Urban and Regional Economics: Marxist Perspectives (Fundamentals of Pure and Applied Economics Series)

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Urban and Regional Economics -Marxist Perspectives

Matthew Edel

Queens College oj the City University oj New York

A volume in the Regional and Urban Economics section edited by Richard Amott Boston College, Massachusetts, USA

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harwood academic publishers Switzerland· Australia· Belgium· France' Germany· Gt Britain India· Japan· Malaysia· Netherlands' Russia· Singapore· USA

Copyright © 1992 by Harwood Academic Publishers GmbH, Poststrasse 22, 7000 Chur, Switzerland. All rights reserved. Harwood Academic Publisben Private Bag 8 Camherwell, Victoria 3124 Australia 58, rue Lhomond 75005 Paris France

Glinkastrasse 13-15 0-1086 Berlin Germany

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5301 Tacony Street, Drawer 330 Philadelphia, Pennsylvaoia 19137 United States of America

Ubrat)' of Congress C••alogin,·in-Publication Dlta Urban and regional economics: Marxist perspectives I Matthew Edt!'

Edel, Matthew,

p. em. - (Fundamentals of pure and applied economics; v. 47. Regional and urban economics section) Includes bibliographica1 references and index. ISBN 3-718&-5102-5

1. Marxian economics. 2. Urban economics. 3. Regional economics. I. Title. n. Series: Fundamentals of pure and applied economics: v.47. III. Series: Fundamentals of pure and applied economics Regional and urban economics section. HB97.5.E26

1992

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No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage or retrieval system, without permission in writing from the publisher. Printed in the United Kingdom.

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Contents

Introduction to the Series

1. Introduction 1.1 The critique of orthodox analysis 1.2 Basic tenets of Marxist method

1 1 7

Yalue flows as geographical transfers

18 18 24 25 26 30

3. Uneven Development: Recent Treatments 3.1 General arguments 3.2 Corporate structure and industrial location 3.3 Regions and cities in advanced capitalism 3.4 Regions and cities in less-developed capitalism 3.5 Non-urban regions

34 34 38 43 51 55

4. Rent Theory and Spatial Segregation 4.1 Land rent and accumulation: general

57

2. City 2.1 2.2 2.3 2.4 2.5

and Region in the Marxist Classics City and country Uneven development Uneven penetration of capital City growth as uneven development

Rent theory and urban location

58 62 70 75 80

5. Urban Services as Social Reproduction 5.1 Social reproduction in Marx's model 5.2 The housing question: Engels 5.3 The housing question: recent treatments 5.4 Transit and the journey to work 5.5 Schooling and education 5.6 Public assistance and social services 5.7 Health and medical care 5.8 Recreation and 'cultural affairs'

89 89 94 97 102 104 106 108 111

considerations

4.2 4.3 4.4 4.5

Marx's categories of rent Urban applications of the rent categories Rent, production and accumulation cycles

v

CONTENTS

vi

5.9 Police and 'criminal justice' 5.10 Common elements in the analysis of reproductive services

6. The Urban Question, Community and the State 6.1 The property rights paradigm and the new questions

6.2 6.3

The local State Community and social movements

Bibliography

Index

113 114 116 117 122 128 134 151

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Introduction to the Series Drawing on a personal network, an economist can still relatively easily stay well informed in the narrow field in which he works, but to keep up with the development of economics as a whole is a much more formidable challenge. Economists are confronted with difficulties associated with the rapid development of their discipline. There is a risk of 'balkanization' in economics, which may not be favorable to its development.

Fundamentals of Pure and Applied Economics has been created to meet this problem. The discipline of economics has been subdivided into sections (listed inside). These sections comprise short books, each surveying the state of the art in a given area. Each book starts with the basic elements and goes as far as the most advanced results. Each should be useful to professors needing material for lectures, to graduate students looking for a global view of a particular subject, to professional economists wishing to keep up with the development of their science, and to researchers seeking convenient information on questions that incidentally appear in their work. Each book is thus a presentation of the state of the art in a particular field rather than a step-by-step analysis of the development of the literature. Each is a high-level presentation but accessible to anyone with a solid background in economics, whether engaged in busi­ ness, government, international organizations, teaching, or research in related fields. Three aspects of Fundamentals ofPure and Applied Economics should be emphasized: - First, the project covers the whole field of economics, not only theoretical or mathematical economics. - Second, the project is open-ended and the number of books is not predetermined. If new interesting areas appear, they will generate •

additional books. vii

viii

INTRODUCTION TO THE SERIES

- Last, all the books making up each section will later be grouped to constitute one or several volumes of an Encyclopedia of Economics. The editors of the sections are outstanding economists who have selected as authors for lhe series some of the finest specialists in the world. J. Lesourne

H. Sonnenschein

Note from the Section Editor It is with great sadness that I report the untimely death of Matthew Edel shortly after the completion of this book. His work combined exemplary scholarship and profound humanitarian concern. He will be deeply missed. I would also like to thank Kelly Chaston for preparation of the index.

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Urban and Regional Economics - Marxist Perspectives * MATTHEW EDEL

Queens College of the City University of New York 1.

INTRODUCTION

This essay reviews Marxist approaches to urban and regional poli­ tical economy. The focus is on issues that enter into orthodox urban and regional economics, such as location and urban concentra­ tion, regional growth and decline, rent and housing, segregation and internal colonization, urban services, and the role of local government. Although some of these issues were treated in early works by Marx and his followers, a self-conscious Marxist urban political economy only began to develop in the late 1960s, as a response to perceived weaknesses in mainstream urban studies, and to Marxist neglect of spatial and local phenomena. The new approaches reviewed here can best be understood in the light of these two critiques. Thus, Section 1 will review both the critique of neoclassical approaches, and the general principles of Marxist political economy. 1.1.

