Urban Political Economy

One of sociology’s original and most fundamental questions is: how does the city shape social life? The answer provided by urban political economy is: as a mechanism in the accumulation of wealth, with all the power and inequality that results. ‘‘Political economy’’ generally refers to the scholarly paradigm that examines how material processes of production and exchange shape and are shaped by decisions made in economic and political institutions; with ‘‘urban,’’ this concern centers around material production of and within cities. Since the 1970s, urban political economy has influenced the field of urban sociology, bringing insights from other disciplines – particularly social geography (with its conceptualization of social space and place) and political science (the focus on government and law) – while retaining sociology’s social constructionist framework. Sociology provides an especially hospitable discipline for urban political economy’s investigation of the ways in which the city’s economic and political relations cohere and evolve across institutional, legal, and territorial domains.


Urban political economy emerged as a critique of the urban ecology paradigm, particularly the latter’s explanation for the growth and structure of cities and regions. By emphasizing the spatial competition for resources by individuals, groups, and institutions, urban ecology has viewed political hierarchies, economic actors and laws, and other social institutions as expressions of more fundamental and pre conscious forces. Its corollary that city governments, local business elites, urban planners, or racist neighborhood associations, for example, are not the ‘‘real’’ agents of urban structure and relations had long struck a cadre of conflict oriented urban sociologists as a problematic denial of social power. By the 1950s and 1960s, urban ecology’s inability to understand critically the problems of white flight and urban poverty in the US as well as urban and political unrest throughout the world created a breaking point for many urban sociologists. Consequently, a first generation of urban political economists began to emphasize the role of economic structure and social power in explaining urban relations.

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The Neo Marxian Tradition

Urban political economy updates the theoretical legacy of Karl Marx around the urban condition, a topic he did not address extensively in his nineteenth century writings. First, neo Marxians explained the city’s evolution as structural expressions of historical relations of production. Beginning in the early twentieth century, their argument goes, industrial capitalists promoted the flight of manufacturing to the urban periphery and the growth of residential suburbs to advance their class interests in, respectively, avoiding the costs of aging and inflexible urban infrastructure and dispersing urban hotbeds of labor unrest. Industrialists promoted these interests in the political and cultural realms via federal policies and cultural sentiments promoting homeownership, suburban development, and the encouragement of growth in America’s ‘‘Sunbelt’’ region (where the union tradition is much weaker than in the older ‘‘Rustbelt’’). In urban sociology, these early neo Marxian claims appeared in the 1970s and 1980s alongside other intellectual agendas that, although not necessarily sharing the same conflict orientation, put urban class relations at the forefront of the field. Research on dual labor markets, immigrant entrepreneurs, ethnic niches, and related issues have all benefited from the neo Marxian insight that economic forces do not merely express social relations but in fact drive them as well. However, by emphasizing capitalism’s causal role, this early urban political economy research in turn raised a question that casts doubt on urban sociology’s disciplinary relevance: is the city merely a container for larger social forces?

A powerful rejection of that question began with a largely European cadre of neo Marxian scholars whose work integrated ‘‘urban’’ with ‘‘political economy’’ in new and compelling ways. First, British geographers starting with David Harvey explained how investment in land provided important functions for capitalism. Borrowing the idea of space as a ‘‘secondary circuit of capital’’ from French sociologist philosopher Henri Lefebvre (whose urban writings at that time were mostly untranslated in English), Harvey contended that land and the built environment offer capital an important alternate site for investment when industrial investments soured. With this claim, Harvey reframed urban sociology’s traditional interest for urban and regional development into a structural Marxist theory of capital accumulation. By assigning landed capitalists a distinct role vis a vis industrialists and financiers in the structural dynamics of capitalism, Harvey also established a new interest for the social role of landlords, developers, and other capitalists who profit from the built environment. Next, the Spanish born, French trained sociologist Manuel Castells theorized that the ‘‘urban’’ corresponds specifically to relations of collective consumption, those city based services, housing, and infrastructure provided by the state with which people reproduce their labor power. His claim particularly resonated in Western Europe and Latin America and launched a neo Marxian research agenda that examines urban politics, grassroots protest, and urban movements as expressions of class relations distinct from the capitalist– worker conflict usually emphasized by neo Marxians.

