docs_14EF4BA6
docs_14EF4BA6
Overview
foR ~ENTURIES, the w_orld ~con~)I~y has. s~~pe~ the life of cities. :r Tlfis
poo1c 1s about that relanonship toaaj Begmmng m the 1960s, the orga -
nization of economic activity entered a period of pronounced transfo~a-
p. The changes were. expressed in the altered structure of the world
~onomy, and also assumed forms specific to particular places. Certain of
these changes are by now familiar: the dismantling of once-powerful in-
dustrial centers in the United States, the United Kingdom, and morer
recently in Japan; the accelerated industrialization of several Third World
countries; the rapid internationalization of the financial industry inta;. a
v,orldwide network of transactions. Each of these changes altered the
relation of cities to the international economy.
In the decades after World War II, there was an international regime
based on United States dominance in the world economy and the rules
for global trade contained in the 1945 Bretton Woods agreement. By the
early 1970s, the conditions supporting that regime were disintegrating.
The breakdown created a void into which stepped, perhaps in a last burst
of national dominance, the large U.S. transnational industrial firms and
banks. In this period of transition, the management of the international
economic order was to an inordinate extent run from the headquarters of
these firms. By the early 1980s, however, the large U.S. transnational
banks faced the massive Third World debt crisis, and U.S. industrial firms
experienced sharp market share losses from foreign competition. Yet the
international economy did not simply break into fragments. The geogra-
phy and composition of the global economy changed so as to produce a
complex duality: ~ y dispersed, yet globally integrated organizA-
tion of economic act1vity1
The point of departure for the present study is that the combination of
spatial dispersal and global integration has created a new strategic role for
major cities. Beyond their long history as centers for international trade
and banking, these cities now function in four new ways: first, as highly
concentrated command points in the organization of the world economy;
second, as key locations for finance and for specialized service firms,
which have replaced manufacturing as the leading economic sectors;
third, as sites of production, including the production of innovations, in
these leading industries; and fourth, as markets for the products and in-
5
4 CHAPTER ONE oVERVIEW
novations produced. These changes in the functioning of cities have had Even industrial homeworkers in remote rural areas are now part of that
chain- The transnational corporations continue to control much of the
a massive impact upon both international economic activity and urban
form: cities concentrate control over vast resources, while finance and end product and to reap the profits associated with selling in_ th~ world
specialized service industries have restructured the urban social and eco- market. The internationalization and expansion of the financial mdustry
nomic order. Thus a new type of city has appeared. It is the global city. has brought growth to a large number of smaller financial markets, a
Leading examples now are New York, London, Tokyo, Frankfurt, and growth which has fed the expansion of the global industry. But top-l~vel
Paris. The first three are the focus ofthis book. control and management of the industry has become concentrated m a
As I shall show, these three cities have undergone massive and parallel
few leading financial centers, especially New York, London, Tokyo,
changes in their economic base, spatial organization, and social structure. Frankfurt, and Paris. These account for a disproportionate share of all
financial transactions and one that has grown rapidly since the early
But this parallel development is a puzzle. How could cities with as di-
verse a history, culture, politics, and economy as New York, London, and 1980s. '{he fundamental dynamic p?sited here is that ~e more gl<;>b-
Tokyo experience similar transformations concentrated in so brief a pe- alized die economy becomes, the higher the agglomerap.on of central
riod of time? Not examined at length in my study, but important to its functions in a relatively few sites, that is, in global cities. '
theoretical framework, is how transformations in cities ranging from Paris The extremely high densities evident in the business districts of these
to Frankfurt to Hong Kong and Sao Paulo have responded to the same cities are one spatial expression of this logic. The widely accepted notion
dynamic. To understand the puzzle of parallel change in diverse cities that density and agglomeration will become obsolete because global tele-
requires not simply a point-by-point comparison of New York, London, communications advances allow for maximum population and resource
and Tokyo, but a situating of these cities in a set of global processes. In dispersal is poorly conceived. It is, I argue, precisely because of th~ terri-
order to understand why major cities with different histories and cultures torial dispersal facilitated by telecommunication that agglomeration of
have undergone parallel economic and social changes, we need to exam- certain centralizing activities has sharply increased. This is not a mere
ine transformations in the world economy. Yet the term global city may continuation of old patterns of agglomeration; there is a new logic for
be reductive and misleading if it suggests that cities are mere outcomes of concentration. In Weberian terms, there is a new system of "coordina-
a global economic machine. They are specific places whose spaces, inter- tion," one which focuses on the development of specific geographic con-
nal dynamics, and social structure matter; indeed, we may be able to trol sites in the international economic order.
