DAVE VALLER
It is this focus on the emergent properties of what is doable?’, Upjohn Institute Staff
a social system where the value of the Working Paper No. 03–89. W.E. Upjohn
approach lies, and against which the distinc- Institute for Employment Research:
tive contribution of LRED policy in partic- Kalamazoo, MI.
ular can be judged. Clearly, though, these are Bartik, T.J. and Bingham, R.D. (1995) ‘Can
very first steps along these lines and there is economic development programs be evalu-
much progress to be made in developing ated?’, Upjohn Institute Staff Working Paper
these insights. But despite the novelty of the No. 95–29. W.E. Upjohn Institute for
approach such theoretical and methodologi- Employment Research.
cal development also offers the tantalizing Beaumont, E.F. and Hovey, H.A. (1985) ‘State,
prospect of informing policy which seriously local and federal economic development poli-
addresses the distinctive problems of locali- cies: new federal patterns, chaos or what?’,
ties and regions, rather than serially repro- Public Administration Review 45, 327–332.
ducing inappropriate LRED policies Beauregard, R. A. (1993) ‘Constituting economic
irrespective of local context. development’, in R. D. Bingham and R. Mier
(eds) Theories of Local Economic Development
Acknowledgement Newbury Park, CA: Sage, 267–283.
Beauregard, R.A. (1999) ‘The Employment
This chapter draws directly on material from Fulcrum: Evaluating Local Economic
Valler, D. and Wood, A. (2010) ‘Conceptu- Performance’, Economic Development Quarterly
alizing Local and Regional Economic 13, 1, 8–14.
Development in the USA’, forthcoming Boarnet, M.G. (2001) ‘Enterprise Zones and Job
in Regional Studies. Copyright permission Creation: Linking Evaluation and Practice’,
provided by Taylor & Francis Books (UK). Economic Development Quarterly 15, 3, 242–254.
Boyer, R. (1990) The Regulation School: A Critical
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researchers acts as catalysts?’,Habitat International ance and concrete research: Investigating the
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30, 2, 181–201. Peck, J. and Tickell, A. (1995) ‘The social regula-
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579
DAVE VALLER
of Thatcherism’, Environment and Planning A Valler, D. and Wood, A. (2010) ‘Conceptualising
27, 15–40. local and regional economic development in the
Peters, A. and Fisher, P. (2004) ‘The failures of United States’, Regional Studies 44 (2): 139–151.
economic development incentives’, Journal
of the American Planning Association 70, 1, Valler, D., Wood, A. and North, P. (2000) ‘Local
27–37. governance and local business interests:
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opment and for whom?’, Regional Studies
41, 9, 1253–1269. Wolman, H. and Spitzley, D. (1996) ‘The politics
Reese, L.A. and Fasenfest, D. (1997) ‘What of local economic development’, Economic
works best? Values and the evaluation of local Development Quarterly 10, 2, 115–150.
economic development policy’, Economic
Development Quarterly 11, 3, 195–207. Further reading
Rubin, H.J. (1988) ‘Shoot anything that flies, claim
anything that falls: Conversations with eco- Ho, S.Y. (2003) Evaluating British Urban Policy:
nomic development practitioners’, Economic Ideology, Conflict and Compromise, Aldershot:
Development Quarterly 2, 3, 236–251. Ashgate (An excellent flavour of the reality of
Sanderson, I. (2002) ‘Evaluation, policy learning evaluative procedures in the context of a new
and evidence-based policy making’, Public era of public management in the UK.)
Administration 80, 1, 1–22.
Taylor, D. (2005) ‘Governing through evidence: OECD (2004) Evaluating Local Economic and
Participation and power in policy evaluation’, Employment Development: How to Assess What
Journal of Social Policy 34, 4, 601–618. Works among Programmes and Policies, Paris:
Turok, I. (1989) ‘Evaluation and understanding OECD. (An invaluable starting point, intro-
in local economic policy’, Urban Studies 26, ducing evaluation issues across a wide range of
2, 587–606. policy forms together with important critical
reflection.)
580
47
The new regional governance and the
hegemony of neoliberalism
John Lovering
All change – no change? institutions of, regional governance has done
more than merely reflect the impact of neo-
The surge of academic interest in the region liberal ideas and neoliberalising intentions.
from the 1980s (which morphed into a focus Rather, they have played a major role in con-
on the ‘city’ and then the ‘city-region’ in stituting neoliberalism as a ubiquitous ideo-
the 2000s), paralleled by the explosion of logical and material force (this does not mean
employment in various agencies dedicated to that anyone mentioned here actually intended
‘regional development’, has transformed the this outcome).
intellectual and policy landscape, and teach-
ing orthodoxies (Pike et al. 2006). But the Neoliberalism was exported with increas-
proliferation of journals, books, edited col- ing vigour and success from its American
lections, conferences, consultancies, TV and heartland to much of the rest of the world
radio programmes and websites that have from the late 1970s to the mid-2000s. It con-
followed contrasts oddly with the lack of sisted essentially of the use of state power,
any really significant change in hierarchies paradoxically to ‘undo’ the legacies of earlier
of regional economic development. Elvis uses of state power (Hayek 1944). But being
Presley would not be impressed: there has essentially an ethical and cognitive dogma, it
been a lot more conversation than action. has been remarkably weak on economics,
This chapter explores this apparent paradox. both at the level of pure high theory and at
It argues that the emergence of an intellec- the level of dirtier everyday practice. The
tual and policy ‘New Regionalism’ since wave of neoliberalisation that has swept
the 1980s has been primarily an ideological around the planet over the past two to three
and political development, in which theory, decades was accordingly accompanied not by
research and policy analysis has been, in the boom that neoliberal advocates antici-
effect, subordinate to the top-down recon- pated, but by overall economic growth rates
struction of spatial governance and the spa- that were relatively feeble by historical stan-
tial imaginary by national governments.The dards in all but a few geographically and
latter has been intimately bound up with the socially exceptional cases. The neoliberal
globalisation of neoliberalism. I suggest here turn neither raised capitalism to new levels of
that the reconstruction of arguments for, and dynamism, nor did it diminish capitalism’s
inherent tendency to uneven development
581
JOHN LOVERING
(even before the outbreak of the new great questions concerning the principles which
Recession). Instead, it gave rise to the expan- might inform a ‘post-neoliberal’ reconstruc-
sion and legitimisation of the ‘political class’ tion (not that these have yet had much influ-
(Oborne 2007). Neoliberalising capitalisms ence on practice – Turner 2009). The
are not freer, more open ones; on the con- intellectual inadequacies of neoliberalism
trary, they proliferate new forms of interven- have been well known and widely available
tion in the ‘life-world’. The expansion of from long before the recent neoliberal adven-
the political class has, however, had some ture began (Davidson 2009, Krugman 2008).
economic effects. It has created a major But in the regional (and latterly city-regional)
market for new policy ‘discourses’, which has policy fields a critical awareness of the sig-
been met – thanks to the contemporaneous nificance of neoliberalism has been conspic-
neoliberalisation of the University and the uously absent, both before and after the
emergence of a new cohort of academic outbreak of recession.
commodity salespeople – by the creation of
new degree and professional courses and ‘Theorising’ in the regional and latterly
other tools of credentialisation geared to the urban policy fields has all too often taken the
creation of new spatial development profes- postmodern form of a mutually agreeable
sions. All this scurrying about has created a sharing of acceptable discourses and assump-
significant number of jobs for those involved tions.The work of a relatively small number
one way or another in the (global) recon- of regional geographers and economists since
struction of spatial governance. And the the mid-1980s led to the construction of a
regional scale, I suggest, is a case in point.The well-defined new orthodoxy (a neat sum-
New Regionalism in ideas and in practices mary of which, presented in a celebratory
has been accompanied by a proliferation of light, is given in the biographical introduc-
private and public networks and bureau- tion to Richard Florida’s 2005 Cities and the
cracies, but cannot be attributed with a lot of Creative Class; for a less flattering view see
innovatory economic change. It has been Lovering 1999, 2006). This has paralleled
good for an in-group minority. But whether the emergence of a new cohort of ‘ideas
it has been as good for anyone else, and entrepreneurs’ in the public policy field as
indeed for ‘regions’ in general, is much less the boundaries between official academic
certain. and policy work have become increasingly
porous. With the advance of neoliberalism
Neoliberalism and public policy-makers have increasingly
regional analysis sought legitimacy in fashionable academic
theories.And entrepreneurial academics have
The global economic recession which erupted been keen to package their insights as fash-
in 2008–9 belatedly drew public attention to ionable commodities. This has perhaps been
the pervasive, and dysfunctional, role of neo- particularly the case in the regional, and now
liberalism in the restructuring of national urban, policy arenas where it has sometimes
and global policy thinking, economic insti- lapsed into ‘theory led by policy’.
tutions, and patterns of economic and socio-
cultural development which followed the This tendency has been particularly evi-
crisis of the ‘Keynesian’ approach to policy in dent where policy-makers and their intellec-
the 1970s (Davidson 2009).The recession has tuals have found common ground in fixating
widened the debate on the inherent prob- on this or that supposedly magic policy
lems in the neoliberal weltanschauung to a bullet. In the early 1990s the leading global
wider audience, and has opened up new example was perhaps Michael Porter, whose
work on clusters became an international hit
582 in industrial and spatial policy circles. The
most prominent example today is probably
THE NEW REGIONAL GOVERNANCE AND THE HEGEMONY OF NEOLIBERALISM
Richard Florida, whose optimistic vision of of former industrial regions into chronic
the role of the so-called ‘creative classes’ in unemployment and underutilisation of capac-
urban development has been packaged as a ity. The resulting ‘regional’ policies gave rise
commodity and eagerly consumed by a global to the spatial units which would be used by
policy-maker audience, spending public dol- central governments for accounting, admin-
lars. Both of these cases exemplify the lack of istration and implementation purposes for
interest on the part of fashionable policy voices the following half century (Keating 1999: 55).
in neoliberalism, and their preference for In the Keynesian ‘Golden Age’ of rapid and
supposed technologically driven transforma- relatively inclusive growth, regional and urban
tions such as the advent of Flexible Speciali- geography become not only analytical points
sation, the arrival of the ‘New Economy’ or of view but also sources of governmentality
the age of ‘Smart’ Business as explaining and of policy experiments.
recent history.The weakness which has char-
acterised the intellectual dimension of the rise The resulting rise of a regional development
of the New Regionalism (and New City- aspect of governance generated the notion of
Regionalism) is best understood, I suggest, as expert regional ‘knowledges’, and the con-
a consequence of the peculiar political soci- struction of a new intellectual service sector
ology of the restructuring of spatial gover- with its own criteria of professional exper-
nance in capitalist societies, and this is the tise. In pre-neoliberal times this knowledge
central theme in the following discussion.To was conceived in broadly ‘Keynesian’ and
put it bluntly, the main consumers of these ‘Myrdalian’ terms. In this vision, tax-generated
ideas are not too worried about how well funds and planning constraints were mobil-
grounded they are, for they like the conclu- ised to meet national spatial goals by encour-
sions to which they apparently lead. aging the spatial redistribution of industry
and to a lesser extent, manpower, to iron out
The region as a policy object regional economic imbalances; cooling ‘hot
spots’ and warming up colder zones bypassed
Spatial policy is inevitably a matter both of by market forces. As everyone knows, from
ideas and of (formal and informal) institu- the 1970s this approach withered under the
tions, all of which have taken different forms joint impact of the proto-neoliberal taxpayer
at different times. Countries at early stages in revolt which constrained the growth of public
the nation-building phase generally devoted funding, and changing national economic
more attention to the development of an policy goals and processes.The latter was not
overarching sense of – and institutions for – merely a ‘technical’ adaptation to changing
national unity than to ‘internal’ geographical real-world circumstances. More important
questions. Only later, when a national eco- was a profound shift of analytical perspec-
nomic space was taken for granted, did inter- tive in elite (and increasingly global) policy-
nal geographical economic disparities come making circles, then the media, then ‘public
to be seen as important, especially where opinion’ (and votes) concerning the role the
they connected to perceived political and state should play in economic management.
cultural differences. Sometimes large states This shift has been given many names accord-
failed to address those problems adequately, ing to the writer’s perspective and the histori-
and this became one reason why the number cal scale imagined,ranging from post-Fordism’,
of states has quadrupled since 1950 to over the emergence of ‘post-political’ society, the
200 today. The recession of the 1930s gave advent of ‘post-modernity’, or even the ‘New
rise to the first systematic spatial-economic Enlightenment’. The perspective I argue for
strategies in Europe as a result of the decline here sees the crucial dimension for our pur-
poses as the ascendancy of neoliberalism as a
new and relatively coherent ideological and
583
JOHN LOVERING
organisational package (described from a principle (if not always practice), because in
sympathetic insider’s point of view in Cockett the latter the central theoretical and practical
(1995), and from outsider critics in Harvey question was distributional (and so inescap-
(2002). ably ‘political’); how should the state redis-
tribute resources between places, and thence
The resulting shift in modes of thinking, people? The ‘depoliticised’ approach that is
and policy, concerning the goals and meth- now dominant regards regions/cities not as
ods of regional ‘development’ was followed components of a mutually dependent moral
from the 1990s by a similar reorientation and political community (parts of an implicit
concerning first cities and then ‘city-regions’. Aristotelian polity) but as quasi-individuals,
Two themes have been particularly promi- obliged to find their own ways to economic
nent at all three scales.The first was a cogni- vitality. Competing with equivalent others,
tive shift towards seeing places as bounded they have both the opportunity and, crucially,
‘entities’ to be studied in their own right the moral responsibility to boost their own
(although exactly how has always been con- capacities and skills in order to increase their
troversial). The second was a normative bias market shares. By embedding this ‘must try
towards the idea that places could and should harder’ bias in institutions and in discourses
improve their ‘competitiveness’ and thereby to which the new leaderships of reconstructed
pull themselves up by their own metaphori- regional/urban governance were obliged to
cal bootstraps.The proliferation of these ideas subscribe, New Regionalist ideas played a
characterised what I called a decade ago the major role in validating and spreading neo-
New Regionalism (Lovering 1999) in which liberal ideas and practice. But since the latter
the region is a privileged scale for capital never stood much chance of achieving sig-
(a ‘crucible of innovation’), for civil society nificant effects in terms of creating jobs
(the nursery of spatial ‘identity’) and for gov- and incomes, this meant that the New
ernance (and thence ‘leadership’). Appropriate Regionalism was bound to become prima-
policies dedicated to these goals would, so rily an ideological and governance project.
the New Regionalist fable had it, reproduc-
ing neoliberal assumptions, improve regional The elephant in the new regional
‘bootstrapping capacity’. room – neoliberalism
Depoliticisation This was never, of course, explicit. For many
of those involved it was not even intended.
