intended effects has led to recognition and significance as part of the
attempts to explore alternative conceptions social economy or ‘Third Sector’ in many
of paths to local and regional development parts of the world (Amin et al., 2002; Amin,
2009; Leyshon et al., 2003). Because such
116
SPATIA L C IR C U ITS OF VALU E
activity is often locally based, meeting local space in which alternative concepts of value
needs from locally produced products, based and more localised circuits of value could
upon recycling and reuse of existing goods flourish. This poses a political challenge for
and materials, in a variety of ways it has a national states and other social forces that
much lighter environmental footprint as well seek to combat these problems of uneven
as creating socially useful work. Paradoxically, development and as such the logics of cor-
however, it is typically those places most porate profitability and territorial develop-
ravaged by economic decline that lack the ment, of capitalist and non-capitalist social
resources needed to develop a vibrant social relations, come into sharp conflict. However,
economy and the developmental alternatives the production of uneven development is a
and alternative localised circuits of value that necessary feature of the expansion of capital-
it could offer. Furthermore, as successful ist social relations and capital accumulation
social economy organisations seek to extend so that there are definite limits as to the
their scale of operations and spatial reach, extent to which value flows can be regional-
they typically move nearer to the logic of the ised and local and regional economies insu-
mainstream economy and its definitions of lated from the effects of wider and dominant
value and criteria for exchange, blurring the circuits of capital.
line between the mainstream and alternatives
to it as the bulwarks and shelters they provide Acknowledgement
are subject to strong convergence pressures
from the mainstream (Hudson, 2009). Thanks to the editors for their helpful com-
ments on an earlier draft of this chapter; the
Conclusions usual disclaimers apply.
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new production geographies? Reflections Practice 8,Cornell University and US Economic
on changes in the automobile industry’, Development Administration, 43.
Transactions of the Institute of British Geographers,
19: 331–345. Smith, A., Rainnie, A., Dunford, M., Hardy, J.,
Hudson, R. and Sadler, D. (2002) ‘Networks
Hudson, R. (1995) ‘The Japanese, the European of value, commodities and regions: reworking
market and the automobile industry in the divisions of labour in macro-regional econo-
United Kingdom. Towards a new map of mies’, Progress in Human Geography, 26: 41–64.
automobile manufacturing’, in R. Hudson
and E. W. Schamp (eds) Europe? New Produc- Sneddon, C. (2007) ‘Nature’s materiality and
tion Concepts and Spatial Restructuring, Springer, the circuitous paths of accumulation: dis-
Berlin, 63–92. possession of freshwater fisheries in Cambodia’,
Antipode, 39: 167–193.
Hudson, R. (2001) Producing Places, Guilford,
New York. Stone, C. (2002) ‘Environmental consequences of
heavy-industry restructuring and economic
Hudson, R. (2005) Economic Geographies, Sage, regeneration through industrial ecology’,
London. Transactions of the Institute of Mining and
Metallurgy, 111:A187–191.
Hudson, R. (2008) ‘Cultural political economy
meets global production networks: a produc- Wai-chung Yeung, H. (2009) ‘Regional devel-
tive meeting?’, Journal of Economic opment and the competitive dynamics of
Geography:1–20. global production networks’, Regional Studies,
43: 325–352.
Hudson, R. (2009) ‘Life on the edge: navigating
the competitive tensions between the “social” Williams, R. (1980) Problems in Materialism and
and the “economic” in the social economy Culture,Verso, London.
and in its relations to the mainstream’, Journal
of Economic Geography: 1–18. Further reading
Lenin,V. I. (1960) Imperialism:The Highest Stage of Harvey, D. (2003) The New Imperialism, Oxford
Capitalism, Lawrence and Wishart, London University Press, Oxford.
(originally 1917).
Hudson, R. (2001) Producing Places, Guilford,
Leyshon, A., Lee, R. and Williams, C. C. (eds) New York.
(2003) Alternative Economic Spaces, Sage,
London. Hudson, R. (2005) Economic Geographies, Sage,
London.
