What are the manifestations of neoliberalism in the European city? To what extent can we find features of neo-liberalism in the entrepreneurial city? Is it a total or a partial change?

Fordism = post-war theory, workers = consumers: link between productivity and wages (purchasing power). wages policy ?

Wall Street 1929 crisis: excess of speculation in the world? → change of economic system

INTRODUCTION

European cities are mostly characterised by advanced capitalist economies but they went through a series of mutations since the past two decades. Which mechanisms are hidden behind these new urban forms and policies? Why this change and what is its nature? Has it occurred suddenly or is it the result of an evolution? (immediate effects or only today)? Natural change or political choice?

What are the manifestations of neoliberalism in the European city? To what extent can we find features of neo-liberalism in the entrepreneurial city? Is it a total or a partial change? Has the impact of neo-liberalism totally or partially shaped the entrepreneurial city in Europe?

To begin with, the shift will be explained in a general economic context will be examined. Secondly, parallels between neo-liberalism and the entrepreneurial city will be studied while also noticing that neoliberalism has not only shaped positively the European city. The economic dimension of the entrepreneurial city will be asked; does it control everything? Are not there any aspects of the entrepreneurial city that have not been shaped by the economic logic? The aim of the essay is to show that the impact of neoliberalism is a key to understand the entrepreneurial city but that in an European context it is not the only explanation. Is the impact of neoliberalism on the European city uniform?

‘From managerialism to entrepreneurialism’, a transition due to a particular context

To begin with neoliberalism is a phenomenon of the rich western market so European cities were predisposed to adopt it. Nevertheless the shift to neoliberalism in the 1970s -1980s was not a natural change but the result of an unstable economic background. The 1970s – 1980s are indeed darkened by inflation, unemployment and trade deficit. 1973 and 1979 oil crashes are the turning point very revealing of the failures of the previous managerialism: Welfare state intervention led from 1945 to 1960s (policy employment, increase of wages) is seen as a burden on economy because of its lack of flexibility. The inefficiencies of Keynesian approaches in 1975 (J.Chirac) and 1981 (P.Mauroy) in France are relevant to this economic turn. Therefore, neoliberalism would have been adopted as a response to crisis and capitalism regulation. The idea was flexibility to cope with instability (Hayek). The mutation to “3rd industrial revolution”, might explain the inadequacy of Fordist and Keynesian policies to the new economic situation whereas they were efficient in the 1960s (money stability with Breton Woods, increase of exchanges, low price for energy). The market of 2nd industrial revolution products (TV-sets, cars) was saturated in favour of computer and services consumption. Consequently the form and style of capitalism development in European cities has changed since the 1970s (Harvey): capitalism is still embedded in Western economies but the way they manage it is strongly different.

The budge to neoliberalism is associated with a political turn: the victory of Thatcher at the head of the Federal Reserve System is the rallying sign of the developed countries to a market economy. In the 1980s, the establishment of a “Washington consensus” imposed by financial institutions (IMF, world bank) is the first step to neoliberalism emergence. (Reagan). Then, the discourse of decline in the 1970s is replaced by the idea of “urban regeneration”: “Thatcherite Britain’s escape from the cycle of post-war failure”. Indeed councils were blamed for the failure of socialist bureaucratie of the 1960s and 1970s. Transition is even seen as a renewal in the European city since the past two decades. A huge discrepancy between the former European city and the actual entrepreneurial one is noticed, as if the city had been completely remodelled.

Is the transition based on an economic theory? Is the entrepreneurial city is the application of an economic theory, the neo-liberalism? The principles that underpin neo-liberalism are: free-market, reduction of power of workforce, deregulation, growth politics and accumulation of capital in the city, risk and free enterprise, flexible economies… Correspondences between this neo-liberalist concepts and theirs manifestations in the entrepreneurial city are numerous; they are not only visible (UDP, urban landscape and image) but also immaterial (network, governance link private / public, involvement of business in policy-making). But this demonstration of this economic theory may fail: this impact is not ...

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The entrepreneurial city as a manifestation of neo-liberalism?

Inter-urban competition between European cities is a direct effect of neoliberalism and free market. In general there is a competition for funds (national but also from European Union). Cities are indeed led by the neoliberalist incremental logic. Funds + Growth policy: they aim at accumulating and more capital in the urban territory (neoliberalism as a theory of transaction accumulation).

Growth policies are linked with search of profit

e.g of Berlin

“To intensify and expand the market, by increasing the number, frequency, repeatability and formatisation of transactions”

Is the entrepreneurial city nothing more than an economic space? Is ‘to what extent’ synonymous to ‘to an economic extent’? If entrepreneurial city totally economic, the impact of neo-liberalism lead to the entrepreneurial city. Otherwise it may be interested to study whether or not there are some spaces or places where neo-liberalism and the law of market didn’t change the city? Do the impact of neo-liberalism and market logic entirely shape the European city? Changes of mentalities due to economic changes?