understand the global order only by analyzing why key structures of the A second major theme of this book concerns the impact of this type of
world economy are necessarily situated in cities. economic growth on the economic order within these cities. It is neces-
sary to go beyond the Weberian notion of coordination and Bell's (1973)
. How does the P?sition of these cities in the world economy today
differ from that which they have historically held as centers of banking notion of the postindustrial society to understand this new urban order.
and trade? When Max Weber analyzed the medieval cities woven to- Bell like Weber assumes that the further society evolves from nine-
'
teenth-century '
industrial capitalism, the more the apex of the social order
gether in the Hanseatic League, he conceived their trade as the exchange
of surplus production; it was his view that a medieval city could withdraw is involved in pure managerial process, with the content of what is to be
from external trade and continue to support itself, albeit on a reduced managed becoming of secondary importance. Global cities are, however,
scale. The modem molecule of global cities is nothing like the trade not only nodal points for the coordination of processes (Friedmann
among self-sufficient places in the Hanseatic League, as Weber under- 1986); they are also particular sites of production. They are sites_for_ (1)
ste>_od it. The first thesis advanced in this book is that the territorial dis- the production of specialized services needed by complex orgaruzati~ns
persal of current economic activity creates a need for expanded central for running a spatially dispersed network of factories, offices, and service
control and management. In other words, while in principle the terri- outlets; and (2) the production of financial innovations and the making
torial decentralization of economic activity in recent years could have of markets, both central to the internationalization and expansion of the
been accompanied by a corresponding decentralization in ownership and financial industry. To understand the structure of a global city, we have to
hence in the appropriation of profits, there has been little movement in understand it as a place where certain kinds of work can get done, which
that direction. Though large firms have increased their subcontracting to is to say that we have to get beyond the dichotomy betw~en manu~ac_tur-
s~aller firms, and many national firms in the newly industrializing coun- ing and services. The "things" a global city makes are highly specialized
tnes have grown rapidly, this form of growth is ultimately part of a chain. services and financial goods.
7
6 CHAPTER ONE OVERVIEW
ing the development of this capability and is a prime beneficiary, it is not
It is true that high-level business setvices, from accounting to eco-
nomic consulting, are not usually analyzed as a production process. Such the sole user.
Equally misleading would be an exclusive focus on transnational banks.
services are usually seen as a type of output derived from high-level tech-
nical knowledge. I shall challenge this view. Moreover, using new schol-
u to the end of the 1982 Third World debt crisis, the large transna-
ti!nal banks dominated the financial markets in terms of both volume
ars~p on prod~c_er ~etvices, I shall examine the extent to which a key
and the nature of firm transactions. After 1982, this dominance was in-
trait of global ciu.es is that they are the most advanced production sites
creasingly challenged by other financial institutions and the innovations
for creating these setvices.
A second way this analysis goes beyond the existing literature on cities they produced. This led to a transformation in th~ le~~g c_omponents of
the financial industry, a proliferation of financial mst1.tut1.ons, and the
concerns the financial industry. I shall explore how the character of a
rapid internationalization of financial markets rather than just a few
global city is shaped by the emerging organization of the financial indus-
banks. The incorporation of a multiplicity of markets all over the world
try. The accelerated production of innovations and the new importance of
into a global system fed the growth of the industry after the 1982 debt
a large number of relatively small financial institutions led to a renewed
crisis while also creating new forms of concentration in a few leading
or expanded role for the marketplace in the financial industry in the de-
finan~ial centers. Hence, in the case of the financial industry, a focus on
c_ade of the 1980s. The marketplace has assumed new strategic and rou-
the large transnational banks would exclude precisely those sectors of the
ti.ne economic functions, in comparison to the prior phase, when the
industry where much of the new growth and production of innovations
large transnational banks dominated the national and international finan-
has occurred; it would leave out an examination of the wide range of
cial market. Insofar as financial "products" can be used internationally,
activities, firms, and markets that constitute the financial industry since
the market has reappeared in a new form in the global economy. New
York, London, and Tokyo play roles as production sites for financial in- the 1980s.
