Cities come to the rescue of capitalism

Cities come to the rescue of capitalism

While the world economy continues to create new and technology induced jobs the skill set of most college and high school graduates does not fit employment opportunities. Finally, most matured economies have established their manufacturing arm in China as means to maintain prices stable so that goods are accessible to their population which is largely middle class. They are the source of employment and the drivers of innovation. This group is urban and recently clusters around what is now defined as Mega Urban Regions (MURS). In short, MURS are the emerging political entity that will dominate the political landscape in the post covid 19 world. These are good economic news but also good political news as city governments enjoy  greater participation of civil society.

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Cities come to the rescue of capitalism

Beatrice E. Rangel

When Cossimo Medici fought to consolidate one of the first working democracies in Europe after the Greek experience little he knew he was consolidating a political entity shaped by and anchored in international trade. It of course was the city state.

This entity succeeded as launching board of international trade until the 18th century when trade had succeeded in reshaping geography and a more efficient entity emerged: the nation state. And while capitalism truly took off with the nation state its pillars were created by the merchant cities of Europe and Asia.

Today technology cum trade are demanding more effective political organizations and above all the release of  institutional burdens that are beginning to halt development of a more effective capitalist system.  Signs of current institutional inefficiency abound. Inequality is growing whether you are in South Africa; Brazil , Shri Lanka or the United States.

Further,  while the world economy continues to create new and technology induced jobs the skill set of most college and high school graduates does not fit employment opportunities. Finally, most matured economies have established their manufacturing arm in China as means to maintain prices stable so that goods are accessible to their population which is largely middle class.

All these developments have one triggering cause in common: the rise of the clerisy and the decay of the petite bourgeoisie or that human group labeled by Thomas Pikkety as the Merchant Right. This is the wealth creating class that thrives on producing and delivering goods and services . This class thrives on innovation and freedom which directly pushed it to conflict with the Clerisy.

Indeed the Clerisy is the social class of  legitimizers who thrive on regulation and central control to impose a given vision of the world into which they militate. The US Clerisy today represents 15% of the work force occupying the highest paying jobs in corporations, NGOs, government bureaucracy and liberal professions such as finance and law. The growth of the Clerisy explains the maze of regulations that encircle modern and mature economies. This regulatory straight jacket has pushed the manufacturing arm of the supply chain to China.

Enter covid19 to do away for a sizable amount of time with international travel and disrupt the world supply chain. Productive effort and political leadership is forced to retreat to the cities. And in the cities the Merchant Right  has greater political power. Given the mounting and pressing demands for  economic efficiency; job creation and economic reignition those people that earn their living in the market place and through constant exchanges they are essential to create wealth. The Clerisy on the contrary,  is a rent extracting class of global nature knowledgeable about the patterns of climate change and complete ignorant of the life routine of towns in their country.

Assuming that Jump starting the world economy  is an exercise in aggregate demand then relative power has shifted in favor of the petite bourgeoisie. Because it entails rebuilding aggregate demand and without the  small bourgeoisie it Is highly unlikely that there will be aggregate demand. Indeed these are the last mile providers of goods and services. They are the source of employment and the drivers of innovation. This group is urban and recently clusters around what is now defined as Mega Urban Regions(MURS).

MURS are great urban corridors linking several metropolitan areas through transportation and logistics. MURS are not only the fastest growing economic units in the world but cradles of innovation and trade. The US is the country with more MURS in the world.  The largest and richest MUR is in the North East and links Boston to New York to Washington D.C., to Baltimore and ends in Philadelphia. Then there is the so called Silicon Valley area; the Fort Worth-Dallas-Houston and the nascent Miami-Tampa.

In Europe MURS are bringing together Central Europe France and Germany and Spain and Portugal. Mayors in MUR cities are slowly realizing their enhanced power and are beginning to redesign regulation; mobility and urban regulations. Most are aiming at making their cities smart cities with integrated systems and data based service procurement.

In short, MURS are the emerging political entity that will dominate the political landscape in the post covid 19 world. These are good economic news but also good political news as city governments enjoy  greater participation of civil society. This is the best antidote against absolutism and bigotry as Cossimo Medici realized when establishing a democratic regime in Firenze.

Published by laht.com on June 29, 2020

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