The Global City in a world-system
Question: “How can world-systems analysis be used to understand the power cities have in globalized networks”
Introduction
Through the globalization process and novel mobility, communication, and information technologies (Sassen 2005), the world has become an increasingly more interconnected system, especially in the 20th and 21st centuries. This interconnection of social histories and economies on a global scale has called to question what unit of analysis would best be applied to social theory to describe the contemporary world (Wallerstein 2004). Immanuel Wallerstein (2004) developed the framework of world-systems analysis to describe how the entire world can be the unit of analysis for theoretical inquiry; all countries, peoples, and spaces are part of a world-system, according to this frame. Within these interlocking systems exist social forms of immense economic and cultural power: global cities. The world-system is a tool of analysis that can be used to conceptualize the power that global cities have in globalized economic networks.
This essay examines global cities’ power through the framework of world-system analysis; it focuses on how, within the world-system, the world economy is shaped and supported by unequal economic power distributions of the core/periphery relationality as facilitated by global cities. In order to address this topic, this essay synthesizes the work done in the world-systems framework, notably by Wallerstein (2004) and Goldfrank (2000), with Saskia Sassen’s work (1995, 2005) on global cities. Supporting work by additional scholars is used to supplement this essay's argument in bridging these complementary perspectives. This essay consists of three parts. The first part unpacks world-systems analysis and examines the structural roles that global cities have in them. Part two elaborates how the centrality of global cities gives these social forms power within world-systems analysis and examines the power dynamics and inequalities inherent in world-systems analysis which global cities command. The third section details some of the limitations of these theories.
Additionally, this essay serves to remedy some of the disconnects between two distinct social perspectives. Wallerstein tends to overlook the role of cities in his discourse (Taylor 1995) and Sassen’s work is not within the world-systems analysis canon, being aligned more with theory on globalization and migrations (Sassen 2007). The two frameworks however are complimentary, each highlighting a weakness of the other; Sassen’s work illuminates the spatial and institutional gap in Wallerstein’s approach to the world economy (Goldfrank 2000), and world-systems analysis can be used to explain how the concentration of power within world cities perpetuates global inequalities.
Part I
Section I: World-System Analysis and Global Cities
The idea of the world-system is “a new perspective on social reality” (Wallerstein 2004:1) developed by Immanuel Wallerstein in the early 1970s that uses the massive scale of the world as the subject of theoretical inquiry. While Wallerstein tends to not use the term “theory” when describing this process, it has been treated as a social theory by academia as a whole (Barbones 2015). World-systems analysis is a complex framework due to the sheer scale of the method; it attempts to link the historical development of the whole world as a way to describe the current socio-economic realities under a globally capitalist system (Goldfrank 2000; Wallerstein). Not only is the scale of space within this framework massive, but the scale of time is also expansive at five centuries as Wallerstein's historical analysis traces the origins of the current capitalist system to the 1500s (Taylor 1995). At its core, world-systems analysis uses Marxist social-economic theory just blown out to the largest possible scale (Barbones 2015). Additionally, along with Cox, Wallerstein perceives the goal of capitalist systems to be ever-expanding, encapsulating the whole of the world (Hier 2001). These two last points are crucial because it shows a key feature of this framework is concerned with expansionist power dynamics.
The unit of analysis in the world-systems is the “world”, both spatially and temporarily. History and cultural development, as such, is not isolated to certain regions but rather mini-systems within the larger system (Wallerstein 2004), however, he does include three historical “turning points” that are foundational to the modern state of the world (Goldfrank 2000). Wallerstein (2004) understands the linkages of the world-system through the world economy and how global processes are connected through modes of production. At a structural level, the world is “a large geographic zone within which there is a division of labor” (Wallerstein 2004:23). The system that Wallerstein describes is inherently capitalist, however, it is not enough to measure this through just the national or regional subdivisions because the world-system is so inextricably linked, rather the structural zoning of the world is contingent on the global division of labor (Wallerstein 2004).
The division of labor is understood through the core-periphery relational dynamic (Wallerstein 2004). The difference between core and periphery is based on the extent to which the production processes are monopolized, the core being more monopolized and benefiting the production style of the core in the world economy (Wallerstein 2004). The semi-periphery is a third grouping within the world analysis system as it shares some monopolizing production, however, these zones are still peripheral to the monopolizing power of the core zones (Wallerstein 2004). Goldfrank (2000) mentions that the concept of core-periphery has been connected to dependency theorists, as such that the core can be understood to be dependent on the periphery. The core-periphery relationship is at the heart of world-systems analysis because it entails how the world economy is shaped to benefit the core, the part of the relationship that has relative power. Babones (2015) expands on this point by commenting that how social theory tends to regard world-system analysis is through power dynamics and how these dynamics are connected to the larger socio-economic system.