We must take into consideration the image of the city shaped by neo-liberalist ideas : to build a positive image so as to attract investors

Impact of neoliberalism on urban landscape? The image is an entrepreneurial field (UDP). Nevertheless, UDP’s are not only neoliberalism and new urban policy + developmental view

UDPs: “material expression of a development logic” (induce a urban and political change)

The city as a space of life and of social relations rather than ‘physical built environments’ p 259 → Not only an economic space

A citizenry shaped by the impact of neo-liberalism or a resistance to economic forces through the preservation social space of life ? Untouched spaces ? (flaneur)

The entrepreneurial city: a city of economic leaders? And what about the inhabitants?

Harvey’s postmodern city is in effect the habitat of the consumer who in turns is a puppet manipulated by more powerful forces

Social change: the entrepreneurial city as a result of its inhabitants ways of life ? But what are the dynamics beyond individual behaviours? Indeed, we can see the possibility of a global change of mentalities (more and more consumption), influenced by economic changes ?

‘Extension of the market principle into non-economic area of life (individuals who would choose their friends and hobbies to maximise their status with future employers)’

Neoliberalism = every one should be an entrepreneur. From the individual entrepreneur (entrepreneur compete with other entrepreneur to keep a job: free market = constant pressure on market) to the entrepreneurial city

Entreprise culture; to act in accordance with market forces

Neoliberalism associated with a specific culture (US culture, a specific language ) English → influence of anglo-american liberalism

Effects of neoliberalism = increasing gap (poor more and more poor and vice versa with rich)

Even if the impact of neoliberalism is important to explain the mechanisms of the European city, me must bear in mind the primacy of policy in the entrepreneurial city. There is indeed a growing importance of the political aspect in the entrepreneurial city

The entrepreneurial city as a political phenomenon?’ A politic ideology rather than an economic one

Chapter 12, p 259

“Entrepreneurial urban regimes must be understood as reflexively constructed political phenomena, rather than as seemingly ‘natural’ responses to processes of economic change” = a transition which has been decided?

The transition to an entrepreneurial city is not a matter of fact. It is the result of political choices and not only of natural economic trends

The political aspect seems to be more important to define the transition to an entrepreneurial city, as it’s the driving force of decisions taken within and outside cities ; so neo-liberalism is a political choice (response to crisis) ; its impact was very important for the entrepreneurial city (its concepts) but it is symptomatic of a broader change.

Urban Governance (the capacity to govern is much more important than the election-fact)

Governance // networks: informational rather than formal relationships (governance of an entrepreneurial city (individual + institutional actors and interests) --> Networks also built by new forms of relations between countries. Not only the result of an decision

Governance = link private / public sector

Clientelism

Entrepreneurial urban governance = ‘coalition of interests including the public sector and private firms which is organised through partnerships and whose equal goal us the enhancement of the competitiveness of the urban region with regard to (a) the location of production activities and command and control functions; and (b) the spatial redistribution of surpluses by the state and quasi states such as the European union’, (Harvey, quote in The Entrepreneurial city)

Neo-liberalism is an idea of elite, that is to say that it’s increase inequalities for the benefit of the bigger → negative impact

Neoliberalism is not synonymous of the end of State intervention but of Welfare State: there is indeed a shift away from management of public services but the city is not totally independent. The state still intervenes but indirectly by providing the basis for economic exchanges and free-market and covering deficits (risk-taker)

Free market cannot exist without the State (no contradiction between the State and the market) // is it the same with a European supra-state?

The entrepreneurial city, the city of the future?

Modernism, a new context for entrepreneurialism; technological and informational revolution reduce costs in communication + transportation revolution of the 19th century; emergence of networks and mondialisation

Face-to-face communication reaplaced by electronic interaction // ‘end of geographical clustering’

Access to global markets; reduction on dependence on conditions imposed by individual places; firms, that have different activities in different parts of the world have choice for investment in a city according to needs of an activity. It increases the interurban competition

: the city can not be isolated and must be competitive to resist to other cities pression. Neoliberalism as an adaptation to the change of the world

The emergence of a society of consumption and of production is linked with the rise of communications: exchanges are more and more important. And it is a field of competitiveness.

→ To improve linkages with Europe (communications, infrastructures); local authorities want to bypass the national scale to have an access to European economic dynamics

The European dimension

In the European context, the impact of neo-liberalism is one of the factors in the transition from a socialist urban policy to an entrepreneurial governance. Broader changes at the European scale had an effect and were linked with a political, economic and urban reorganisation.

