Why Politicians Can’t Bargain With Big Business
Can Politicians Bargain With Business?
When the average individual thinks of politics and elected government officials, the common thought that may not immediately register is the connection between business and politics. Such a thought might be difficult for the average citizen to fathom, or is this concept a more common understanding than recognized on the surface? Whichever the case, it is a topic worth investigating and exploring to uncover the hidden layers that reveal the interconnected nature of business and politics, and how these relationships influence our political scene and influence our communities and the development that occurs within.
Urban Development, A Competition or Conflict?
The concept of urban development is one that appears to gain the interests of many political scientists, business analysts and researchers alike. Perhaps it is due to the realization that, when discussing urban development, the conversation tends to dance around the elephants in the room, i.e. the people within these areas of urban development and how the action ensued will affect them. Economies are experiencing rapid changes due to de-industrialization in some cities, and revitalization in others (Cox and Mair, 1988). With this, we see the emergence of competition within local economies that seek to claim control of the wealth of the cities inhabited for more bargaining power (Molotch, 2011).
As a result, local municipalities require coalition building, only with the caveat that not all coalitions have equal power (2011). While local government and locally dependent firms collaborate to create business coalitions to stimulate investment in their local economy, there is the looming presence of more substantiated corporations consistently striving for acquisition of as many resources available to seize control of the local economy (1988). In response, these locally dependent firms attempt to appeal to the self-interest of state entities, also locally dependent, to connect with their influence, stability and power and power. These strategic alliances are developed to cultivate a healthy community and mitigate risks associated with a lack of growth management (Cox and Mair, 1988);(Molotch, 2011). As many different definitions and perceptions of growth often circulate, this can become cumbersome and must be addressed.
The Right to the City
Iveson states in Cities Within the City: Do-It-Yourself Urbanism and the Right to the City that, “we are presently witnessing the growth of, and interest in, a range of micro-spatial urban practices that are reshaping urban spaces”. With a global economic recession progressively infecting the world, there are many concerns as to the potential effects of neo-liberalism and capitalist ideologies on the economies of many nations (Brenner et al., 2009).
It is no secret that de-industrialization creates job loss, yet it is unfortunate that the outcry of many local, urban, disenfranchised communities who have been in a perpetual outcry about the current conditions contributing to disparity within communities was not validated until the global recession gained attention (Cox and Mair, 1988). Interestingly enough, many local economies and community members appear to have understood for some time, neo-liberalism is unsustainable.
With this knowledge, many communities appear to have formulated a manner of operating that allows them to survive in the oppressive conditions distressed communities are found to exist in (Brenner et al., 2009). Yet as innovative and sustainable as these micro economies may be in the face of neo-liberalism, they are often termed with condescending terms such as “insurgent, or guerilla, groups” (Iveson, 2013); an unsettling terming of what is occurring as language shapes perception. It is interesting to observe the educated experts that struggle to, “. . . search for an appropriate language to describe these practices” which in turn, “reflects the fact that we are not quite sure what, if anything, connects them across their diversity.” (2013). Very discouraging however, it gives great insight into the struggles of Public-Private partnerships and the emergence of the question, who has the right to the city?
Iveson does a beautiful job identifying the appropriation that occurs in a plethora of cities, specifically among areas of urban revitalization. Community gardens, graffiti, housing and retail cooperatives, bartering schemes and a host of other resilient activities employed by these micro climate communities often catch the eye of the corporations seeking to consume resources to assert control (2011).
Knowing that the cultures are being appropriated to redevelop other communities, who indeed has the ‘right to the city’? This observation becomes integral to the discussion as these alternative coalitions prove viable yet are often not the community members that are within the growth machines leveraging public funds away from the areas most needed in the interest of private investments (Molotch, 2011).
These machines tend to consist of business leaders, property owners and investors and financial institution affiliates (2011). The presence of appropriation highlights the recognition of what are keys to revitalization, yet the insight is often exploited for financial gain of the private sector as the public sector is left to continue to fend for themselves. The conundrum identified is that, public private partnerships have the high risk of volatility due to divided interests of the public and private entities. One seeks capital, the other seeks social wellness, which leads to the next question, “What defines Growth?”.
Divided Interests
“Whether or not working class people will possess a working class consciousness, engage in class practices and form labor unions, their own political parties, and cooperatives, depends upon the presence of other, enabling social structures in which people find a sense of community that can sustain them . . . Accordingly, where a significant measure of traditional local dependence remains, a higher potential may exist for class-based conflict between business coalitions and local people over the appropriate response to deindustrialization, attracting new industry, and the local business climate” (Cox and Mair, 1988).