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The Neo Weberian Tradition

If Marx gives urban political economy its concern for the structural dynamics of capitalism, Max Weber’s legacy provides the conceptual vocabulary with which to understand social power and human agency. This is underscored by the curious fact that for Marx, the notion of a ‘‘ruling class’’ is somewhat a contradiction in terms. Governance involves political processes that, to have theoretical integrity, must not be entirely determined by other social realms; yet Marx famously gave little credence to politics’ autonomy from material relations of production. Consequently, structural Marxists like Harvey had no vocabulary with which to understand urban power and political contingency apart from the structural determination and historical conjunctures of the economy.

Reasserting its intellectual relevance, the American school of urban sociology reintroduced the neo Weberian question, ‘‘Who governs the city?’’ posed previously within political science during the 1950s and 1960s. In this earlier community power debate, Floyd Hunter and other proponents of the elitist perspective argued that a core group of private urban elites regularly and successfully promote their interests through city hall. Rejecting this claim, Robert Dahl and other advocates of a pluralist perspective countered that private interest groups may prevail on certain issues, but not consistently enough to dominate urban politics. Eventually, the community power debates reached an impasse over inconclusive findings as well as theoretical and methodological differences. By the 1970s, as urban political economists studied the ways in which cities generate wealth for capitalists, it became clear with hindsight that neither side in the community power debate had theorized the material interests of the city’s power holders in a substantial way.

Consequently, urban political economists adapted neo Weberian premises to the neo Marxian problematic and identified the social production of urban space – that is, city building – as the institution that organizes the material interests and galvanizes the political dominance of urban elites. This means that urban governance is not confined within urban governments; just as important are the private decisions made by place based entrepreneurs and businesses to make money. Harvey Molotch crystallized this idea with his theory of the growth machine, a territorially defined coalition of urban elites from across public, private, and civic sectors that promotes growth in order to advance its common interests in intensifying land based exchange values (higher rents for developers and landlords, increasing tax revenues for local governments, new readers for local newspapers, more ratepayers for utilities, more jobs for local trade unions, and so on). With his colleague John Logan, Molotch identified the class relations and political stakes underlying the growth machine, asserting that the exchange value interests of growth machines invariably portend environmental impacts, infrastructure strain, fiscal constraints on public services, and other material conflicts with the use value interests of residents. For urban sociologists, the growth machine theory transcended the earlier community power debate by identifying urban growth as the consensus agenda (which elitists emphasized) underlying the overt conflicts and political factions of city hall (which pluralists emphasized).

Contemporary research on urban power has further developed the insights of growth machine theory, which did not theorize in detail on how urban elites engage the political realm, under what conditions they cooperate with one another (in fact, urban elites may be divided by vested interests in different parts of the city or different kinds of growth), or how effective they are in attracting urban growth and achieving political hegemony. These issues have been taken up by urban regime theory, a school of urban political science that has influenced urban political economy since the late 1980s. An urban regime is the set of formal and informal arrangements that makes urban governance by a public–private coalition possible. As Clarence Stone has explained, urban regimes vary by the agendas that their participants pursue; some are radically progressive, while others simply maintain the political status quo. However, the most frequently observed type is the development regime enacted by pro growth elites, although for reasons that go beyond the shared interests of the growth machine. Just as importantly, actors in the development regime most effectively marshal and share the political benefits, business opportunities, and other ‘‘selective incentives’’ that enforce cooperation and prevent dissent within their public–private coalition.

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New Patterns of Urban Restructuring

Since the 1980s, urban political economy has developed in large part as a response to the dramatic shifts in economies, politics, population, and settlement associated with urban restructuring. This concept has pushed urban political economists to identify what is qualitatively new and significant about capitalism’s transformations of the city. For example, the globalization of traditional American industry, on the one hand, merely demonstrates at a larger scale structural dynamics that spurred the growth of the American Sunbelt decades earlier: industrial capital’s vulnerability to site specific labor costs and labor control, and its benefits from geographically uneven development. On the other hand, the technological and organizational innovations that made globalization possible have generated unanticipated economic, spatial, and social outcomes.