Thus there are a number of reasons to focus a study on marketplaces
struments and centralized marketplaces for these "products."
and pr~duction sites rather than on the large corporations and banks.
A key dynamic running through these various activities and organizing
Most scholarship on the internationalization of the economy has already
my ~~ysis of the place of global cities in the world economy is their
focused on the large corporations and transnational banks. To continue
cap~bility for producing global control. By focusing on the production of
to focus on the corporations and banks would mean to limit attention to
selVlc~s and financial innovations, I am seeking to displace the focus of
their formal power, rather than examining the wide array of economic
attenti.on from the familiar issues of the power of large corporations over
activities, many outside the corporation, needed to produce and repro-
governm~nts and _econ~mies, or supracorporate concentration of power
duce that power. And, in the case of finance, a focus on the large trans~a-
through mterlocking directorates or organizations, such as the IMF. I
tional banks would leave out precisely that institutional sector of the m-
want to focus on an aspect that has received less attention, which could
dustry where the key components of the new growth have been _invented
be referred to as the practice of global control: the work of producing
and put into circulation. Finally, exclusive focus on corporati.ons and
~d reproducing the organization and management of a global produc-
banks leaves out a number of issues about the social, economic, and spa-
ti.on system and a global marketplace for finance. My focus is not on
tial impact of these activities on the cities that contain them, a major
power, but on production: the production of those inputs that constitute
the capability for global control and the infrastructure of jobs involved in concern in this book and one I return to below.
A third major theme explored in this book concerns the consequences
this production.
of these developments for the national urban system in each of these
The power of large corporations is insufficient to explain the capability
countries and for the relationship of the global city to its nation-state.
for global control. Obviously, governments also face an increasingly com-
While a few major cities are the sites of production for the new global
plex environment in which highly sophisticated machineries of central-
control capability, a large number of other major cities have lost their role
ized. ~ana_gement and control are necessary. Moreover, the high level of
as leading export centers for industrial manufacturing, as a res~t o~ the
specializati.on and the growing demand for these specialized inputs have
decentralization of this form of production. Cities such as Detrmt, Liver-
created the conditions for a freestanding industry. Now small firms can
pool, Manchester, and now increasingly Nagoya and Osaka have bee_n
?uy co~ponents of global capability, such as management consulting or
affected by the decentralization of their key industries at the domesu.c
mternati.onal legal advice. And so can firms and governments anywhere in
and international levels. According to the first hypothesis presented
the world. While the large corporation is undoubtedly a key agent induc-
9
8 CHAPTER ONE OVERVIEW
above, this same process has contributed to the growth of service in- cities since the 1980s. These cities constitute a system rather than merely
dustries that produce the specialized inputs to run global production competing with each other. What contributes to gro~ in_ the netw~rk
processes and global markets for inputs and outputs. These industries- of global cities may well not contribute to growth m nations. For m-
international legal and accounting services, management consulting, :fi- stance is there a systemic relation between, on the one hand, the growth
nancial services-are heavily concentrated in cities such as New York in global cities and, on the oth~r han~, the de:fic~ts of national govern-
London, and Tokyo. We need to know how this growth alters the rela-' ments and the decline of major mdustnal centers m each of these coun-
tions between the global cities and what were once the leading industrial tries in the 1980s?
