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Chapter 4 – Globalization, Entrepreneurial Cities, and the Social Economyi - page 4 / 12





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catchall concept of 'globalization'. Together with the increased importance of global financial capital, this weakened the 'taken-for-grantedness' of the national economy as a natural object of economic management and reduced the effectiveness of Keynesian policies. Moreover, not only was the efficacy of national economic policy undermined by internationalization, regional and local economies were also increasingly found to have their own specific problems. These could be solved neither by the usual national macro-economic policies nor by standard industrial and/or regional policies formulated at the centre. Other economic factors that weakened the KWNS included the challenges posed by lower-waged but increasingly high-tech East Asian NICs as well as the rise to economic super-power status of Japan, with its more flexible production system; the more general shift from more supply-driven to more demand-driven forms of production (often paradigmatically summarized, but never adequately characterized, as the shift from Fordism to post-Fordism); and the feminization of the labour-force (with its impact on the family form and the family wage which both played key roles in the KWNS).

Overall, these changes made it harder for the state to manage its national economy as if it were closed (as it had done, for example, in relying on demand management) and so prompted an interest in, and a shift towards, more supply-side intervention. This could be limited to neo-liberal supply side measures or extended to include tailor-made measures targeted at specific sectors and/or places. The latter policies often refocus economic strategies around the specific features of regional-local economic spaces and cities' potential role in the struggle to maintain international competitiveness and/or defend jobs, growth, and welfare in the face of competitive pressures at home and abroad. There was also an increasing emphasis on flexibility in manufacturing and services (including the public sector) based on new technologies (especially micro-electronics) and more flexible forms of organizing production. And there was increasing concern with how economic and social policies affect structural and systemic competitiveness vis-a-vis other economies -- thereby creating political openings for attacks on social welfare to the extent that competitiveness is understood in terms of direct and indirect costs of production (thus including the social wage).

Politically, the KWNS was undermined by growing political resistance to taxation and stagflation, by the crisis in postwar compromises between industrial capital and organized labour, by new economic and social conditions and attendant problems which cannot be managed or resolved readily, if at all, through continuing reliance on top-down state planning and/or simple market forces, and by the rise of new social movements which could not be easily integrated into the postwar compromise -- especially as these movements developed in crisis-prone cities and were often oriented to global or local rather than national issues. Whilst the rise of new social movements is partly related to economic and ecological crises associated with mass production and the problems facing the KWNS, it is also linked more generally to the development of a politics of identity, to the phenomenon of the 'risk society', and to so-called 'post-modern' patterns of consumption. The link between economic and community development, notably in terms of the empowerment of citizens and community groups, puts a premium on partnerships embracing not only the state and business interests but also community organizations of various kinds. This is reflected in active sponsorship of the 'third sector' and/or 'social economy' (both located between market and state) alongside other forms of decentralized public-private partnerships (see below). It can also be seen in efforts to solve local problems by involving as many different local stakeholders and partners as possible. Many of the new social movements are also oriented to other scales of action than the national level -- especially to the city and the international arena.

Socially, the KWNS was undermined by a tendential 'de-nationalization' of civil society. This is reflected in the development of cosmopolitanism, 'tribalism' (or the rediscovery or invention of primordial, affectual identities at the expense both of liberal individualism and of civic loyalty to an 'imagined' national community), and an expansion of diverse social movements which now operate across national boundaries. Together these phenomena have weakened the sense of national identity which shaped the KWNS in its formative period and have also weakened thereby the coalition of forces which sustained it. In additin, the more specific values, social identities, and interests associated with the welfare state have undergone a transformation. This is associated with rejection of the social democratic and/or Atlantic Fordist normative commitment to a class-based egalitarianism and its accompanying class-based redistributive politics; with a pluralistic identity politics and 'politics of difference' in which there is greater emphasis on mutual respect, authenticity, and autonomy; with increased concern for personal empowerment rather than for the bureaucratic administration of legal rights, monetized entitlements, and uniform public services; and with the expansion of the so-called 'third sector' and/or social economy, which supposedly operate flexibly outside of the framework of pure markets and the bureaucratic state (but often in close conjunction with them as a 'shadow market' and 'shadow state'). These shifts have not

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