Determining what growth is needed can create a wealth of tension as city interest can have a complex definition when considering the various interests and needs of a variety of classes, political views and communities (Peterson, n.d.). There is an idea that because of capitalism and its effect on the economy and divided interests, local coalitions are not likely to remain stable (1988). To overcome these challenges, local, collaborations attempt to secure state partnerships and gain interest and support from the local communities. This often proves viable as the states themselves are inherently dependent on a thriving locale and its economy as they generate revenue though the taxability of that local population (1988). The risk with these public-private partnerships, however, is that often there are gray areas that emerge amidst blurred lines of where the “state ends and private firms begin” (Barnekov and Rich, 1977).
This is where emergent tensions can be seen. Tensions of defining growth in itself and establishing what growth is needed, a seemingly simple task, yet is complex due to the nature of sociology and politics involved surrounding class, race, and other various components that typically divide potential stakeholders. The question must often be, “What is the motive, or driving factor, behind this initiative?”.
Profit driven restructuring often leads to displacement and gentrification, while appropriating the very customs and practices of the displaced communities as urban spaces are ‘commodified’ for the benefit of the capitalist, private interest (Brenner et al., 2009). Noting this, Brenner et al. make the argument that critical urban studies is becoming more of a necessity when considering urban policy and development to confront the many, though often obscured, challenges (2009).
Understanding this, it is apparent that local governments must successfully manage their assigned public sectors, goods and services to protect the local economy and the people within (Peterson, n.d.). The reality is that all areas, whether city, state, or national, desire to see improvement on the social, political and economic scale, yet leaders face the challenge of remaining sensitive to the interest of their communities, of which many local leaders prove less likely to b (n.d.). The issue with this is that this style of development, profit driven and focused on private interest over public, never seems to solve problems and only perpetuates an endless cycle of classism, social conflict and other disparaging results as cities are constantly and consistently shaped and reshaped, again reiterating the need for a critical approach to the effects of capitalism driven urbanization and its effects on the cities and its people (2009).
City Interest and Growth Management
As we continue to progress through this discussion, it is important to recognize the city interest that underlines many of the discussions. Kantor and Savich discuss how cities consistently pursue capital while competing for tourism, foreign trade, franchises and grants (n.d.). It is this quest that became the downfall of many cities in the past as, in their quest to satisfy self-interests, they pursued single industry machines that appeared to be best at the time (Molotch, 2011). This was ultimately the destruction of key cities as businesses revealed their true bargaining power by uprooting and moving locations, leaving a decimated local economy, along with devastated communities. This is what brings the recognition that local governance and economic development are highly interconnected to how larger political parties bargain resources between both the public and private sectors (Kantor and Savich, n.d.).
The aforementioned information brings to surface the ways that city interests can be complicated. City interest often encompass the needs and wants of many within the public and private sectors, yet the municipalities must protect their interests on all fronts while appeasing the interest of others. The complications strengthen when it is realized that that many policies are “under scrutinized because they were enacted upon due process and matriculated through proper procedure”, yet ultimately may be extremely detrimental to the public at large (Peterson, n.d.). Interestingly, it appears that cities are engaging in these practices as a form of necessary growth management, however it has shifted from what it once was (Molotch, 2011). In response, many counter coalitions have formed locally to disrupt the disparate operations between the private sector and municipalities. While some are more effective than others, they often prove powerful in many cities (2011).
This struggle for power and balance indicates a deeper issue within city interest and the local municipalities responsibility to its citizens. Kantor and Savich acknowledge the interdependence of the public and private sector while recognizing the capacity of the public being influenced by popular control and the private sector holding the capacity to produce wealth in the market (Kantor and Savich, n.d.). The conundrum is the fact that cities desire to manage growth to protect the economy but are often faced with competing with other cities as businesses shop for locations to establish themselves. The cities want to control growth yet need businesses to stimulate the wealth in the local economy they are dependent upon. Unfortunately, this often places cities and their leaders at the mercy of capitalistic, neo-political growth machines that have little interest in the well-being of the poor. Understanding this, Molotch proposes the hypothesis that investing in the indigenous entrepreneurs can greatly benefit the poor community despite the looming presence of these growth machines (2011).
Cities for People, the Right Way of Thinking?