centers in their nations. Does globalization bring about a triangulation so The fourth and final theme in the book concerns the impact of these
that New York, for example, now plays a role in the fortunes of Detroit new forms of, and conditions for, growth on the social order of the
that it did not play when that city was home to most production jobs in global city. There is a vast body of lit_erature o_n the impact of a dyn~c,
one of the leading industries, auto manufacturing? Or, in the case of high-growth manufacturing sector m the_ highl~ developed ~ountnes,
Japan, we need to ask, for example, if there is a connection between the which shows that it raised wages, reduced mequality, and contnbuted to
increasing shift of production out of Toyota City (Nagoya) to offshore the formation of a middle class. Much less is known about the sociology
locations (Thailand, South Korea, and the United States) and the devel- of a service economy. Daniel Bell's (1973) The Coming of Post-Industrial
opment for the first time of a new headquarters for Toyota in Tokyo. Society posits that such an economy will result in growth in the number
Similarly, there is a question about the relation between such major of highly educated workers and a more rational _relation of ~orkers to
cities as Chicago, Osaka, and Manchester, once leading industrial centers issues of social equity. One could argue that any city representlng a post-
in the world, and global markets generally. Both Chicago and Osaka industrial economy would surely contain leading sectors such as those of
were and continue to be important :financial centers on the basis of their New York London, and increasingly Tokyo.
manufacturing industries. We would want to know if they have lost I will e;amine to what extent the new structure of economic activity
ground, relatively, in these functions as a result of their decline in the has brought about changes in the organization of work, reflected in a
global industrial market, or instead have undergone parallel transforma- shift in the job supply and polarization in the income distribution and
tion toward strengthening of service functions. Chicago, for example, was occupational distribution of workers. Major growth industries show a
at the heart of a massive agroindustrial complex, a vast regional economy. greater incidence of jobs at the high- and low-paying ends o_f the_ scale
How has the decline of that regional economic system affected Chicago? than do the older industries now in decline. Almost half the Jobs m the
In all these questions, it is a matter of understanding what growth producer services are lower-income jobs, and half are in_ the two highest
embedded in the international system of producer services and :finance earnings classes. In contrast, a large share of manufacturmg workers we~e
has entailed for different levels in the national urban hierarchy. The in the middle-earnings jobs during the postwar period of high growth m
broader trends-decentralization of plants, offices, and service outlets, these industries in the United States and United Kingdom.
along with the expansion of central functions as a consequence of the Two other developments in global cities have also contributed to eco-
need to manage such decentralized organization of firms-may well have nomic polarization. One is the vast supply of low-wage jobs req~ed by
created conditions contributing to the growth of regional subcenters high-income gentrification in both its residential and commercial set-
minor versions of what New York, London, and Tokyo do on a globJ tings. The increase in the numbers of expensive restaurants, luxury hous-
and national scale. The extent to which the developments posited for ing, luxury hotels, gourmet shops, boutiques, French hand _laundries, an_d
New York, London, and Tokyo are also replicated, perhaps in less accen- special cleaners that ornament the new urban landscape illus1:ates ~s
tuated form, in smaller cities, at lower levels of the urban hierarchy, is an trend. Furthermore, there is a continuing need for low-wage mdustnal
open, but in1portant, question. services, even in such sectors as :finance and specialized services. A second
The new international forms of economic activity raise a problem development that has reached significant proportions is what I call the
about the relationship between nation-states and global cities. The rela- downgrading of the manufacturing sector, a process in which the share_ of
tion between city and nation is a theme that keeps returning throughout unionized shops declines and wages deteriorate while sweatshops and m-
this book; it is the political dimension of the economic changes I explore. dustrial homework proliferate. This process includes the downgrading of
I posit the possibility of a systemic discontinuity between what used to be jobs within existing industries and the job suppl~ patterns of _some of the
thought of as national growth and the forms of growth evident in global new industries, notably electronics assembly. It is worth notlng that the
10
CHAPTER ONE OVERVIEW 11
growth of a downgraded manufacturing sector has been strongest in highly specialized skills in top-level management (C~andler 1977). These
cities such as New York and London.