The critique of orthodox analysis

Orthodox urban economics, like its Marxist counterpart, was greatly stimulated by the urban crises of the 1960s. Although there had been prior analyses of location, land use, transportation, and local finance, it was only in the 1960s that these were assembled into a formal, unified The author would like to thank Candace Kim Edel and Richard Arnott for ideas and assistance with this study. and to acknowledge the help over the years, in understand� ing aspects of these materials, of David Barkin, Laurence Harris. Steve Hymer. Harry Magdoff, Ann Markusen, Emilio Pradilla, Steve Rose, and Bill Tabb and of the Union for Radical Political Economics and the Conference of Socialist Economists. •

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field of specialization [103,322]. But as urban and regional economics evolved into a complex mathematical field, it seemed to ignore the questions of social policy and social criticism that had attracted scholars. Dissenters who doubted its policy-relevance, or objected to its assumptions of market optima, turned to alternative approaches, including historical materialism or Marxism. Dissatisfaction with orthodox approaches was voiced along several lines. By the I 960s, neoclassical micro-economics, sometimes com­ bined with Keynesian macro-economics in a 'neoclassical synthesis', had come to dominate the field, pushing to the margin or beyond alternative 'institutionalist' approaches as well as Marxism. The dominant approaches had proven useful for the analyzing of price phenomena and many allocative issues. Their central message, that market exchanges could increase consumer satisfaction and the efficiency of resource use, was widely held. (Indeed, by the 1960s discussion of the proper design for market socialism had begun to displace the exclusive emphasis on planning among Marxist eco­ nomists.) However, there was also widespread concern with issues that neoclassical economics as an analytical tool (and· the unrestricted market as a policy instrument) could not easily handle. One area of concern was market failure. Certain market failures were widely recognized, and made the subject of separate theories, which then had to be linked somehow to the neoclassical model. Unemployment and inflationary states were treated by Keynesian models [WI), and problems of pollution, co-location and the like by a theory of externalities [97). But these models seemed to treat pervasive social phenomena as limited areas of exception. A later neo­ classical argument, that all would be well if everything from air to zygotes were subjected to property rights, raised ethical issues of who should receive the new properties, or what it would mean to society if every aspect of life were treated as property. A second concern was ineqUality, of power as well as of goods. Uneven income distribution, discrimination, gender domination, monopoly, manipulative advertising, international dominance and dependence, arms races and war were all important social concerns. Market theory could measure many of their costs or consequences, in relation to a presumed Pareto optimum, but it was not really a theory of their causes. Consumer sovereignty could not explain hidden persuasion, nor could measurement of the gains to the discrimina-

URBAN AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

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tor, monopolist or imperialist fully explain how such contravenors of the market got the power to do their damage. The market, in its pure form, merely reflected and perhaps amplified prior distributions of resources. Indeed there was even doubt within formal economics, raised by the Sraffa approach, about whether the solution to a general equilibrium market model required additional assumptions about the relative power of labor and capital, even beyond the assumption of an initial property distribution [25]. In addition, the need for social relationships, that complement and restrain market ties, and the issue of worker or consumer alienation, could not be treated by neoclassical economics [301]. By classifying these needs, the issues of power and inequality, as outside of the economic model, the field seemed to deny them their importance. But these were problems that the social sciences needed to confront. To make matters worse, exporting these problems to sociology and political science was impossible, because the orthodox paradigms of those fields (social exchange theory and social ecology, and plura­ list political science) were based upon models of preference and competition derived from the neoclassical economic model. Finally, the neoclassical economic model and its Keynesian amend­ ment were in many ways atemporal and ahistorical. They dealt in instantaneous processes or in short period of time. Although long-term changes could be modelled as series of short steps, this did not seem a useful way of treating long-term historical change. Models focused on the approach to equilibrium seemed particularly inadequate for treating those discontinuous breaks in history that involved changes in institutions or economic systems. Given these complaints, it is not surprising that critiques of neo­ classical economics, and a search for different approaches, emerged in a number of fields. The urban studies field, and its regional counterpart, was no exception. Beginning in the \ 96Os, neoclasfiical urban models and their counterparts (urban social ecology and pluralist political science) were criticized for internal inconsistencies and for lacunae. Like other critics, urban scholars argued that orthodox approaches falsely assumed a social consensus, and posed questions without consideration of distribution, class and monopoly power. Orthodox approaches presented outcomes · as the 'natural' results of technological change or abstract market forces, while the critics argued for recognition of greater causal complexity, including

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the importance of special interests or segregatory splits in society. Many examples were ad hoc, but they were nonetheless telling. For example, urban renewal, which had been touted as necessary for efficiency of growth, was shown to promote specific power interests or segregation [94]. The demise of street rail systems, presumed due to inefficiency, was traced to the monopoly power of bus companies [355] . The growth of suburbs was linked to financial or real-estate monopolies, or to national programs for social control, rather than to autonomous consumer choice [338]. Local governments which had been described as reflecting the interests of a plurality of groups were restudied with an eye to power elite domination [91]. The very definitions of such phenomena as crime were shown to reflect class . prejudices [144]. A critique of land-use models argued that, first, any neoclassical model depended on debatable assumptions of rationality, foresight, and individual independence of preferences. These models also took as given and implicitly natural a distribution of capital and 'human capital' that was itself an outcome of class conflict [180]. Furthermore, neoclassical spatial models were prone to error, on their own terms, because of technical market failures. Urban co-location, external dis­ economies, public goods and the like were admitted, even by the orthodox, to be the essence of urban life [ 1 03] . Eventually these ad hoc critiques led to a desire for an alternative approach. That such an approach should be based, at least in part, on ideas drawn from Marxism, was the argument of three notable works, which appeared in the 1 970s, by David Harvey, a British geographer [180], Manuel Castells, a French-trained Spanish sociologist [53], and David Gordon, a US economist [145]. Harvey's early essays were centered on questions of distribution. Even when the market 'worked', Harvey argued, it reinforced unequal power relations. He also criticized the harmony tacitly implied in 'Pareto optimality', and urban sociology's shared 'moral order'. It was, he argued, more useful to use the notion of conflict 'to analyze disequi­ librium in a city system' than to assume equilibrium [180, Part 1]. Harvey then began to move toward an alternative formulation, based on the earliest 'Marxist' urban analysis, Engels' description of Manchester [1 12]. Manchester, a city with few regulations or formal plans, had been built by market forces if any city ever was. Its land-use pattern 'fit' the standard urban economic models of a concentric city·