An important but under-investigated aspect The reconstruction of spatial governed
of this was that it implied the ‘depoliticisation’ focused on the region and then the city was
of regional economic policy; what regions presented as a requirement of simple good
(or cities) needed was less politics, more busi- economic sense. Some added a ‘sentimental’
ness experts, and (for Florida specially) more justification too, for such a restructuring
pluralism and tolerance. This doctrine repro- of governance could also give new life to
duced at the sub-national scale the depoliticisa- regional or urban ‘identities’. But the influ-
tion of economic analysis and the determination ence of the parallel national and international
of policy goals and methods which has been a shift towards neoliberalism was downplayed,
key objective of neoliberalism at the national denied, or more commonly simply over-
and international levels (Hui 2006). The looked (Cooke and Morgan 1996, Florida
extraction of politics and the delegitimising 2005).
of fundamental debate over values, goals and
methods differentiatedthis ‘NewRegionalism’ Yet it would appear bizarre to a histori-
from the ‘Old Regionalism’ at the level of cally minded observer to suggest that such a
584
THE NEW REGIONAL GOVERNANCE AND THE HEGEMONY OF NEOLIBERALISM
radical cognitive and normative reorientation historical patterns in the rise and fall of policy
could be unaffected by the wider context paradigms since the origins of capitalism and
in which neoliberalism has provided the the advent of the ‘reformist state’ from the
overarching official weltanschauung, the most late eighteenth century (Polanyi 1944). The
widely endorsed way of thinking, both cog- relationship between the state and the econ-
nitively and normatively, in state and business omy has been reconceived and redesigned
circles, and in academic and other communi- at intervals – triggered by recessions and
ties, and in much of popular culture or ‘civil crises – ever since, oscillating between a fairly
society’ for the past three decades (Harvey well-defined set of oppositions, alternatively
2002, Gamble 2009, Hui 2006). To suggest advocating and deprecating an active inter-
that it has deeply influenced the goals of ventionist role on the part of the state. As
public policy, and the methodological prin- Gamble (2009) puts it, the policy-intellectual
ciples adopted by economists and geogra- preference has in effect wobbled between an
phers amongst others would be relatively ‘efficient state’ hypothesis (the most recent
uncontroversial in economics and political case being Keynesianism), and an ‘efficient
philosophy. But in academic regional geog- market’ hypothesis (neoliberalism).
raphy and urban policy studies both sides of
the Atlantic this would often raise a dissent- What is neoliberalism anyway?
ing eyebrow. In these academic corridors
the term neoliberalism has more often been So we need to spend a few moments pinning
avoided as ‘too political’, or as quaintly econ- down just what this thing called neoliberal-
omistic – out of date in an era supposedly ism is. Classical Liberalism crystallised out of
defined by postmodernity and the cultural a highly diverse set of eighteenth-century
turn. Some commentators, especially those doctrines which shared the aim of reducing
close to government policy-making circles, authoritarian government by Church or State.
have diminished the significance of neoliber- In the nineteenth and twentieth centuries
alism by detaching the term from its historical Liberal theorists narrowed their social and
and social-scientific meaning and identifying ethical vision and focused in particular on the
it instead with (a journalistic reading of) the supposed virtues of private property rights,
particular set of policy paradigms and pack- stressing the need to reorient the use of state
ages associated with Reagan in the USA in power to avoid ‘interfering’ with what, after
the 1980s and Thatcher in the UK. As such, John Locke, they wished to see as Natural
it is long since dead and gone, and not worth Rights.The degree to which the state should
wasting too much time on today. In this also address social inequalities and long-term
mode Alan Harding in urban policy, for visions of the Social Good became increas-
example, and Pike et al. in the regional field ingly problematic for Liberal thought as the
(2006: 28) admit the ‘N’ word only in their twentieth century approached the twenty-
background historical sketches. first. Early Liberals accepted the need for a
major role here to create a healthy population
Reading neoliberalism in this way is rea- and a decent social order (Liberals designed
sonable enough if one’s aim is less to relate the British welfare state, implemented by
policy approaches to their historical context Labour and then by Conservative govern-
than to fit them into neat boxes with party- ments between the 1940s and 1960s). Late
political labels in a tidy chronological list. twentieth-century neoliberals took a much
But this risks missing the wood for the trees, less generous and more myopically economic
reducing policy to a series of pragmatic approach,explicitly or implicitly relying on the
adjustments, or intrusions of a set of intel- Burkean claim that inequalities are acceptable
lectual fashions that are essentially arbitrary.
Above all, it forgets the vast literature on 585
JOHN LOVERING
so far as they are the result, and the cause, of was intellectually more sophisticated than its
general economic improvement.This reduc- predecessors. ‘neoclassical’, ‘new classical’ or
tion of classical Liberal thought to the harsher ‘rational expectations’ theories in economics
doctrine of ‘neoliberalism’ (the term was first were no better at explaining macroeconomic
used by Milton Friedman in 1953) was how- reality (Davidson 2007). The strength of the
ever motivated by concerns that were only in neoliberals has been organisational and ideo-
part economic. Its advocates saw themselves logical: they knew where to push and what
as the latest carriers of the moral message of to say to win over audiences (as traced by
the Enlightenment (Ebenstein 1997). By pri- Cockett 1995).Because they imagined them-
oritising natural property rights and market selves to be heroic ‘outsiders’ to the
forces governments could bring about imme- academic and political Establishment, neo-
diate economic gains, and these would even- liberals have perhaps been more aware than
tually bring about the only kind of ethical their opponents that their agenda entails a
and social transformation that ‘human nature’, ruthless but subtle realpolitik. In the circles
as Liberalism conceives of it, would allow to that mattered neoliberalism became hege-
become sustainable. So in the 1990s (while monic largely because policy-makers and
many geographers were obsessing over the their target audiences were persuaded by
arrival of Postmodernity and the demise of the neoliberal assertion of the impossibility
Grand Theory) one of the most ambitious of business as usual. The contemporaneous
examples of Modernist grand theory was transformation of the world political stage, as
rising to global ascendancy in the world out- Soviet communism collapsed and the USA
side in the form of neoliberalism. became the world’s only superpower, helped
validate this shift away from the ‘efficient
Neoliberalism is an ambitious programme state’ to the ‘efficient market’ assumption.
which brings with it a set of epistemological, This has had profound implications for ana-
normative and methodological principles. lysis and policy thinking at all geographical
As such it supplies not only ‘off-the-shelf ’ scales. The ‘neoliberal turn’ largely explains,
policy guidelines. It also offers a vision of I suggest, why regional development in
what ‘development’ means, and the ethical recent years has achieved so little in eco-
assumptions this entails. Liberalism rests on a nomic terms, and has paradoxically increased
radically naturalistic conception of the indi- bureaucracy and ‘ideological’ interventions.
vidual and thence society (Hayek 1944). It sees
the attempt to deny this naturalism through The globalisation of neoliberalism
irrational constraints on ‘freedom’, especially and the New Regionalism
where these arise from collectivist institu-
tions, as the ultimate cause of economic Between the mid-1980s and mid-1990s gov-
(and political) failures, including spatial ones. ernments, academics, and consultants, plus
Where neoliberalism is the theory neoliber- private ‘ideas entrepreneurs’ working for
alisation became the practice – the extension groups such as industrialist lobbies in the US
of commodity production in place of non- and EU, developed a series of suggestions as
market exchanges, the commodification of to how spatial policies might be better geared
more and more areas of social life, and of to economic priorities. A common theme
space. As analysts like Frederic Jameson have was the emphasis on ‘clustering’, inferred
insisted, neoliberalisation over the past three from observation of some successful indus-
decades has radically extended the prove- trial compels, such as aerospace and IT, as
nance of market forces and the capitalist reported by the influential Michael Porter in
dimension of social relations and culture. the US. This resuscitated an old economic
Neoliberalism did not become ascendant
from the 1980s through the 1990s because it
586
THE NEW REGIONAL GOVERNANCE AND THE HEGEMONY OF NEOLIBERALISM
geographical theme in the new form of a do not have much pre-existing economic
policy package. Porterism insisted that ‘clus- meaning. New Regionalist bodies such as
tering’ was essential, and that it required sup- Development Agencies therefore lack a plau-
portive institutional adjustments.The idea that sible local economic rationale and popular
historically new technological and global- political support, and are particularly prone
economic imperatives implied the need for a to capture by maverick politicians or business
‘modernisation’ of strategic imperatives and special interests.At the opposite end of the EU
forms of governance became an orthodoxy. the influence of neoliberal conceptions of eco-
Subsequently, between the mid-1990s and nomic imperatives and the New Regionalist
mid 2000s, these orthodoxies were institu- turn has played the dominant role in the
tionalised in the form of policy recommen- post-devolution economics of Wales. The
dations,loan conditions,and political pressure emphasis on boosting competitiveness, and
from some of the world’s most powerful on supply-side polices such as ‘skills training’,
organisations, not least the World Bank and offers a case study in importing and imple-
European Commission (which after the menting New Regionalist orthodoxy, pack-
demise of Delors in 1995 shifted from a aged in local-friendly talk of local special
broadly Keynesian to a broadly neoliberal needs and autonomy. In both Wales and
orientation in many dimensions). In the Turkey these developments are most signifi-
European case, for example, the European cant not for what they are likely to do for
Roundtable of Industrialists, arguably the regional economic development (little) but
‘peak’ organisation representing corporate for what they reveal about how globalisation
capital, played a major role in legitimating a of policy discourses has impacted on the
reorientation of spatial policy from the early restructuring of spatial governance.
1990s. Within a couple of years this had
become the central plank of the European In Wales, devolution to the new National
Regional Directorate, and numerous academic Assembly after 1999 allocated formal respon-
publications began to emerge reflecting this. sibility for ‘regional’ (now ‘national’) devel-
opment to a newly elected body. But it lacked
The top-down nature of the new regional intellectual or political resources to do other
policy agenda meant that in many regions it than act out the global orthodoxy, especially
arrived as if dropped from a helicopter. In since it was underwritten by Labour Party
others they emerged more organically as the policy in London. The spatial pattern, and
latest in a long series of regional experiments. content, of economic development in Wales
In poorer countries, for example, the neolib- since devolution has been shaped more by
eralisation of economic and regional strategy the development of Cardiff – stereotypically
was more likely to come as part of a package neoliberal in its reliance on property markets
of ‘structural adjustment’. In the European and consumption – than by the well-mean-
Union, on the other hand, it has often come ing economic policy statements of the Welsh
through the pressure on aspiring new mem- Assembly (Lovering and Bristow 2006).As in
bers to demonstrate their acceptance of the the Turkish case, there is a striking gap
‘European Acquis’. So today in Turkey, for between the claims made for New Regional
example, part of the ritualistic dance which it institutions and discourses, and the actual
has to perform to be accepted as a legitimate development of the space economy.
candidate for EU Membership (enthusiasm
for which is sinking rapidly) is the establish- In general it would seem that the most
ment of formal regional structures. But interesting result of the creation of New
Turkey has been highly centralised (at inter- Regional discourses and institutions, in terms
vals a military quasi-dictatorship) since the of economic development, is that not much
republic was founded in 1923 and regions really happened as a result. At the level of
detail different regional stories could of
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JOHN LOVERING
course be told, and these details are not dynamic businesspeople in policy-making
unimportant (such as the relative role of circles. But what is really at stake here is not
housing market boons, export industries merely local failures of recruitment or of
versus service sectors, etc.). But there can be effort. The New Regionalism was never
no denying that for all the organisational going to work; the creation of new policy
restructuring, consensus-building, network- principles and new institutions was never the
ing at all scales, production of mountains of application of practical wisdom to contin-
grey literature, lavish expenditure on market- gent problems.The new regional leaderships
ing and public relations material, and the were never going to be able to deliver what
employment of tens of thousands in region- was asked of them.
ally badged institutions, the impact on the
ranking of regions in terms of most indica- The focus on the supply side
tors has been so modest as to be generally and lack of research into
undetectable.The European Commission and regional dynamics
the numerous European regional lobbies
have been the noisiest advocates of new The new regional strategic vision was justi-
regional policy fashions since the 1990s, fied by appeal to a collection of generalised
but there is little evidence of any significant historical claims concerning the arrival of
change in the economic rankings of the new (‘post-Fordist’) technologies,or the demise
component regions (Petrakos et al. 2005). of state protectionism, the rise of the ‘radical
The striking regional economic develop- individual’, or the world-historical transfor-
ments in other parts of the world – for exam- mation of everything in sight implied by
ple, in India and South East China – have to ‘globalisation’; stories that converged on the
be attributed to national developments idea that a restoration of competition and
within which New Regionalist ‘bootstrap- market forces should underlie the recon-
ping’ has had very limited significance. As struction of all economic governance.Those
analysis and as strategy, the New Regionalism End of History assertions turned out, as they
hasn’t worked.Yet like every good ideology, a always do, to be premature. One example was
chronic mismatch between theory and real- the misinterpretation of the arrival of Flexible
ity hasn’t stopped it being influential. Specialisation to imply the end of mass pro-
duction (of which there is now more than
The problematic agenda of ever).Together with assertions about chang-
New Regionalist policy ing industrial relations and consumer tastes
these vague but intriguing notions congealed
For most people in their target constituen- into claims for the arrival of the New
cies the proliferation of new regional institu- Economy, which looked absurd within only
tions must seem like little more than another a few years. Above all, the pressure to focus
example of the expansion of the tax-funded on ‘supply-side’ questions that was character-
‘quangocracy’.The construction of this new istic of neoliberal thinking led to chronic
layer of governance has further expanded the neglect of the demand side and of the real
political class (Oborne 2007). Since this has dynamics of spatial flows in economic devel-
not been accompanied by noticeable regional opment.Where Keynesian spatial policy had
economic gains it has sometimes prompted triggered efforts to understand the empirical
criticisms of an ad hominem nature. These macroeconomics of each region (or city, or
focus on the supposed failings of leadership, city-region) the neoliberal influence directed
or of key individuals, or the presence of attention elsewhere. In neoliberal eyes the
too many sluggish bureaucrats as opposed to real spatial agenda for each area (however
exactly that is defined) is to learn how to
588
THE NEW REGIONAL GOVERNANCE AND THE HEGEMONY OF NEOLIBERALISM
‘bootstrap’ itself into a more competitive political character of the ‘region’, and of the
state. Demand conditions are less important institutions that should be built to articulate
than the potential to change supply condi- it. Regions are economic spaces that thrive
tions; macroeconomic questions are someone by doing distinctive things (specialising), with
else’s responsibility. (therefore) distinctive institutions and even
social relations. But the spatiality conjured up
In this spirit the construction of the new by the recent restructuring of spatial govern-
regional apparatus was accompanied by the ance has rarely coincided with that of the
production of mountain-high piles of reports, materiality of the capitalist economy and the
assessments, scoping studies, SWAT analyses geographies of empirical identities. Regions
and opinion surveys examining this or that do not generally map onto fractions of capi-
spatial development or perceived local eco- tal, and have done less and less ever since the
nomic weakness. But few of these asked the industrial revolution. Nor do they generally
most crucial questions about how regional correspond to a unitary sense of identity and
economies actually function. In particular purpose. As a result the governance niches
the relationship between external demand and represented by the creation of new regional
internal variables – seen as vital to regional (city-regional) institutions, programmes, net-
analysis in the Keynesian era since it consti- works, and associations, have been occupied
tuted the ‘export base’ and its multipliers – by individuals who have been generally unrep-
has received very little attention since the resentative of their regions, if only because
1970s. We now have libraries full of lists of their regions cannot be ‘represented’ by any
regional and urban statistics and interview single interest or discourse.
quotes, but hardly any exploring questions of
economic significance. Economics has been The occupants of these positions consti-
displaced by Business Studies.The most fash- tute what I suggest it is helpful to think of as
ionable writings manage to arrive at regional the ‘Regional Service Class’ (or Urban, or
(or urban) development proposals without City-Regional Service Class according to
needing to descend to the level of local case).The concept of class is of course terri-
empirical detail at all; it is enough to invoke bly unfashionable, especially in former Soviet
Global Truths and ‘apply’ them to local cir- countries where it was loaded with discred-
cumstances (for numerous examples relating ited associations. But the term captures the
to regions see the Michael Porter website; way in which occupations and shared dis-
for cities see Richard Florida’s, or in a more courses constitute distinct social groups, and
evasive vein Amin and Thrift 2002). in Weberian or Marxist versions it still has
some value (as Florida rightly recognised in
The political sociology of the his conception of the Creative Classes). The
New Regionalism – the Regional concept of the Regional Service Class bor-
Service Class rows from Karl Renner’s attempt a century
ago to characterise a growing social stratum
The weaknesses of much of the information at the nation-state (German) level (Lovering
gathering inspired by new regional structures 2003).This ‘service class’ was neither capital-
reflects the weaknesses of those structures ist nor worker. It performed functions for
themselves. And here we encounter perhaps those more powerful (capital and the state),
the most problematic aspect of the new from whom it derived its slightly elevated
regional and urban apparatuses: their political economic and social status. For Renner the
sociology. New Regional ‘theory’ from the ‘service class’ raised new questions of origins
1980s to the mid-1990s assumed in effect (where does it come from?), composition
a fairly simple economistic basis for the (who is in it?), function (what does it do
and how does it do it?) and also ethical and
589
JOHN LOVERING
cognitive questions (what does it conceive ideas about what regional development
to be the public Good?). These are useful consists of, and how to achieve it. But in one
hints as to how we might approach the new important respect this can never be a ‘true’
Regional Service Class (RSC), whose emer- regional equivalent to Renner’s service class.
gence has been perhaps the most significant For regional service class can only have a
empirical result of recent changes in spatial somewhat tenuous relationship to industry
governance. and a complex or compromised relationship
to central government. Since regions do not
In the era of Keynesian regional policy the map onto economic circuits,production chains,
equivalent of the RSC would consist of cen- or interest groups in any clear or consistent
tral government functionaries, dedicated to manner, the RSC is likely to suffer both an
the regional application or servicing of cen- excess of ‘autonomy’ and a deficit of ‘repre-
tral policies.With the neoliberal turn and the sentativeness’. A glance at the rise of urban
related rise of the New Regionalism from boosterism in the US is instructive here.