have also "increased the dependence of the corporanon on pr?ducer ser-
The expansion of low-wage jobs as a function of growth trends implies . s which in tum has fostered growth and development of higher levels
VICe,
a reorganization of the capital-labor relation. To see this, it is important
of expertise among producer service firms" (St~back and ~oyelle 1982:
to distinguish the characteristics of jobs from their sectoral location since
15). What were once support resourc~~ for m~Jor corporan~ns have b~-
highly dynamic, technologically advanced growth sectors may well con-
come crucial inputs in corporate dec1s1onmaking. A firm with a muln-
tain low-wage dead-end jobs. Furthermore, the distinction between sec-
plicity of geographically dispersed manufacturing pl_ants con~b~tes. to
toral characteristics and sectoral growth patterns is crucial: Backward
the development of new types of planning in producnon and distnbunon
s~ctors, such as downgraded manufacturing or low-wage service occupa-
surrounding the firm.
no?s, can be part of major growth trends in a highly developed economy. The growth of international banks and the more recent dive~sification
It 1s often assumed that backward sectors express decline trends. Sim- of the financial industry have also expanded the demand for highly spe-
ilarly, there is a tendency to assume that advanced sectors, such as fi-
cialized service inputs. In the 1960s and 1970s, there was considerable
nance, have mostly good, white-collar jobs. In fact, they contain a good
geographic dispersal in the banking ind~stry~ with ~~y region~ centers
number of low-paying jobs, from cleaner to stock clerk.
and offshore locations mostly involved m fairly tradinonal banking. The
These, then, are the major themes and implications of my study.
diversification and internationalization of finance over the last decade re-
sulted in a strong trend toward concentrating the "management" of the
As a further word of introduction I must sketch the reasons why pro-
global industry and the production of financial .~ovations _in a more
ducer services and finance have grown so rapidly since the 1970s and why
limited number of major locations. This dynamic 1s not unlike that of
they have high concentrations in cities such as New York London and
multisite manufacturing or service firms.
'
Tokyo. The familiar explanation is that the decade of the 1980s ' a
was but
Major trends toward the development of multisite manufa~turing, ser-
part of a larger economic trend, the shift to services. And the simple
vice, and banking have created an expanded demand for a wide range of
explanation of their high concentration in major cities is that this is be-
specialized service activities to manage and control global networks of
cause of the need for face-to-face communication in the services commu-
factories, service outlets, and branch offices. While to some extent these
nity. While correct, these propositions are incomplete.
activities can be carried out in-house, a large share of them cannot. High
We need to understand first how modem technology has not ended levels of specialization, the possibility of externalizing the production of
nineteenth-century forms of work; rather, technology has shifted a num-
some of these services, and the growing demand by large and small firms
ber of activities that were once part of manufacturing into the domain of
and by governments are all conditions that have both re~ulted f~om and
services. The transfer of skills from workers to machines once epitomized
made possible the development of a market for freestanding seMce firms
by th~ ~s~embly line has a present-day version in the transfer of a variety
that produce components for what I refer to as global control capability.
of act1v1t1es from the shop floor into computers, with their attendant
The growth of advanced services for firms, a key component of pro-
technical and professional personnel. Also, functional specialization
ducer services, along with their particular characteristics of production,
within early factories finds a contemporary counterpart in today's pro-
helps to explain the centralization of management and servicing functions
no~ced fragmentation of the work process spatially and organizationally.
that fueled the economic boom of the mid-1980s in New York, London,
This has been called the "global assembly line," the production and as-
and Tokyo. The face-to-face explanation needs to be refined in several
sembly of goods from factories and depots throughout the world, wher-
ways. Advanced services are mostly producer services; unlike other types
ever labor costs and economies of scale make an international division of
of services, they are only weakly dependent on proximity to the con-
labor cost-effective. It is, however, this very "global assembly line" that
sumers served. Rather, such specialized firms benefit from and need to
creates the need for increased centralization and complexity of manage-
locate close to other firms who produce key inputs or whose proximity
~ent, co1:1trol, and planning. The development of the modem corpora-
makes possible joint production of certain service offerings. The_ accou1:1t-
non and its massive participation in world markets and foreign countries
ing firm can service its clients at a distance but the nature of its service
has made planning, internal administration, product development, and
depends on proximity to other specialists, from lawyers to programm~r~.