In her global city thesis, Saskia Sassen explained how the financial capitals of New York, London, and Tokyo have assumed new centrality in the coordination of transnational corporate (TNC) activity. This is not because these global cities attract TNC headquarters, many of which have in fact left major cities, but instead because they concentrate the social networks of smaller financial and advanced business service firms that oversee, respectively, the capital investments and legal organizational management needed by TNCs. Sassen’s insight that geography, markets, and networks assume a coordinating role formerly contained within corporate bureaucracy parallels a larger theory about the geography of ‘‘flexible accumulation.’’ Rejecting the popular wisdom that place no longer matters in globalization, this theory documents the central function of flexible industrial districts in industries where skilled labor, entrepreneurial companies, and specialized support systems cluster, such as Silicon Valley (technology), Hollywood (film), Paris (high fashion), and the ‘‘Third Italy’’ (textiles).

Amidst the global context of capital mobility and job flight, these and other economically vibrant cities and regions in fact witness economic polarization and social inequality, due to economic growth as well as stagnation. For instance, well paid workers in booming technical, cultural, and creative industries create new demand for consumer services that employ low skill labor. Also, some creative industries remain competitive by relying on local sweatshops (endemic in fashion centers like New York or Los Angeles) or other informal enterprises. Manuel Castells and John Mollenkopf have described the subsequent urban structure with their idea of the dual city. In its more glamorous half, new professionals revitalize once staid urban economies, gentrify abandoned neighbor hoods, and stimulate the growth of coffee shops, bistros, bars, and other high end consumer services. In its less affluent half, working classes become less secure with the exodus of manufacturing and other activities that once created decent paying union jobs, while new immigrants leap over older ethnic and racial groups to manage and fill the low paying service and sweatshop jobs, or to sell goods on the street in informal economies.

Theoretically, globalization underscores how the dynamics of growth and decline extend beyond the scale of any one city, region, or even nation. Not surprisingly, urban restructuring has thus challenged urban political economy’s models of human agency. On the one hand, the structural context in which growth coalitions operate has always been ‘‘global’’ to some extent, as companies choose a location from a variety of places, and places’ competitive advantages are influenced by non local factors like state budgets, national federal mandates, and interest rates. On the other hand, capital investment and urban growth increasingly materialize in a decentralized, market form. At least in the new economy’s industrial clusters, the decisions that bring growth are made by a number of actors too large for any growth coalition to sway effectively with conventional lobbying. As urban political economy keeps abreast of the structural changes associated with urban restructuring, the paradigm’s practitioners continue to reevaluate what constitutes the ‘‘political.’’ Does the neo Weberian focus on political institutions’ legitimacy, interest groups’ pressure politics, and coalitional power plays still have explanatory value in this era of urban restructuring? If so, just how much, and at what scale does it explain?

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  1. Castells, M. (1983) The City and the Grassroots. University of California Press, Berkeley.
  2. Dahl, R. (1961) Who Governs? Yale University Press, New Haven.
  3. Harvey, D. (1982) The Limits to Capital. University of Chicago Press, Chicago.
  4. Hunter, F. (1953) Community Power Structure. University of North Carolina Press, Chapel Hill.
  5. Logan, J. & Molotch, H. (1987) Urban Fortunes. University of California Press, Berkeley.
  6. Mollenkopf, J. & Castells, M. (Eds.) (1991) Dual City. Russell Sage Foundation, New York.
  7. Nevarez, L. (2003) New Money, Nice Town. Routledge, New York.
  8. Sassen, S. (1991) The Global City. Princeton University Press, Princeton.
  9. Stone, C. (1989) Regime Politics. University of Kansas Press, Lawrence.
  10. Tabb, W. & Sawers, L. (Eds.) (1978) Marxism and the Metropolis. Oxford University Press, Oxford.

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