the 1980s a new kind of RSC had to be con-
structed, with a new mission. In UK cases the In his 1989 analysis of urban entrepre-
new RSC often began in the 1980s as an neurialism David Harvey highlighted the key
embryonic group focused on inward invest- roles played by urban coalitions formed by
ment. Over the following decade and a half economic interests, in particular property
this was expanded and encouraged to engage developers, and urban political elites:
in a more ambitious, indeed holistic, socio-
cultural agenda for restructuring.The nature The new urban entrepreneurialism
of the occupants of these roles, and the posi- typically rests, then on a public–private
tion they find themselves in, might best be partnership focusing on investment
illuminated by recalling the concept of ter- and economic development with the
ritorial ‘cadres’ developed by van der Pijl in specific construction of place rather
his important studies of the evolution of than amelioration of the conditions
national and international economic devel- within a particular territory as its imme-
opment in the mid-twentieth century (1998). diate (though by no means exclusive)
These describe how throughout recent his- political and economic goal.
tory a small and identifiable set of policy
cadres have played a key role of identifying (Harvey 1989: 8)
from within the flux of events the emergence
of a crisis, and securing support for a com- In the present context this can be regarded as
prehensive policy shift to resolve it.The key an outline of the political economy of the
‘cadres’ of Keynesian capitalism operated in ‘Urban Service Class’. It suggests it will tend
the apparatus of central government, the to be committed to focusing on policies that
higher echelons of the business world, and are likely to enhance property values and the
the institutions most directly implicated in urban tax base. To these ends it works with
the development and exploration of ideo- others to encourage what comes to be brack-
logical discourses – Universities,‘think-tanks’ eted as ‘regeneration’ in various consumer-
and consultancies, plus the media. and investor-friendly forms. Harvey suggests
that the natural focus of urban entrepreneur-
In this spirit we could define the RSC ialism is property development and urban
as those cadres working in the region who regeneration, for the housing and property
are officially engaged in the project of visu- markets are generally ‘urban’.
alising the region and its relations to the
wider world. Its business is cognitive and What could be the equivalent at the
normative – producing and transmitting regional level? Housing and property mar-
kets, not to mention manufacturing, do not
590
THE NEW REGIONAL GOVERNANCE AND THE HEGEMONY OF NEOLIBERALISM
fall into neat regional boundaries.Commodity has exercised many urban geographers, cul-
chains and corporate industrial grouping tural theorists, planners and urban designers
very rarely follow a regional pattern. The (Amin and Thrift 2002). What’s missing in
region, even more than the city, sits awk- most of this literature is any recognition that
wardly across functional economic boundar- the impulse to this reimagining and con-
ies. We may conclude that the character of scious ‘reimaging’ has been powerfully influ-
a Regional Service Class is likely to be even enced by the political economy of economic
more ‘semi-detached’ from its ostensible governance, rather than some kind of auton-
socioeconomic base than its urban parallel. If omous general global economic and cultural
regions were the way some 1980s regional shift. Under pressure to demonstrate that they
theories claimed then they might be expected are doing something worthwhile, especially
to generate a coherent Regional Service when their funding is only partly provided
Class. But they are generally not like that, by central government, they are likely to seize
and the construction of a Regional Service on ‘symbolic’ activities where performance is
Class has accordingly had to be most ‘unnat- at once highly visible, and inoffensive to any
ural’, that is to say, driven, by the national major vested interest.
state, from above and afar. As a result the de
facto Regional Service Classes which have The reapolitik of institutional survival,
been constructed as part of the creation of in circumstances where the institution con-
new regional institutions of governance have cerned cannot hope to satisfy any but a few
usually been no more than what Allen and local economic interests, encourages a ten-
Cochrane nicely describe as an ‘assemblage’ dency to excessive displays of the perfor-
(2007).This is a recipe for bureaucratic com- mance of governance. If you can’t deliver
promise, not a political expression of conver- much in material terms, you can at least put
gent economic interests (in Marxist language: on a good show to demonstrate that your
a spatially identifiable fraction of capital). But existence is worthwhile. It is no surprise that
this does not mean it cannot act as a Pijlian the ‘performative turn’ in regional and urban
cadre. Rather, the fact that there is no pre- governance should recently have become so
existing self-evident economic interest which ostentatious and pervasive. There are few
it can represent and strategise for suggests regions and cities in which the presence of
that it will enjoy a high degree of autonomy, the local regional development agency or
able to make the running because no one similar actor is not noisily demonstrated to
else can. the public in light shows, firework displays,
sponsorship of all sorts, festivals and goodwill
Why new regional institutions events and lots of new signage. Here the New
incline towards symbols and Regional (and urban) pattern echoes the
performative governance broader tendency of neoliberalism; what
ordinary people, and even most business-
This helps explain why in so many regions people, know about their local economy is
the focus of the main players in economic shaped by the up beat story local agencies of
governance is on what at first seem to be governance tell about it. And the positive
relatively trivial matters such as the construc- image that invariably results is consolidated
tion of new imaginaries around regional by the everyday observation of the extraordi-
identity, and regionally badged ‘spectacle’. nary new Cities of Spectacle that have trans-
The reimagining of the city, in particular, formed the visual horizon on most cities on
has been a hot topic in recent research, and the planet.
There may be unemployment and inequal-
ity, and you may not be able even to live here,
591
JOHN LOVERING
but the well-manicured urban spectacle on subsidise floral displays on airport highways
display surely means that things are looking up! while doing nothing to address chronic
Walter Benjamin saw the arcade as a monu- unemployment?
ment to the production of commodities.
The urban experience is shaped by represen- These are of course political questions. As
tations. And what better to represent the noted earlier, one of the most worrying
revitalisation of the region/city/city-region aspects of the emergence of the new appara-
than a glorious new shopping mall, glamor- tus of spatial governance, thanks largely to
ous architecture, and lots of sexy new bars the dominance within it of what I have called
and restaurants? Those whose jobs depend on New Regionalist thinking, is that they have
keeping the new spatial apparatus in business not been accompanied by a general local
are likely to regard a focus on image manage- political engagement in the development of
ment targeted at elite groups as a perfectly economic goals and strategies. Just the oppo-
rational approach to ‘economic development’, site; the depoliticising current inherent in the
for understandable reasons (for which they regional governance agenda in practice (if not
can find plenty of succour in the publications in the more Utopian new regionalist theo-
of a Porter or a Florida or a Landy). And the retical speculations) has worked against this.
absence of a public discourse questioning the The New Regional turn proved to be not an
dominant conception of economic develop- agenda for social inclusiveness and political
ment, and a more democratic structure of regeneration, but for the consolidation of a
spatial governance through which it could professionalised political class, and a focus on
find expression, means there are few voices policies intended to persuade the local public,
to disagree. A bias towards rhetoric, image rather than represent it.
management, and celebration is inherent in
the neoliberalisation of spatial governance Given this, the prospects for the Recession
(Lovering 2007). are particularly gloomy. Regional structures
are far better placed to become specialists in
The New Recession and the spatialist ideology (‘our region/city is the
future of Regionalism most famous/competitive/beautiful/impor-
tant’) than to become political spaces for
The era of global neoliberalism was one of new constituencies and new demands. And
faltering and uneven growth, even before indeed the Recession has so far drawn forth
the recession broke out in 2008. It is inevita- a mainly conservative response which stresses
ble that the attempt to create lots of little the need to do what was already ostensibly
regional players competing in this semi- being done, but even more energetically.
stagnant wider context should have little to If the recovery continues to take the form
show for itself.With the arrival of Recession of renewed financial profitability alongside
the regional apparatus that has so labori- entrenched slow growth and chronic under-
ously been constructed over the past couple employment, the pressure will surely be
of decades now faces new challenges. How towards more of the same. In this gloomy
will these already feeble apparatuses of gov- scenario the new regional governance con-
ernance maintain their credibility (and fund- tinues to act out the logical corollaries of the
ing) when they are unable to claim even absence of a macroeconomic strategy aimed
modest economic success? Will the pressure at sustainable and high-quality employment.
to demonstrate governance through sym- Having already developed, through lack of
bolic activities become even more intense? alternatives, skills in symbolic gestures and per-
Or will it seem even more absurd to formative governance, the Regional Service
Class may find it has acquired just the capaci-
592 ties that fit the new bill; a recipe for authori-
tarianism and further image management.
THE NEW REGIONAL GOVERNANCE AND THE HEGEMONY OF NEOLIBERALISM
The reconstruction of spatial governance Depoliticisation and the construction
in reality has taken a very different form, of a New Regionalist (and urban)
with less attractive effects, from that antici- orthodoxy
pated in New Regionalist theorising. I have
argued that this is largely because the latter Amin, A. and Thrift, N. (2002) Reimagining the
failed to take into account the factor of Urban, Cambridge: Polity Press.
neoliberalism (and the global hegemony of
the US). Now that both of these are in ques- Cooke, P. and Morgan, K.(2000) The Associational
tion, we have the opportunity to subject the Economy, Oxford: Oxford University Press.
inherited wisdom to fresh challenges. And
this will mean paying much more attention Florida, R. (2005) Cities and the Creative Class,
to the processes whereby the de facto Regional London: Routledge.
Service Class is constructed, and to what it
does and why.There is an older and simpler Harvey, D. (1989) “From managerialism to
language for this; it revolves around the word entrepreneurialism: The transformation in
democracy. The challenges to dominant urban governance in late capitalism”,
economic thinking and policy implicit in Geografiska Annaler. Series B 71 (1), 3–17.
the notion of a Green New Deal, or of
local empowerment, or of a remoralisation of Lovering, J. (1999) ‘Theory led by policy:
the economy, all point at sub-national level The New Regionalism’, International
to the need for a greater awareness and Journal of Urban and Regional Research 23,
understanding of the content and behaviour 379–395.
of the Regional Service Class, and for mea-
sures that may help transform it into some- Lovering, J. (2006) ‘The new imperial geography’,
thing very different from its neoliberal in Helen Lawton Smith and Sharmi Bakhti-Sen
incarnation. (eds) Economic Geography, Past Present and Future
London: Routledge.
References and further reading
Lovering, J. (2007) ‘The relationship between
Regional development and Neoliberalism and Urban Regeneration’,
governance trends International Planning Studies 12, 4, 343–366.
Bristow, G. and Lovering, J. (2006) ‘Shaping events, Oborne, P. (2007) The Triumph of the Political Class,
or celebrating the way the wind blows? The London: Pocket Books.
role of competitiveness strategy in Cardiff ’s
“ordinary transformation”’, in A. Hooper and Polanyi, K. (1994) The Great Transformation: The
J. Punter (eds) Capital Cardiff 1975–2020: Political and Economic Origins of our Time,
Regeneration, Competitiveness and the Urban New York: Farrar & Rinehart.
Environment, Cardiff: University of Wales Press.
Wang Hui (2006) ‘Depoliticised politics from East
Pike, A. (2004) ‘Heterodoxy and the Governance to West’, New Left Review 41, 29–45.
of economic development’, Environment and
Planning A, 36, 2141–2161. Weakness of Neoliberalism as
economic theory, and origins
Pike, A., Rodriguez-Pose, Andres and Tomaney, of the recession
John.(2006) Local and Regional Development,
London: Routledge. Davidson, P. (2009) John Maynard Keynes,
Abingdon: Routledge.
Porter, M.E. (1990) The Competitive Advantage of
Nations, New York: Free Press. Gamble, A. (2009) The Spectre at the Feast:
Capitalist Crisis and the Politics of Recession,
Petrakos, G. Rodrígues-Pose, A. and Rovolis. A. London: Palgrave.
(2005) ‘Growth, integration and regional dis-
parities in the European Union’, Environment Krugman, P. (2008) The Return of Depression
and Planning A, 37, 10, 1837–1855. Economics, London: Penguin Books.
The political economy of
neoliberalism as a hegemonic
policy discourse
Cockett, R.(1995) Thinking the Unthinkable:
Think-tanks and the Economic Counter-revolution
1931–1982, London: HarperCollins.
Ebenstein, A. (2007) Milton Friedman, New York:
Palgrave.
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JOHN LOVERING
Hayek, F. (1944) The Road to Serfdom, Chicago: Lovering, J. (2003) ‘The Regional Service Class’,
University of Chicago Press. in Nicholas A. Phelps and Philip Raines, (eds)
The New Competition for Inward Investment:
The politics of place and context Companies,Institutions andTerritorial Development
Allen, J. and Cochrane, A. (2007) ‘Beyond London: Edward Elgar.
the territorial fix: Regional assemblages’, van der Pijl, K. (1998) Transnational Classes and
Politics and Power Regional Studies 41, 9, International Relations, London: Routledge.
1161–1175.
Turner, B. (2009) ‘Citizens, communities and
conflict: Surviving globalization’, Citizenship
Studies, 13, 40, 431–437.
594
48
Local Left strategy now
Jamie Gough and Aram Eisenschitz
Introduction Since the industrial revolution, the Left,
with the partial exceptions of anarchism,
Leftwing local initiatives often develop out syndicalism and utopian socialism, has tended
of capitalist crises such as that which has to see the national and international scales as
developed globally since 2007 – Germany in strategically the most important. Key flows
the 1920s, Italy in the 1970s, Britain in the of capital and commodities are at these scales,
1980s, the US in the 1990s, Latin America in and nation states have greater powers and
the current decade. When living standards resources than local and regional govern-
fall, when the proportion of those is unem- ment; accordingly, the focus of the Left has
ployed or when poverty rises, when nation been to influence these economic flows and
states either choose not to or are powerless to the nation state. But we shall argue in this
intervene, then a radical local politics may chapter that the ‘local’ scale, stretching from
emerge.This politics may go beyond quanti- home and workplace to region, is an essential
tative amelioration of economic conditions scale for Left politics, and indeed has specific
to develop qualitatively new social relations strengths for the Left. It is true that the place
and genuinely liberatory politics. Crises do of the local within wider economic flows
not always, however, lead to such local poli- and higher scale state structures makes Left
tics: the strategies adopted by the Left can local strategy problematic and replete with
be crucial, and these are the subject of this tensions and pitfalls: localism has often been
chapter. We put forward our own views on a trap for the Left.The purpose of this chap-
Left strategy, but include others’ through ter is to shed light on some of these difficul-
critique.We consider more developed coun- ties and dilemmas, in the present context of
tries (MDCs) and urban areas in newly neoliberalism and its crisis. Such a discussion
industrialised countries (NICs), where the is particularly important in the present period
majority of the population depend directly due to the burgeoning of local economic
or indirectly on waged labour; we shall use initiatives and urban programmes, most of
the Marxist term ‘the working class’ to refer which do not advance Left politics and many
to this majority; we do not consider local of which militate against it.We therefore seek
struggles in the rural Third World. here to develop ideas for a distinctively Left
595
JAMIE GOUGH AND ARAM EISENSCHITZ
approach to local development which pri- radical initiatives issuing from some Left
oritises the interests of the working class. Labour councils – sometimes rather grandly
dubbed ‘municipal socialism’. Their main
We first consider the dependence of Left foci were the maintenance of their services
local politics on its national and international and the tax revenue to fund them, and initia-
political setting by using the example of Left tives to sustain and improve local jobs and
initiatives in Britain since the late 1960s.We further equal opportunities (Boddy and Fudge
then consider the present difficult – but not
hopeless – situation internationally for the 1984; Eisenschitz and Gough 1993: 75–86;
Left after 30 years of neoliberalism. Section
IV considers some strategic issues for a Left GLC 1985, 1986; Gyford 1985). The latter
local politics that can begin to overcome local economic initiatives were inspired by the
working class fragmentation and depolitici- dominant strategy adopted by the trade union
sation. SectionV considers how these princi- and Labour Left nationally, the Alternative
ples might be carried through in particular Economic Strategy (Coventry et al. Trades
kinds of local initiative. Councils 1980; London CSE 1980) – a major
statement of which was edited by the former
The rise and fall of the local British prime minister (Brown 1975). This
Left in Britain strategy envisaged public investment in the
private economy, with the state exerting
In Britain from the late 1960s until the defeat increasing control, to improve innovativeness
of the miners’ strike in 1985 there was an open and productivity, widen and deepen skills,
political crisis, generated by unprecedentedly give workers greater say in their industries,
low profit rates of British capital, moves to and overcome social disadvantages within
austerity by capital and the state, and militant work; conversion to socially useful and eco
resistance to the latter by trade unions, social products was also proposed.These ideas made
movements and residents’organisations (Glyn a brief appearance in the manifesto and first
and Harrison 1980).While some of this resist- year of the 1974 Labour government; but
ance was nationally organised, much of it arose otherwise local authorities had to carve out
from local organisations. Regarding employ- their Left policies within tight legal and
ment, previously non-militant groups of financial constraints,in opposition to national
workers such as British Asians and women in governments; after the decisive defeat of the
Ford, Imperial Typewriters and Grunwick, as miners and the government’s 1986 abolition
well as previously well-organised workers of the Metropolitan Counties, these efforts
such as dockers, printers and car workers, collapsed.
undertook long disputes; workers occupied
closed factories; even the two crucial national The subsequent 20 years in Britain have
miners’ strikes of 1973 and 1984–5 were seen very few localised struggles, notable
strongly rooted in the mining communities. exceptions being the local-national revolt
A well-organised national network of shop against the poll tax in 1990 and some site-
stewards was sometimes able to link strong based ecological protests; the few workplace-
workplace organisation to solidarity within based strikes have generally remained isolated
and beyond the industry. Resistance around and been defeated. Neoliberal discipline was
council house rents and squatting was also imposed in Britain more heavily and success-
highly localised and differentiated, as were fully than in other developed countries
many of the actions of the women’s and excepting the US, through maintaining a
black movements. Responding to grassroots high value of sterling (deflating manufactur-
resistance, the 1970s and early 1980s also saw ing in particular), imposing anti-trade union
laws, and privatising much of the previously
596 well-unionised public sector. The strongly
credit-based expansions of 1992–9 and
LOC A L LEFT STR ATEGY N OW
2001–7 gave the appearance that neoliberal- the productive and disciplinary potential of
ism had regenerated the British economy, these policies to be used while suppressing
even though economic inequality increased. their radical potential.