Why should cities be for people? Well, why should they not? For years the people of the cities throughout the world have appeared to have known something that many elite class members have failed to grasp. This is evidenced through the appropriation of practice with the removal of the people, indicated by Iveson’s discussion. Consistently, individuals seek to understand what cities do and who are they for. Almost humorously, the answer appears to rest within the condescendingly labeled ‘insurgent groups’ that are often overlooked and deemed as incredible or lacking expertise, yet their resilience and ability to adapt and operate within the shadow of capitalism displays a thread of hope that many outside looking in have trouble comprehending (Iveson, 2013).
For years, community members have held an outcry against neo-politics and the capitalist agenda, but it was ignored until the global economic crisis made what was mentioned valid. The question should then become, “Why was the voice of the people stifled as irrelevant?”. The following question then becomes, “Why are individuals such as planners, policy makers, and others determining what the people want and need but few surveys to quantify and qualify the suggestions have been performed? (2013). If cities are truly for the people, why are people-centered tasks not conducted?
“Zeiger (2011b) puts it this way: ‘how do we measure the impacts of ambiguously defined and informal activities?’. . . this cannot be a matter of simply evaluating individual practices and projects. It must also be a matter of discerning whether a larger picture is emerging across these practices and projects, and asking about the nature of this bigger picture if it does exist” (Iveson, 2013).
What is this larger picture? Because it very much does exist. Brenner et al. suggests that the global economic crisis is the biggest security threat, perhaps because it creates the conditions that stir up communities into protests, frustrated that social and public institutions are not the recipients of necessary funds, often redirected to banking and other financial institutions (Brenner et al., 2009). Brenner et al. continues to say,
“A key challenge for radical intellectuals and activists, therefore, is to decipher the origins and consequences of the contemporary global financial crisis and the possibility for alternative, progressive, radical or revolutionary responses to it, at once within, among and beyond cities. Such understandings will have considerable implications for the character, intensity, direction, duration and potential results of resistance” (2009).
The reality is, many private sectors only seek public interests as long as it fits within their objectives and meets a specific need they have (Kantor and Savich, n.d.).
This can be circumvented however, if the cities realize their ability to shape their own future. While private sectors and government have different interests, they often have similar goals (2009). Governments have the capacity to contend with growth machines and leverage their ability for growth. The caveat is to avoid being a growth-hungry city and positioning oneself to be at the demands of businesses. Two key examples of this can be witnessed in remarkable places. One, within history, is recognizing the Native Americans and their ability to thrive in simplistic economies, but through greed, capitalistic ideology and exploitive appropriation an entire people was all but destroyed. A second example that currently survives is that of Latino populations who immigrate and establish micro communities that thrive.
These same principles of what made these various people successful are transferable to today and cities can learn and implement these strategies to reshape their future and regain their autonomy. Kantor and Savich provide some key points that are supportive of these examples and highlight some important facts to examine. The reality is, capital is not always potable, and businesses’ greatest bargaining resource is control over the private wealth during the investment process. With this, municipalities tend to possess some control over land and can inhibit businesses’ from being positioned to exploit and cities can return to being for the people. Smaller communities tend to avoid competition in capital markets and capital investment. Rather they attempt to maintain autonomy and employ a balanced approach to more growth-hungry communities, often to the benefit of them and their people.
Conclusion
The question remains, “Can politicians bargain with business?”. Quite possibly yes. The key is in how this bargaining occurs, and to whose expense. Kanton and Savich suggest that national politics can empower local governments to leverage more bargaining power with businesses through creation of access to capital. This can help offset the influence of businesses regarding the shaping of local policies. Politicians must not sacrifice the interest of the public for the interest of the state as this creates gentrification and urban deformation, foundations of neo-political governance and capitalism. When capitalism rules, people are often the ones who wear the weight of the ramifications as the elite classes continue to compete for monopolization of resources by any means. Politicians can and should bargain with businesses, yet in a manner that voices the interests of the people and creates a check and balance for the way businesses operate.
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References:
Brenner, N., Marcuse, P. and Mayer, M. (2009), “Cities for People, Not For Profit”, City 13(2–3)
Cox, K. and A. Mair (1988). “Locality and Community in the Politics of Local Economic Development”, Annals of the Association of American Geographers, 78(2): 307–325
Iverson, K. (2013). “Cities Within the City: Do-It-Yourself Urbanism and the Right to the
City”, IJURR, 37(3): 941–956.
Kantor and Savitch, “Can Politicians Bargain with Business?”, American Urban Politics in a
Global Age.
Molotch, H. (2011). “The City as Growth Machine” in R. T. LeGates and F. Stout, Eds.
The City Reader. 5th Edition. Routledge.
Peterson, P. “The Interests of the Limited City”, American Urban Politics in a Global Age.