r_esearch increasingly important and complex. Diversification of product
Major corporate transactions today typically require simult~eous part1_c1-
lines, mergers, and transnationalization of economic activities all require
pation of several specialized firms providing legal, accounnng, financial,
13
12 CHAPTER ONE OVERVIEW
move of large corporations into consumer seIVices contributed to ~e
public relations, management consulting, and other such services. More-
closure and decline of many small independently own_e~ consumer se1V1ce
?ver, concentration arises out of the needs and expectations of the high-
firms. The growing complexity of governmental actiVIty further fed the
mcome workers employed in these firms. They are attracted to the ame-
demand for specialized seIVices and expanded central management and
~ties and lifestyles that large urban centers can offer and are likely to live
lanning. Second, the growth of the financial industry, and especially of
m central areas rather than in suburbs.
iey sectors of that industry, benefited from policies and ~onditions often
The importance of this concentration of economic activity in New
harmful to other industrial sectors, notably manufacturmg. The overall
York, London, and Tokyo is heightened by the fact that advanced ser-
effect again was to feed growth of specialized seIVices located in ~ajor
vices and finance were the fastest-growing sectors in the economies of
cities and to undermine the economic base of other types of localities.
their countries in _the 1980s. It is a common mistake to attribute high
Third the conditions and patterns subsumed under the first two working
growth_ to the seIVice sector as a whole. In fact, other major seIVices, such
hypotlleses suggest a transformation in the economic relationships
as public and consumer services, have leveled off since the middle or late
among global cities, the nation-states where they are located, and the
1960s in the United States and since the 1970s in the United Kingdom
world economy. Prior to the current phase, there was high correspond-
and Japan. In other words, the concentration of advanced seIVices and
ence between major growth sectors and overall national growth. Today
finance in major urban centers represents a disproportionate share of the
we see increased asymmetry: The conditions promoting growth in global
nationwide growth in employment and GNP relative to population share.
cities contain as significant components the decline of other areas of the
The combination of high levels of speculation and a multiplicity of
United States, the United Kingdom, and Japan and the accumulation of
small firms as core elements of the financial and producer services com-
government debt and corporate debt. Fourth, the ~ew con~tions of
plex raises a question about the durability of this model of growth. In-
growth have contributed to elements of a. new class ~gnme~t m global
deed, by the mid-1990s the larger banks once again had a more central
cities. The occupational structure of maJor growth mdustnes charac-
role in the financial industry, and competition and the advantages of scale
terized by the locational concentration of major growth sectors in global
had l~d to mergers and acquisitions of small firms. Finally, and perhaps
cities in combination with the polarized occupational structure of these
most important, at what point do the sources of profits generated by this
sectors has created and contributed to growth of a high-income stratum
form of economic growth become exhausted?
and a low-income stratum of workers. It has done so directly through the
Over the_ last twen~ years, major economic growth trends have pro-
organization of work and occupational structure of major growth sectors.
duced spatial and social arrangements considerably divergent from the
And it has done so indirectly through the jobs needed to seIVice the new
configuration that characterized the preceding decades. The economic
high-income workers, both at work and at home, as well as the needs of
sectors, localities, and occupations that account for a large share of eco-
nomic growth today differ from those central to the immediate post- the expanded low-wage work force.
World W~ II period. Most commonly, this process has been interpreted
This brief introductory chapter presents the main issues and arguments
as the decline of old and the emergence of new industries, typically seen
the book will develop. Part One discusses the major trends in the spatial
as two somewhat unconnected events necessary for the renewal of an
dispersion of production and the reorganization of the financial industry.