Local public services increasingly excluded
both clients and workers from influence. This history suggests some general points.
Local politics became dominated by a con- First, Left advance at any spatial scale is criti-
sensual, apparently apolitical ‘partnership’ cally dependent on militant struggles by
between councils, business and community popular collective organisations; Left policies
organisations which implemented ‘pro- of government are a response to pressure
business’ policies (Cochrane 2007). Trade from them. Second, the Left may be able to
unionists, especially at the workplace level, take initiatives in particular localities against
were largely shut out of local politics, includ- the flow of national politics; but these initia-
ing from Labour Party decision making. tives are limited and fragile unless there is a
Where residential communities were for- revival of the Left at a national level.Third, a
mally drawn into urban programmes, as they given policy may be used in politically very
increasingly were from the 1990s, they found varied ways (Eisenschitz and Gough 1993:
that the key decisions were made elsewhere ch.2; Gough and Eisenschitz 2006: ch.8).
and that the militant community politics of In particular, for policies of the state and of
the 1970s was ruled out (Atkinson 1999; the voluntary and community sector (VCS)
Gough and Eisenschitz 2006: 148–156, to be implemented with empowering dynam-
200–202). Deregulation and privatisation of ics requires particular strategies and continu-
housing and public transport effectively sep- ous pressure from popular organisations. We
arated them from working-class political expand on these points below.
influence. Coming into the present crisis,
then,popular organisations in Britain,includ- The legacy of neoliberalism
ing those at a local level, are numerically
weakened and politically demoralised. Since the 1980s neoliberalism has defeated,
or inhibited the emergence of, Left local ini-
Because they promised a boost to produc- tiatives not only in Britain but worldwide.
tion, some of the policies developed by Left Offensives by firms to raise their profitability
councils in the 1980s have come into the have increased job insecurity and weakened
mainstream, but in forms compatible with, and union organisation, exacerbated by cuts and
even reinforcing, neoliberalism. Supporting privatisation in state employment. Increased
old and new industrial districts was pioneered mobilities of productive and money capital
by the 1980s Enterprise Boards, and now, as and commodities have undermined the old
‘clusters’, is the central strategy of the English centres of union strength and the working-
Regional Development Agencies, shorn of class community organisation that often went
considerations of job quality, equalities or with that (Silver and Arrigi 2000). At the
workers’ influence (Balls and Healey 2000; same time, an enormous reserve of labour
Gough 2003). Promotion of the social econ- has been opened up in the Third World
omy, seen in the 1980s as opening to work- through industrialisation of agriculture and
ers’ self-management, is now a central part explosive growth of cities, resulting in an
of national and local anti-poverty policy, urban working class of one billion people
in the form of semi-private self-help and (Davis 2004), of which half are either un- or
quasi-privatisation of public services (Amin under-employed and a large proportion work
et al. 2002). Training for oppressed groups in the informal economy (Petras and
has shifted from skilled waged work to self- Veltmeyer 2001). An increasing part of the
employment and entrepreneurship. Lack of urban working class globally makes its living
pressure from popular organisations has allowed
597
JAMIE GOUGH AND ARAM EISENSCHITZ
through crime, particularly the illegal drugs political-economic traditions which can be
industry which has been created by crimi- durable over many decades and to some
nalisation, and crime organisation disorgan- extent survive changes in global regulation
ises and sometimes directly attacks progressive such as neoliberalism; even among the MDCs
collectivities (Ramonet 2002). there are enormous variations in ‘national
regimes’ (Coates 2000). Thus in the US,
Capital’s demands and its mobility have Britain, Canada,Australia and Japan since the
weakened taxation, public spending and state 1980s, and the former Eastern Block coun-
regulation of business. Austerity has encour- tries since 1989, collective resistance has been
aged competition for welfare services and weak. By contrast, in many EU countries
jobs within the working class, resulting in a since the 1990s there have been militant
steep rise in ethnic or religious identification struggles around jobs, pensions, unemploy-
and xenophobia throughout the world ment and racism. In these countries local and
(Panitch and Leys 2002). Insecurity of per- regional governments have in some cases
sonal and household income, widening of been able to maintain or innovate some
individual and household incomes, erosion top-down, mildly social democratic policies,
of welfare services, and weakening of estab- partially shielding their populations from neo-
lished community ties by enforced migra- liberalism; in the US, the weakness of social
tion, have weakened cultures of collectivity democracy has meant that this role has in some
and mutuality and encouraged anomie and places been played by innovative community
possessive individualism (Vail et al. 1999; development initiatives (Williamson et al.
Sennett 1998; Beck 2001). In the developed 2002). The newly industrialising countries,
countries, particularly, workers, even the despite strong long-term growth, have seen
poor, come to blame themselves for their accumulation and/or financial crises which
problems (Galbraith 1992). The disavowal have elicited much militant, even explosive,
of responsibility for economic and social collective action – even in the face of brutal
well-being by neoliberal states has further repression, as in China; this has tended to
inhibited working-class political involvement. remain localised because of repression of
Socio-economic weakening of open, formal national popular networks (Sanyal 2008). In
popular organisation, and states’ and capital’s those parts of the Third World with low or
repression, have meant that much collective negative growth, the economic weakness of
organisation is (semi-) illegal, hidden within the working class has mostly enabled dictato-
sub-cultures (Scott 2005).Thus neoliberalism rial regimes to prevent collective action for
has had major success in its central objectives – economic and social aims, or to channel it
to atomise and individualise the world work- into inter-ethnic conflict; this is true of most
ing class, weaken collective organisations in of the Middle East and Africa, and to some
both production and social spheres, and extent India. It is in Latin America that pop-
depoliticise the population by imposing ‘the ular resistance to neoliberalism has been
rule of markets’. strongest, including movements of the rural
poor, struggles by unionised and unemployed
Since the 1990s, however, there has been a workers and by indigenes, often organised
certain revival of both militant unionism and at the neighbourhood level, mostly against
urban struggles (Moody 1997; R. Cox 1999; the state; these have led to the formation of
Merrifield 2002; Leitner et al. 2007). This Left or social democratic governments
process has been highly uneven between (Panizza 2005). Overlaid on these national
countries due in part to differences in the differences are, in many nations, large differ-
severity of the attacks on living standards, in ences in the strength of the Left between
the effective fragmentation of the working regions and localities (Jonas 1996;Agnew 1997;
class, and in direct repression. Resistance
has also varied with territorially specific
598
LOC A L LEFT STR ATEGY N OW
K. Cox 1998; Castree et al. 2004: ch.6). In the local scale. This scale facilitates the involve-
late 2000s, then, the possibilities for building ment of increasing numbers of people
Left initiatives at a local level start from very through the immediacy and visibility of
different positions in different continents, local problems of economic, social and cul-
countries and localities.As we write the pic- tural life. Collective organisation can draw
ture changes weekly, as protests against the on existing bonds of friendship, acquaintance
effects of the global recession erupt across the and trust. The sharp constraints of money
Third World, former Eastern Bloc and the and time that most people have for participa-
MDCs. tion in politics are easiest to overcome with
local organisation. In some cases, though
Strategic ideas for Left local not all, longstanding local traditions of soli-
politics darity can be drawn on (Wills 1998). Thus
Sklair (1998) argues that, even to confront
Class, collectivity and the local the major global institutions and practices of
power, local action is the essential starting
In these circumstances, how can Left initia- point – even though this needs to be multi-
tives be built against neoliberal disempower- plied and linked at higher spatial scales. The
ment using the local scale? Basic principles local scale is thus essential to a strategy of
should be to combat neo liberal indivi- collective organisation and action. It is then
dualism and anomie by building wide, varied possible to build ‘a sense of local commu-
and comprehensive collective organisations nity’, not in its currently dominant form as
of ordinary people, developing collective reinforcement of local hierarchy and compe-
control over the economy, enhancing collec- tition with other localities, but in a progres-
tive social reproduction, and thus extending sive way which can contest power (Cowley
democracy through all aspects of society. et al. 1977; Massey 1993; Craig and Mayo
Empowerment must be collective to combat 1995).
the market-fatalism that social atomisation
has created, to provide force of numbers Collective working-class organisations are,
against capital and (often) the state, and to in the first place, oppositional to capital and
begin to plan production and reproduction the state rather than ‘constructive’, since by
according to genuinely social criteria. This definition they do not have control over the
implies that a social democratic strategy major social resources. Trade unions form
limited to progressive policies carried out and develop through defence against employ-
top-down by the local state (for example, ers. Residents’ organisations make demands
Allmendinger 2003) is inadequate. But equally, on the local state and on property, infrastruc-
a libertarian/anarchist strategy limited to tural and service capital. This organisation
building islands of progressive practice such around immediate, daily needs can involve
as individual social enterprises (Gorz 1982; large numbers of people in organisation and
Gibson-Graham 1996) or Foucauldian het- activity.This practical-oppositional nature of
erotopias (Genocchio 1995; MacCannell working-class organisation is neglected by
2008) is inadequate in that it organises only a some purportedly ‘Gramscian’ strategists who
small elite, does not confront markets, and see the central task of a progressive move-
does not offer solutions for the majority of ment as being the construction of an alterna-
the population; it therefore cannot develop tive hegemonic ideology (Laclau and Mouffe
inclusive, strong organisations and action. 1985; Hall and Jacques 1989); this privileges
the activity of Left intellectuals and margina-
A strategy of collective organisation needs lises all others’, and dodges addressing the
to be rooted in, though not limited to, the immediate material needs of the majority. It
is also glossed over by theorists who deny or
599
JAMIE GOUGH AND ARAM EISENSCHITZ
downplay the existence of ‘power over’ (Allen Thus during the crisis of 2001–3 in
2003) and who propose alternatives based on
Deleuzian networks (Amin and Thrift 2002; Argentina, the middle class played a substan-
Swyngedouw 2008); it is at best unclear how tial role in local mobilisations (Ozarow 2007).
such networks can confront the major forms The struggle specifically against extreme
of power in contemporary society (Sklair poverty therefore needs to link collective
1998). Similarly, the oppositional nature of action of the poor to mainstream working-
working-class organisation is neglected by class organisations; the latter have an interest
those, including all the major global institu- in this since poverty is essentially a distilla-
tions, who propose the building of generic tion and concentration of oppressions expe-
‘social capital’ in working-class, especially rienced by all the working class (Gough and
poor, communities (World Bank 2000; Social Eisenschitz 2006). If this link is made, then
Exclusion Unit 2001).This approach occludes the poor will have more effective means of
how social capital and civil society are pro- organisation than the riot (cf. Zizek 2008).
foundly shaped by capital and the state Left local strategy, then, can and should
(R. Cox 1999), and that local relations encompass organisation of the great majority
between people are specific to particular of the population, from the poor to the
social projects and thus particular political middle class.
strategies (Fine 2001; Das 2004).
The local state, capital and
The crucial organisations here are not social enterprises
only those of the poor – the target group
for so many mainstream local economic ini- While workers’ organisations are in the first
tiatives – but those of the whole working place oppositional, a Left strategy cannot be
class, including ‘the middle class’.Throughout simply in opposition to the local state.
industrial capitalism the non-poor have had Especially in the developed countries and the
better formal organisation than the poor NICs, the local state has substantial powers
because of their stronger position in produc- and resources which the Left needs to use
tion and greater resources for organising; and and develop. Basic services such as education,
in recent decades the poor have tended fur- health, social housing and environmental
ther to lose organisational capacity through services cannot be adequately provided for
economic and social atomisation and the without the taxation and borrowing powers
drugs industry.A symptom of this problem is of the state, and the socialisation of the econ-
that in recent years the poor and deracinated omy cannot proceed without the powers and
have found expression for their anger in funds of the state.The Left therefore needs to
fruitless rioting, inter-ethnic fights, and bat- resist cuts in spending on useful services and
tles with the police which lead nowhere, as restriction of local governments’ abilities to
instanced in South Los Angeles in 1992, tax and borrow, and defend direct state deliv-
British cities in 1981 and 1991, the Paris ery of services against fragmentation into cost
banlieux in 2004, and Greece in winter centres, contracting out, quangoisation and
outright privatisation (Whitfield 2006). It
2008–9. Besides, in the last 30 years the non- needs to defend, or push for, egalitarian deliv-
ery of services which empower users and
poor have acquired increasing reasons for build their sociability, as, for example, in the
self-organisation and militancy. Job loss, inse- revolutionary education practices of Reggio
curity, deskilling, loss of autonomy within Emilia in Italy (Dahlberg and Moss 2006).
work, and erosion of pensions and welfare
services started with unskilled workers but The Left also needs to defend the existing
have moved ‘upwards’ through middle layers powers of the local state to regulate investment,
to professionals, and this tendency ‘to share
the misery’ is obvious in the present crisis.
600
LOC A L LEFT STR ATEGY N OW
for example, in the built environment, and to open and responsive to them (Wainwright
run trading enterprises. More ambitiously, it 1994: ch.7).
needs to push the local state to intervene in
the local economy on the side of workers A corollary is that the oldest and still most
(Gough 1986; Totterdill 1989; Cumbers and popular aim of the Left, extending democ-
Whittam 2007). The local economy is cen- racy, is not achieved simply or mainly by
trally important not just because most peo- extending formal methods of participation in
ple’s incomes depend on it, but also because local government: ‘participation’ needs to be
it determines workers’ autonomy, quality of of a form which achieves radical results.
labour and ability to organise within the Collective organisations need to achieve real
working day. Local production politics has, control and design of state services, invest-
however, to recognise that it may not be ments and regulation of private interests
possible, in the medium term, to gain the (Eisenschitz 2008). If this does not happen,
necessary powers or funding. participation simply results in demoralisation
of people and bureaucratisation of their
‘Support for state action’ does not, though, organisations. In particular, decentralisation
mean allowing elected representatives and of state powers and spending from nation to
state officers a free hand. On the contrary, region to locality to neighbourhood in the
collective organisations in civil society need name of increasing participation – a current
to impose continuous pressure on the local
state,open up its processes of decision making consensus from Right to Left – is meaning-
to inspection, and become an integral part of
less unless the smaller scale facilitates greater
that decision making – in short, a real and popular control over resources and powers.
Moreover, for the Left ‘extending democracy’
popular democracy. For example, any state should not concern merely the state but pri-
policies involving employment and produc- vate capital and indeed social enterprises: for
tion need to be made in association with the socialists, the disempowerment of working
relevant trade unions, and pupils, parents and people within production is central to their
teachers’ organisations need to direct schools. social, political and cultural disempowerment.