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URBAN AND REGIONAL ECONOMICS, MARXIST PERSPECTIVES

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with the poor living near the center and the rich on the edge. But, Engels had argued, this free market outcome was also interpretable as a strong, if automatic, display of power. He described the rich as living . .. in free, wholesome country air. in fine, comfortable homes, passed every half or Quarter hour by omnibuses going into the city. And the finest part of the arrangement is this, that the members of the money aristocracy can take the shortest road through the middle of all the labouring districts without ever seeing .. . misery that lurks to the right and left . . . I know very well that this hypocritical plan is more or less common to all great cities; I know. too. that the retail dealers are forced by the nature of their business to take possession of the great highways; 1 know that there are more good buildings than bad ones upon such streets everywhere, and that the value of land is greater near them than in remote districts, but at the same time I have never seen so systematic a shutting out of the working class from the thoroughfares, so tender a conceal­ ment of everything which might affront the eye and the nerves of the bourgeoisie [112, pp.46-7; cited in 180, pp. 132-3J.

Markets, in other words, ratified and hid power relationships. Harvey applied similar considerations to orthodox models of ghetto location, arguing that the market forces they identified ratified discriminatory power relationships. He also began a discussion of the use of Marx's theories of rent to study class and power influences on urban land use [180, Part 2]. Harvey's analysis is developed further in [18 1-184, 186]. Harvey also went beyond the discussion of spatial and economic effects of power and competition, to discuss their cultural conse­ quences. He argued that the market system, even when it operates effectively, has a social cost. To suggest how competition divides and alienates people in cities, he once again drew on a quote from Engels: Londoners have been forced to sacrifice the best qualities of their human nature, to bring to pass all the marvels of civilization which crowd their city .. . The brutal indifference, the unfeeling isolation of each in his private interest becomes the more repellent and offensive, the more these individuals are crowded together within a limited space . . . the social war, the war of each against all, is here openly declared . . . people regard each other only as useful objects. [112, pp. 23-5; cited 180, pp. 133-34J.

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Using this example, Harvey related competition and the urban form it generated to social alienation [180]. He thus related urban issues to a critique of capitalist alienation in Marx's [254] and Engels' early writings and in such twentieth century critiques as [238, 245]. Similar arguments about capitalism and urban alienation were developed by Henri Lefebvre [220,221] and Raymond Williams [406]. Harvey has returned to these themes in [185]. A second influential analysis was made in the introduction and design of an anthology by David Gordon [135], who distinguished 'radical' theory from 'conservative' and 'liberal' versions of orthodoxy. He contrasted free market theories with those favoring some govern­ ment intervention, and suggested conflict theories as the radical alternative. This formulation was pedagogically useful, but it led to problems. Some of the 'liberal' theories were conflict theories, although they suggested conflict might have a mediated and mutually beneficial outcome. Thus, what was 'radical' about radical theory was not clear. (Harvey's notion of analyzing disequilibrium to devise policies for equilibrium also failed to distinguish between unresolvable conflict and conflict leading to reform solutions within capitalism.) These ambiguities lent strength to the search for explicitly Marxist formulations, centered on the question of class conflict. Gordon's own version of this attempted to relate specific institutions to a Marxist theory of stages of accumulation (see Section 3), which suggested that the implications of a reform might be different in different periods of accumulation [146-148]. A third major critic, Manuel Castells, examined both market solu­ tions and pro-monopoly state solutions from a class perspective [53]. He argued that both the market and government intervention, rather than being neutral, reflected the relative power of different classes. In addition to examining land use and locational issues, Castells empha­ sized the provision of government social services as a crucial arena for conflict among classes, opening an important area for debate and analysis (see Section 5). Castells also criticized using 'the city' as a unit of analysis, without disaggregating it in class terms [53]. This critique was directed primarily at orthodox urban sociology, which discussed urbanism as having many social consequences, often ignoring class or using 'urbanism' as a euphemism for 'capitalism'. It also was directed at Marxists who had taken 'the city' as a social category, equivalent to

URBAN AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

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[220, 221]. But it also added to Harvey's and Gordon's argument class had to be considered explicitly, along with 'market' forces, urban economics. Castells and Harvey also raised arguments over the notion of space implicit in the attempt to apply essentially non-spatial theoretic mo,aels to spatial problems. This led to long debates over the nature of space and the question of what is natural. (For summary see [152, 354, 356].) Taken together, the critiques by Harvey, Gordon and Cas­ tells suggested the insufficiency of neoclassical or orthodox social science approaches for urban analysis. In particular,they emphasized the importance of class conflict as an important factor to consider, and suggested Marxist analysis as a means to consider class. Other authors carried on with the critical analysis, suggesting Marxist analysis might respond to the other neglected items noted above in the orthodox approach. (For a sampling, see the anthologies [6, 45, 66, 75, 81, 93, 145, 166, 167, 168, 269, 293, 295, 302, 303, 341,379].) Some of these works, still primarily criticisms of the orthodox approach, did not really show how far a Marxist alternative could be developed. Developing such an approach would be a long task, made difficult because there were few antecedents. Even neoclassical urban economics was itself a relatively new field. In the US, where that neo­ classical work was advancing fastest, Marxism had undergone severe repression (particularly prior to the late 1960s), and a new generation had to learn and interpret it for itself. Marxism itself had developed as an essentially macroscopic system, so how to fit an urban or regional level of analysis into it would be controversial. Given the initial problems, one cannot yet claim Marxist urban and regional economics as a 'finished' analysis, although it has, I argue, yielded important insights and findings. Sections 3 through 6 below will suggest how far the analysis has come so far. 1 .2.

