2 Cities in the World System

Anant Maringanti

I.   Introduction

In the last 20 years, the Globalization and World City (GaWC) Research Network, anchored at the University of Loughborough, has produced prolific research on the structure of the world economy based on an understanding of a network of world cities. GaWC research, or world cities network research, focuses on the ‘world system’ of capitalism as the appropriate scale for understanding globalization, global culture, urbanism, and the power geometries between regions in the world economy. The following module presents the antecedents of the GaWC framework, key concepts used by GaWC research, the methods applied for this research, the insights and limitations of their findings, and major critiques of the approach.

II. The World System

In the mid-20th century, one of the key innovations in sociological analysis came in the form of systems theory. Systems theory can be simply understood using the analogy of the organism. A system, by this analogy, has a definite structure made up of inter-connected parts with specific functions and inter-relations. However, the whole is greater than the sum of its parts, i.e. the system is holistic. Thus, the key characteristics of a system are boundedness, inter-connectedness of different parts and their functioning, and holism. Given the general favourability enjoyed by such structural-functional thinking at the time, it was no surprise that such an approach was also applied to the understanding of capitalism at an international scale.

Beginning in the 1970s, Marxist theory has attempted to grapple with capitalism as a phenomenon at the global scale. Initial theories of capitalism as an international system emerged from Latin America, particularly Brazil, in the form of dependency theory. Andre Gunder Frank, a pioneer of dependency theory posited capitalism as an international system with a peculiar spatiality. He identified Western Europe and America as the metropolis where capital is accumulated, and other regions as satellites from where surplus is extracted (Frank 1970). The specific argument of dependency theory had to do with the production and reproduction of ‘underdevelopment’ through the creation of ‘developmental aid’ which made satellite nations (former colonies) dependent on metropolitan nations (former imperial powers), and sustained the system.

These theorizations emerging from Latin America also captured the imaginations of social and political movements in the developing world, and particularly in Latin America itself. During a diplomatic visit to Venezuela, Hugo Chavez presented to U.S. President Barack Obama a copy of the dependency theory book ‘Open Veins of Latin America’ by Eduardo Galeano.

Immanuel Wallerstein’s ‘world system’ theory, first developed in the 1970s, more specifically used systems theory to understand capitalism in its global functioning (Wallerstein 1974). In Wallerstein’s theory, the system was defined by an international division of labour. He classified nation states into core, periphery, and semi-periphery. The core nations have a greater concentration of high-skill and capital intensive industries, while peripheral nations have a greater concentration of low-skill and labour intensive industries. This structure of international capitalism results in an ‘unequal exchange’ between core and periphery (see also Emmanuel 1972). The core, with greater technological development, extracts raw materials at low costs from the periphery to produce high-value commodities and services. While, the  periphery, to even aspire to do the same would need to invest in extremely expensive technology transfers, and in increasing the skills of workers. Thus, this pre-existing division of labour systemically produces uneven development, because nations are effectively locked into place, and it perpetuates the extraction of resources away from the periphery to the core. This, in a nutshell, is the functioning of the capitalist world system.

World system theory has been extremely influential in the way the history and international politics of development and capitalism is understood. Within development studies, dependency theory and world system theory provided an alternative imagination of world history as compared to the modernization theory of the likes of W.W.Rostow. Modernization theorists’ have often been accused of representing time and history as a hollow dimension, because they understand development in a crudely evolutionary framework that pits all the nations of the world in one progression with the developing countries attempting to catch up with the developed ones. This idea of history as culminating at a particular stage is known as historicism or teleological thinking.

World system theory, on the contrary, presents a historical worldview where nations at different “stages of development” are no longer placed in a progression, but acknowledged to be co-constitutive. As opposed to the teleological race to modernization, history and geography are shown to be fractured, and development is shown to be a fundamentally uneven process that occurs in one place at the cost of expropriation of resources, or surplus from another place. This understanding of history and development allows us to appreciate the coevalness or simultaneous existence of vastly different temporalities or geographies.