Such possibility of real influence also encour- If production is, then, to be subjected to
ages wider and more active participation in greater democratic control,this must be partly
those collective organisations, which is the through the direct actions of local collective
best insurance against their bureaucratisation, organisations. Given these caveats, extensions
capture by ‘leaders’, or corruption (which of democracy into the state and economy can
are chronic problems everywhere). The form virtuous circles, whereby ordinary
Argentinian piqueteros negotiated for the people come to understand social mechanisms
neighbourhood in the street in order to put better, feel greater ability to change them, and
pressure on the state representatives and thus propose more radical solutions.
to prevent clientalist corruption (Starr 2005).
Since the local state is formally controlled These considerations raise important dilem-
by political parties, Left trajectories for mas concerning the contracting out of local
the local state are also furthered by the devel- state services to not-for-profit enterprises
opment of Left parties genuinely responsive and the Voluntary and Community Sector
to their membership and committed to (VCS).This type of contracting out has been
working-class interests. Politicians from a major aspect of reform of local government
such parties who control local government in, for example, Britain; the Labour govern-
can both ‘take the local state outwards’ ment has argued that theVCS is more plural,
through supporting popular organisations democratic, responsive and innovative com-
and actions, and take these organisations pared with the ‘bureaucratic’ and ‘inflexible’
‘into the local state’ by making it more state (Paxton and Pearce 2005).Some Centre-
Left commentators of a postmodern or
601
JAMIE GOUGH AND ARAM EISENSCHITZ
associationalist bent have supported this pro- articulations of the local state, community
cess on the grounds that it empowers civil organisations, and collective social groups are
society, democratises the services, and weak- possible in delivering essential services.
ens the overbearing state (Amin and Thrift
2002). It is true that non-state organisations A related debate concerns the role of
have sometimes delivered essential services in social enterprises and worker cooperatives
ways which are more visionary and innovative in producing marketed commodities. Some
than departments of the local state. For brief associationalist (Cooke and Morgan 1998;
periods of crisis, community enterprises may Gibson-Graham 1996) and market-socialist
form something of an alternative that may be (Nove 1983; Sayer 1995) authors argue that a
a means of reshaping the state. In the city of comprehensive system of such enterprises,relat-
Mosconi in Argentina, for instance, there were ing through markets,is a potential,feasible alter-
300 projects built by well-organised grassroots native to capitalist production.They argue that
organisations that effectively developed a par- it is a desirable one since it allows workers much
allel local state (Starr 2005). But the Left needs greater autonomy and control within their
to be cautious before calling for wholesale enterprises, increases innovativeness and pro-
hand-over to theVCS. In the first place, these ductivity, and spatially decentralises decision
services remain dependent on state funding; making. If this were so, then the Left has
the projects in Mosconi, for instance, relied on a simple,comprehensive alternative to both state
local and national state funding,World Bank- and market (Catterall et al. 1996); Mance (2009)
backed workfare schemes, and the goodwill speaks of social enterprises as ‘the material base
of local oil firms (Schaumberg 2008: 378). of post capitalist societies’. In the last decades
Existing contracting out to the VCS is taking there have indeed been many local Left initia-
place for the same, neoliberal reasons as con- tives to support such enterprises (Pearce 2003).
tracting out to private firms: to lower wages However, once again, we think that the Left
and conditions, and to depoliticise services by should not pursue producer cooperatives oper-
passing the buck for ensuring their quality. ating in free markets as the only strategy for pro-
This has fragmented service delivery, created duction of commodities (Gough and Eisenschitz
greater unevenness across localities, and made
it more difficult for the local state to pursue 2006: 216–21). Cooperatives tend to be under-
pro-working-class policies (Mayer 2007). A
strong, continuing role for the local state in capitalised and thus find it hard to out-compete
delivery of services is in our view essential in the private sector. They often rely for survival
order to ensure their universality, equity and on self-exploitation of the workforce.They typ-
quality, and in order that they can be demo- ically need the state for both funding and coor-
cratically planned across the locality. But, as dination,so that they cannot so easily escape the
we have just argued, these very roles of the state’s ‘dead hand’.We therefore believe that we
local state need to be opened up to much need strategies for local state production and
greater control by residents, clients and ser- Left strategies within-and-against the existing
vice workers. The Left needs to ensure that private sector (see further sectionV).And since
social enterprises funded to provide essential Left strategy for social enterprise, in both state-
services do not undercut public sector funded services and commmodity production,
employment conditions, are genuinely demo- is far from straightforward, we also discuss this
cratically accountable, are efficient, and are further in sectionV.
not corrupt. Under these conditions, their
innovativeness can help to make the services Connecting different aspects
directly run by the state more innovative.With of local life
this kind of approach, many different concrete
Left local strategies need to address all aspects of
602 the locality holistically, in particular combating
LOC A L LEFT STR ATEGY N OW
the characteristic splits in capitalist society strong and militant union organisation
between production and reproduction, the inspired revolts in the social sphere – rent
public sphere and the home, economy, strikes for rent controls in the former case,
social life and culture, and society and nature mass squatting of housing and free public
(Meszaros 1995: 464ff.). Left strategy should transport in the second.These collaborations
refuse the division between ‘economic’, are not always easy, however; there are likely
‘social’, ‘environmental’ and ‘cultural’ policy to be tensions between local groups due to
making. For example, democratisation of their different preoccupations and foci: for
privately controlled production means not example, workers in polluting industries may
only pushing for more skilled and auto- clash with local residents’ groups; male work-
nomous work (Hales 1980; Cooley 1987) ers may not see the point of expanding nurs-
but also changing its goods and services ery provision; users of cars may be unwilling
towards basic human needs (Mackintosh and to see their use restricted. But the local level
Wainwright 1987: ch.7; Elson 1988). While is the ideal scale at which to thrash out these
reproduction of people under capitalism is disagreements and negotiate practical ways
centred on private domestic work and pri- forward, since the different groups can meet
vate use of commodities purchased, these are face-to-face and also directly inspect the
in fact strongly socially constructed, particu- concrete local facts relevant to the dispute.
larly by capital; Left strategy should aim to
make this socialisation conscious and demo- The problem of spatial scale
cratic, whether it be food and nutrition,
the geography of retailing, the design of While the locality is a necessary and poten-
housing, or public transport versus the car. In tially powerful scale for Left action, the latter
each of these areas there can be collaboration always needs to be linked into higher spatial
between workers in the service and residents scales.The world is constructed through the
consuming it, redesigning the service for relations between territories, but by the same
the benefit of both groups (Lavelette and token each locality is constructed by its rela-
Mooney 2000;on housing seeArkitektkontor tions to others (Howitt 1993). The key task
1974; on public transport see GLC 1985: considered in this chapter, of constructing
ch.20). Moreover, safeguarding of ecosystems solidarity and collectivity within localities,
through local action nearly always involves is thus inseparable from constructing them
decisions which span the spheres of produc- at wider spatial scales (Swyngedouw 2000;
tion and social life respectively. Such actions Gough 2002).In modern society,social actors
across the two spheres are the best way of within any locality have powerful impacts on
developing a culture of care for both humans society and nature outside it. Conversely,
and nature, by posing the question of the progressive actions within localities can easily
aims of production (use values versus private be undermined by markets in land, produc-
profit) and the nature of human and ecosys- tion, commodities and money operating at
tem needs. Such actions can expose the larger scales, by firms based outside the local-
alienated nature of both production and con- ity, and by spatially higher levels of the state
sumption under capitalism (Pepper 1993). (Obi 2005). The latter problem is worse the
smaller the ‘locality’ (another reason why spa-
Moreover, they imply collaboration tial decentralisation of state decision making
between popular organisations in the respec- can be counter-productive). The limitations
tive spheres – trade unions, residents’ groups of the local are less the more broad and inclu-
and social movements – and hence their sive are the local collective organisations (so
mutual support. These alliances can be very that higher scale pressures do not so easily
powerful: for example, in Glasgow during
603
the First World War and in Turin in 1969–70,
JAMIE GOUGH AND ARAM EISENSCHITZ
create divisions), and the more holistic are Through this kind of overall strategy, the
the initiatives being taken (so that the demo- depoliticisation wrought by neoliberalism
cratic forms of social and economic life in can start to be reversed, as the social nature of
the locality have greater resilience). But the daily life becomes increasingly evident and
scale problem cannot be avoided. In conse- it begins to be more strongly subject to
quence, local collective organisation always collective political debate and action. These
needs to seek the greatest solidarity and processes are path dependent; in particular,
cooperation with similar organisations else- existing consciousness and socio-economic
where. This solidarity is especially necessary practices may mean that apparently modest
when localities are linked by capital’s invest- reforms can have radical dynamics. We have
ments: gains by workers in one workplace or noted the very different degrees of collec-
locality can be easily undermined by capital tive organisation and militancy between
(and workers) elsewhere in the same industry countries and localities at present, and these
unless workers cooperate across space (Hudson will affect how bold initiatives can be.
and Sadler 1986). To the extent that a local Moreover, Left tactics need to vary over
civil society begins to direct local govern- time: in Britain, for example, rather than
ment in progressive ways, it needs to prevent simply widening theVCS as in the 1980s, we
undermining by both other local govern- need to radicalise and democratise it; and
ments and the nation state.Thus Left organi- rather than simply resisting privatisation, we
sation, strategy and transformation at higher need to bring services back into public own-
spatial scales are essential to any Left local ership. Tactical acumen is essential for the
advance that is to last more than a year or local Left.
two. To change the hallowed slogan, ‘think
and act locally and globally’. Fields of action
Such cooperation across localities and Struggles around jobs
nations cannot rely on the state nor even on
national and international bureaucracies of The workplace is the most essential scale for
popular organisations such as trade unions: it trade union organisation and contestation:
has to be built from the bottom up.Thus on larger scale workers’ organisation has no base
employment, in recent years a new National and no purchase without it.The daily inter-
Shop Stewards Network has been con- actions between workers within the work-
structed in Britain, and many international place, and the recognition of their common
campaigning organisations have been built situation there, are the basis for collective
from the grass roots (Moody 1997) – an early organisation. At the workplace scale workers
pioneer was the Transnational Information can act rapidly, and in ways that provide a
Exchange (Chapkis and Enloe 1983). In the spectacle of resistance in walk-outs, pickets
last 15 years or so a loosely organised move- and occupations, helping to win support
ment against neoliberal globalisation (or ‘alter- from other workers and residents in the
globalisation movement’) has emerged locality (Hudson and Sadler 1986; Jonas
linking national, and to a lesser extent local, 1998).
unions, community organisations and pro-
gressive NGOs, meeting through the Social If the workplace is profitable, then it can
Forums which were, significantly, initiated by be possible for workers to gain concessions
the city government of Porto Alegre, Brasil. from management through action restricted
So far, this movement has not organised any to that workplace (Castree et al. 2004:
large-scale actions, but has yielded many
useful bilateral cooperations (Amoore 2005; xvii–xviii, 18–23); this was often done, for
Routledge and Cumbers 2009).
example, in large manufacturing plants in
604
LOC A L LEFT STR ATEGY N OW
Britain in the 1960s, and this developed a These have been addressed by ‘community
strongly decentralised union movement. But unionism’ targeted on industrial neighbour-
when profitability is low or there is over- hoods and using those spaces to develop
capacity in the industry, purely local action solidarity (Wills 2001). ‘Living wage’ cam-
is insufficient: management can threaten paigns based in particular cities or neigh-
to close the workplace if workers resist bourhoods have successfully organised to
restructuring or wage cuts; and if workers are improve wages of low-paid, often casualised,
successful in keeping their plant open, this sometimes illegal-immigrant, service workers,
will tend to cause job loss elsewhere in the including those that work in small work units
industry or multi-plant firm (Herod 1997; such as caretakers and cleaners (Savage 1998;
Harvey 1996: ch.1). The spatial divisions Figart 2004). Thus in recent years London
and competition between workers orches- Citizens, based in residential-community,
trated by management can be combated only minority-ethnic and church organisations,
by cooperation between workers in has worked with unions to secure a living
different workplaces within the industry. wage well above the national minimum wage
The logic of such cooperation is then for for groups of low-paid workers, something
unions to begin to monitor patterns of the unions alone had not achieved (Holgate
investment and disinvestment across the and Wills 2007). In globally traded goods,
industry, at scales from the locality to the such local campaigns can be further strength-
globe depending on the sector, and then ened through international networks of soli-
begin to make demands on that investment: darity (Ross 1997). Finally, the local scale is
the germs of socialist planning (Gough 2002; an essential one for organising the unem-
ployed since – given the widespread failure
Gough 2004: 269–283).
of unions to organise them – they are out-
Where there is a locally centred industrial
district or dense local subcontracting link- side (larger scale) production-related net-
ages between workplaces, unions can gain works. In recent years local organisation has
strength from organising within the industry been the basis for regional and national
across workplaces, sometimes using blockage marches and actions of the unemployed
of contracting linkages for bargaining (GLC in some European countries, reconnecting
them with employed workers and residents
1985: ch.15; Castree et al. 2004: 162–165); (Mathers 2007).
powerful local solidarity can thus be devel- In times of acute crisis, workers’ collective
oped. This approach can sometimes be used actions of different types can catalyse each
in industrial districts where workers and other across a locality. Thus in the crisis of
employers belong to the same minority eth- the early 2000s in Argentina militant neigh-
nicity. The employers often use ethnicity to bourhood assemblies and local organisations
subordinate their workforce (Kakios and van of the unemployed posed an alternative
derVelden 1984); but workers may use com- power to capital and state.With this support,
munity bonds to organise their solidarity, as workers in many localities tried to seize the
have the Turkish and Kurdish workers in the means of production, despite more than
London clothing industry. half of workers being in the informal sector
(Schaumberg 2008); some 170 cooperatives
The local scale is also an essential one for were formed as workers took control of
organising the worst-organised workers.The (mostly small) closed factories (Dinerstein
extreme exploitation of most homeworkers 2007).
can be addressed through community-based
campaigns (Allen and Wolkowitz 1987). A Altogether, then, localities remain essential,
large proportion of the workforce in MDCs though not sufficient, sites for workers’ collective
now works in small, non-unionised work- resistance to capital.
places of diverse sectors within each locality.
605
JAMIE GOUGH AND ARAM EISENSCHITZ
The organisation of production its capitalist forms. Local money (Monbiot
and investment 2009) can increase circulation and, if it stim-
ulates corresponding production, is non-
Despite the very limited resources and inflationary. Thus the city government of
powers of local and regional government Curitiba in Brazil paid its own workforce
around production (albeit with big variation partly in local money which it had organised
between countries), there are progressive for local municipal and private services to
policies which they may be able to imple- accept, leading to rapid local economic
ment or at least push for. First, the local state growth. In Argentina there was a massive
may be able to invest in and run trading growth in local voucher schemes from 1995
enterprises. The local authority in Glasgow, in response to economic collapse;the number
USA, for instance, provided a local tele- of these Trueques peaked at 4,700 in the 2002
communications network giving a cheaper crisis; the vouchers were exchangeable
and better internet connection for residents between schemes, creating an effective second
and attracting strong inward investment national currency. The schemes enabled the
(Williamson et al. 2002: 152). Such invest- unemployed, particularly women, to market
ments or plans for them can be used to put in their labour power, micro-enterprises and a
question the efficiency and social impacts of few larger worker cooperatives to be set up,
private production (on building work see abandoned buildings and land to be used,
Direct Labour Collective 1978; on telecoms unsold production from local factories to be
see GLC 1985: ch. 16). exchanged, and local services to gain ade-
quate custom. Half of surveyed local house-
Second, there is powerful legitimacy for holds made over half their income through
the local state to bring into use underused the schemes, and many subsistence goods
resources, be they unemployed workers or could be purchased with vouchers (Gomez
unused land and buildings.The political point and Helmsing 2008). Local Exchange and
is further reinforced if these resources are Trading Schemes (LETS) organise direct
used for innovative forms of production, for exchange of individuals’labour time,enabling
example, worker cooperatives, skilled and production and consumption of useful ser-
autonomous forms of work, or socially vices, albeit limited to those without sub-
useful products. stantial fixed capital or economies of scale
(Walker and Goldsmith 2001). Cooperatively
Third, investment money may be chan- owned credit unions or local government-
nelled into the locality by using political owned people’s banks can provide much
pressure on the major holders of savings, the better terms for savings and borrowing than
pension funds and insurance companies; the the private sector (Fuller and Jonas 2003).All
latter are vulnerable to this pressure because these forms of money make the link between
they hold working people’s savings. In social production and consumption more direct
democratic countries such as Sweden trade and transparent, and thus encourage a social
unions have long had a say in how their view of the local economy.
industry’s pension fund is invested; in other
countries, unions and local governments can The Third Sector
apply pressure for the same ends (Minns
1980; Blackburn 2003). Again, the point The ‘Third Sector’, not-for-profit enterprises
should be to democratise and politicise the or the ‘social economy’ can play an impor-
process of investment and the choices it tant role in Left strategy, by demonstrating
involves, for example, to prioritise high the possibilities for workers’ or residents’
unemployment areas or green production.
