creative classes

The Urban Crisis in Late Capitalism

We can crop him out before posting, right? (elianlindt)

We can crop him out before posting, right? (elianlindt)

It’s purely a coincidence that the startling footage of a paying customer being dragged off of a United Flight by airport police went viral the same week that Richard Florida’s latest bookThe New Urban Crisis” came out, but I think the two events demonstrate the same problem.  As individual consumers, as cities, or as entire regions, we are experiencing the long building, negative consequences of “late capitalism.”  It is a force that has not only dehumanized many aspects of our society, but it has also failed to deliver its promised shared prosperity.  How we address this problem, or if we are even able to, will take more than zoning reform or affordable housing funding.

Late capitalism as a term has its origins in Marxist critiques of capitalism from 100 years ago, but has generally been applied to capitalism post-1945.  As I’ll explain, I think the term works better when focusing on the post-Cold War period.  In any case, it is meant to describe our current period of development as a limited stage of evolution as opposed to a permanent state. Eventually, as the theory generally goes, the extreme concentration of economic and political power will undermine and potentially destroy the stability of the larger society.

This is certainly a provocative way to understand what has been almost a century of relative global economic growth and stability.  No generation is fully aware of its place in broader historical cycles, but particularly after WWII, our period sure feels unique.  Famously, Francis Fukuyama published an essay, then book, called “The End of History and the Last Man” in 1992 about how liberal democracy (which is how I’ll describe our model for this blog) might represent the endpoint of human social and economic evolution.  How could such triumph be described as “late” to imply that it won’t last?

Fukuyama has at times been misunderstood (he didn’t think liberal democracy would go unchallenged or wouldn’t experience set-backs) but his belief that the economic and social model of western democracy would be the default setting for human evolution has been criticized by some as historically naïve or culturally biased.  History doesn’t “end” obviously and many systems have looked stable and enduring until they aren’t.

Fukuyama also assumed that the liberal democratic model “worked,” inherently. There are lots of metrics to point to about how much peace-and-prosperity the world has enjoyed post-1945. Of course there are also many metrics that point to this peace-and-prosperity being a zero-sum game that relied on denying peace-and-prosperity to a considerable amount of the global (and domestic) population. 

More importantly to this idea, though, is that liberal democracy produced the most peace-and-prosperity at least compared to communism. That’s the big catch to all of this.  As Churchill famously stated (or restated) about democracy, it is the worst system of government except when compared to every other form of government.  For most of the post-1945 world order, we had the Soviet Union as a competing model to compare to.  And it’s pretty easy to see which system was ‘better’ relative to the other.

However, over the 25 years since the fall of the Soviet Union and the end of the Cold War, it’s harder for us to remember just how much of our foreign and domestic policy was based on competing with communism. The US Government wanted and needed to show the world, let alone its own citizens, that liberal democracy created a better life than communism.

The New Deal coalition that emerged from the Depression to dominate domestic politics for most of the post-1945 period was based partly on the existential fear that Americans might want an alternative system if there was one to compare with. If capitalism were more brutal than communism, as it certainly appeared to be during the Great Depression, maybe the American model would fall.

This real tension served as a check against unfettered capitalism and produced public and private institutions that ensured prosperity – and power - would be shared on a large scale. This check is what allowed the greatest wealth creation in the history of the world to expand in America.

That check is gone.  (It started to breakdown before the end of the Cold War certainly.) Our politics have enshrined the supremacy of the market and our culture has so sufficiently demonized “government intervention” as ‘socialism’ that we have allowed many of those public and private institutions to be gutted or removed entirely.

Whether it’s the loss of unions or anti-monopoly agencies, the march of stateless, shareholder corporatism has continued unabated for decades.  It is no wild-eyed conspiracy to say that big, global corporations are the dominant actors in our society.  It seems like a quaint formality that it was even necessary to give them the same constitutional rights as citizens (without many of the same responsibilities.)