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Basic tenets of Marxist method

Before turning to Marxist approaches to urban and regional analysis, a brief general discussion of Marxist political economy is necessary. Marxism essentially adds to the questions of orthodox economics two principal concerns, One is for class and class con/lict; the other is for

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the analysis of long-term change as an unfolding process, driven by conflict and contradiction. The analyses of class and change, in turn, are approached using the division of labor as the point of departure for understanding how the economy and the rest of society function. For Marxism, the division of labor not only includes the assignment of technical tasks to different workers within a factory, or their allocation to different industries but also, perhaps even more fundamentally, the division of society into persons with different social relationships to the productive process: owners and employees, landlords and serfs, etc. [264]. (It also includes the division of labor between men and women, in the family as well as the wor kPI�ce ' an asP ect n?t emphasized by Marx, but requiring further analYSIS by iater Mamsts.) The importance of the division of labor is illustrated by a simple comparison. Economics is defmed, in a leading texbook, as the study of 'What is produced? How? and For Whom?' [330]. Political science has been defined as the study of 'Who gets what, when, and how?' [219]. Marxist political economy asks 'Who does what, under whose command and who benefits by that work?' (In any of these cases, the question 'and where?' may be added, but it is in some sense secondary.) The centrality of the division of labor and its interrelation with class domination was put forward in Marx's and Engels' early writings. A particular analysis of the division of labor, value and exploitation in a capitalist economy emerged later, through Marx's critique of classical economics. Thus there are two main strands to Marxist method. Materialism and historical analysis given rise to a periodization of history and a general theory of change; 'Marxist economics', the specific (and potentially quantitative) analysis of capitalism, is an elaboration within this schema, valid only for our particular period of history. 'Marxist economics' and 'Marxist political economy' are imprecise terms, since Marx developed them as a critique of classical political economy. From his viewpoint, the analysis of the economy alone, even through 'Marxist' economics, cannot be a complete analysis of the system. It oversimplifies the analysis of society and the contradic­ tions that lead to historical change. Nonetheless, Marxists analyzing particular historical conjunctures use economic models. Marxist models (and even, for limited purposes, neoclassical models, if they are used for keeping an eye on conflicts of interest between classes)

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URBAN AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

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be subsumed within the more general historical materialist

Historical change and periodization 'materialist' analysis of long-term change may be considered first. and Engels formulated what they called a materialist method for �hillos()phical and historical analysis. They drew from Hegel and his follo�len the notion of continual change, derived from contradictions existing order of things. For Hegel, this change had come about ideas (theses) created opposite positions (antitheses) from their jnternal contradictions. This resulted in new ideas (syntheses), which turn would have their own contradictions and antitheses, leading to 'fUirther change. Marx and Engels disagreed that abstract ideas were separate force which moved history or controlled society. They focw,ed on how people produced their 'material life' and how this ch.an.ged over time. The key issue was how particular historic divisions labor (theses) generated opposing forces (antitheses) leading to new di1lisi,ons of labor (syntheses), and, of course, further conflicts [264]. Marx and Engels emphasized the division of labor between work its control. 'Division of labor' had a dual meaning; the technical division between workers doing different things (e.g. smelting metal harvesting grain), and the class division between workers and those them (peasants v. landlords, employees v. employers). i",'"''''Uo; imbalance between industries, or class conflict, could generate for change, but Marx and Engels focused on the latter, tT"C;T'� major historical stages in the division of labor. These are sornet:imes referred to by different forms of ownership (tribal, ancient communal, feudal, and capitalist); sometimes by patterns of control over labor (slavery, feudal tribute tak:ing, capitalist (wage relations) [261, 264]. Property and labor control merge into a notion of a con­ trolling 'mode of production' at each historical stage: primitive communism, ancient slavery, feudalism (and other tribute-taking modes), capitalism, and, by deductive projection, an eventual com­ munism [258, 261, 265]. Each stage is analyzed in terms of its inner workings, and the contradictions that will lead to further change. 1.2.2. The analysis of capitalism Of the different stages posited by Marx and Engels, capitalism is the most carefully defined and analyzed. A political economy of

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capitalism is implicitly developed, through a critique of CI'lSSj.Cai political economy. The basic Marxist definition of capitalism cente:n on the relationship between owners and workers. In capitalism duction is controlled by a capitalist class and actually carried out a class of wage-workers. Four necessary characteristics define a system as capitalist presence of capital as defined by Marx; the position of wage labor a proletariat in the division of labor; the extraction of surplus and the prevalence of commodity exchange). Other chanlct,,,j,;tic! allow analysis of differences between different forms of capitalism. The different characteristics will be described in turn.

Capital The ability to command labor and to maintain power over the use of tools, land, and other means of production is fund,am.entai for the ruling class in any mode of production. In capitalism, control takes the form of ownership and control of a generalized form wealth referred to as 'capital'. Capital includes not merely machines and other 'capital goods' used in production. It is not the same as money net worth. It includes these, but fundamentally it is the ability to command labor and to accumulate more wealth through ownership of wealth. Capital is distinguished from wealth in other modes of production, or from 'capital goods' alone, by two aspects. The first is its flexibility. One's wealth under capitalism may be invested in land, machines, funds for hiring labor, money bank accounts, bonds, inventories and so on. Wealth is transferable from one form to another. Indeed, profit making requires that capital change forms. A capitalist uses money to hire labor, acquire machines and buy raw materials. He then uses the laborers' work to transform the materials, and sells the goods, thus transferring wealth back into the money form. Such a uniform, flexible type of wealth was not characteristic of prior modes of production. The second distinguishing characteristic is capital's relation to labor. Buying and selling alone, without using labor to transform materials, cannot lead to expanded production· and expanded wealth. Capital needs wage labor to function. Thus part oI the definition of capital is that it exists where there is a pool of labor available for hire. The proletariat The proletariat is a class of workers who must rely on work for a wage or salary for their livelihood. In the pure case, they

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URBAN AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

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)ia e nothing to sell but their ability to labor, The situation is not " cballged fundamentally by their ownership of some tools or by spe, ..•,! . .• • SkiliS. or by protective legislation or custom, These may affect ,. . Or working conditions. but education or tools are usable. and wages. , can operate. only if an employer offers work, The worker :"p rotections , n d job, Workers have to hire out to , o

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value The basic form of the exploitation of the proletariat

lI,RX capitalists is the production and extraction of surplus value, Marx ;.>!iargues that the daily pay received by laborers. and the amount they . can produce in a day. are determined by two separate processes. The 11;,! paY is determined by the liv�ng standard necessary for the worki,,;g class !'

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i to subSist and reproduce Itself. ThiS IS not a bIOlOgical subSistence r. '.1e�el; it is determined by 'historical and moral elements'. These include i';1the degree to which capital needs better trained and educated workers.