Lipietz, A. (1977) Le Capital et Son Espace,
Maspero, Paris. Massey, D. (1984) Spatial Divisions of Labour,
Macmillan, London.
Lipietz, A. (1987) Mirages and Miracles, Verso,
London.
Massey, D. (1984) Spatial Divisions of Labour,
Macmillan, London.
118
10
Labor and local and regional development
Andrew Herod
Introduction as by reducing the number of working hours,
can shape how local and regional economies
Workers have long organized themselves into function by giving workers more leisure time
various social, economic, cultural, and politi- in which to spend their wages, thereby affect-
cal groupings. Often, such entities have ing how money circulates locally/regionally
focused their attention most directly on what and what impact this will have on, say, the
happens in the workplace and have sought to retail or entertainment sectors (see Pike et al.
negotiate better wages and working condi- (2006) for an example from the UK). At the
tions or to secure greater control over the same time, workers’ organizations can play
production process. Workers’ organizations, direct and active roles in encouraging or dis-
though, have also played important roles couraging local and regional economic
beyond the workplace, as they have tried to development beyond the workplace, as when
improve workers’ lives as consumers and citi- they may throw their weight behind the
zens and not just as producers. For instance, construction of housing for workers or
in 1895 members of the Christian socialist attempt to limit the redevelopment of par-
movement established the International ticular urban areas which might result in the
Co-operative Alliance with the intent of set- factories in which they work being replaced
ting up transnational cooperative trading by high-end residential units.
associations (Gurney 1988), whilst labor
unions and other worker organizations have Given, then, that workers’ organizations
also fought for things like public education can shape local and regional development
and improved public health facilities. through their activities in both the work-
Importantly, both these types of activities – place and beyond it, in this chapter I under
those focused specifically on the workplace take two tasks. First, I provide a brief theo-
and those beyond it – have had often dramatic retical analysis of how the activities of work-
impacts on patterns and processes of local ers’ organizations can be linked to the
and regional development.Thus, increases in unfolding patterns and processes of local and
wages can bring more money into an econ- regional development, particularly with
omy from outside. Equally, struggles to regard to their proactive efforts to mold the
improve work’s qualitative dimensions, such economic landscape in particular ways.
Second, I detail a number of case studies in
119
ANDREW HEROD
which such organizations have deliberately extracted from workers. This will generally
sought to shape the local and regional eco- require that factories or mines or other
nomic landscape through their activities. workplaces are situated in specific places,
These examples are not meant to be an that workers are provided with housing suf-
exhaustive account of all the ways in which ficiently close to work (either directly by a
workers and their organizations shape local firm, as with company housing, through the
and regional development but, rather, to be market, or by the state), that roads or other
illustrative and to stimulate further thinking types of infrastructure are available to move
about labor’s role in making the economic goods and people around, and so forth. The
landscape of capitalism and other political- realization of any surplus value generated,
economic systems. however, also requires investment in infra-
structure. Often, this is the same infrastruc-
Theorizing labor’s role in local ture – roads can be used both for bringing
and regional development raw materials to a site and for taking away
finished products – but sometimes it requires
Workers are geographical creatures. They different types of infrastructure, such as shops
have a vested interest in ensuring that the in which finished goods can be purchased.
economic landscape is made in some ways Thus, as Harvey (1982: 233) put it, collec-
and not in others. As intimated above, much tively capital must invest in “factories, dams,
of this is done in an indirect way through offices, shops, warehouses, roads, railways,
their actions within the workplace. Hence, docks, power stations, water supply and
workers’ efforts to increase their wages will sewage disposal systems, schools, hospitals,
indirectly impact upon how the economic parks, cinemas, restaurants – the list is end-
landscape evolves around their places of less” so that the capitalist system is main-
work, ensuring that it remains, they no tained.