Fourth, it is possible to take local initiatives
in money circulation which put into question
606
LOC A L LEFT STR ATEGY N OW
control of the enterprise, social innovation, the social economy worldwide.These explic-
production directly to meet social needs, and itly liberatory campaigns seek to generate
efficient production without capitalist direc- synergies of alternative finance, local curren-
tion. South Central Farm in Los Angeles, for cies, fair trade, ethical consumption and low-
example, improved food quality and security, impact technologies, using a variety of own-
preserved traditions of a peasant community ership forms. The accumulation of political
recently uprooted to the city, and enabled strength is important since the social econ-
members to develop as individuals and as a omy has to constantly fight against being
collective; the potentially militant dynamic legally marginalised by lobbying from private
of such initiatives is shown by the strong business.With this kind of strategy, the social
fight waged to take the land into community economy can complement and radicalise,
ownership (Irazabal and Punja 2009: 11). rather than undermine, increases in workers’
However, social enterprises can equally well influence within mainstream production and
serve rightwing politics: they may survive the extension of democratic state-owned
through self-exploitation, with wages, hours production.
and conditions inferior to the industry aver-
age; they may be used to habituate people to In the medium term, however, a liberatory
poor employment; they may be under- social economy is dependent on Left advance
resourced self-help, an inferior substitute for in the whole society, without which com-
formal welfare services; and the state may munity-based organisations tend merely to
contract out to them in order to cut wages manage their place within capitalist markets.
and conditions; in short, they may teach Petras (1997) argues that Latin American
‘standing on your own two feet’ rather than NGOs from the 1980s moved from progres-
working-class cooperation (Eick 2007). In sive politics to becoming neoliberalism’s
Britain at present, for example, the social community face. In Argentina, the radical
economy inclines more to the rightwing community-based initiatives in welfare and
than the leftwing model (Amin et al. 2002; production of the early 2000s withered when
Fuller and Jonas 2003). the Kirchner government used the national
scale to seize the political initiative from the
To lead the social economy in a leftwards Left. Only 10 per cent of the Trueques pres-
direction strategy is therefore vital (Medoff ent in 2002 survived until 2007, and this was
and Sklar 1994; Eisenschitz and Gough partly due to lack of support from and inte-
2009). Social enterprises need to form the gration with local governments (Gomez and
strongest possible ties to unionised workers Helmsing 2008). In the US employee own-
in mainstream production,by being unionised ership of firms has not made any fundamen-
and by tapping into the technical expertise of tal challenge to capitalism (Williamson et al.
mainstream workers; they can then, recipro- 2002). Particularly in times of economic
cally, show the latter the advantages of having decline, wider Left advance is needed for
immediate control over one’s production worker- and community-controlled enter-
process. Adequate capital should be secured prises to maintain their radical dynamics.
from the local state (including as land and
buildings), from socialised finance, or from Fighting social oppressions
recycling of profits from other social enter-
prises. Economic and political economies of Various social oppressions are substantially –
scale should be sought through networking though never wholly – constructed within
of community enterprises locally, nationally localities, and many radical struggles against
and internationally. There are global net- them have had this scale (Gough and
works that attempt to build cooperation
between the millions of people involved in Eisenschitz 2006: 131–135, 224–228; Craig
607
JAMIE GOUGH AND ARAM EISENSCHITZ
and Mayo 1995). The oppression of women blocking of inter-local migration. This crisis
is rooted in local relations between home, has been caused by insufficient new building
neighbourhood and waged work. Campaigns to meet monetarily effective demand, let
for more social care for children and the alone need, plus a massive channelling of
infirm, better housing, housing suitable for capital into property via direct investment
varied households, closer proximity of home, and credit, much of it directed at speculative
waged work, welfare and services, more con- gain (Harvey 1989: ch.2; Turner 2008). The
venient and free public transport, and for Left internationally has been extraordinarily
women’s equality within waged work, can unsuccessful in pushing for expanded supply
lead to practical gains, and can show that of affordable housing. This is in part due to
apparently individual problems are social and the legal, institutional and financial structures
have collective solutions (Rowbotham 1989; of housing provision being almost entirely in
Greed 1994; Darke et al. 2000). Racism’s the hands of nation states, over which the
deepest roots are in relations between the Left has had virtually no influence.
national and international scales. But racism
is strongly expressed and developed within The most substantial local struggles around
localities, and is fought there in campaigns housing under neoliberalism have been to
for equality in housing, education and health defend poor people’s occupation of,or tenure
care and against super-exploitation in waged in, existing stock. In the 1970s and 1980s,
work (Sivanandan 1990). Mainly locally there was mass squatting by the poor in the
based campaigns for safety in both homes fast-growing northern Italian cities, and
and public spaces have been waged by black widespread squatting, mainly by young
people, women, and lesbians and gay men people, in high-value empty housing in cen-
(Rowbotham 1989; Bhavnani and Coulson tral cities. However, state violence against
2005). Neighbourhood and local scales are squatters increased, and further rises in value
vital cultural supports to all these struggles, have meant declining space available for
since antagonistic groups there confront each squatting in major cities. There have also
other not as abstractions but face-to-face and been struggles to oppose eviction of (largely
thus, potentially, as full persons. For example, long-standing) poor residents from CBD-
campaigns to stop deportation of refugees in fringe neighbourhoods to make way for
Britain have had their greatest success in commercial buildings and expensive apart-
stubborn defence of refugees by their British ments; in recent years the latter has been a
neighbours who have befriended them central part of the vaunted ‘urban renaissance’
(Hayter 2000); conversely, some of the worst (Swyngedouw et al. 2002). In the 1970s and
racism in Britain is found in regions such as 1980s these defensive campaigns had some
Cumbria and Lincolnshire with very few successes (Wates 1976; Tuckett 1988); but
black or immigrant residents. Local settings more recently there have been few successes
can thus be powerful in overcoming preju- and many defeats; most of the successes have
dice and developing practical solidarity. been in defending or setting up work and
living spaces for low-income creative self-
Housing and land employed people (Porter and Shaw 2008).
This deterioration reflects, in part, the ever-
The last 25 years have seen rapid inflation in increasing profits from CBD-fringe develop-
house prices throughout the MDCs and ment, and the consequent increasing
NICs, resulting for the majority of the work- ruthlessness of developers and state in push-
ing class in drain on income, poor accom- ing it through; creative spaces can, however,
modation, overcrowding, insecurity, and sometimes be welcomed as adding ‘vibrancy’.
Another form of resistance, in Britain and
608 Germany, for example, has been of social
LOC A L LEFT STR ATEGY N OW
housing tenants to (semi-) privatisation of their Again, national legislation is key. But local
homes; well-organised neighbourhood cam- actions around major office and luxury-
paigns have had some successes here, though housing developments and the state’s facilita-
without reversing the national policies. tion of them can make propaganda for the
socialisation of land (Oudenampsen 2008;
These campaigns, however, have been essen- Holgersen 2008). More positively, with legisla-
tially defensive, and have not achieved new tive backing social ownership of land may
programmes to increase the supply of afford- be developed as local community ownership,
able housing.Yet given the manifest disaster of where gains from land development can be
neoliberal housing provision, now exacerbated used for locally determined social good,
by the recession, Left campaigns for affordable whether in further fixed investment or in
housing could be very popular, as they were in welfare services. This was indeed the strategy
the nineteenth- and early twentieth-century of the early twentieth-century Garden City
MDCs. Left strategy should focus on the par- movement in Britain; today the community
tial de-commodification of housing, through trust in Letchworth has a property income of
state and cooperative ownership (Bowie 2008) £6m, used for social purposes. Such landown-
funded by control of the major national and ership can breed radical political dynamics.
international investment funds, zero-carbon Thus Boston’s Dudley Street Neighbourhood
construction by state-owned or cooperative Initiative managed to appropriate the private
building firms backed by the builders’ unions, landlords, and used this political momentum to
and state appropriation of empty housing. develop strong policies on jobs, health, educa-
While this is essentially a national task, local tion, transport and local services (Medoff and
actions can dramatise the housing shortage, Sklar 1994). However, the Left needs to guard
for example, through small-scale state and against governments using development values
community building as well as resistance to as an excuse to cut direct state funding, and in
city-fringe evictions, boycott by building ways which exacerbate spatial uneven devel-
workers of demolition of low-income hous- opment. Thus in recent years in Britain, with
ing (as in the Sydney ‘green bans’ in the little central state funding for social housing,
1970s: Mundey 1981), or coordinated mass local governments have been forced to negoti-
squatting of empty property.The vast experi- ate social housing as ‘planning gain’ from pri-
ence of self-build on squatted land in Third vate development, hence subordinating it to
World cities over the last 50 years suggests the market. The Development Trusts which
another possible avenue; but this constructs have multiplied in poor neighbourhoods of
slums unless tied to collective organisation of Britain in recent years often own fixed assets;
building, as in contemporary Venezuela, to but this has been used to make anti-poverty
legalisation of occupation, to provision of measures a local responsibility dependent on
physical infrastructures by the state. low-value local resources (Development Trusts
Association 2008). Community asset manage-
Such campaigns point towards social own- ment can be used in depoliticising ways (Aiken
ership of all land. Private ownership of land, et al. 2008). Community land ownership needs
extended by neoliberalism, is a deep, chronic to be an additional gain, not compensation for
generator of privatised culture (Low and cuts in other fields.
Smith 2003), whereas its public ownership is
a palpable assertion of the primacy of the Participatory budgeting
social. Capital gains to private owners from
change of land use are a gross example of Participatory budgeting, in which neigh-
unearned income, and so lack legitimacy: bourhood assemblies have control over the
the Left should push for their full appropria-
tion by the state (Massey and Catalano 1978: 609
188–190; Sandercock 1979: ch.6).
JAMIE GOUGH AND ARAM EISENSCHITZ
local state’s spending in their neighbourhood, of the local state cannot be effective if the
was pioneered in 1989 by the far Left gov- working class is disempowered and unable to
ernment of Porto Alegre. It has since been act in the economic and social spheres.
taken up in many localities in Latin America Indeed, under these conditions formal dem-
and beyond (Sintomer et al. 2008), some- ocratic methods of government may func-
times under strong pressure from the work- tion to contain discontent by dividing and
ing class (Rogers 2005: 5). In Porto Alegre co-opting community groups (Cockburn
decisions on annual priorities for capital 1977); according to Sintomer et al. (2008)
investment were discussed in open neigh- this has indeed been the most common
bourhood assemblies; these decisions were experience of participatory budgeting in
then centralised through delegates to bor- recent years.
oughs and from them to the city, which then
decided on distribution between boroughs. Alternative accounting systems
This method politicised local government
and elicited extraordinary participation from Economic actors in capitalist society nor-
the population, especially from previously mally make decisions through a calculus of
marginalised women, black people, those prices and incomes, assumed to arise from
without secondary education and unskilled exchange in markets. This calculus tends to
workers; in the first five years, 8 per cent of lock people’s strategies into the order of cap-
the adult population was involved at some italist society, and thus subordinate them to
stage (Abers 1998). The process stimulated its forms of power (Mohun 1979).Conversely,
the formation of neighbourhood associations alternative calculi can potentially challenge
and self-organisation of blacks, disabled capitalist logics. In the field of local and
people and the elderly (Bairerle 2002). Over regional politics in particular, in recent years
the years there was a shift from parochial capitalist accounting and criteria have been
defence of one’s patch to support for the (increasingly) dominant; the Left needs to
most needy neighbourhoods. Investment challenge precisely these notions of ‘devel-
switched sharply from prestigious projects opment’ (Pike et al. 2007).
mainly used by the better-off to basic infra-
structures such as street paving, sewers and One alternative approach to accounting
schools. Spending became more efficient and has been welfare economics, which uses
less corrupt (Abers 1998). price calculations but shifts from individual
actors in markets to aggregate outcomes
But, even in Porto Alegre, participatory for social groups and the public good. Thus
budgeting has had limitations (Baierle 2002). cost-benefit analysis puts a price on the
The delegation structure was not powerful impacts of, for example, a major infrastruc-
enough to prevent the council bureaucracy ture investment, including both social actors
from continuing its control over city-wide and phenomena such as noise excluded in
infrastructures. The city was hemmed in by the relevant market exchanges. Social impact
the authority of State and Federal govern- assessments of (dis)investment decisions can
ments which were less democratic and radical. demonstrate their wider benefits and costs,
Most importantly, democracy in the city for example, how closure of a large work-
was strongly affected by the overall political place imposes costs on the state in lost taxes,
atmosphere in the locality and beyond: the income support and health spending and
Brazilian trade unions were on the offensive on suppliers in lost income (Glyn 1985).
in the 1980s but from the 1990s have been in Calculation of a money value of domestic
retreat in the face of a neoliberal offensive work has sometimes been used to argue for
which has greatly increased unemployment. feminist policies (Peterson and Runyan 2005).
Once again we see that formal democracy
610
LOC A L LEFT STR ATEGY N OW
Such calculations can be useful in showing transparent by linking local people to the
that capitalist society is not ‘economically workers ‘producing’ the greenhouse gases,
rational’ even in its own terms, and in getting water and food they ‘consume’, partially
people to think socially. But they have limita- bypassing the commodity form.
tions. Many calculations assume key prices
and incomes as given, as when cost-benefit Finally, a recently developed strategy has
analysis values people’s free time as a fixed been ‘the economics of happiness’ (Layard
fraction of their money income (Ball 1979). 2006; Michaelson et al. 2009). Like welfare
More profoundly, the calculations do not in economics, this starts from a critique of neo-
themselves reveal the social relations which classical economics, arguing that aspects of
give rise to the initial miscalculation of costs human well-being such as health, education,
and benefits. For example, the fact that a creativity and general happiness are mis-
workplace closure imposes costs on the local priced ‘by markets’ but nevertheless need
state which may exceed the saving by the to be accounted for in economic policy.
firm does not prevent the closure, since the This work can justify allocating economic
state and the firm are separate social actors resources to support these aspects of well-
subject to quite different social relations. being. But the limitation of this work is that
A genuinely radical dynamic here would aspects of well-being are pictured as quasi-
need to question and violate these social commodities which can be ‘delivered’ to
relations, for example, by the state taking individuals; again, the approach fails to focus
over the firm without compensation. on social relations.Thus Layard does not cri-
tique capitalist social relations of production
Another approach to social valuation is and the low self-esteem and unhappiness
that of LETS. LETS does indeed change that are intrinsic to exploitation (Marx 1980;
social relations of production by setting up Sennett 1998), nor how capitalism generates
direct exchange of work without money. indifference to others (Geras 1998). Well-
Though creating another money (labour time being is not simply something which indi-
units), it enables revaluation of people’s labour, viduals have more or less of but is within
skills, caring work, and even humanity through relations to others. Thus Wilkinson and
increased (self-) esteem (Walker and Goldsmith Pickett (2009) show that the well-being of a
2001). country’s inhabitants is strongly correlated
with low income inequality, that is, with its
Other alternative calculi seek to value ‘the relations of distribution. At a smaller scale,
non-economic’, that is, neither labour nor Baker et al. (2004: ch.2) argue that a funda-
products of labour. One such is accounting mental aspect of well-being is being within
of aspects of the ecosystem, such as green- relationships of care.Alternative calculi, then,
house gases, water and agricultural land. Again, can form powerful critiques of capitalist out-
this accounting is ideologically important for comes and point to social solutions. But the
the Left in highlighting eco-societal impacts Left needs to act on these by challenging the
and long-term consequences of present relations of the economy.
actions, and in pointing the finger at both
capitalist production dynamics and mindless Conclusion
consumption. But again, the accounting can
be the basis for quite different political direc- Socialist tradition has emphasised solidarity
tions. Are carbon emissions to be fixed in and economic planning at national and inter-
advance, or made to respond to profits and national scales.The local scale has been seen
incomes through trading of quotas? A Left as problematic because of the subordina-
strategy adopts the former approach, thus tion of enterprises and local economies to
violating capitalist logic. Moreover, ecological
production relations should be made more 611
JAMIE GOUGH AND ARAM EISENSCHITZ
competition at higher spatial scales, and Allen, J. (2003) Lost Geographies of Power, Oxford:
because of the weaker powers of the local Blackwell.
state compared with the national. Neoliberal
globalisation is said to have exacerbated these Allen, S. and Wolkowitz, C. (1987) Homeworking:
problems. But we have argued that localities Myths and Realities, Basingstoke: Macmillan.
are a crucial site for Left strategy, because
important social and economic relations are Allmendinger, P. (2003) ‘From New Right to
enacted and reproduced there, because of New Left in UK planning’, Urban Policy and
dense local relations between economy and Research, 21 (1): 57–79.
social life, and because daily interactions and
proximity facilitate building relations of soli- Amin, A. and Thrift, N. (2002) Cities: Reimagining
darity and collectivity. Transforming social the Urban, Cambridge: Polity Press.
relations at higher spatial scales is certainly
necessary, but local struggles are a dialectical Amin, A., Cameron, A. and Hudson, R. (2002)
moment in this. Placing the Social Economy, London: Routledge.