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the extent to which labor itself has been able to enforce better mini­ f'lupum standards through class organization and the social definition f" bf the family as the unit of reproduction. Once this social mini­ �.t ,.,,rmum. the 'value of labor power'. is establiShed. competition for jobs ; � {!>'among individual workers will hold wages near this 'subsistence' � floor. f On the other hand. the productivity of a worker in a day is �etermined in part by technology and equipment and in part by how " hard and fast the employer can make workers work. There is no need J :j.: for a day's production to be any specific multiple of a day's pay. "I although if revenue falls below labor costs. the employer will fire the , Workers or go bankrupt. In general. production will exceed pay. and I\: a surplus product will remain as the property of the employer. Thus. � ownership of capital allows the owner to end up with products worth : '" more than the sum expended in putting the process into motion. This ", is what Marx terms surplus value. How much surplus value is produced /" determines what capitalists can spend on consumption. on controlling ! .>!'society. and on new forms of production. " Given a level of subsistence. the magnitude of surplus value can be increased either by speedups or longer working days or by improved technology or more productive organization. Changes can be affected f by capital-labor conflict. which influences both the pace and the orga, nization of work. as well as workers' living standards.

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The capitalist enterprise takes its profits out of surplus value. It ma

also make payments to other non-workers: interest payments for the . " use of borrowed money, rent for the use of land, and perhaps taxes': all of these revenues are considered shares in surplus value because theY' are not payments for labor.

Commodity exchange The existence of capital as flexible, trans: , formable wealth requires that capitalists be able to sell products. If this

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were not so, each worker would have to receive as wages the goods

he himself produced; surplus value would take the form of unsold.. inventories. The system would collapse. This possibility emerges in"

crises, when large inventories do remain unsold, and production is

)

decreased for want of buyers. Capitalists must 'realize' their profits by selling their goods, in order to keep on hiring workers and producing.

Thus capitalism requires a 'sphere of commodity exchange' in which" goods are bought and sold.

An exchange system using money is more efficient than barter. Thus

capitalists sell their products for money, pay workers with money, and',i use money to buy new equipment. Use of money, however, creates problems. Fluctuations in its supply may interrupt exchange, causing ) inflation or recession. Further, money creates possibilities of making! loans for future repayment. This creates pressures on capitalists and

workers, and risks of default, because debts must be repaid. Vulner- i ability to monetary problems or debt is a necessary aspect of capitalism.

Capitalist systems also have characteristics which vary between different countries or over time. These include:

Landownership

Any

economic

system

requires

procedures

for

managing the use of land and other natural resources. Capitalism requires rules of landownership for two reasons. First, to maintain a subservient proletariat, it is necessary to limit its free access to land. Second, rules are required as to which capitalist owns which resources. However, the forms that property rights take, including large or small private properties or State property, may vary, as may the class composition of the landowning group.

Institutions of social reproduction

For capitalism to survive, the

bourgeoisie and proletariat must be perpetuated from generation to generation. They must reproduce themselves physically, and also pass

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AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

13

positions, skills and attitudes to their children or new recruits. institutions which take part in or foster this social repro­ including various forms of family, and community, bureau­ religious institutions, can vary greatly among different societies. For capitalism to exist the 'State' or government must pro­ framework for exchange, a guarantee of property rights, and degree of control over subordinate classes. In a crisis, the State controllable by capitalists if their vital interests are at stake. the ways in which the State is constituted and performs its vary. It may be democratic or authoritarian/totalitarian, ,tn,li"ea or decentralized. It may express not only general capita­ in/er",/, but also the particular interests of subgroups of capita­ It may be more or less sensitive to pressures by labor, peasants landing aristocracy. Further, its functionaries - administration, lre.mcrac:y and military-may have power to impose policies in their specific interests. The State's role may vary, in terms of how much imlert'vit owns, what share of production it takes in taxes, or which of production, exchange or reproduction it administers or �gu�ates, as long as this does not interfere with the most vital interests

solidarity A final variable feature is the degree of unity within bourgeoisie and within the proletariat. The internal unit of each involves economic dimensions like the degree to which profit rates unequal in different industries, or wages are unequal for different 'o[Jeritance was undisreplaced older lineage forms of social organization. Along with a territorial form (the State) replaced older kinship-based political [ 1 1 1 ] . Other materialist writers have skipped the controversial maJysis of the family and related the rise of the territorial State, liniltially based on slavery and tribute-payment, directly to surplus [62]. Internal aspects of urban life, including 'the necessity of administrapolice, taxes, etc.; in short, of the municipality and thus of in general', were also studied in relation to class [264] . The ;otlesiion of upper-class communities (e.g. Athens or Sparta) was I; ' attrilbul:ed to the need of the upper class to cooperate (as co-owners) against the large slave population. However, cohesion was limited by

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splits in the ruling · community between landowning and mercantW� interests. Urban exploitation of the rural population, and intra-urbani; ruling class divisions, were thus the principal antagonisms in the mode of production that emerged.

2.1.2. Feudalism A second transition, from ancient slave society to feudalism, was carefully analyzed. Marx sometimes suggested an inevitable passage from slavery to feudalism to capitalism [265]. At other times he· suggested a different possible pattern, an 'Asiatic' mode, in which cities', remained as tribute-takers and organizers of public works over system�; of villages, in which a local kinship organization still prevailed [259] ;, Apart from the impact of public works, the villages were not reshaped, as fundamentally as slavery reshaped the subject populations. Mal)P suggested 'Asiatic' systems might be more stable, less rent by contradic-] tions that force evolution, than the slave systems. There is a majorL debate over this formulation [3 1 , 193, 194]. ,'., Marx suggested that in the West the slave system was unable to I sustain the surplus demanded by the large-scale urbanization of empires like Rome, or even to sustain the subject population in the face) of the level of exploitation demanded [259]. Post-Roman Europe and,' the Mediterranean were left with a lower surplus for urbanization! than prevailed in Asia. This required a more localized, rural-centere.d existence for the ruling class. Marx [258] and Engels [ 1 1 1] also suggest the reconstruction of the rural areas reflected pre-slavery communal ! forms, involving village cooperation and individual small property no�i/ found in many Asian-mode villages. Lefebvre finds in Marx th�" I suggestion that Western feudal institutions thus had more potential for, internal contradiction and for the growth of an embryonic capitalism than did the tributary systems elsewhere [222, 223]. This European particularism may represent Marx's limited and' Western-centered sources more than anything else [13]. Later writings!, have weakened the notion of a changeless, 'historyless' non-European" world without internal potentials for change (e.g. [28, 412]). In the absence of a comparative materialist history of the World, differ-i ences between European and non-European feudalism must be judged ." with caution. Whether the origin of capitalism and international ' expansion in Europe - rather than East Asia, the Moslem world or} elsewhere-was a matter of chance (or a few decades or centuries) or '