doubt hope, one of prosperity rather than
poverty. However, it is important to recog- There are several important issues which
nize that workers also play a role in shaping emerge from such a conceptualization. First,
the broader economic landscape beyond the the form of the economic landscape is seen
workplace, both proactively and reactively. to be both a reflection of, but also constitu-
Three important bodies of theory have tive of, the capitalist accumulation process –
emerged within the critical geographic lit- the demands of securing and realizing profit
erature in the past two decades or so which require a certain physical configuration of
seek to link workers’ political and economic the landscape,whilst this configuration shapes
practices with the impacts of such actions on how accumulation processes unfold, as goods,
local and regional development patterns. capital, information, and workers flow
between particular places along the networks
The first of these bodies revolves around emplaced in the landscape.There is, in other
the concept of what Harvey (1982) called words, a socio-spatial dialectic (Soja 1980) at
“the spatial fix.” Largely developed out of his play. Second, it is important to bear in mind
effort to spatialize Marx, Harvey suggested that there may be significant divisions within
that if capital is to engage in accumulation collective capital – one group may wish for
successfully, then it has to ensure that there is one particular type of spatial fix, whereas
a certain geographical configuration of infra- another may wish for a different type, such
structure placed in the landscape. It is essen- that the actual economic landscapes which
tial, he argued, that labor and raw materials eventually materialize are the result of struggle.
are brought together at particular locations Third, not only is there a synchronous socio-
so that work can be done and surplus labor spatial dialectic at work but there is also a
diachronic one, for landscapes have certain
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LABOR AND LOCAL AND REGIONAL DEVELOPMENT
path dependences to them. Thus, the land- are generated, a second – closely related – one
scapes which facilitated accumulation at one is that of what Cox and Mair (1988) have
historical moment increasingly come to limit called “local dependence.” Specifically, Cox
its possibilities as the social relations of capi- and Mair suggest that social actors are differ-
talist accumulation change, although this entially tied to various places through capital
varies from place to place and over time, investments and other economic bonds, kin-
given that the rate at which capitalism’s social ship ties, political relationships, and the like.
relations develop will vary historically and At the same time, they have disparate abilities
geographically. Fourth, and perhaps most to move elsewhere.Thus, whereas some capi-
significant for our purposes here, although tal is quite flighty, that with large amounts of
Harvey outlined an important way of think- investment fixed in particular places (like
ing about how patterns of local and regional utility companies) or with significant ties to
development are related to the internal particular places (such as a reliance on highly
machinations of capitalist accumulation, he trained labor that is only available in certain
did not have a particularly active conception places) is less so. Likewise, whereas young
of labor in this process – workers appeared workers with few responsibilities may readily
more or less simply as factors of production. pick up and move elsewhere, older workers
In response, a number of writers (e.g., Herod who own houses they may not easily be able
2001) began to explore how workers – either to sell or who may find it hard at their stage
individually or as part of a collective entity in life to find another job are more fixed in
like a labor union – similarly seek to place in place.These considerations mean that certain
the landscape their own spatial fixes, fixes firms and individuals are more dependent
which they see as important for their own upon the continued economic vitality of the
ability to reproduce themselves socially and communities in which they live and/or are
biologically on a daily or generational basis. invested than are others.The result, Cox and
Specifically, such writers argued that workers Mair argue, is that they are much more likely
struggle over the geographical location of to engage in boosterist local politics than are
work and over the location of those other those firms and individuals who can more
things (businesses, schools, roads, recreation easily move on somewhere else should the
facilities, and so forth) which allow them to local or regional economy begin to sag.
