Month: May 2016

Impacts of the Global Financial Crisis on Cities in Europe: Chapter on the Social Investment Market

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CURA Researcher Robert Ogman has published a chapter on the social investment market in a recently published book on Urban Austerity in Europe.

Robert’s chapter discusses the relationship between austerity policies and the social investment market, showing government’s turn towards Social Impact Bonds in the hope of offsetting public sector budget cuts by attracting private investment to social service provision. He first explains the historical emergence of SIBs in the financial crisis of 2007/8, and SIBs’ narrative of cost-savings, before turning to their implementation in a concrete case, where the city of Peterborough hoped to use investor dollars to fund probationary services to reduce prisoner reoffending. He identifies a set of contradictions between the promises of SIBs as a cost-cutting mechanism and the resulting expansion of public expenditure, challenging the idea that this new public-private partnership may provide an easy solution to social and fiscal problems created by austerity. This chapter is part of Robert’s doctoral research on SIBs and the social investment market as part of a “social neoliberal” strategy to manage the crisis of neoliberal hegemony. His analysis of the Peterborough SIB is part of an international comparison between SIB development in the US and UK.

You can buy the book either directly from the publishing house (http://www.theaterderzeit.de/buch/urban_austerity/) or, of course, at your favorite book store. An e-book will soon be available as well.

Description and details are below:

Schönig, Barbara; Schipper, Sebastian (Hg.) (2016): Urban Austerity: Impacts of the Global Financial Crisis on Cities in Europe. Berlin: Theater der Zeit. 296 pages. ISBN 978-3-95749-083-4. 22€

What started as a mortgage crisis in 2007 and became a global financial and economic crisis in 2008 has been transformed into a sovereign debt crisis since 2010. In all of these interwoven phases, cities have been, in multiple ways, at the heart of the turmoil as indebted home-owner have been evicted, masses of people impoverished, public budgets squeezed, municipal infrastructures privatized, public services downsized, and, above all, austerity measures implemented. In view of the above, this book puts an issue into the center that affects most people living in urban regions across Europe – the idea that fiscal austerity is an unavoidable necessity that politics cannot escape no matter how harsh the consequences might be. To bring the effects of austerity politics at the forefront, contributors to this book expose actual urban problems in their spatiotemporal dimensions, discuss regulatory restructurings under a new regime of austerity urbanism, and reflect on the role of urban social movements struggling for progressive alternatives. We hope that this collection of counter-hegemonic narratives to neoliberal policies can make a small contribution to inspire critical urban scholars, political activists, and social movements in their struggle for progressive social change in Europe and elsewhere.

Blazing the Neoliberal Trail: Review by Jonathan Davies

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Professor Jonathan Davies continues our second installment of CURA’s book debates by share’s his thoughts on Tim Weaver’s recent book ‘Blazing the Neoliberal Trail‘. This post will be followed by a final reply from Tim int he forthcoming weeks.

It was a great honour to debate Tim’s new book at the annual meeting of the Urban Affairs Association earlier this year.  The book announces Tim as an important new thinker in the field or urban political economy.  It was a pleasure to read a deeply learned piece of work presented with erudition and lightness of touch.  Perhaps the most interesting thing I learned from the book concerns the dynamics and temporalities of policy transfer.  We tend to assume that because the UK likes to borrow (ever more right wing) policies from the USA, that the USA was the main trailblazer in neo-liberal urban policy.  In fact, Tim shows that the UK was able to outpace the USA, because its centralized and hierarchical political traditions made this easier to accomplish.  More broadly, these differentiations show why an urban focus is so important for getting to grips with the epidemiology, variegation, hybridity and contestation of neoliberalism.

The main question I have about the book concerns the way different disciplinary perspectives open up different temporal understandings of neoliberalism.  I pick up on a striking phrase in Tim’s conclusion in relation to the class politics of neoliberalism. He argues that the “bourgeoisie was not knocking on doors”, demanding enterprise zones and urban development corporations.  These initiatives were driven politically, and hence Marxist conceptions of capital and class do not really help us understand them.  Tim accordingly emphasizes the role of policy ideas and entrepreneurs, and the way in which different configurations of institutions and traditions were more or less open to change.  These factors undoubtedly matter a great deal, but I do not think they are incompatible with a Marxist analysis, rooted in the ideas circulating and gathering force during the emerging social and economic crises of the 1960s.

From a sociological perspective, Boltanski and Chiapello argued in The New Spirit of Capitalism, that by the 1960s, the bourgeoisie was indeed clamouring for change, hankering to be free from the stultifying command structures associated with Fordist development and the Weberian political order.  But, it is notable that similar ideas were also incubating in the British Labour Party and US Democrats, through Harold Wilson’s “white heat of the technological revolution”, and John. F. Kennedy’s “new frontiers”. So, from the standpoint of ideas, the break with the post-war order was implicit in the emerging political and economic zeitgeist of 1960s for both left and right.  Ultimately, for reasons beyond the scope of this discussion, the neoliberals succeeded in appropriating this spirit and translating it into the policy agendas Tim discusses at length in the book.  Two points follow.

First, governments and corporations were both influenced by proto-neoliberal ideas and sentiments well before the 1970s and 80s and sought to organize around them.  It is here that we find the roots of the crisis of the post-war order and of neoliberal transformation.  Tim might respond, correctly, that neoliberal ideas did not fully grip on the terrain of politics and policy until much later – and after many brutal struggles.  However, the second and crucial point is that looking at the 1960s shows that neoliberalism was indeed a class project and why a sharp analytical distinction between state and capital is problematic. There is a tacit pluralism in Tim’s approach, which does not sit easily with his general political orientation. If instead we treat capitalist states as part of the capitalist system, it is easier to see why “progressive” political leaders would be dazzled by a “new spirit of capitalism” promising social and economic renaissance – and for reasons that have little to do with political pressure from the bourgeoisie.  Of course corporations try to influence governments, but the absence of such lobbying does not mean class power is not central. Class operates in many more-or-less subtle ways.  My argument is that an appreciation of how different classes responded to the burgeoning crises of the 1960s is critical for understanding the ideas and policies of later trailblazers of neoliberalism, so deftly analysed in this important volume.