The work of dependency theory and world system theory was later carried forward by the likes of Egyptian scholar Samir Amin, who spoke of ‘peripheral capitalism’. Amin points to the following features that define capitalism in peripheral nations: rapid urbanization, formation of a local bourgeoisie and elite with whom wealth is concentrated, an imbalanced industrial sector, and heavy reliance on foreign aid. The first of these features, i.e. rapid urbanization, is most relevant to us in this module.

III. The Globalization of Capitalism

World system theory identifies nation states as the elements of the system, and within these nations are other regions and city regions. In fact, both Frank and Wallerstein, identify that within these nations also, one finds similar systems with a core in certain cities, connected to the peripheral countryside. Yet, in the time they were written, the nation state, and the mosaic of states that formed the world, were the intuitive units of analysis. Beginning in the 1980s, however, these units of analysis were no longer so intuitive.

The world system theory has been extremely influential in shaping critical thinking about global capitalism and international relations, but has undergone certain modifications in the light of what David Harvey (1992), a renowned critical geographer, has called space-time compression. The challenge to its original formulation arose because while the international character of capitalism was clear, the theory could not grasp the global scope of the new form of capitalism; what has been called post-industrial capitalism, or (optimistically) late capitalism.

Since the 1980s, due to rapid advances in information and communication technologies (ICTs), it has become possible for trans-national communication to take place instantaneously. Thus, virtually annihilating the distance between far-off regions. For capitalism, this has meant that diverse operations taking place across different regions can be co-ordinated and monitored simultaneously. For this reason, firms locate their command and control centres in specific places, from where other nodes of production can be managed through the use of ICTs. This new architecture of capitalist operations management, and the production of hierarchies between the highest control centres and other nodes in the network, prompted Manuel Castells to name them as “spaces of flows” with differing intensities of flows of information (Castells 1996).

At around the same time, there were major shifts taking place in nations around the world. In the early 1980s, Britain and America, under the leadership of Margaret Thatcher and Ronald Reagan respectively, pioneered a process of ‘liberalization’, which resulted in huge disinvestments in the public sector, deregulation of markets, and the favouring of free trade across national borders. These measures were also introduced in Latin America, through structural adjustment clauses attached to loans taken from the trans-national financial institutions such as the World Bank and International Monetary Fund (IMF). Developing countries in Asia and Africa followed suit. These structural adjustments inaugurated an extensive field of critical theory, and the processes that ensued were given the name  ‘neoliberalism’. With the neoliberal policies adopted or made to be adopted by most countries in the world, the flow of goods and capital across national borders had significantly increased. With this free(er) flow of information, capital, and goods across national boundaries, questions had begun to be raised about the very significance of “national territories” in an understanding of capitalism. Thus, the very definition of the world system as a mosaic of nation states, was found to be less useful in the new context where capitalist firms had grown increasingly autonomous in relation to nation states. Neoliberalism is just another name for the globalization of capitalism.

IV. Nations to Cities

With the global character of capitalism being more conspicuous than ever, the need for a trans-national understanding (meaning across nations, but also understanding beyond the idea of nations) was more pressing. A possible strategy for reformulating the understanding of the world system came from the writings of Saskia Sassen, Peter Taylor, Paul Knox and other scholars who turned to the network of cities, rather than the mosaic of nation states, as the appropriate scale to understand global capitalism.

In the dawn of the “information age” or “post-industrial” capitalism described above, it was believed that ICTs would make face-to-face interactions redundant and would render urban agglomerations obsolete, creating a hyper-connected ‘global village’. This imagination of agglomeration becoming obsolete is one major aspect of the idea of a ‘post-industrial’ society. However, this imagined process of de-urbanization never occurred. On the contrary, the new ICT industries themselves, and the ICT-powered global financial firms, were thriving in sites of agglomeration such as Silicon Valley, California and Wall Street, which continued to dominate. Thus, the technologies that were imagined to allow human settlements to spread out, themselves created very dense agglomerations of businesses and people; what Castells (1996) has called ‘technopoles’. This continuity of urbanization, and significance of cities to capitalist accumulation, provoked theorizations of the urban beyond their being sites of production or consumption. The value of reciprocity, trust, transfer of tacit knowledge, and other affective transfers, was recognised as a crucial aspect of urban life. And the urban was recognised as the crucial site for capitalist accumulation, and for the command and control of firm operations at a global scale. While cities are obviously constrained by the policies of particular nation states, and are attached to vast country regions that are excluded from the ‘spaces of flows’, the sheer intensity of their connectivity to and interactions with cities in other national territories, and the immense magnitude of such transactions compelled theorists to privilege the trans-national relations of cities over their national constraints.