live their lives and which have tangible impacts Equally, they may be more likely to seek to
upon local and regional development patterns. reduce their own local dependence by exter-
As with capital, though, different segments nalizing it, through, for instance, drawing
within the working class and its organizations down their investments in their own fixed
of collective representation might prefer quite capital and using rented factories or office
different spatial fixes to be implemented in buildings (if they are firms) or seeking to sell
the landscape. Equally, the landscapes which their homes and move into rented accom-
facilitated their self-reproduction at one his- modation in the same community (if they are
torical moment may not at later moments, a workers). Consequently, those workers who
fact which leads workers to seek to rework are relatively spatially fixed in particular
the economic landscape.Through their strug- places often work hand-in-hand with local
gles over the economic landscape’s form, then, capitalists to ensure that investment is brought
workers and their organizations shape patterns to their community, forming business coali-
of local/regional development. tions to stimulate and/or continue local and
regional development efforts.This means that
If the spatial fix is one concept which whereas sometimes workers may mobilize
helps link the political and economic activities around their class interests, at other times
of workers and their organizations to how they may defend their territorial ones, with
patterns of local and regional development
121
ANDREW HEROD
their choice dramatically shaping local/ one example of a union having a significant
regional development patterns. impact on local development patterns is that
of the International Ladies’GarmentWorkers’
The third way in which workers and their Union (ILGWU) in New York City. Faced
organizations have been theorized to play a with the loss of jobs in the industry in the
significant role in shaping patterns of local 1970s and 1980s as a result of building owners
and regional development is through the transforming their manufacturing lofts into
practice of seeking deliberately to mold the office space for the service-sector firms
built environment for purposes of transform- which were increasingly looking for cheap
ing social relations – that is to say, through space in Manhattan’s Garment District, the
engaging in spatial engineering for social union sought to limit conversions as a way to
engineering purposes. Thus, workers and preserve manufacturing space (Herod 1991).
their organizations have often attempted to Through lobbying the city government, in
establish various communities which reflect the early 1980s the union was successful in
their social values, and in the nineteenth and having established a Special Garment Center
twentieth centuries many unions went about District preservation zone in which building
building utopian communities of one sort or owners’ abilities to rezone and convert their
another. In the case of New York City’s gar- lofts would be restricted.The result was that
ment workers in the 1920s, for instance, the space was saved for apparel manufacture that
union built worker cooperative housing with otherwise would have been converted into
the goal of creating a “workers’ city” which office space, such that garment manufactur-
would both give them greater security against ers were able to weather some of the pres-
being evicted by their landlords but also rep- sures they were facing.Through its ability to
resented in bricks and mortar their vision of shape zoning patterns, then, the ILGWU
a more emancipatory built environment was able to impact upon local development
(Vural 1994). Likewise, in Berlin after the patterns not just in midtown Manhattan
Second World War unions built some 10 per (location of the special district) but also else-
cent of all housing constructed in the city in where, as service-sector office users, denied
some years, with goals similar to those of the locations in the garment district, were forced
New York garment workers (Homann and to look for space in other parts of the city.
Scarpa 1983). Their objective in all of this
has been to put “social thought in three If the ILGWU’s activities in New York
dimensions” (Fishman 1977: 7), to create City represent a very local intervention into
built environments which are, perhaps, more the dynamics of urban real estate,theAmerican
emancipatory than those within which they Federation of Labor-Congress of Industrial
would otherwise find themselves. Organizations (AFL-CIO) has more broadly
played important roles in shaping the urban
Some diverse examples of labor fabric. One way in which this has been the
shaping local and regional case is through the housing policies pursued
development by various unions, which in the early post-
war period encouraged both suburbanization
Having outlined some of the theoretical and urban redevelopment as a solution to
issues concerning labor’s shaping of local union workers’ housing needs (Parson 1982,
and regional development, in this section 1984; Botein 2007). Other examples are
I present several case studies intended to give those of the AFL-CIO’s Building Investment
a flavor of how workers and their organiza- Trust, a real estate fund established in 1988
tions have actually made the economic land- and worth some $2.1 billion as of 2009, and
scape in particular ways.At a very local scale, its Housing Investment Trust, first established
as the Mortgage Investment Trust in 1965
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LABOR AND LOCAL AND REGIONAL DEVELOPMENT
and which by its own reckoning has financed show not only how unions shape local and
close to 500 housing projects, creating or regional development but also how they may
preserving more than 80,000 homes. During work simultaneously at different geographi-
the first decade of the 2000s, the HIT com- cal scales to do so – hence, US unions build-
mitted some $2.6 billion to finance the ing housing in Latin America worked both
development and/or preservation of over transnationally but also at the scale of the
33,000 housing units, with such investments neighborhoods impacted by such projects.