economy. I shall challenge this disconnecting view; this means asserting
The focus here is on the geography, composition, and institutions that
that new gro~ rests, to ~ significant extent, on deep structural pro-
constitute the globalization of economic activity since the 1980s. This
c~sses of decline .. The question of the long-term durability of the global
aims to be a straightf01ward empirical description of the composition and
ci_ty_ that I have Just posed turns on not seeing decline and growth as
direction of international investment, seIVice transactions, and financial
distinct. The "high-flying" 1980s and 1990s emerged in part out of the
flows. It entailed dealing with a vast amount of evidence, disaggregating
same dynamics that led manufacturing of the old sort to decline.
in order to capture dimensions of interest to the analysis in this book and
This systemic connection, I will argue, plays itself out in several eco-
reaggregating in order to facilitate comprehension. The many tables in
nomic arenas. I propose to examine this through several working hypoth-
eses. They are the following: First, the geographic dispersal of manufac- these chapters seIVe to summarize the detail~·-J?e ~urpose. ~~~~~':t~ly
io understand how various forms of globalizaton m econormc a~ti\11):y
turing, which contributed to the decline of old industrial centers, created
a demand for expanded central management and planning and the neces- ge~~a-'newTorrns,,.of cen~-~ti.?!.1:?._ sp:~ifi~a!!Y,. the _r;P!~.Y~, ~?_;ig
aggl!)meration of specialized se1V1ces anctfrn.ance eVIdent m maJor cities.,
sary specialized services, key components of growth in global cities. The
14 CHAPTER ONE 15
OVERVIEW
Part Two examines the industries that form the core in these cities and uld raise in a study about major contemporary cities. But these ques-
the national and transnational space economy of these industries. The ~
nons are stratemc
o--
for understanding such cities from the perspective
.
of
.
purpose is to arrive at an understanding of the place of global cities in the th world economy-what moment in the global accumulation process is
organization of these industries, and to do so through an examination of co:tained by or located in major cities? And they are strategic for und~r-
the characteristics of the industries-rather than a detailed analysis of the standing the interaction of local and global processes-h~w doe~ the ~s-
economic base of the cities-in the context of national urban systems as t on·cal , political , economic , and social
. specificity
. . of a pamcular city resist,>
well as an elemental global hierarchy of cities. Chapter 5 examines the facilitate, remain untouched by mcorporatlon mto the world economy.
characteristics of the new components of centralization. They amount to Why has Tokyo's trajectory increasingly diverged from those of New York
a new basic industry: the production of management and control opera - d London in the 1990s? In this context, the contrasts among New
tions, of the highly specialized services needed to run the world economy, ~rk, London, and Tokyo should be ~umina~g, given. the~r roles as
of new financial instruments. Chapters 6 and 7 discuss the role of global leading world financial centers and their very different histones, econ-
cities in the new organization of the world economy, examining the de- omies, and cultures.
velopment of these cities into sites of production for the new basic indus-
try and the growth of inter-city transactions.
Part Three discusses some of the key aspects in the distribution of
benefits and burdens of this particular form of growth. What is the range
uf jobs directly and indirectly sustaining the operation of this type of
economic sector? And to what extent does the occupational and income
distribution of these cities' resident work forces reflect the existence of a
thriving profitmaking economic core? Chapter 8 examines how these
transformations in economic activity generate a new labor demand and a
new income structure in these cities. Chapter 9 examines the characteris-
tics of the backward economic sectors that appear to thrive in these cities
and seeks to understand what, if any, is the articulation between these
two types of growth.
The concluding chapter discusses the political implications of these de-
velopments, addressing the following three questions. What are the polit-
ical implications of concentration of the benefits of economic growth in
global cities and in a stratum of high-income workers alongside the de-
cline of what were once thriving localities and sectors of the work force?
How does the consolidation of the world economy and of global centers
for its control and management affect the relationship between nation
and city, particularly between global cities and the nation-states they sup-
posedly belong to? The final question concerns the durability of these
arrangements: What are the conditions for the reproduction of this mode
of growth?
The three central questions organizing this book can be simply put as
follows. What is the role of major cities in the organization and manage-
ment of the world economy? In what ways has the consolidation of a
world economy affected the economic base and associated social and po-
litical order in major cities? What happens to the relationship between
state and city under conditions of a strong articulation between a city and
the world economy? These represent only a few of all the questions one