At the point of Wallerstein’s work, there was no unifying political structure such as a world government (Goldfrank 2000), so therefore World-Systems operate through various institutions, or mini-systems, that serve a functional purpose in the greater world-system (Wallerstein 2004). Institutions are collections of social forms that develop a matrix which in turn allow the world-system to function and operate in the way to endlessly accumulate capital (Wallerstein 2004). Wallerstein (2004:x) lists several of these institutions: “states and the interstate system, productive firms, households…[etc.]” but does notably not include cities here. Within the world-system framework, these social forms exist because they facilitate the world economy, not as forms within themselves, but as mini-systems within the world-system that support its own functioning. Wallerstein (2004) considers that this creates contradictions when applying the lens of world-systems analysis because it can develop the perception that these institutions are delinked from the larger system. For example, the organizational existence of states within the world-system is necessary because they are the permit functions such as “a productive base, military organization, diplomatic alliances…[etc.]”(Goldfrank 2000:171) and notably “enforce and reinforce mechanisms of unequal exchange” (ibid:171). These institutions have power because they are the elements that drive and operate the world economy as these institutions are responsible for maintaining and controlling the division of labor in core-periphery relationships.
Where does the global city fit into this? Wallerstein does not mention this when examining the institutions that facilitate the world-system; however, the institutions he does mention, are all centralized within cities, notably productive firms (Sassen 1995) as well as the concentration of political power within national state capitals. Friedmann (1995a) identifies this weakness in Wallerstein’s framework, as a whole network of scholars identify the role that cities play as a driving force within the world economy and world-system power structure.
The world city hypothesis ( Friedman 1986 ) introduced the idea of the global city and is crucial for understanding the linkage between world-system Analysis. Friedman (1986:70) describes the role of the city as “an economic and social system at a given location of a metropolitan region”. He continues that because certain cities are so central to the world economy, they are given hierarchies where some cities are more central to other cities than others, thus defining them as world cities. The hierarchies of these cities correspond to the cores within the world-systems so that the more global the city the more representative it is of the core within the world economy (Friedmann 1986). Put simply, the world city hypothesis indicates that certain cities within the world-system are central to the functioning of the world economy and therefore have power.
Sassen’s (1995, 2005, 2007, 2009) work on global cities further articulates the world city hypothesis. Her work addresses Wallerstein’s general issues with geographic space. Sassen (1995, 2009) argues that power in the world economy is centralized in global cities because major financial firms strategically allocate themselves to these positions and therefore a significant proportion of financial capital is handled in select cities. From strategic positions of power, firms are able to control the world economy due to the nature of shifting demands in which the way labor is divided and because corporations need to be centralized in order to grow and expand (Sassen 2005). This echoes Friendmann’s world city hypothesis which claims that cities existing in the core of the world economy are the place-based localities that are responsible for concentrating and accumulating international capital (Friedman 1986).
Sassen’s (2005) global city model is organized by seven hypotheses that explain why global cities concentrate economic power the way they do. The globalization of the world economy is based in such diverse geographical locations that it is required for the centrality of corporate functions in order to control transnational operations (Sassen 2005). Global cities are needed within the world economic system because the spatial centralization of labor allows for outsourcing, centralized decision making, being connected to other partnerships, the concentration of high-powered professionals, and the ability to network within transnational systems (Sassen 2005, 2009). To summarize these ideas, global cities are geographically important in the world economy because they allow the business to be successful and expand, or as Smith and Timberlake (1995a:1) describe the phenomenon, global cities are “linchpins in the spatial organization of the world economy”.
Sassen and Wallerstein have existed relatively separately from one another – Sassen tends to not conceptualize cities within the world-systems analysis framework whereas Wallerstein does not cite cities as institutions that drive world economies. However, the role that Sassen’s city plays is compatible with the world-system framework. Sassen’s view of the centrality of global cities aligns with the core-periphery relationship of Wallerstein (2004) in that it is not about the culture, language, etc. but rather the division of labor and the monopoly of production (Sassen 1995, 2005). Global cities can be understood to have a monopoly on the production of financial exchange as financial firms are spatially centralized in global cities (Sassen 2005). The global city also corresponds to how Wallerstein sees the institution as facilitators of a larger system. Due to the shifting space-based dynamics, it might be theoretically advantageous to conceive of cities as forms that transcend national conceptions, as global cities are now more linked to the global rather than the national (Sassen 2005). Sassen (2005:38) argues “cities that are strategic cities in the global economy tend to disconnect from their region”. This means global cities share more in common with other global cities than they do with the region or physical place to which they have traditionally been connected, put in other words, New York City shares more in common with other cities on the global network such as London than it does with the region that it is geographically located, New York State. Applying this to Friedmann’s (1986) world cities hypotheses, they are more connected as cities belong to the world-system Core than they are to their region. This again works within the world-system analysis framework as cultures are bound to the division of labor based on monopolization, in this sense supporting the labor that continues to be increasingly more concentrated in global cities (Goldfrank 2000; Wallerstein 2004). The significance of global cities, therefore, is evidence of institutional shifts within the world-system as transnational corporations and telecommunication technologies transcend the institution of the state.