generating over 22,000 union construction
jobs and leveraging some $1 billion in addi- Organized labor has also played a signifi-
tional investment capital for community cant role in shaping patterns of local and
development. Two notable projects have regional development in Eastern Europe
been the Chicago Community Investment during both the communist and post-com-
Plan, a $500 million initiative announced in munist period. Hence, under communism
2005 to help the city address housing and the role of labor unions was to serve as “trans-
community development needs, and the mission belts” of the economy, which is to
HIT’s Gulf Coast Revitalization Program to say that they were supposed to be the social
rebuild communities impacted by Hurricane entities who made sure that the production
Katrina (AFL-CIO 2009; see also Hebb and quotas determined by central economic plan-
Beeferman 2009). ners were achieved.Although there was some
variation in how this was done – unions in
The US, though, is not the only place in countries like East Germany and the Czech
which the AFL-CIO has been involved in Republic, which had industrialized before
building housing and local communities. 1945, were generally less authoritarian than
Hence, beginning in the 1960s the Federation were those in countries like Bulgaria and
began using some of its constituent members’ Romania, which largely industrialized after
pension funds, together with US government the Second World War (Herod 1998) – the
monies, to construct housing and other types unions generally served to mobilize/disci-
of infrastructure and make small loans to pline the workforce to fulfill quotas and
workers in Latin America and the Caribbean engage in “socialist emulation.” Equally,
(Herod 2001). Such activities were part of a unions served as conduits through which
broader campaign designed to limit the appeal workers might acquire consumer goods (TVs,
of communism to workers in the countries in cars) or gain access to economic and social
which they were located, based upon the benefits (vacations at union-owned resorts,
belief that improving workers’ material con- coupon books for rationed food, etc.).
ditions would make them less susceptible to Consequently, unions – even as arms of the
communist ideology. In Brazil, for instance, a state – were central actors in processes of eco-
448-unit housing complex was constructed nomic development. Significantly, though,
in São Paulo and schools and community they have also been key participants in the
centers in a number of rural communities, transformation of the region’s economic
whereas in Colombia low-cost worker hous- landscape associated with what has come to
ing projects were built in 15 cities through- be called “the transition.” Hence, many
out the country. Similar such projects were unions assumed enthusiastic roles in processes
completed in many other countries in the of enterprise privatization and were active
hemisphere, with important impacts on local advocates of economic restructuring in the
and regional economies. Likewise, other early 1990s, in the belief that privatization,
countries’ labor movements played roles in the introduction of market reforms, encour-
shaping economic development in develop- agement of an entrepreneurial system and
ing countries as a way to hinder commu- culture, and the restructuring of enterprises
nism’s spread (Weiler 1988). Such examples was required to kick-start local and regional
123
ANDREW HEROD
economies after almost half a century of cen- decisions concerning how work should be
tral planning. Indeed, in Poland Solidarnos´c´ organized and in long-term planning for
(Solidarity) was a major advocate of neolib- companies and plants in particular commu-
eral policies in the 1980s (Ost 1989) and nities, is central to how industrial relations
many others across the region took similar work and has important impacts upon local/
stances – one adviser to the Czech national regional economies – in the 1970s, for
labor federation Cˇ MKOS, for instance, sug- instance, Scandinavian unions began initiat-
gested that unemployment in the early 1990s ing research projects aimed at developing
in the Czech Republic was too low and that alternative technologies for use in manufac-
“[a]n increase [in it] would be healthy,” since turing (Bansler 1989; Lundin 2005) so as to
this would likely bring higher productivity help reduce negative impacts on the local
and thus, perhaps, higher wages for those environment and give workers more influ-
workers who remained employed. At the ence over how the work process is structured.