URllAN AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

21

ffelrences in the basic mode of production, remains unclear. All is that Europe did get there first. Its resulting expansion was called a 'world historical fact', one that fundamentally the forms of transition possible in other parts of the globe.

The origins of capitalism )velrthI'ow of European feudalism by capitalism was carefully by Marx and Engels. Class formation and conflict in towns, conflict, played central parts in these analyses. had beeen mainly rural. Enserfed peasants were exploited with both groups organized into relatively tight class communities. Marx's materialist analysis suggested ; cemflict also shaped the town's organization: necessity for association against the organized robber nobility, the for communal covered markets in an age when the industrialist was same time a merchant, the growing competition of the escaped serfs :warming into the rising towns. the feudal structure of the whole country: combined to bring about the guilds [264, pp. 45-46].

the towns, class conflict developed between masters and and between these and the 'rabble' left out of the structure. Competition between guilds and between towns also As commerce widened, in part as the result of improved agri­ further divisions of labor emerged. These included the rise of �rchru"t class in the towns, and of manufacturing which extended the guild crafts to the hiring of non-guild weavers (often in the 'putting out system' and then in factories. With the of merchant capital, and its alliance with national monarchs local feudal lords, a new class force come to be felt. The growth merchant capitalist class was furthered by overseas exploration 'oIIqlLeS1C. It acquired a labor force through enclosures and other �lormatIll1, because otherwise crowding in cities would prevent ade­ housing (although after a revolution, division of bourgeois pro­ could alleviate the worst problems). Marx argued tliat urban beyond a proper measure was harmful to the natural environ­ a problem which he, too, saw as resolvable only with the end >JcapitaUism [261]. This was a Utopian vision, albeit one that avoided detailed blueprint drawing of those socialists Marx and Engels as mere 'Utopians'. It has inspired some efforts to plan for

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MAITHEW EDEL

24

urban-rural balan.ce in those nations where revolutions inspired by Marxism have seized power. But, as those nations have discover,dr attempts at social reconstruction, including spatial planning, ite difficult matters. A Marxist analysis of efforts to create socialism, and. '''' socialist cities, is very much an embryonic project. 2.2.

Uneven development

Marx and Engels presented the history of city-country antagonismsal a high level of abstraction. For specific modes of production, concrete analyses of the forces that stimulate city growth or regional differe�;. tiation may be made for specific modes of production. Since fo capitalism accumulation is the central driving force, Marxist theori� of regional or urban growth and decline have been formulated in relation to accumulation. Marxists have used the term 'uneven development' or 'unev�ql and combined development' to describe the inherent tendencies in capitalism that lead to different outcomes for various regions 'di'l locations, and their inhabitants. Some actually speak of a 'law of, uneven development', implying an inevitable spatial dimension to · Marx's more general statement that capitalism inevitably amass,!s: wealth and poverty at opposite 'poles' [309, 354]. For example, Erne!,!, Mandel suggests a uniform process that generates spatial unevenneSS: even in the ideal case of a homogeneous beginning.

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\Vh.etI1er the unevenness requires widening disparities between over time, or whether periods of convergence (or reversals e' n,lative positions of different areas) are predicted; or whether only refers to the speed with which different areas tread path of development. \vlLetller the 'law' holds similarly for all periods of capitalist )pnrrent, or whether, for example, it may operate differently in )p"riaLlis·t' phase than it did in earlier stages. wlilether similar explanations hold for geographic disparities in or accnmulation between different categories of areas: dis­ between nations, between subnational regions, between cities, sub-metropolitan neighborhoods, between cities and their etc. [93]. its uniformity or inevitability, or lack thereof, Marx and saw uneven development as emergent, at least contingently, capitalism. There are several different explanations for the unevenness of accumulation in Marx's writings on accumula­ are based on the uneven penetration of capital into non­ environments, some based on the role of shared (urban) in productions, and some based on the flows of values in the basic model of capitalism itself. IIn••w.n penetration of capital

to which capitalism penetrated and transformed different or countries was important in Marx's writings. In Europe, an or 'primitive' phase of accumulation of capital had preceded ,xis:tellce of industrial capitalism itself. Peasants had been driven land, and merchant wealth transformed into industrial capi­ . Once this had occurred, further accumulation continued reinvestment of profits. But something like primitive accu­ might continue as an adjunct to capitalist reinvestment, if pre-capitalist areas were available for capital to dominate. relationship was analyzed in Marx's writings on coloniza­ it is also relevant to development within basically capitalist A society recognized as capitalist still contains elements of economic forms, and may even create or reconstruct some such (like commercial slave plantations in the nineteenth century, regrowth of peasantry in some capitalist areas.) Differentiation