Many people will point to the wealth creation and job creation of these corporations (along with the cheap goods and services they create) as a clear public good.  No doubt there is some public good there.  But the cost of this concentration of power at the same time as it recuses responsibility has a clear public cost.  Wages have stagnated, health outcomes have declined, economic mobility has flatlined, and our environment continues to deteriorate at a frightening pace.  We have no mechanism politically to make those corporations pay these costs.  The public – present and future - does instead.

And, after the Cold War, there is no external pressure on our system to keep corporations and the capital behind them accountable. The idea that our system has to ‘compete’ with another system to maintain its legitimacy is laughable now.  Capitalism won. 

It shouldn’t be laughable.  Long before the 2016 primaries and election, it has been clear that many Americans across all political spectrums simply don’t believe in the legitimacy of our model.  This anger has, regrettably, manifested in different forms with different villains depending on the constituency you’re looking at, but the message is clear and universal.  Our form of liberal democracy isn’t producing the type of economic prosperity or social progress that we’ve been trained to expect as Americans. 

The social contract has broken down and been replaced by one-sided terms and conditions.  The joke is now on us, whether we fly Untied or not. That is late capitalism.

This is where the "new urban crisis" and Richard Florida’s book comes in.  Mr. Florida famously coined the term “creative classes” in his first book 15 years ago that showed how the concentration of knowledge economy jobs in cities was driving the urban revival that was destined to benefit all of humanity.  That optimism might sound hyperbolic but Mr. Florida and many urban boosters championed this in earnest and for sincere reasons. (I also believe urbanism is a better way of organizing society.)

However, late capitalism was always going to create a winner-take-all urbanism. Smaller (mostly non-coastal) cities have been gutted while larger (mostly-coastal) cities have been gilded.  The poor and working class suffer in both scenarios, but the very wealthy are the only ones benefiting from this urban revival. 

Mr. Florida has undergone a commendable self-correction. He acknowledges that the great urban revival hasn’t happened.  Outside of a few ‘superstar cities,’ too many places in America haven’t benefited from the ‘creative class.’ Even the gains made in those cities haven’t been shared and haven’t led to an expansion of opportunity for others. As a result, Most Americans still live in the suburbs or want to move there eventually. Poverty in the suburbs is in fact exploding as a result of some of these trends in cities. Cities aren’t part of the solution. If anything, they are exacerbating the problem.

Mr. Florida has also come to recognize the larger structural issues facing cities around class and race that were neglected in his original work.  Building tech and young-friendly neighborhoods with great amenities and transportation networks doesn’t help existing working-class or poor residents and makes it too expensive to attract new ones.  Too many of the benefits are going to a small pool of affluent, educated residents that are mostly white.

Mr. Florida outlines several city-level and state-level policy suggestions about how to mitigate some of these stratifying elements.  Some are worthy of support, others are not as comprehensive.

But more importantly, he acknowledges that these are larger questions that we must address as a society.  He hedges on criticizing capitalism overtly (and as far as I know has never commented on late capitalism) but it is refreshing for someone with such passion for cities and experience studying urbanism to challenge our assumptions about our liberal democratic model. More of this is needed.

The urban crisis is not a problem for technocrats.  This isn’t the fault of urban planning.  It’s the inevitable consequence of economic nihilism.  It is a political problem and a values problem.  These require value-based solutions (as opposed to ideologically-based ones) and political changes that our current model refuses to entertain or acknowledge.

As it stands now, it is likely that the unfortunate United passenger is going to get millions of dollars in a settlement.  Maybe the airlines relax some of their overbooking policies.  But the structure of the airline industry – the oligopoly – is enshrined in our laws and culture, which won’t change anytime soon.  Most passengers won’t have the option to refuse to fly United.  As consumers, we have lost the fight in late capitalism.

The urban crisis is more complicated (indeed, crisis isn't really the right word), spanning many industries, many political interests, and many stakeholders.  There is no single incident to go viral (or maybe there are too many) to galvanize the nation and there are no simple, populist solutions that can quickly satisfy it.  But there can be change. Frankly, there must be change. As citizens, the fight against late capitalism must begin. It is our only way to define what comes next.