Urban Agglomeration

Last semester, I learned that the economic rationale for the mysterious persistence of cities (agglomerations) in the communication age could be explained simply by the massive externalities created by the generation of tacit knowledge. Of course, this rationale applies to growth-generating cities such as New York or Boston, rather than cities experiencing economic decline; the idea being that tacit knowledge is gained through the proximity of people and firms (where constant innovation generates increasing returns to scale) whereas knowledge that can be replicated can also be outsourced (and thus dispersed) to regions with cheaper labor. This week’s readings demonstrate that explaining capitalist economic growth in the context of the wider political and social forces that shape cities is far messier exercise. For example, Joe Painter discusses the nascent application of regulation theory to urban theory, and attempts to define the “Mode of Regulation” of post-Fordism using examples from local government in Britain. Crudely, this involves a shift from centralised, process-driven ‘Fordist’ government to something more decentralised, outcome-driven and neo-liberal. It is easy to see why regulation theory appeals to urban theorists for supposedly taking account of political and social change, but its premise that the instabilities of capitalism are ironed out by forces that are neither conscious nor accidental and usually unintended (Modes of Regulation) surely renders the task of definition extremely difficult, and makes me wonder how this theory can be usefully applied.