First the re-territorialisation to an Europe of regions interferes with the national organisation: local has become essential in decision-making. Moreover, the change from a national scale to a supranational space has modified relations between cities (EC, ‘hollowing-out of the Nation-State). For instance the development of Euroregions (SAR-LO-LUX) has increased inter-urban competition in a localised place and led to an emerging city hierarchy.

It may be supposed that neoliberalism is adapted to this new multiscalar space since flexibility in relation between cities is essential.

In an European context, the neoliberalist idea of free market is completed by one of a Single European Market. A series of decisions at the European scale has open an European space of exchange. On the one hand, liberty of circulation was given out by Schengen treaty in 1986. So protectionism came to an end with the progressive disappearance of Frontiers. On the other hand, economic measures were adopted such as the ‘Pact of Stability’ in 1997 or policies against inflation from 1983 in order to install a common currency (1993-1995, deflationist policies in Europe). Deregulations were applied at a national scale.

Moreover, the change in relations between countries (rise of communication, technological progress) has increased the competition between cities. Investors have the choice between Europe or the world? That’s why mayors and representatives have to take into consideration the world-wide trends (mondialisation). In a european context do European being more and more unified against the united states)

Impacts rather than impact. Neoliberalism is a world-wide trend: so it has not only shaped the European cities but also every western and capitalist ones. Neoliberalism presents some general features but manifestations differ in each country according to previous features. (Mayer)

Brenner & Theodore develop the same idea of an embeddedness of neoliberalism in a range of geographical scales (national, regional, local and European contexts)

‘actually existing neoliberalism’

So neo-liberalism impact has not created a type (x) of European city ; the European cities undergo the same macro-changes but might differ in the way they cope with them (p 259 Several urban regimes)

European diversity. European cities differ from new American ones because importance of the past… neoliberalism can not have had the same impact in the transition to an entrepreneurial city. European cities are more than entrepreneurial.

4. Cities as important to convey neoliberalism ‘from neoliberalized cities to the urbanisation if neoliberalism’

CONCLUSIONS

Neo-liberalism heralded a transition to an entrepreneurial city insofar as we find a lot of correspondences. Neo-liberalism has be been chosen and decided by politics as a response to economic crisis. So behind neo-liberalism there are broader dynamics than neo-liberalism. Nevertheless its impact is not completely positive if we think of inequalities.

Last but not least, the entrepreneurial city has also been shaped by cultural changes of society: society of consumption.

Future of E cities ?

Neoliberalism is more than an economic theory.

The entrepreneurial city is not fixed ; neo-liberalism established its basis but the European city is continually changing ; it may be totally different from its initial features in the next 5 decades

European city is an entrepreneurial city, as North American ones ; but some differences ; which? These trends in Europe are a manifestation of a broader trend lead by the United States

A complex system of interactions between politic, economic, social, cultural factors… (a mutually process of change). Dynamics more complex than a mere economic cause in the shape of entrepreneurialism

REFERENCES

BRENNER Neil and THEODORE Nick, ‘Cities and the Geographies of “actually Existing Neoliberalism”’, in Antipode, 2002: 350-377

HALL Tim and HUBBARD Phil, The entrepreneurial city, geography of politics, regime and representation

HARVEY David, ‘from managerialism to entrepreneurialism’, 1989

LEVY Jacques, Europe, une géographie, France, 1997 (p219)

MARGIT Mayer, ‘The shifting local political system in European cities’

SWYNGEDOUW Erik, ‘Neoliberal Urbanization in Europe : Large-Scale Urban development Projects and the New Urban Policy’, Antipode, 2002

Encyclopaedia Universalis France, 1998

‘Histoire de Paris’, Que sais-je, France

TREANOR Paul, Neoliberalism

The inefficiencies of Keynesian approaches in 1975 (J.Chirac) and 1981 (P.Mauroy) in France are relevant to this economic turn

Fordism = post-war theory, workers = consumers: link between productivity and wages (purchasing power). wages policy ?

Wall Street 1929 crisis: excess of speculation in the world? → change of economic system

(1993-1995 deflationist policies, deregulations at a national scale)

Entreprise culture; to act in accordance with market forces

Neoliberalism associated with a specific culture (US culture, a specific language ) English → influence of anglo-american liberalism

“Entrepreneurial urban regimes must be understood as reflexively constructed political phenomena, rather than as seemingly ‘natural’ responses to processes of economic change”

The EC, p226

web.inter.nl.net/users/Paul.Treanor/neoliberalism.html

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