[BRIEF NOTE] Thoughts on "A City of Capital"

[rfmcdonald]

Thanks to A. from Facebook for linking to the Simon Parker and David Goodhart article "A City of Capital", taken from the April 2007 issue of Prospect Magazine. Once upon a time, before the great population growth of the 19th century, with a compact population and relatively good transport, all of England could be characterized as a city-state centered upon a dominating London:

By 1700 the population of the capital had reached nearly 600,000 individuals, and was on the verge of becoming the largest city in Western Europe, challenged for this role only by Paris.[. . .] One estimate suggests that a sixth of all people born in England needed to live some part of their lives in London simply to account for the capital's population growth in this period.

During the seventeenth century migration tended to be long distance and international. As a result, besides its youth, London's population in this period was also characterised by its diversity. All the regions and countries that made up the British Isles were well represented by self-concious communities of migrants. Specific neighbourhoods were associated with Yorkshire, Scotland and Ireland. At the same time the Huguenot refugees from France successfully carved out a distinct district for themselves in Spitalfields.

Since the 19th century, and the population growth that gave England a population comparable to that of the European giants of France, Germany, or Italy (as detailed in "Quand Angleterre rattrapait la France", a French-language INED publication of May 1999), England hasn't been a city-state. As Parker and Goodhart persuasively argue, that political status has been concentrated quite specifically on a London that, since Thatcher's reforms in the mid-1980s and especially since the 1997 election that brought a modernizing New Labour to power under Tony Blair, has partially detached itself from its English hinterlands to become a global metropolis.

[T]he abolition of the GLC coincided with the end of London's decline. It was not clear at the time, but the Thatcher government was putting in place the foundations of a new London. It was turning the British economy into one of the most open and deregulated in the world, speeding the switch from manufacturing to services. Enthusiasm for deregulation spread to the City of London, where "big bang," also in 1986, laid the foundations for rapid expansion. Financial and business services, along with tourism, arts and civil aviation, were to be Britain's future--and all of them centred on London.

Global economic developments reinforced London's position, both within Britain and internationally. The increased mobility of capital and labour made it more difficult for governments to direct economic activity away from the metropolis. Moreover, London had significant advantages. It was the capital of a country with relatively good government, moderate taxation and a strong legal system. Its time zone overlapped with both the far east (in the morning) and New York and Toronto (in the afternoon). English was spoken. The City of London corporation acted as a well-connected cheerleader for its local industries. The result is that London now leads the world in several financial sectors, including foreign exchange, derivatives, insurance and international equities. It directly employs around 300,000 people in financial services, who earn an average of £90,000 a year.

The arrival of the Blair government in 1997 did nothing to undermine London's vigour. In fact, it made various changes that further helped London. One of these was the creation of the GLA and the office of mayor of London, which allowed Ken Livingstone, the nasal-voiced south Londoner, the "cheeky chappie" of British politics, to re-emerge in 2000 as socialist boss of a hyper-capitalist city-state. For the previous 15 years, London's governance had advanced via a messy patchwork of quangos and agreements between the London boroughs. The GLA was to provide a more strategic view.

Another helpful change after 1997 was a relaxation of Britain's immigration rules, marking the start of a period of sharp growth in net immigration to the capital. Each year from 1997 to 2006 saw a net inflow of 100,000 foreigners to London, to which must be added the population's natural growth (more births than deaths) of 50,000 to 75,000 a year. These increases are partly offset by an annual outflow of around 80,000 to the rest of Britain—take immigration out of the picture and, according to some estimates, the capital's population would have fallen by around 600,000 between 1993 and 2000. The net effect of this population "churn" is that London's population is now around 35 per cent foreign-born, a figure moving rapidly towards 50 per cent.

The proportion of the London population born overseas is now on the point of passing New York and is even coming close to the level New York experienced during the period of massive immigration in the mid-19th century. Given the existing diversity of London's ethnic make-up--just under 30 per cent of the population were non-white at the turn of the century--the scale and type of post-1997 immigration has given London perhaps the most exotic population composition of anywhere on the planet. Toronto, though a smaller city, is similarly diverse. New York is not far behind. But nowhere else in Europe or Asia can match the sheer numbers and ethnic complexity of modern London.

[. . .]

To the rest of Britain, London can seem an arrogant bully, devouring a growing share of the economy and evolving into a place that is wholly different from the rest of the country. This argument usually conflates two Londons: a political London that runs an over-centralised England, and an economic London, the global hub that sucks in knowledge-economy jobs and the skilled labour needed to do them. As Livingstone points out, it is unfair to blame Londoners for being home to the capital which he would be happy to see the back of. And despite regional resentment of the capital's success, the political leaders of northern cities know that London provides the tax income to fund Scandinavian levels of public spending elsewhere—public spending in London represents just 36.5 per cent of its "gross value added" compared to more than 60 per cent in Wales and the northeast. Londoners make up 12.5 per cent of Britain's population, but contribute 19 per cent of its taxes: the capital pays out roughly £12bn to the regions every year.

Yet as one study of data from the 2001 census puts it: "The country is being split in half. To the south is the metropolis of Greater London, to the north and west is the 'archipelago of the provinces'--city islands that appear to be slowly sinking demographically, socially and economically." The government has attempted to correct some of this imbalance. But while some regional cities, such as Manchester, have blossomed under Labour, they remain an archipelago of fragmented urban centres. This has bred a difficult regional dynamic within British politics--resentful provincial cities dislike their dependence on London and try to prevent their tax money being spent on more projects in the capital, even when those projects could benefit the country as a whole. Crossrail is a prime example, with Westminster reluctant to spend national money on a project for the capital, forcing the mayor to try to find the money from his own resources and private business.

The general outline of the pattern of global city formation outlined by Parker and Goodhart--the rise of a local metropolis to global prominence, the complaints of the metropolis' old declining hinterland that its needs are being neglected, the fiscal and institutional constraints placed upon the rising city--is familiar. Read the entire article; Parker and Goodhart have managed to come up with a prototypical study of the global city that is worth noting in detail.