The Left local strategy discussed here is Amoore, L. (ed.) (2005) The Global Resistance
above all a class policy, against the individu- Reader, London: Routledge.
alisation and division of the working class
which is the foundation of all capitalist power Arkitektkontor, A.B. (1974) ‘Urban redevelop-
and which has been deepened by neoliberal- ment: the Byker experience’, Housing Review,
ism. Accordingly, we have given primacy to 23 (6): 149–156.
collective self-organisation and practical col-
lective economics rather than autonomous Atkinson, R. (1999) ‘Discourses of partnership
progressive action by capital and the state. and empowerment in contemporary British
The heart of a radical local politics is a jour- urban regeneration’, Urban Studies, 36 (1):
ney from individual to collective modes of 59–72.
thinking and acting. This implies a develop-
ment of place-based community, not as the Baierle, S. (2002) ‘The Porto Alegre Thermidor?
commonly encountered self-subordination Brazil’s “participatory budget at the cross-
of the weak to the strong, but as the solidar- roads”, in L. Panitch and C. Leys (eds) Socialist
ity of the weak against the powerful.We hope Register 2003, London: Merlin.
we have shown that there are many promis-
ing tactics for carrying forward this strategy Baker, J., Lynch, K., Cantillon, S. and Walsh, J.
during the present crisis. (2004) Equality, London: Palgrave.
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Gough, J. (1986) ‘Industrial policy and socialist Other local issues
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of labour, capitalism and socialism: an alterna- Register 2003, London: Merlin.
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London: Compass.
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617
49
Local and regional development
Reflections and futures
John Tomaney, Andy Pike and Andrés Rodríguez-Pose
Legacies to popular and political discourse – points
to the growing integration of international
The terms and prospects for local and markets. Frequently presented as an inexora-
regional development are being transformed. ble process, globalisation is, in fact, a politically
The context for local and regional develop- constructed settlement, which favoured some
ment in the thirty years after the end of the social groups and places more than others
1970s was the rise of neo-liberal globa- (Hirst and Thompson, 1999). Globalisation
lisation. Neo-liberalism, with its origins in facilitated the expansion and restructuring of
the pro-market reforms and deregulation of international trade which was accompanied
finance of, first, the Thatcher governments in by rising living standards, but also by rising
the UK and, then, the Reagan adminis- interpersonal inequalities (Milanovic, 2005) as
trations in the US shaped the international well as intra-national – although, curiously,
ideology of economic development to a not international – disparities (Rodríguez-
greater or lesser degree across large parts of Pose and Crescenzi, 2008). Integrated finan-
the world. Neo-liberalism recast the relation- cial, capital and trade markets, though, also
ship of state and market, so that the chief role became the mechanism for the rapid trans-
of the former was to facilitate the operation mission of the global financial crisis whose
of the latter. Part of the political success of initial trigger was the collapse of the American
neo-liberal reforms was that they were sub-prime housing market, but which had
accompanied by a period of relatively rapid much deeper roots in the debt-fuelled forms
economic growth, although ultimately they of economic growth which were visible from
established the conditions which produced Europe to the Middle East to North America
the severe financial crisis and recession after and, in turn, were themselves related to new
2007 with its highly uneven local and patterns of production, consumption and
regional character exacerbating existing ine- trade imbalances that were the outcomes of
qualities and creating new ones. neo-liberal globalisation during this period
(see Harvey (2005) for an overview of the
Globalisation was the partner of neo- history of global neo-liberalism).
liberalism in the transformation of the world
economy during this period. Globalisation – Neo-liberal globalisation had a profoundly
a term which passed from academic research geographically uneven impact and prompted
618
LOCAL AND REGIONAL DEVELOPMENT
diverse responses by national and local gov- saw marked increases in socio-economic and
ernments and firms and non-governmental territorial inequality; China presents a nota-
organisations in the developed and develop- ble example. In some accounts spatially
ing worlds. Indeed, while capturing some- imbalanced growth is assumed to be positive
thing of the economic hegemony during this in the early stages of rapid industrialisation
period, the idea of neo-liberalisation contains which will be mitigated at a later date (World
the danger of obscuring its variegated nature Bank, 2009). Others, however, stress the
and the complex interplay of factors which political dangers of growing inequality asso-
have shaped – and will continue to shape – ciated with globalisation which arise when
the prospects for local and regional develop- the proceeds of growth are not equally dis-
ment (see, for example, Peck and Theodore, tributed, markets are imperfect and richer
2007). Rather than attempting to distil con- countries and regions are able to assert
ventional conclusions from the contributions market power (Birdsall, 2001, 2006; Stiglitz,
to this Handbook, this chapter begins by 2006; Perrons,Turok, Cochrane, this volume).
reflecting on the main trends shaping the Even in poor and middle-income countries
present and future of local and regional the relationship between growth and human
development. It then explores the principles development is far from straightforward as
and values that underpin local and regional the debate about the Millennium
development, before examining the potential Development Goals reveals (ODI, 2008).
conditions for successful local and regional
development strategies. The chapter con- The growth of inequality is not restricted to
cludes by reflecting explicitly on the politics poor or middle-income countries. Inequality
of local and regional development. also grew in OECD countries in the twenty
years to 2008 (OECD, 2009). The European
Contexts Union is characterised by doggedly persistent
inequalities: the most recent official analysis
As we noted in the introduction to this detected some convergence of regional perfor-
Handbook, an important current connecting mance across Europe, which it attributed to
localities and regions in the global North and strong regional policies (or Cohesion Policy
South are the shared contexts to their devel- in EU parlance), although inequalities remain
opment predicament. The scale of socio- large (European Union, 2007). Moreover,
economic inequality between and within regional inequalities widened within countries
countries and between and within regions with growth tending to be concentrated in cap-
and cities is a striking feature of the period ital city regions everywhere, and most markedly
from the end of the 1970s, despite the growth in post-socialist transition countries such as
in world income.The measurement of socio- Warsaw, Prague, Bratislava and Budapest, which
inequality is complex and by no means uncon- experienced rapid growth before 2007
troversial. At a global scale, the UNDP’s (Doman´ski, this volume). Such cities grew at
Human Development Index (e.g. UNDP, the expense of the rest of the country, reflect-
2007) reveals the extent of the gaps. Collier ing the shift of employment from agriculture
identifies (2007) a “bottom billion” of the and industry to services (with rural and old
world’s population which resides in countries industrial regions undergoing the greatest
– notably in sub-Saharan Africa – character- relative decline) (European Commission,2007).
ised by “development traps”, which have left In short,regional inequalities remain entrenched
them marginalised in relation to the world across the world and, in many cases, are grow-
economy. Countries which experienced ing, although patterns of change are highly
rapid growth during this period typically also heterogeneous, affected by distinctive socio-
economic structures, diverse patterns of change
and variegated the policy responses to these.
619
J O H N TO M A N E Y, A NDY PIKE AND ANDRÉS RODRÍGU E Z-POSE
On a global scale, the growth of spatial proved highly uneven between and within
inequalities is closely linked to accelerating countries. For instance, New Zealand, the
urbanisation. Rapid urbanisation (and rural Baltic states, Ireland, Iceland, Greece and
depopulation) is a marked feature of devel- Spain which experienced rapid, debt-fuelled
oping and newly industrialising countries. growth and widening regional inequality
It is, however, a feature of even the most found themselves highly exposed to the con-
urbanised societies such as Europe and sequences of the GFC and entered periods
Australasia. For instance, in Australia – in of draconian fiscal austerity in 2008. This
some accounts the most highly urbanised reversal of fortune was especially dramatic in
society on the planet – state capital cities Ireland, for example, when it is recalled it was
continue to increase their share of the considered a model for other small, open
national population (Birrell and O’Connor, economies during the 2000s (Bradley, 2006;
2000). Social and economic inequalities Krugman, 1997).
between cities and their hinterlands continue
to grow, but so do inequalities within cities, Making long-term prognostications about
especially “global cities” in the developed the impact of the GFC on the prospects for
and developing world. The management of local and regional development is fraught
these relationships is a pressing problem of with danger. Some consequences of the GFC,
public policy across the globe and likely to however, seem evident and are likely to be
intensify in light of economic crisis and cli- long-lasting. Evidence from the UK (Martin,
mate change (UN HABITAT, 2008; Chien, 2009) and Australia (Australia Parliament
Gonzalez, Nel,Turok, this volume). House of Representatives, 2009) highlights
the uneven regional impact of the GFC and
The prospects for local and regional devel- suggests its severest impacts are on already dis-
opment are being and will continue to be advantaged regions. An immediate conse-
profoundly affected by the impacts of the quence in many countries, including some
global financial crisis (GFC) which unfolded which experienced rapid recent growth, is
after 2007 and marked the end of a long severe fiscal pressure as governments deal
period of uninterrupted growth for many simultaneously with the unprecedented and
economies around the world. Although one massive costs of bank bailouts, stimulus mea-
of the proximate causes of the crisis lies in sures, and rising unemployment in the
the exposure of the international banking context of collapsing revenues. These devel-
system to defaults in the sub-prime elements opments will undoubtedly undermine the
of the US housing market, the larger causes medium- and long-term capacity for govern-
are found in the imbalances which developed ments to intervene in the economy. Steeply
in the global economy between deficit econ- rising debt levels, already leading to what may
omies (notably the US, the UK or Spain) be a long-lasting claw-back in public expendi-
and creditor countries (notably China and ture, are likely to affect the sustainability of
Germany), which in turn are linked to evolv- economic growth for some time. In particular,
ing patterns of international trade and invest- many lagging regions across the world, already
ment. The rapid expansion of financial dependent on heavy government or interna-
services on the back of debt-fuelled house- tional organisation transfers are likely to suffer
hold consumption in many industrial coun- most from this process. Hence, how and where
tries, as well as other parts of the world such governments choose to retrench will shape the
as the Middle East, underpinned economic prospects for cities and regions across the world.
growth, but contributed further to trade In the medium term,local and regional author-
imbalances. The scale of the crisis and its ities are likely to have fewer resources available
translation into a “credit crunch” produced to invest in development projects, especially in
its impact on the “real economy”, which those regions which need them most.
620
LOCAL AND REGIONAL DEVELOPMENT
A potentially far-reaching effect of the reshape patterns of trade, investment and
GFC arises from the debate about the future financial flows, which will affect the pros-
role of the financial services sector in the pects for local and regional development
economy, emerging from criticism of the through shaping the activities of transnational
excesses which developed in the sector, nota- firms and the ways in which regions are
bly in countries such as the US and UK, but inserted in global production networks
also in countries such as Dubai and Iceland. (UNCTAD, 2009; Coe and Hess, Dawley,
The head of the UK’s Financial Services this volume).
Authority, Lord Turner, even suggested that
the sector had grown “beyond a socially rea- The search for an effective governmental
sonable size”, while much of its activities response to the GFC drew attention to the
were “socially useless” (quoted in Inman, emergence of a new pattern of geopolitics,
2009; NEF, 2009). Reflecting on the growth symbolised by the growing importance of
of the financial instruments which were the G20. Within this grouping the rising
complicit in the emergence of housing bub- political and economic prominence of Brazil,
bles and excessive consumer debt, and which Russia, India, and China (the so-called BRICs)
lay behind much of the urban renewal pro- is especially noteworthy. The relative insula-
grammes of the 1990s and 2000s, Paul tion of these economies from the GFC, along-
Volcker, the former chairman of the US side their growing importance in the world
Federal Reserve Bank and later chairman of trade system will have impacts for the distri-
President Obama’s Economic Recovery bution of economic activity globally and at
Advisory Board, said,“I wish someone would the local and regional scales, although the
give me one shred of neutral evidence that models of economic development they
financial innovation has led to economic embody (for instance, in relation to demo-
growth – one shred of evidence” (quoted in cratic structures and progress on reducing
Hosking and Jagger, 2009: no page). The inequality) are notably different from each
extent to which pressure develops to reform other and from the models which under-
the financial services so that it focuses on pinned neo-liberal forms of globalisation.
“socially useful” productive activities will The Brazilian government of President Lula,
shape the conditions for local and regional for instance, has made tackling inequality a
development and the amount and nature of priority, notably through its food policies
resources available for investment in eco- (Morgan, this volume).The future of globali-
nomic development, albeit in conditions of sation will be shaped by China especially
austerity. (Dunford, Chien, this volume) and it is pos-
sible that globalisation may start to adopt a
Paradoxically, given the fiscal stresses very different form, where within develop-
described above, the GFC has seen the return ing country (i.e. intra-China, intra-Brazil or
of the state to centre stage in economic intra-India) and South–South trade flow
development. Although the actions of the become much more important at the expense
state were central to the operation of neo- of the currently dominating North–North
liberalism, its role was carefully limited in flows. Changing patterns of trade, new forms
many states to the support of the develop- of international regulation, the rise of sover-
ment of markets and the financialisation of eign wealth funds and new patterns of for-
the economy. Even some of the ideologues eign direct investment (for instance, growing
of neo-liberalism now recognise that this Chinese influence in the Middle East, Africa
model has died (Wolf, 2009). The shape of and Latin America especially in pursuit of
things to come in this respect is hard to natural resources) will shape the prospects for
divine but new forms of regulation at national local and regional development in developed
and international scales have potential to and developing countries and in rich and
621
J O H N TO M A N E Y, A NDY PIKE AND ANDRÉS RODRÍGU E Z-POSE
poor regions. These developments though economy will continue to provide threats
suggest the need for new global understand- and opportunities for local economies, the
ings, albeit carefully contextualised. Storper GFC provides a reminder that traditional
and Scott (2003) in the context of globalisa- concerns such as macro-economic structures,
tion and international economic integration, the fiscal and redistributive capacities of the
abjure older conceptions of the structure of state, the operation of land and property
world economic geography as comprising markets and the availability of credit for
separate blocs (First, Second and Third infrastructure investment — i.e. tangible as
Worlds), each with its own developmental well as intangible assets — provide the con-
dynamic. Instead, they suggest the need to text for the knowledge cities and regions and
build a common theoretical language about should not be neglected in discussion of local
the development of regions and countries in and regional development.
