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Chapter 4 – Globalization, Entrepreneurial Cities, and the Social Economyi - page 7 / 12





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and entrepreneurship -- either by the initial pioneers or perhaps latecomers who are able to exploit their competitive position in a later stage of the product cycle to build a resource base for subsequent innovations.

Making due allowance for obvious differences in the 'product', this dynamic is also seen in inter-urban competition. The capacity of global cities to remain at the top of both world and national hierarchies is linked to their ability to remain at the forefront of economic and institutional innovation. But inter-urban competition can also displace competitive advantages across cities lower down the hierarchy. Some cities begin apparently irreversible decline as they are out-manoeuvred by innovations in other established or emerging cities; this is especially likely where their initial superiority in the hierarchy was based on static comparative advantage. At the same time, of course, imitation and speculation can also lead to overproduction both within individual growth centres and in general through diffusion. This 'crowding' phenomenon is currently reflected in the 'serial production of world trade centres, waterfront developments, post-modern shopping malls, etc.' (Harvey 1989: 10). Thus inter-urban competition tends to produce a 'snakes-and-ladders' game with frequent shifts among winners and losers among players in the middle ranks. The capacity to remain at the top of the hierarchy or to move up it typically depends on cities' capacities and strategies for acquiring complex strategic activities and/or promoting innovative production (Kraetke 1995: 136-142). All of this points to the importance for inter-urban competition of the entrepreneurial capacities to engage in strong competition (for further discussion, see Jessop 1998).

The illogic of globalization

Neither the tendential shift from Keynesian welfare national states to Schumpeterian workfare postnational regimes nor the tendential rise of the entrepreneurial city suspends the contradictions and conflicts of capitalism. The latter has always depended on a contradictory balance between marketized and non-marketized organizational forms. Although this was previously viewed mainly in terms of the balance between market and state, the rise of economic and social partnerships in entrepreneurial regimes has not introduced a neutral third term. Instead it adds other sites and scales upon which the balance can be contested and provides a meeting ground for the competing logics of accumulation and politics. Furthermore, the expansion of the economic logic of capitalism and economic competitiveness to include more and more factors previously regarded as 'extra-economic' creates new spaces for conflict over the primacy of accumulation relative to the codes, values, and interests of other subsystems (such as education, science, health). It thereby intensifies struggles over the hegemonic and/or dominant principle of societalization (Vergesellschaftung) in the wider society.

Capitalist growth depends essentially on the market-mediated exploitation of wage-labour -- not on the inherent efficiency of unfettered markets. Markets mediate the search for added value but cannot themselves produce it; and the very process of commodification engendered by the spread of the market mechanism generates contradictions which cannot be resolved by that mechanism itself. This is evident in contradictions inscribed in the most basic forms of the capitalist market society. Thus the commodity is both an exchange-value and a use-value; the wage is both a cost of production and a source of demand; the worker is both abstract labour and a concrete individual; money is both national money and international currency; productive capital is both abstract value in motion and a concrete stock of time- and place-specific assets in the course of being valorized; and so on. It was in managing, at least for a while, such contradictions and dilemmas in the spatio-temporal matrix of the national economy and the national state that the 'welfare mix' associated with the KWNS made its own contribution to the Atlantic Fordist regime. Nonetheless, much of what passed then as 'market failure' (i.e., was discursively constructed as such) and to which the KWNS was judged an appropriate response was actually an expression of deeper contradictions of capitalism. Thus KWNS intervention often only modified the forms or sites of these contradictions -- introducing class struggles into the state and/or generating tendencies towards fiscal crisis, legitimacy crisis, rationality crisis, etc.. And, as the capital relation developed in ways that undermined the national economy as an object of state management, the underlying contradictions re-emerged.

The impact of globalization is to exaggerate the importance of the first side of these contradictions. In general terms globalization reinforces the abstract moment of exchange value in these different structural forms at the expense of the more concrete substantive-material moment of use value. For it is capital in these abstract moments that can be most easily disembedded from specific places and thereby enabled to 'flow' freely through space and timeix. Capital in its concrete moments, however, always has its own productive and reproductive particularities that can only be materialized in specific types of spatio-temporal location. Even where they are relatively de-coupled in specific forms of capital (e.g.,

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