Crisis or Opportunity?

1. Crisis or Opportunity?

4. Modes of development • The technological arrangements through which labor acts upon matter to generate the product, ultimately determining the level of surplus. (Agrarian, Industrial, and informational). Each MOD is defined by the element that is fundamental in determining the productivity of the production process. • Each MOD has a structurally determined goal, or performance principle, around which technological processes are organized: • Industrialism: oriented toward economic growth, that is, toward maximizing output • Informationalism: oriented toward technological development, that is toward the accumulation of knowledge. While higher levels of knowledge will result in higher levels of output, it is the pursuit and accumulation of knowledge itself that determines the technological function under informationalism. • Modes of Production (including capitalism) evolve with the process of historical change. In some instances, this leads to their abrupt supersession; more often, they transform themselves by responding to social conflicts, economic crises, and political challenges, through a reorganization that includes, as a fundamental element, the utilization of new technical relationships that may encompass the introduction of a new MOD.

5. Three Different MODs • i. Pre-Industrial (Agrarian MOD) • Extractive: economy based on agriculture, mining, fishing, timber. Increases in surplus result from quantitative increases in labor and means of production, including land. • ii. Industrial- (Industrial MOD) • Fabricating: using energy and machine technology for the manufacture of goods. Source of increasing surplus lies in the introduction of new energy sources and in the quality of the use of such energy. • iii. Post-Industrial- (Informational MOD) • One of processing in which telecommunications and computers are strategic for the exchange of

6. Mode of Production: • A mode of production is characterized by the structural principle by which surplus is appropriated, thus designating the structural beneficiary of such appropriation, namely the dominant class. • Castells, M. (1989). The informational city: information technology, economic restructuring, and the urban-regional process. Oxford, UK; Cambridge, Mass., USA, B. Blackwell: Chap. 1.

7. Production: • The action of humankind on matter (low entropy matter-energy) to appropriate and transform for its benefit by obtaining a product, consuming part of it (in an unevenly distributed manner), and accumulating the surplus for investment in accordance with socially determined goals. • Humankind: labor and the organizers of production • Labor: internally differentiated and stratified according the role of the producers in the production process. • Matter: nature, human-modified nature, and human-produced matter. • Technology: The type of relationship established between labor and matter in the production process through the intermediation of a given set of means of production enacted by energy and knowledge. • Surplus: The share of the product that exceeds the historically determined needs for the reproduction of the elements of the production process • Castells, M. (1989). The informational city: information technology, economic restructuring, and the urban-regional process. Oxford, UK; Cambridge, Mass., USA, B. Blackwell: Chap. 1.

8. The capitalist and statist modes of production The capitalist mode of production is characterized by: 1. separation between producers and their MOP (means of production) 2. the commodification of labor 3. private ownership of the MOP on the basis of control of commodified surplus (capital--e.g., machinery, buildings, tools, computers) These three features determine the basic principle of appropriation and distribution of surplus by the capitalist class. Capitalism is oriented toward profit-maximizing, that is, toward increasing the amount and proportion of surplus appropriated on the basis of control over the MOP. Under the statist mode of production (in the centrally planned economies of communist countries) the control of surplus is external to the economic sphere: it lies in the hands of the power-holders in the state, that is, in the apparatus benefiting from the institutional monopoly of violence. The allocation and distribution of goods and services is determined by central planning (as opposed to the market as in capitalism). From Castells (1989)

9. The MAIN PROCESS in the transition to a "post-industrial society" is NOT the shift from goods to services. Rather it is the emergence of information processing as the core, fundamental activity conditioning the effectiveness and productivity of all processes of production, distribution, consumption, and management (Castells, 1991:10). The new centrality of information processing results from a series of developments in the spheres of: (1) production, (2) consumption, and (3) of state intervention. 1. production: emergence of large corporations, the shift from capital-labor as key to knowledge (science, technology, management) as key to increase surplus 2. consumption: constitution of mass markets, info gathering/info distribution. The rise of the welfare state the and millions of jobs in information handling 3. State intervention: depends on steering by manipulating info networks, increasingly complex administration

10. Commodity Production: The inner core of capitalist society consists of commodity production. Commodity production may be characterized as a general social process in which capitalist firms take materials and equipment, combine these with labor, and then sell the output for a profit. Process (Castells 1989) LP M - C ...P...C' - M‘(etc.) MP M = money C = commodity LP = labor power MP = means of production (i.e., tools, machinery, factory, nature) P = production

12. History and long waves of capitalism i-ii I. The Great Depression of the 1930s and the decline of the laissez-faire model of the pre-Depression era II. Post-WWII Restructuring, emergence of a new model (Keynesianism), based 3 structural modifications: 1. social pact between big capital and big labor (limited capital-labor accord) 2. regulation and intervention by the state (limited capital-citizen accord) 3. emergence of new global institutions to control the international economic order (IMF). These changes ushered in the golden age of western capitalism, a quarter century of unprecedented economic growth

13. History and long waves of capitalism iii-iv • III.Crisis of the system in the 1970s. Mechanisms established in the 1930s and 1940s created contradictions that thwarted growth in the capitalist economy: • *labor steadily increased its share of the product • *social movements imposed constraints • *fiscal crisis strapped the state • *international competition intensified • *oil shock • IV.Current period: Capitalist Restructuring in the 1990s and the creation of a new model of socio-economic organization based on three fundamental processes: • 1) the appropriation by capital of a significantly higher share of surplus from the production process (click for synical image) • 2) a substantial change in the pattern of state intervention, with the emphasis shifted from social redistribution to capital accumulation (click for historical data) • 3) accelerated internationalization of all economic processes • New information technologies have been decisive in the implementation of these three fundamental processes of capitalist restructuring.

14. Market Rationality vs. Social Rationality A COMMODITY is the form products (e.g., washing machines, clothes, fast food) take when production is organized through exchange in a market system. The commodity has two powers: first, it can satisfy some human want, that is, it has USE VALUE; second it has the power to command other commodities in exchange, a power of exchangeability referred to as EXCHANGE VALUE. Survival in a capitalist economy demands a constant renewal of investment aimed at reaching larger and larger markets. This involves market rationality. Market Rationality Logic tied to the economic pursuit of the highest possible profit. Emphasis is placed on the realization of exchange value. Social (and ecological) Rationality Logic that takes into account community and solidarity relations (and biophysical reality) in a way that prioritizes use value (and sustainability) as opposed to the realization of exchange value.

15. Emphasis on sustainability puts Environment-Development interdependencies in a new light. from D E (1960’s-1980’s) to E  D (1980’s-2000+) However, much work needs to be done to get a clearer picture of the poverty-environment-equity nexus.

17. Wealth Development Environment Poverty To what extent does poverty contribute to environmental degradation?To what extent do environmental hazards contribute to poverty? • There is little evidence of urban poverty being a significant contributor to environmental degradation but strong evidence that urban environmental hazards are a major cause or contributor to urban poverty. David Satterthwaite (2002) • Characterization of a North-South divide is outdated: Globalized rich and localized poor (Wolfgang Sachs 2002); Graham and Marvin (2001) Splintering Urbanism • Most definitions of poverty used in the South fail to consider health (or access to basic services which are essential for health). We need a broader definition of urban poverty (see Friedmann’s work on poverty and access to the bases of social power—e.g., defensible life space/housing, access to surplus time above the needs of subsistence, social networks, and participation in social organizations; esp books on Empowerment 1992, and the Prospect of Cities 2002). Also see Evans (2002) Livable Cities.