all parts of the world, as well as about the
broad architecture of the emerging world In 2007, the Intergovernmental Panel on
system of production and exchange. However, Climate Change (IPCC, 2007) concluded
such a common theoretical framework requires that the warming of the climate system is
an acceptance of the “provincial” character of unequivocal, with most of the observed
much orthodoxy and the need for theories increase in globally averaged temperatures
to be developed in – as well as developed since the mid-twentieth century being very
for – the global South and to acknow- likely due to the observed increase in anthro-
ledge the legacies of colonialism (Mohan, pogenic (human) greenhouse gas concentra-
this volume). tions. It predicted that anthropogenic
warming and sea level rise would continue
Local and regional development policy in for centuries due to the timescales associated
the 1990s and 2000s was heavily influenced with climate processes and feedbacks, even if
by the notion of the knowledge economy. greenhouse gas concentrations were to be
Developments in knowledge and the appli- stabilised, although the likely amount of
cation of knowledge to knowledge (Carnoy temperature and sea level rise varies greatly
and Castells, 2001) were deemed to be central depending on the fossil fuel use intensity of
to the growth of productivity, especially with human activity during the next century.The
the growth of information and communica- IPCC states that the probability that this is
tions technology.The idea that technological caused by natural climatic processes alone is
change and improvements in human capital less than 5 per cent. World temperatures
are the sources of growth, the idea of the could rise by between 1.1 and 6.4°C during
knowledge economy had a powerful appeal the twenty-first century leading to increased
across the globe and led to influential attempts sea levels, more frequent warm spells, heat
to identify “learning regions” as a focus for waves and heavy rainfall and an increase in
policy (Florida, 1995; Morgan, 1997; Hudson, droughts, tropical cyclones and extreme high
1999;Ó Riain,this volume).Such approaches tides. The growing concern with impacts of
emphasised, at various times and in various climate change throws up both new chal-
places, for example, the role of science parks lenges for local and regional development
and/or the role of university–industry rela- and returns attention to old problems of the
tionships in regional development (e.g.OECD, physical geography of development. Shalizi
2007).These models were widely adopted in and Lecocq have argued that,
Australasia (Yigitcanlar et al., 2008); Europe
(Knight, 1995) and North America (Industry Until recently, policymakers and devel-
Canada, 1999), but were also adopted in opment experts could at least assume
developing countries, notably China (Wang, that where there was water today, there
2009). While the growth of the knowledge would be water in the future. Or that
622
LOCAL AND REGIONAL DEVELOPMENT
where there was coastline suitable for a and spatial costs and benefits of different
port, that coastline would still be there forms of change need to be carefully weighed
in the future. In other words, the geo- (Christopherson, this volume).
graphical and physical foundations
for development, and for the determi- But the costs of climate change – as well
nation of competitive advantage, were as those of addressing it – will be unevenly dis-
treated as stable and reliable. This pre- tributed. As the Garnaut Report (Garnaut
sumption is no longer true, as climate 2008) showed for Australia the introduction of
change threatens to bring about impor- carbon pricing will have highly uneven regional
tant shifts in precipitation and weather consequences. For instance, Garnaut identified
patterns, sea levels, and water flows, the specific threat to the Latrobe Valley brown
ratcheting up pressure on the land and coal-mining region inVictoria – which produces
on ecosystems, thereby making stable 80 per cent of the state’s electricity – arising
parameters less stable (Shalizi and from his proposed carbon emission trading
Lecocq, 2010). scheme, suggesting it might need structural
adjustment measures to assists its adaptation,
Basic questions of the management of natu- although in general it saw market mechanisms
ral resources and habitats and access to food, as the means of regional adjustment. Such
water and energy are likely to loom large in restructuring is likely to become commonplace
policies for local and regional development, and produce new patterns of local and regional
which in turn will be affected by interna- change and shifts attention to what solutions to
tional policies frameworks in these fields. these problems might be found at the regional
These ecological challenges will affect both scale (Jonas et al., this volume)
developed and developing countries and
will require local planning to cope with their Climate change impacts such as rising sea
diversity, although cities and regions will levels are likely to affect some of the poorest
have uneven capacities to adapt and regions in the world. Thus climate change
mitigate depending on differential access to and broader development objectives, such as
knowledge, finance and technology. tackling poverty and inequality are likely to
be interlinked in both developed and devel-
Notwithstanding the uncertainties, the oping countries.Thus, according to Stern,
scientific consensus, together with the pre-
cautionary principle, form the broad case for Strategies for managing the risks of
policies aimed at mitigation and adaptation climate change for meeting the other
to climate change.The Stern Review for the great challenge of this century – over-
UK government concluded that the benefits coming poverty – must be intertwined
of strong, early action on climate change and built together: if we fail on one we
outweigh the costs. Among other things it will fail on the other.
suggested that the transition to a low-carbon
economy will bring challenges for competi- (Stern, 2009: no page; see also
tiveness but also opportunities for growth, UNDP, 2007)
while policies to support the development of
a range of low-carbon and high-efficiency Adaptation and mitigation in the face of cli-
technologies are required urgently. Stern mate change occur in the context of – and
(2007) made the case for establishing a carbon are linked to – population growth and rising
price, through tax, trading or regulation, as living standards for some, which are leading
an essential foundation for climate change to increased demand for energy, water and
policy.This is not merely a technocratic exer- food.The UK government’s Chief Scientific
cise, but a deeply political one in which social Adviser posits a possible “perfect storm” of
global food, water and energy shortages by
2030 (Beddington, 2009). Stable and reliable
623
J O H N TO M A N E Y, A NDY PIKE AND ANDRÉS RODRÍGU E Z-POSE
supplies of food, water and energy cannot be A final factor shaping the conditions for
assumed in any part of the world according local and regional development is the trend
to this analysis and addressing these issues toward decentralisation of governance across
will be a task for policy-makers’ regions in both the developed and developing world.
both the developed and developing world. There is a long-standing debate about the
potential contribution of decentralisation to
Demographic change forms an important economic efficiency (through better match-
component of the context for local and ing of the heterogeneous preferences of citi-
regional development (Vaiou and Wills et al., zens in different localities to public spending
this volume). Global population growth is a thus enhancing allocative efficiency) and its
key factor in the development resource pres- impact on geographical inequality (because
sures. Poverty is a factor compelling migra- differences in economic endowments among
tion from, for instance, Central America to regions mean poorer regions may lose out to
the United States, or from Africa to Europe richer ones in the struggle for resources).The
and Asia to Australia comprising refugees and economic impact of decentralisation is, how-
legal and illegal migrants. In Europe, major ever, far from settled. There is limited evi-
migrations occurred between Central/ dence of a positive impact of fiscal and
Eastern and Western Europe in the 2000s. political decentralisation on overall economic
Regions in developed countries, moreover, growth and “the relationship between decen-
now compete internationally for global talent tralization and the evolution of disparities at
via skilled regional migration programmes subnational level seems strongly affected by
of the types pioneered in Scotland, the the level of wealth of a country, the dimen-
Australian state of Victoria and the Canadian sion of its existing disparities, and the pres-
province of Manitoba. ence of solid fiscal redistribution systems”
(Rodríguez-Pose and Ezcurra, 2009: 34).
The impact of these migratory movements Thus, although the trend toward decentra-
on local and regional donor and host econo- lised systems of governance is important,
mies are profound (Coombes and Champion, local and national contexts will continue to
this volume). Incorporating migrants, shape its character.
whether lower or higher skilled, into local
labour markets and social structures is likely In short, coping with population change,
to be a central challenge for local and regional climate change adaptation and mitigation,
development policy.At the higher end of the securing supplies of energy, water and food –
labour market migration of skilled workers including localising production of these – are
between developed countries – or from likely to figure strongly in local and regional
developing to developed countries – is a sig- development strategies, which are increas-
nificant component of regional change in ingly likely to be enacted by decentralised
Canada, Australia the Gulf States and some institutions.Tackling these problems with an
Western European economies. In developed eye to impacts on inequality will also be a
countries the ageing of populations is a challenge for policy-makers. Moreover, the
regionally uneven process leading to the ability of the nations to respond to these
creation of retirement regions such as the challenges is likely to depend on local and
coastal areas of Queensland in Australia, the regional action.
coast of Florida or South West England,
throwing up new challenges for the deve- Values and principles
lopment of these regions. The issue of
whether ageing populations are a welfare The terms and prospects for local and
burden or an economic opportunity is an regional development will be determined
open and context-specific question (Glasgow
and Brown, 2007).
624
LOCAL AND REGIONAL DEVELOPMENT
not merely by global trends, but also by social it having a mainly ameliorative effect. For
and political action which, in turn, will be instance, in the UK, it has been suggested
determined by the values and principles that there is no hope of regenerating north-
which attend such action. In defining such ern cities and that policy should focus on
values and principles it is necessary to con- boosting agglomerations by investments in
sider the different (and competing) concepts infrastructures, thus accelerating the growth
that have arisen to explain contemporary of financial services in London and the South
patterns of local and regional development. East (Leunig and Swaffield, 2008).
One highly influential body of theory in
national finance ministries and international The NEG can be criticised for its simplified
organisations such as the World Bank (2009) theoretical assumptions which fail to capture
is the “new economic geography” (NEG), the wide range of economic and political fac-
which focuses on how increasing returns tors that shape development and on empirical
affect the spatial agglomeration economic grounds for overlooking the evidence of
activity producing both growth and inequal- growth potential outside major urban areas.
ity (Krugman, 1991; Venables, 2006, 2008). Agglomerations do not always lead to sus-
For instance, an analysis by the UK Treasury tained high annual average growth, while
in 2006 argued that: there are opportunities for growth in periph-
eral regions which cannot be explained by the
Theory and empirical evidence sug- axioms of NEG (OECD, 2009a). Moreover,
gests that allowing regional concentra- agglomerations are the product of the deci-
tion of economic activity will increase sions of public as well as private actors (Barca,
national growth. As long as economies 2009).This suggests that there is potential for
of scale, knowledge spillovers and a growth in a wide range of regions, including
local pool of skilled labour result in regions which do not exhibit strong agglom-
productivity gains that outweigh con- erations (OECD, 2009a). Such analysis leads
gestion costs, the economy will benefit to a different set of policy conclusions to
from agglomeration, in efficiency and those that are associated with NEG.
growth terms at least … policies that Accordingly, over recent years it has become
aim to spread growth amongst regions possible to identify a new or emergent model
are running counter to the natural of regional policy, which has been adopted,
growth process and are difficult to in adapted fashion, in developed and devel-
justify on efficiency grounds, unless oping countries and which at its heart focuses
significant congestion costs exist. on the identification and mobilisation of
endogenous assets:
(quoted in Martin, 2009: 21)
In response to poor outcomes, regional
The view embodied here is of a trade-off policy has evolved, and continues to
between national efficiency and regional evolve, from a top-down, subsidy-
equity. However, despite the formal com- based group of interventions designed
plexity of the models developed by the new to reduce regional disparities, into a
economic geography its analysis represents a much broader family of policies
highly simplified view of the regional devel- designed to improve regional competi-
opment process, which emphasises how tiveness.These policies are characterised
market forces under conditions of monopo- by: a strategic concept or development
listic competition facilitate the adjustment of strategy that covers a wide range of
productive capacity. Its policy implications, direct and indirect factors that affect
when taken to its conclusions disavow the the performance of local firms; a focus
effectiveness of regional policy or at least see on endogenous assets, rather than
625
J O H N TO M A N E Y, A NDY PIKE AND ANDRÉS RODRÍGU E Z-POSE
exogenous investments and transfers; an can alter economic geographies (Boschma and
emphasis on opportunity rather than van der Knaap,1999;Bower and Christiansen,
on disadvantage; and a collective/nego- 1995; Scott, 1998). Such approaches can con-
tiated governance approach, involving tribute to territorial competition which can
national, regional and local govern- make a limited contribution to development
ment plus other stakeholders, with the (Bristow, Gordon, this volume), leading to
central government playing a less dom- strategies of “pure waste” as incentive wars
inant role. The new regional approach develop (Rodríguez-Pose and Arbix, 2001).
is based on the principle that opportu- A key question then concerns how strategies
nities for growth exist in the entire ter- make a positive sum contribution to devel-
ritory, across all types of regions. The opment through the development of local
aim is to maximise national output by assets (Cheshire and Gordon, 1998; Camagni,
encouraging each individual region to 2002) and the role of national and interna-
reach its growth potential from within. tional regulation in limiting wasteful forms of
Before,policy makers regarded regional territorial competition.
polices as a zero sum game. Recent
reforms of regional policy in a number It is also important, however, to consider
of OECD countries provide evidence approaches which go beyond a narrow focus
that this thinking has undergone a on improvements in the rates of GDP growth
paradigm shift. as the main measure of development. While
growth is desperately needed to improve the
(OECD, 2009: 5) conditions of the “bottom billion”, in richer
countries the relationship between economic
Such approaches can form a component growth and human development is more
of a “place-based policy” aimed at tackling uncertain. Indeed, recent research has drawn
underutilised economic potential and reduc- attention to the decreasing returns to society
ing social exclusion, through supply of inte- and personal well-being of more economic
grated goods and services tailored to local growth in rich countries. Levels of health
contexts and triggering institutional changes and well-being vary significantly between
(Barca, 2009). There is evidence that this and within richer countries and there is con-
broad approach has been adopted in Europe vincing evidence that this reflects not levels
(Tödtling, this volume) and North America of growth, but levels of inequality at both
(Green Leigh and Clark, this volume) and national and regional scales. Notwithstanding
Latin America (Vázquez-Barquero, this the general growth in inequality, Japan and
volume).This approach to local and regional Scandinavian societies with comparatively
policy gains support from alternative theori- low levels of inequality exhibit fewer of
sations, such as those which emphasise notions the social problems that characterise more
of “constructed advantage” (DG Research, unequal societies such as the United States,
2006), drawing on developments in evolu- while the same is true of more of individual
tionary economics which provide a stronger US states. Moreover, evidence suggests that
foundation for public policy interventions to inequality is not just a problem for the poor
shape patterns of local and regional develop- in such societies, but for all social groups —
ment.The focus here is on how public policy for instance, levels of ill-health are higher
can aid the process of industrial adaptation among all social groups in more unequal soci-
through interventions in the development of eties (Wilkinson and Pickett,2009;Sustainable
indigenous innovation assets. Structural Development Commission, 2009). This sug-
change in the economy, including the emer- gests that local and regional development
gence of“disruptive technologies”may create should not just be about promoting greater
“locational windows of opportunity”, which growth, but also about reducing levels of
626
LOCAL AND REGIONAL DEVELOPMENT
inequality, and that mobilising resources in instrumental role in generating political
lagging and/or peripheral areas may consti- incentives, and its constructive function in
tute a valid recipe for both greater overall the formation of values (and in under-
growth and lower territorial polarisation. standing the force and feasibility of
More importantly, it suggests that tackling claims of needs, rights, and duties).
local and regional inequalities may be neces- These merits are not regional in char-
sary for the achievement of national well- acter. Nor is the advocacy of discipline
being. In this context, Sen’s (1999a) notion or order. Heterogeneity of values seems
that the focus of development should be to characterize most, perhaps all, major
informed by the formation of “capabilities” cultures. The cultural argument does
rather than the pursuit of utility would seem not foreclose, nor indeed deeply con-
to be especially pertinent at the local and strain, the choices we can make today.
regional scale (Morgan, Perrons, this
volume). (Sen, 1999b: 16)
The focus on the relationship between These arguments apply at all scales of multi-
inequality and well-being raises profound level governance systems in developed and
questions about how we theorise the econ- developing countries: democracy is a univer-
omy and understand the nature of growth sal value. Designing effective and accountable
(Sen, 1999a; Stiglitz et al., 2009; Sustainable local and regional institutions is by no means
Development Commission, 2009; Perrons, straightforward and is marked by social con-
Turok, this volume) and is the background to flicts but is essential to long-run success of
renewed interest in“Steady State Economics” strategies (Crouch, this volume). Questions
drawn from classical economics, but recast in of state and social power will continue to
the context of growing ecological pressures, determine the space(s) for action (Cochrane,
which posits an economy based on a con- and Cumbers and Mackinnon, Jessop, and
stant stock of physical capital, capable of Jones and MacLeod, Lovering, this volume).
being maintained by a low rate of material
throughput that lies within the regenerative Strategies and politics
and assimilative capacities of the ecosystem
(Daley and Farley, 2003). These ideas are in The design of local and regional development
their intellectual infancy but, along with strategies embodies values and principles.The
ideas about the relationship between inequal- definition of local and regional develop-
ity and well-being, point to the importance ment is a starting point for strategy-making.
of a more rounded consideration of the ques- Defining the purposes and objects of devel-
tion of “what kind of regional development opment is a matter of debate. Democratic
and for whom?”, which emphasises the social debate is intrinsically, instrumentally and
and the ecological as well the narrowly constructively important in the process of
defined economic (Pike et al., 2007). strategy development. Partnerships between
local actors are an essential complement to
Democratic decision-making is central to formal democratic structures and a means
the task of finding answers to the question of of mobilising constructive engagement. We
“what kind of development and for whom?” tried to show above some of the general
Sen is clear about the advantages of demo- challenges which affect localities and regions
cratic practices in the formulation of devel- in all parts of the globe, but we have empha-
opment priorities, regardless of the level of sised the value of decentralised responses to
development of given countries or regions: these and place-based solutions. We have
asserted the central objectives of tackling
The value of democracy includes its
intrinsic importance in human life, its 627
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