26

MATTHEW EDEL

between regions, like that between more and less developed can sometimes be analyzed as an interplay between areas more and converted from slavery or feudalism to capitalist labor orl�anLizlltio Unevenness may also involve the evolution of land ownership tions and the State apparatus, both of which draw lines (of jurisdiction and of property) in the lands in which capitalism emerged. Part of the uneven penetration of capitalism iI ' lva,lve:d t degree to which the capitalist class is able to bend these two capitalist' institutions to its designs. In the classic Marxist literature 'uneven development' was primarily to international relations and independence. The question became an important area of theoretical debate early in twentieth century (e.g. [228, 241, 359, 387]). In a few cases, howe'v, the issue was extended to repressed internal groups or regions, the American Communist Party's discussion of self-determination the 'Black Belt' [289] or the Italian Party's reference to their South an 'internal colony' [155]. Recent Marxist regional literature has debated the internal model in several contexts [236 v. 190]. Critics argue that class rel"Hnr have become more important than spatial relations, and that a focus may obscure these or divide potential class-based m()v€:m.!Ut: But others argue Marx underestimated the power of re��orlaJi: and nationalist movements including those based on spatial nomic advantage [138, 280]. Colonial analogies remain nPWI,UlIlgS seems to argue against a low organic composition of capital. owever, fIXed and constant capital are not interchangeable concepts. buildings are viewed at the moment of their construction, absolute is possible if the organic composition of capital in construction is low. Alternatively, if buildings are considered as fIXed capital, the meaSllfe of constant capital that should be compared with annual rent labor costs is not the building's construction cost but rather its depreciation, which may be low compared to annual labor maintenance costs. Under either argument, the organic composition SOIldition for absolute rent may be met. question , cannot be settIed by appeal to quotes from Marx. rent theory was developed, to explain agricultural rent, but he 'discussed its application to urban land and to sites providing building

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materials. His distinction between rents was not limited to aglriclJltlll He cited cases of rent from housing monopoly, and he argued absolute rent for land in general would raise urban land rents urban and agricultural land users must compete for space (26 1 ) . Marx did not explicitly indicate t o what extent urban land rent differential, monopoly or absolute rent. These examples basically just classify rents. They suggest =h,;"h:,. combinations of landownership and land use might have an impact interclass distributions of value, and hence on class strug:g gle .� to show in practice how these various rents affect a, distribution and other aspects of urban capitalist systems . . One issue in this is whether the various possible barriers to ment in land listed earlier are operative, and what their effects Much of the literature of raC\icai urban economics in the late 1960s 1970s was devoted to documenting such barriers existed. �•.. �," indicated cases of landlord or developer monopoly, involvement in the land market in support of such monopolies, linkages between financial and land investors [1 1 , 47, 75, 94, 1 19, 177, 276, 302, 3 13, 3 3 1 , 342, 363). The general impression given these studies was that monopolies would restrict investment, pu:shilrr� up rents to workers. In terms of rent theory, the amounts to a clarrtn'\!I!1 that either large scale monopoly rents ('tribut a la Engels'), or ne,·h.", absolute rents ('tribut a la Marx') are received by fractions of the bourgeoisie, often without consideration either of possible distinction between the two classes of rent, or of argument that rent increases might fall on employers rather worker-tenants (or worker-homeowners, if purchase of homes developers was involved). These studies seemed at first sufficient indicate class conflicts were spilling over from the labor market the urban land market, and to suggest possible alliances between movements and (tenant or homeowner) community movements. However, these early studies also were marked by certain inconsis­ tencies in their findings (98) . For example, monopoly factors we,re. mel, general, presumed to increase rents and living costs. But m(lUo1poly ': in the petroleum industry, and the power of auto monopolists government policy, appeared to have led to policies to encourage � ) ;' petroleum use in commuting, which seemed to have increased supply of suburban residential land and possibly reduced housing,) costs. Analyses of developer groups, while finding that in some

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, held back land from development, also found they formed part

[of, po.Jitical 'growth coalitions' that tried to stimulate more develop­

[276, 278]. The confusion over interest rate effects mentioned was yet another example. These anomalies suggested that more j", neeClea than simply to demonstrate the existence of monopoly. was needed of what specific conditions allowed high rents to 'cl1larlgecl, or what the division of cost burdens among workers and employers might be [180, 369, 370]. It was the search for better �analyses of these issues that led to the revival of Marxist rent theory. application of this theory will be discussed in two contexts. The is the overall question of whether there is a landed fraction WAf', oo,n;'o1 and, if not, whether this means rent considerations are for accumulation. The second is the application of rent l\lItimPOJrtaJot I th , eol,etic considerations to issues of urban location.

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question of how seriously rent affects accumulation in contem­ capitalism centers on whether rent has become so fused with and interest that it cannot be considered a separate category , allalysis. A related question is whether there is a specific landed or landed fraction of capital.

1. Is there a landed class or fraction? suggested that with the integration of landed and capitalist and with the reduction of land quality differences through absolute and differential rent might disappear. This pos­ is also suggested in Lenin's description of the integration of economic interests in urban development. The specUlative l�vc�lol)ment of the suburbs of rapiClly growing cities, Lenin argued, the work of 'finance capital'. In this development

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The monopoly of the banks merges here with the monopoly of ground rent and with monopoly of the means of communications. since the rise in the price of land and the possibility of selling it profitably in allotments, etc., is mainly dependent on good means of communication with the centre of town; and these means of communication in the hands of large companies which are connected, by means of the holding system and by the distribution of positions on the directorates, with the interested banks [227, p. 65[.

76

MATTHEW EDEL

This suggests that even though ground rent is part of the profit of banks and transit monopolies, there is not particular interest whether profits for the combine as a whole take the form of land increases, interest or transit profits. A similar possibility is raised in recent examinations of wt..tlJer; '� Britain has a landed interest (or a landed fraction of the bourl,ec,isi,,) today, and whether it affects rent. Michael Ball argues that since urban land is now owned by users and a separate landed fraction capital no longer exists, a separate rent component of surplus may not be identifiable. Ball almost goes so far as to say the of land rent is becoming inapplicable [21 ,22]. Massey and Catalano identify a series of landed groups inf.�:��:��o:t�o

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MATTHEW EDEL

transit systems may be private, cooperative or municipal. It has been' argued that private automobile ownership and use reinforces SUla�l,\!!" atomization and commodity fetishism, but the issue has not been clusively researched. A large amount of literature has examined possible biases in the choice between modes [103] and particularly the setting of fares public transit [97, 344, 416]. These generally favor individual mobile commuting. Most Marxists accept the neoclassical conclusion that in the presence of economies of scale, profitability or break-even pricing sets fares above marginal cost. Subsidy may therefore beneficial not only to transit users, but to broader accumulation well. In general, Marxists have supported campaigns for greater transit subsidy, e.g. in the defense of the Greater London Council [37]. However, the possibility that commuter subsidies to workers may passed on to employers through lower wages has not been carefully explored. 5.5

Schooling and education

Education is one of a series of 'human services' components of the value of labor power. While education through the family, appren­ ticeships, religious institutions and even formal schools capitalism, the formalizing of education into universal schooling be traced to the expansion of industrial capitalism. Samuel Bowles and Herbert Gintis suggest the importance of working class schooling for the reproduction of capitalism as a system of inequality. They with 'the fact that schools produce workers, [43, p. 10]: Schools contribute to profit through their training functions, and by stabilizing the system through their ideological functions.