V.  Global Cities

Saskia Sassen (1991) argues that contemporary capitalism is based on a peculiar duality: the spatial dispersal of economic activity, but the global integration of markets. Thus, erstwhile industrial hubs located in developed countries such as America and Japan gradually dissolved in favour of setting up manufacturing plants in developing countries, while managing firms from developed countries. Yet, while commodity production has been spatially dispersed, neoliberal policy shifts across the world have created an integrated global market for goods. In such a scenario, cities occupy a crucial place as command and control centres for the spatially dispersed operations of firms. They are also the sites where finance capital is concentrated and transacted. In addition, the classical functions of cities as sites of production and consumption make them hubs of innovations and also markets for products and services. Thus, it is cities, and not nation states, that are key nodes in the world economy.

The work of Friedmann (1986) also pointed to cities as key command centres in the new international division of labour. Friedmann actually went on to produce one of the first hierarchical lists of world cities on the basis of four different kinds of articulations: “Global financial articulations, Multinational articulations, Important national articulations, and Subnational/regional articulations”. He also explicitly uses the world systems approach to identify primary and secondary cities in the core and periphery.

Friedmann identified New York, London and Tokyo as the global cities—the paramount nodes in the world economy. Sassen subsequently justifies the selection of these cities based on her argument that certain ‘advanced producer services’ are the new drivers of global capitalism. These services include banking, advertising, legal services, and so on. This relational approach unveiled a new kind of architecture for the capitalist world system. Sassen notes the existence of a triadic core consisting of America, Western Europe and Japan, and understands global capitalism as nodes and sub-nodes of a vast network of information and capital flows anchored in the three global cities.

VI. World City Network

This new architecture of the world system captured the imagination of a rich collective of geographers based in the UK. This group of scholars would go on to constitute the Globalization and World Cities (GaWC) Research Network which has been pivotal in furthering this research agenda.

Their key conceptual innovation was to take focus away from merely cities and city-regions, and instead focusing on cities and city-regions in relation with the international network of cities into which they are connected through flows of information, capital, goods, migrant workers, or tourists. In 1999, the GaWC put forth a first roster of 55 world cities—above and beyond the global cities of New York, London, and Tokyo, identified by Sassen—which were classified as alpha, beta and gamma cities based on their connectedness to other cities in the roster (Beaverstock, Smith, and Taylor 1999). Since then, the GaWC has periodically updated and enhanced this roster, and have provided some very cogent insights into global capitalism and into the significance and function of cities in the world economy.

The rosters are produced based on a computation of a city’s ‘global capacity’. In the earliest roster, the ‘global capacity’ of a city was calculated by identifying key advanced producer services and enumerating the number of firms with ‘global competence’ operating in the city, and the scale of their operations.

The world system in the form of a world city network is, according to the GaWC, the new theatre of accumulation. And three regions in particular; North America, Western Europe and Pacific Asia are the major ‘globalization arenas’; fertile grounds for the emergence of world cities.

What does this architecture mean for those cities that do not make it to the roster of world cities? That are less connected. What does it mean for activities in the city besides advanced producer services?

The classification of cities into alpha, beta, and gamma classes identifies a hierarchy of cities, but also further reifies it. The classification, intended as a critical tool, becomes a tool for measuring the competitiveness of cities in the world economy. The proxies used to place cities in particular classes become valorized and cities around the world, who are ‘off the map’ desire to acquire assets such that they might rise in the rankings. Thus, cities across the world vie for globally competent firms to set up a facility in their city-regions. The primacy of advanced  producer services, becomes an actuality in popular and policy discourse, and is seen as the most legitimate marker of progress or urban transformation. The GaWC research itself, offers little to prevent this reification. Given their interest in empirically and longitudinally tracking the architecture of the world city network, the re-enforcement of their own tools in the global competitiveness are not explicitly reflected upon. In any case, the influence of the hierarchically superior cities is seen as cultural influence, and the world city network as the stage for the articulation of a global culture.