Goldfrank (2000) makes a significant example in demonstrating the role cities play in the world-system. Using the historical approach, Goldfrank links how hegemony has been maintained in financial centers throughout the ages, linking historical power shifts in the world-system from Venice to Amsterdam to London to New York (2000:172). The power of hegemonic financial centers within is crucial to understanding cities through world-system analysis. Hegemonic state power is “never strong enough to absorb the entire world-system” (Goldfrank:172), so therefore different global cities play the role of facilitating power shifts within the world-system as economic power is centralized within cities. Knox (1995) determines that certain cities dominate the international economy, world affairs, and are highly centralized in terms of transnational corporate headquarters. This is further highlighted in studies on global cities, where emphasis is placed upon the cities that are most linked to global economies, (at the time of the literature in this essay) which tend to be New York, London, and Tokyo (Knox 1995; Sassen 1995). It is reported by many researchers that New York, London, and Tokyo exist as cities far above other institutions within the global network of cities in terms of the centrality of economic power (Knox 1995; Sassen 1995; Alderson and Beckfield 2004). Furthermore, world cities are interconnected through a global web, global cities being more highly connected to other global cities and more periphery cities (Alderson and Beckfield 2004). Smith and Timberlake (1995a) suggest that the social ecologies of global cities are observable by studying airline traffic to cities, again highlighting the dominance of London and New York, cities that according to the Goldfrank (2000) have historically had hegemonic power in the world-system by means of serving as centralized financial hubs.
While Wallerstein does tend to overlook the role that cities have in the world-system and the world economy, there is sufficient evidence, especially in Sassen’s work, to support the idea that the strategic positionality of corporate financial headquarters in key cities is responsible for driving the world economy. Now that the connection between world-system analysis and Global cities has been acknowledged, this essay will examine the power that global cities have and have had within the world-system.
Part II - Global Cities and Power
Global cities are a concentrated form of power that are responsible for the financial monopolization of the core system within the world economy. Recognizing that world-system analysis is blown out Marxist theory (Barbones 2015) one can examine the role of power within the world-system based on how much the institutions working within the city can affect and control the world economy. Power radiates from global cities such as London and New York within the world-system because of the centrality of institutions such as transnational corporations and political groupings (Friedmann 1986; Sassen 2009). Knox (1995) determines that the role of power and control of global cities is understood through their decision-making in relation to the world economy and cultural activity. As such, due to corporate centrality, the more globally embedded the city is in the world economy the more power these cities can accumulate (Alderson and Beckfield 2004).
Cities accumulate power due to their centrality. Alderson and Beckfield (2004) use network analysis to examine how certain dominating cities maintain their power. They (Alderson and Beckfield 2004) conclude that core cities, such as New York, London, and Tokyo, can maintain their power since other smaller cities are dependent on them and rely on them for economic development through resource distribution. Sassen (2005) notes the growth of power in centralized core cities as those cities become the most attractive locations for high-paying elite jobs, incentivizing those cities to be appealing to high-earning professionals. Cities thus maintain power and grow in power because they are so heavily linked and centralized within the world economy which facilitates perpetual growth. Sassen (2005:32) argues that capitalist economic realities “have contributed to a demand for new forms of territorial centralization of top-level management and control functions” meaning that decision-making powers that affect the entire world are located in specific geographical locations. Hegemonic power is also a persistent element of world-system analysis. Goldfrank (2000:171) states that “hegemonic power is characterized by simultaneous supremacy in production, commerce, and finance, which in turn support a most powerful military apparatus”. Hegemonic powers contain the world financial center of the time; the powers of hegemony in world-system are facilitated by the institutions within global cities that most control production, commerce, and finance.