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On the one hand, by imparting technical and social skills and a� motivations, education increases the productive capacity of the On the other hand, education helps defuse and depoliticize the po'tentially explosive class relations of the production process, and thus serves perpetuate the social, political and economic conditions through a portion of the product of labor is expropriated in the form of profits [43, pp. 10-1 1].

The training function is similar to the traditional view of edlucaLtio,n which 'explains the increased value of an educated worker by treating

URBAN AND REGIONAL ECONOMICS: MARXIST PERSPECTIVES

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worker as a machine'. But Bowles and Gintis challenge human �cilpH:a] theory for ignoring that education for productivity is also � � ' iDlcuiocatio" of motivations, and willingness to be treated as a machine. explore parallels between the apparent rigidities and stupidities working-class education (e.g. the demand that six-year-olds sit still) the atmosphere of the shop or office floor in hierarchical occu­ . For workers slotted for these positions, education in subser­ is 'appropriate' career education [43, cf. 5 1 , 65]. 'Jlc)wles and.Gintis hold that the school system legitimates inequality, being open and meritocratic, but in practice apportioning in relation to parental class. They demonstrate statistical lation:shi]ps between parental income and offspring's school per­ and eventual occupational rewards. Controlling for IQ it does not alter outcomes (it is probably invalid for measuring !'�:W::anythiIlg but class background). The recognition of social control by the school raises questions of origins of that control. Bowles and Gintis argue that universal sec:ondalry schooling was imposed on workers by the bourgeoisie, to !1I� "4!loeru:ure control and the shaping of skills to specific corporate needs Gorelick, however, argues that workers did fight for more :�l lcation, and that its expansion should be treated as a working-class icoDlqm:st in the face of opposition [1 50], although a gain not free of

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: htra,jictory elements [151]. Both [43, 150] reject the liberal view of �§ uopoily (limited training of doctors, high costs), and private .payment for health care was shown to leave adequate care beyond workers' means. Thus socialized medicine was advocated. The alter­ native reform, State payment for health care through national health .in;suran(;e or welfare systems was seen as better than nothing, but was criticized for amounting to a traltSfer from the State budget to a medical monopoly, with only minimal trickling down to the workers. :"'Furthennore such reforms, by putting different groups of workers into differellt systems, might split working-class interests [92, 105, 107,

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Stuciies of health care production and distribution have examined by pharmaceutical companies, physician organizations, uU'I'''''' centers and other large private 'health empires' [105]. How­ support for a socialized solution has been tempered by the reali",tielU that provision by a capitalist state would be uneven. certain minima had been achieved, medical care in Bri­ tain, for example, was better for the bourgeois than for the workers [92] . John Ehrenreich has summed up much of the Marxist literature on health care as encompassing an 'economic critique': medical care is treated as a commodity like any other; the important things about medical care can then be derived from the general laws for the production and distribution of commodities . . . The primary problems that the political economic critic identifies by this analytical approach, then, are distributional [107, p. 16).

110

MATTHEW EDEL

This critique, however, is only part of the Marxist analysis of he:.ltllr! A second, 'cultural' critique examines processes of production and consumption in medical care, and the very definition of medicine and > health: medical care as we know it-i.e., as it has developed in society-is not just an unambiguously useful commodity like asparagus or shoes or swimming lessons. Like many other more complex com­ modities, it is thoroughly permeated with capitalist priorities and talist social relations. Not merely the distribution, not merely transaction between doctor and patient, but the medical technology (which is based on certain assumption about the nature of processes, the causation and cure of disease, the relations of i� to their own bodies and to social processes) embodies the social created by capitalist society [107].

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This is, of course, parallel to the situation for housing in ways. As Ehrenreich comments:

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There are many other cases in which apparently neutral and obJiectiv technology is in fact penetrated by and helps recreate the social rel'.tio'nl which developed it; the single family housing unit presupposes created) a noncollective mode of living; individual automobiles imply entire conception of use of energy. use of time. and spatial organization of society; assembly line production techniques and machinery assume and reinforce the separation and antagonistic relation between m,m,u anu manual labor; and so forth [107].

Indeed, some Marxists argne that there are not merely 'many other cases' of non-neutral technology: the entire notion of autonomous science can be questioned [16]. The medical case is certainly one in which a large number of influences come into play. On the other hand, initial resistance to notion of medicine as intrinsically affected by outside interests has with more resistance than would a statement that housing type is so affected. After all, alternative forms of housing are readily visible within the advanced capitalist nations, but an alternative to mc)de:rn medicine, on first glimpse, seems hopelessly inferior. Nonetheless, critiques of specific medical practices have developed. Mental health care, particularly institutionalizing

URBAN AND REGIONAL ECONOMICS: MARXIST PERSPECfIVES

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!i:p�ltients for a variety of symptoms, was one key area of critique. Critics

went from the specifics of wrongful institutionalization and an analysis of how institutions control patients, to a view that the very definition ImaU'.1 health and mental illness was suspect. Similarly, the feminist nOllenler,t began to examine the medical treatment of women, and from a critique of sexist behavior by doctors in the dispensing , , ofmed.icine, to the clainl that the very definition of medical conditions served to control women, making natural reproductive functions appear as illnesses, limiting behavior, subjecting women to dangerous Ji1,�dil�al procedures, and restricting their resistance in both the work­ and the family [106, 107, 149]. The cultural critique suggests that the very model of individual medical care is inadequate, for ignoring environmental considerations and public health activities [ 1] . It tends to blame patients for having flle ([ise,as!", diverting attention from social causes [106, 107, 281 ] . The of public health campaigns in China helped to dramatize '