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Remaking cities, changing people

Kalpana Sharma

Geographer David Harvey critiques the impact of neo-liberalism on the urbanisation process.

THE MARXIST geographer David Harvey could not have chosen a more appropriate time to come to Mumbai. For his analysis of neo-liberalism and its impact on forms of urbanisation had an uncanny resonance vis-à-vis what is happening in India's financial capital.

Professor Harvey, who is the Distinguished Professor of Anthropology at the City University of New York, was the keynote speaker at an International Conference on "Accumulation, Dispossession, Claims and Counterclaims: Transformative Cities in the New Global Order" organised by the Department of Geography of the University of Mumbai on October 12 and 13. His work on the relationship between political and economic change and the processes of urbanisation is well known. Apart from his early works such as Social Justice and the City (1973), his most recent books are The New Imperialism (2003) written after the Iraq war and A Brief History of Neoliberalism (2005). It is the latter work that speaks of "accumulation by dispossession," the core of his address at the Mumbai conference, a concept that could be applied to processes of urbanisation in India.

The 71-year-old bearded professor looks like one but does not speak like an academic. His talk was refreshingly free of jargon. In simple everyday language, he expounded on his theory about how cities around the world were being shaped, the kind of people who were remaking them, and how this process also changed people. Professor Harvey has studied the growth and development of Paris between 1848-1871 and that of New York City since 1942. The two basic rules of capitalistic engagement, continuous accumulation of capital and reproducing class relations, also apply in the context of the growth of cities. "There is a fetish about growth," he says. "If we don't grow, we die. Everyone cheers when we have 8-10 per cent growth. But what does this mean for the environment and for people," he asks.

Paris was transformed when the scale of planning encompassed the city as a whole instead of parts of it. In New York, too, the planning took in the entire New York Metropolitan Region and became a pattern that several other cities in the United States followed. These processes were able to absorb surplus capital, says Professor Harvey, at a time of capitalistic growth.

But in New York City, in particular, this form of rapid urbanisation in the 1960s led to the "hollowing out" of the city as industries and wealth moved to the suburbs. The centre of the city was left to the racially marked minorities. So even as there was substantial growth in the economy, urban centres were suffering. Federal funding to expand employment possibilities through expanded municipal services was one solution to this.

Another was what New York City attempted by "spectacular property development schemes" in the city centre, something we see happening in Mumbai today particularly in the former textile mill lands. It was during this period that much of Manhattan was built including the World Trade Centre. It was expected that this would yield substantial tax revenues for the city. But the global crash in the property market in 1973, the oil crisis, and a cutback in Federal subsidies, created a financial crisis for New York City, which has a budget equivalent to that of some European countries. The city began borrowing heavily from investment banks but within a couple of years, they refused to lend anymore.

The U.S. government could not afford to allow New York City to go bankrupt. In order to find a way to revitalise the city, it made a deal with Saudi Arabia in 1975, a couple of years after the oil crisis, to recycle surplus petrodollars through the New York Federal Bank. This, says Professor Harvey, was the beginning of the process that has made New York City the world's financial capital. It also meant the end of manufacturing in the city and the beginning of what he calls "debt bottling plants."

As part of the process of revitalising New York City, a Downtown Business Partnership was set up that planned to invest in turning Manhattan into a cultural, media, and tourist centre. At the same time, there were huge cuts in municipal services and lay offs. To attract investment into the city a public relations exercise was launched with the slogan "I love New York," one that survives even today.

But the unions, who were badly hit by the cutbacks and who opposed the pro-business direction, launched a parallel campaign with the slogan "Fear City." They picketed tourist sites including the airport and drew attention of visitors to cutbacks in police and fire services and in garbage collection. They stressed that this was making New York City unsafe and dirty.

New twist

The campaign worked as tourism was hit. The pro-business groups running the city set about expanding civic services and re-employing people. But there was a new twist. The services were extended only to Manhattan while other parts of the city continued to be neglected. "They turned Manhattan into one large gated community. They re-oriented the municipal government from serving the people to serving business," explains Professor Harvey.

This form of urban development is based on two principles that the new liberal political economy follows worldwide, says Professor Harvey. One, if there is a conflict between the well being of financial institutions and the well being of people, choose the former. In innumerable instances where either federal governments or multilateral agencies have stepped in to deal with debt, they ensure first that the lenders are paid off. The second principle, he says, is that you don't abolish municipal government or government but change their role from serving people to creating a favourable business climate. If there's a conflict between the welfare of people and creating a good business climate, choose the latter. This, he says, has become the core of the neo-liberal programme all over the world in the last two or three decades.

Surplus global capital

What about surplus global capital today? Where is it being absorbed? Urbanisation in developing countries is swallowing up much of the global surplus capital, he says. For instance, "Urbanisation of China is a phenomenal sink for surplus capital," says Professor Harvey and points out that 50 per cent of the world's cement supplies in the last five years were used by China. All this has an effect on the global economy. Countries like Chile and Australia, for instance, had benefited from the demand for raw material from China. Now India is also beginning to invite such investment. "The rules of engagement of capitalist economics have been crucially wrapped up in processes of urbanisation that are on a world scale," he emphasises.

Neo-liberal economics has been spectacularly successful from the standpoint of the upper classes but not for generating growth, says Professor Harvey. Wealth, he said, was not being generated out of growth but by taking away people's rights to such entitlements as pension, decent education, and housing. "The global processes of dispossession are transforming our cities. And as our cities get transformed, we get transformed. As a result, we also become neo-liberals. We begin to look for individual solutions to problems and social solidarity disappears," says Professor Harvey.

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