The historical perspective within world-system analysis explains how the core has been able to gain power over the periphery in the world-system. A way to understand this is through the historical process of colonization. Wallerstien (2004) traces the history of colonialism through the world-system analysis as core powers (the colonizers) exploit peripheral zones (the colonized) for material and, in special significance to world-system analysis, labor. Wallerstein (2004:56) acknowledges “The colonial powers justified their assumption of authority through…racist arguments about the cultural inferiority and inadequacy of the local populations'', which continues to shape global inequality in the modern era. Goldfrank (2004:56) expands on colonial power systems, claiming that because of the peripheral positions of the colonized states, they were “maximally subject to exploitation by firms and persons from a different country”. The peripheral is consequently understood as being exploited by the core within the world-system, the surplus-value then going back to the core as a profit. The core was able to be maintained and developed to its position of power by exploiting the peripheral and using the capital gained to perpetuate capitalist expansion (Wallerstein 2004). The financial centralities that Goldfrank (2000) mention can be therefore understood as being built through the capital gained by exploitation. The labor and material that was accumulated via colonization, therefore, went back to the core powers and reinforced institutions within their system. Reading this through Sassen, colonial exploitation contributed to the expansion and development of the core global financial powers geographically located in global cities.
World-system analysis shows how the core continues to extract surplus value from the periphery via exploitation. Brown et. al (2010) suggests that global commodity chains can be understood through world-system because commodity chain originates in the periphery locations of production and ultimately cumulates in world cities. The division of labor is analyzed through commodity chains, where production is sourced in poorer countries (i.e. the periphery) and commodities then traverse through global commodity chains cumulating at the core (Smith and Timberlake 1995b). These commodity chains are rooted in global cities by the fact that transnational companies use these commodity chains by means of making profit, and these companies often need to be centralized in global cities in order to be competitive in the global markets (Sassen 1995, Smith and Timberlake 1995b)
Global cities occupy positions of power in the world-system for several reasons. They historically represent the financial and political hubs for state and business institutions that colonized societies in the global south facilitating a system of exploitation that allowed the core to grow and expand via surplus capital. Secondly, the position and centrality of transnational corporate power within cities in the world-system allow them to facilitate decisions on a global scale which allows them to maintain power and command elements that affect the global economy, such as the concentration of high-level financial institutions (Sassen 1995; 2005) and control of global supply chains (Smith and Timberlake 1995b; Brown et al. 2010). Global cities have power in that they are centralities that command the world economy in the world-system.
Part III - Limitations
There are some limitations in this analysis of the role global cities play in the world-system. The first limitation of the world-system analysis is the fact that this theory is very much coming from the global north and much of the theory is linked to prior forms of knowledge that have been established through colonization. While world-system analysis is very much a protest to that type of theory (Wallerstein 2004), it nonetheless can be guilty of prioritizing eurocentrism, notably Wallerstein’s “three turning points in world history” which argues that events happening in the global north define the shape of the contemporary world-system. While this does not negate any of Wallerstein’s contributions, it is important to consider where knowledge is being produced and replicated, even though this theory itself is a protest to this type of knowledge production (Goldfrank 2000; Wallerstein 2004).
A second limitation of both Wallerstein and Sassen is the economic metric they use to examine power. While Knox (1995) does reference the cultural power of global cities there is little elaboration on the specifics. Both Wallerstein (2004) and Sassen (2005) come from the perspective that power is sourced from economic decision-making powers. Would world-systems analysis work if it did not prioritize economic power as the central metric of power? Does cultural capital indicate a form of a hegemonic power in the world-system, and if so, is it centralized to cities the same way which economic power is?
Conclusion:
Global cities are social units that facilitate the power formations of the capitalist economic system. But even within these cities, cities which exist in the core of the world-system, there are high levels of inequality (Sassen 2007). While cities do allow for powers of the core to centralize, there are also centralities of inequality within these same structures (Sassen 2007) and this is only increasing as global migrations are forcing more people to move to global cities, creating what can be described as an urbanization crisis (Sheller 2018). Global cities are geographical representatives of the core power in the world-system, but perhaps they also represent an internal core/periphery divide within their own geographical metropolitan boundaries as a deep division of labor persists within these social forms (Sassen 2007; 2009)
World-system analysis can be used to understand the power that global cities have in globalized networks such as the world economy. Cities are geographical spaces that permit high levels of concentration of transnational corporations within the core of the world-system, and this spatial organization facilitates expansionist economic development through the exploitation of the periphery (Sassen 2005). Historical perspectives of world-systems analysis illuminate how cities are central in maintaining the hegemonic powers within the core by means of colonization of the periphery (Goldfrank 2000) and supply chain control (Brown et al. 2010). Additionally, the interconnectedness of global cities aligns with world-system analysis in that global cities exist in a highly connected network (Sassen 2005; Alderson and Beckfield 2004), suggesting that this network of global cities is representative of the decision-making power within the core of the world-system. Global cities are key institutions of power within the world-system, contingent on the fact that they serve as geographical centralities of concentrated power.
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