same time, numerous Western labor organi- Equally, in countries like China unions have
zations, from the AFL-CIO to entities like not only been involved in shaping industrial
the International Metalworkers’ Federation policy but also in establishing and running
and the German metalworkers’ union IG businesses themselves. Hence, according to
Metall, ran training seminars and otherwise the All-China Federation of Trade Unions,
worked with new and reformed unions in by the late 1990s Chinese unions had set up
the region to help them reimagine them- 120,000 enterprises and operated more than
selves along Western lines (Herod 1998, 100 Sino – foreign joint ventures and over-
2001).The result of these activities has been seas-based businesses, with such trade union-
that unions both within Eastern Europe and run enterprises employing 980,000 workers
from beyond it have contributed in myriad and generating approximately one-third of
ways to the processes of local and regional union incomes through the profits they
development which continue to unfold. earned (ACFTU 1999). More recently, enti-
ties like the Shanghai Federation of Trade
Unions have played similar roles in shap- Unions have established employment agen-
ing patterns of local and regional develop- cies for migrant workers and those workers
ment in other parts of the world, as in laid off by the restructuring of state enter-
Mexico. In this case, they have done so as prises, whilst other unions have made small
part of a corporatist arrangement with the business loans to migrant workers looking to
Partido Revolucionario Institucional (PRI – start businesses (China Daily 2009). Certainly,
Institutional Revolutionary Party), which the fact that the official unions in China are
ruled Mexico for much of the twentieth presently arms of the state means that these
century.Thus, the Confederación deTrabajadores practices raise significant questions concern-
de México (CTM – Confederation of Mexican ing where labor organizations end and the
Workers) was for many years a central pillar state begins.At the same time, though, should
in corporatist politics in Mexico and played such organizations gain greater autonomy as
important roles in designing industrial policy a result of growing worker pressure, then
(including the creation of import substitu- they will have considerable influence, as
tion industrialization programs and, later, the independent unions, on local and regional
Border Industrialization Program which development patterns.
encouraged establishment of the maquiladora
plants that have industrialized Mexico’s Finally, unions have impacted upon local
northern border). Likewise, in Germany and and regional development directly through
Scandinavia the idea of “co-determination,” their collective bargaining activities.Although
in which unions and workers participate in there are literally millions of examples of this,
124
LABOR AND LOCAL AND REGIONAL DEVELOPMENT
a particularly pertinent one involves the waterfront communities from Maine to
International Longshoremen’s Association Texas.
(ILA), which represents dockworkers in East
Coast ports in the United States. Beginning Concluding comments
in the 1950s, shipping companies began to
deploy containers – essentially, large metal Putting all of this together, it is obvious that
boxes – as a means to transport goods. The workers can have dramatic impacts upon
result was that much of the labor-intensive local and regional economic development in
work of loading and unloading ships which, a number of ways. First, they can help bring
out of necessity, had historically been done at capital into their locality or region from out-
the waterfront could now be done at inland side through successfully negotiating higher
warehouses – whereas previously every piece wages and/or securing employer agreement
of cargo had to be handled on the piers, now that more investment being expended on
only the containers themselves did. In their workplaces. This can help buoy the
response to fears of job losses, however, the local/regional economy, which can have
ILA successfully negotiated a series of work- various multiplier effects, and can also have
preservation rules, one of the principal ones significant impacts upon how work is struc-
being an agreement that any container pack- tured – for instance, new investment may be
ing or unpacking work which would other- in the form of improved workplace tech-
wise have been done at warehouses located nologies which can perhaps enhance effi-
within 50 miles of ports in which it repre- ciency (hence bringing more factory orders
sented dockers had to be done instead within to a region). Second, they can dramatically
these ports – this rule, in other words, forced shape patterns of local and regional develop-
work which might have migrated inland to ment by themselves moving into or out of
remain at the waterfront whilst it also forced particular localities or regions – if a region
work that had already been shifted inland to cannot produce a labor force in situ through
be brought back to the piers, with all of the natural increase, for instance, then insuffi-
resultant impacts on local and regional work cient labor migration may starve it of work-
patterns (Herod 2001). At the same time, ers whereas too much may swamp it, with all
though, the union also successfully forced the of the consequences for patterns of local and
employers to agree to a reworking of the regional development of either alternative.
scale at which collective bargaining took Third, workers can shape local and regional
place in the industry. In particular, whereas economies through the impact that their
traditionally bargaining had occurred on a own actions have on the actions of other
port-by-port basis – New York employers social actors. Hence, if workers become too
negotiated with New York dockers, powerful in particular places they may
Philadelphia employers with Philadelphia encourage capital to flee their regions.