But apart from the cities which are ‘off the map’, there are regions and places within the ‘world cities’ which are ‘off the grid’. Knox (1995) acknowledges this inter-city and internal structure of world cities and presents two sides to the world system: viz. the fast world and the slow world. This is analogous to Castells’ classification of spaces of flows and spaces of places. Knox further classifies the slow world into ‘cyburbs’ which act as sub-nodes to the world cities, while ‘cyberia’ is the disconnected hinterland. In the Indian context, this inter-regional division of labour has been articulated with the metaphor of the caste system as consisting of ‘software brahmins’, ‘hardware shudras’, and network outcasts. This discussion of disconnectivity and differential connectivity is meant to flag one of the short-comings of the GaWC approach. Namely, that it focuses overbearingly on advanced producer services in very particular spaces which are largely distributed in the triadic core of the world system. As Bunnell and Maringanti (2010) put it, using the rhetoric flowing from dependency theory, GaWC’s research agenda reflects a largely ‘metropolitan concern’. GaWC research misses out aspects of what Stephen Graham has called ‘splintering urbanism’. While the space of flows, the advanced producer services, or the command and control centres are one aspect of the city, and an important part to comprehend for an appreciation of global capitalism, missing out on the splintered fragments produced simultaneously with these spaces of flows ultimately gives us a partial image of the world system or global capitalism.

VII.     Critique of GaWC Research

The GaWC network being a collective of exemplary scholars, has produced a significant body of auto-critique, and internal debates. Much of this debate is methodological, and some of it is conceptual. For instance, Sassen (2002) criticizes the lack of specification in GaWC literature of the ‘practices that constitute what we call economic globalization and global control’. Similarly Knox (1995) points out that while the world city network is seen as defining and articulating a global culture, it is not very clear where the articulations of this culture are geographically located.

The critique of GaWC from outside has come from what is now cast as a single opposing perspective, that is Ordinary Cities research (OCR). They point out that this identification of particular cities as forerunners in urbanisation is problematic for three reasons. Firstly, it suffers from being ‘eurocentric’ and privileging the narrative of modernity as formulated and articulated in the history of Paris, or London, or whichever other city (Robinson 2006). In that sense, the universality of experience, is a veneer over an actually parochial assertion to being extra-ordinary. Secondly, and as a corollary to its eurocentric character, it rehearses the old historicist trope of casting all other cities as laggards in a game of catch-up. Thirdly, it effaces the particularity of urban experience elsewhere, and by extension all theory emerging from the Other cities are treated as singular narratives. Thus, recurrently ossifying pre-existent hierarchies of attention directed to extra-ordinary cities, and leaving ‘Other’ experiences outside the overarching narrative (Bunnell and Maringanti 2010; Roy 2009).

VIII.  Conclusion

While criticism of GaWC research is valid, the network has consistently produced high quality research based on longitudinal datasets. This vast body of research offers a compelling theory about the influence wielded by certain extra-ordinary cities in controlling economic globalization. While it must be argued that global culture is articulated in spaces other than these world cities, the hegemony over cultural production held by the world cities is indisputable. The important point to note while using the framework of GaWC is what the network themselves called the ‘placelessness’ of world cities. There is a certain usefulness to this understanding of flows and boundless space, but placelessness is not the nature of the world. It offers a particular relational understanding of urbanism, that allows us to link up vastly diverse urban contexts from across the globe, but is only useful as a background for understanding local specificities and different manifestations of processes such as neoliberalization across the world. Acknowledging local specificity in the face of this placeless theory is important to balance the power geometries in shaping policies and discourses around urbanism which are skewed heavily in favour of the cities which are ‘on the map’.

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