dockers, etc. – the ILA’s national leadership Likewise, the local and/or national state may
sought to develop a national, coastwide con- seek to rein in workers’ economic and polit-
tract as a way of presenting a unified face to ical power in such situations, for fear that
those employers who operated out of multi- without so doing they may be unable to
ple ports along the coast. Perhaps the most attract capital or that accumulation may be
significant impact of this new system on local affected. Finally, workers can dramatically
and regional economies was that it augured shape local/regional economies through
the beginning of a national wage rate based directly intervening to shape the physical
upon conditions in New York (where dock- layout of the built environment as they seek
ers’ wages were highest), which dramatically to secure the particular spatial fixes they feel
increased the amount of money cycling into
125
ANDREW HEROD
are necessary to ensure their own social and of the activities of the International Metal-
biological reproduction. workers’ Federation,” In A. Herod (ed.)
Organizing the Landscape: Labour Unionism in
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LABOR AND LOCAL AND REGIONAL DEVELOPMENT
Further reading Anatomy of Industrial Capitalism, Boston: Allen
& Unwin, 172–194. (Investigates the politics
Cravey, A. (1998) “Cowboys and dinosaurs: around steel mill closures in Europe in the
Mexican labor unions and the state,” in 1980s and how different groups of workers’
A. Herod (ed.) Organizing the Landscape: Labor responses to these shaped local economies.)
Unionism in Geographical Perspective, Humphrey, C. R., Erickson, R. A., and
Minneapolis: University of Minnesota Press, Ottensmeyer, E. J. (1989) “Industrial develop-
75–98. (Documents the role played by unions ment organizations and the local dependence
in shaping industrial policy in Mexico and hypothesis,” Policy Studies Journal,17.3: 624–
how more recent neoliberal policies have 642. (Explores the politics surrounding the
transformed the geography of industrial devel- creation of local boosterist coalitions and the
opment in the country.) usually minimal formal influence in such coa-
litions of unions.)
Herod, A. (1998) “Theorising unions in transi- Lee, C. K. (2003) “Pathways of labour insurgency,”
tion,” in J. Pickles and A. Smith (eds) Theorising in E. J. Perry and M. Selden (eds) Chinese
Transition: The Political Economy of Change in Society: Change, Conflict and Resistance (2nd
Central and Eastern Europe, London :Routledge, edn), New York: Routledge, 71–92. (Focuses
, 197–217. (This chapter details some of the upon contemporary labor struggles in China
ways in which unions helped structure the and what this means for the activities of the
transition from Communism to post-Com- official trade unions.)
munism in Eastern Europe, and with what Peck, J. (1996) Work-Place:The Social Regulation of
consequences for patterns of economic devel- Labor Markets, New York: Guilford. (Shows
opment.) how labor markets are spatially regulated and
how workers’ organizations can shape how
—— (2010) “Spatial engineering for social engi- they operate, thereby influencing patterns of
neering in company towns,” in A. Vergara development.)
and O. Dinius (eds) Between Managerial Waterman, P. and Wills, J. (eds) (2001) Place, Space
Ideologies and Workers’ Power: Twentieth-Century and the New Labour Internationalisms, Oxford:
Company Towns in the Americas, Athens, GA: Blackwell. (This edited collection contains
University of Georgia Press,in press.(Examines several chapters which highlight how unions
how spatial engineering has been conducted shape local and regional development.)
for purposes of social engineering, from the Wills, J. (2001) “Community unionism and trade
scale of individual workplaces all the way up to union renewal in the UK: Moving beyond
entire landscapes.) the fragments at last?,” Transactions of the
Institute of British Geographers, 26.4: 465–483.
Hudson, R. and Sadler, D. (1986) “Contesting (Examines how community unionism can
work closures in Western Europe’s old indus- impact upon local economies.)
trial regions: Defending place or betraying
class?,” in A. Scott and M. Storper (eds)
Production, Work, Territory: The Geographical
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