Like all Castells’ pieces, this book covers a large scope and does so with a lot of detail. In broadest strokes, this book is an analysis of (the then) new information technologies and urban-regional processes as they occur in a larger historical context. He identifies this new mode of development as the informational mode of development. His hypothesis: we are experiencing a historic set of transformations that relate to: capitalism as a social complex and capitalism’s restructuring (global capital flows), the informational mode of development, and IT as a potent operating instrument.
Castells uses the first chapter to enumerate his underlying theoretical framework. Namely, that societies organize around human operations, themselves formed by “historically determined relationships of production [humankind’s appropriation of matter and other humankind production – Marx], experience [“actions of human subjects on themselves within the various dimensions and cultural entity in the endless search for fulfillment of their needs and desires” (8) – Freud, Reich, Chodorow], and power [the relationship, generally state/territory-articulated between people, shaped by production and experience, by which some exert control over others – Weber, Foucault, Sennett]. Capitalism and statism both separate the producers from agency over surplus, the former for profit, the latter for power. Gramsci’s understanding of hegemony is particularly meaningful to Castells, as well: a class’s ability to justify its dominance by establishing political and cultural values that marshal the majority and serve that dominant class’s agenda, whatever it may be. (NB: For Castells, the “elite” is not the ruling elite, but the hegemonic group that forms civil society.)
Chapters two through six are sequential investigations into the urban-regional transformation. Two regards IT production and spatial patterns; three discusses IT services/office’s territorial effects; four, five, and six discuss the impact of restructuring the socio-economic aspects of IT on cities and regions in these three dimensions of the restructuring: (1) the new relationships between capital and labor, (2) the transformation of the state (eg, “welfare” to “warfare”), and (3) the internationalization of the economy. The major theme throughout all of this is the Space of Flows.
Informational Mode of Development & Restructuring
Modes of development refer to the technologies applied by labor to wield product, and thus surplus. Previous modes include agrarian and industrial. Today, says Castells, our mode of development is informational: knowledge begets knowledge, and so on. Discoveries aren’t products but innovations and new processes.
Where industrialization was motivated for and by economic growth, informationalism focuses on the accumulation of technological developments. All modes of development evolve with history. Sometimes the change results in revolutions (or total inertia), but more likely is the a transformation that occurs through the feedback to the consequent social chaos, economic crises, and political strife. Central to this reorganization (“restructuring”!) is the use of novel technological relationships of production that might include new models of development.
“Restructuring” is “the process by which modes of production transform their organizational means to achieved their unchanged structural principles of performance. Restructuring processes can be social and technological, as well as cultural and political, but they are all geared toward the fulfillment of the principles embodied in the basic structure of the mode of production. In the case of capitalism, private capital’s drive to maximize profit is the engine of growth, investment, and consumption” (11).
In the case of the informational mode of development, there are both technological and organizational implications for capitalist restructuring. The technological: increased profit rate (which empowers capital over labor), shift of state’s role from redistribution to focusing on technology’s infrastructural needs (especially in terms of warfare), and the utter internationalization of the economy. The organizational: human capital and knowledge-generation become indispensable while productive labor is downgraded, flexible (networked) organizations necessary to withstand the international market shifts, and a strong shift from centralized corporations to decentralized networks.
Capitalism of the 80s
But in the 80s, a new socio-economic model was needed to achieve capitalism’s goals, which brought forth the capitalism of the 80s: (1) increased exploitation of labor for profit (i.e. higher productivity from technology, lower wages, weakening of labor protection, decentralized production for cheaper labor, huge expansion of the informal economy, reorganization of labor markets to take advantage of those least protected, attenuating of labor unions); (2) regarding state intervention, “from political legitimation and social redistribution to political domination and capital accumulation” (25) (i.e. deregulation, privatization, regressive tax reform, state-supported high-tech R&D as defense priority [“warfare state”], shrinkage of welfare state, fiscal austerity measures; (3) quickened internationalization of all economic exchanges/flows for the assured profitability resulting from an expanded system. NB: capitalism’s always been a world economy, the great change now its its real-time transactions, which permit greater wealth creation. I.e. people can now find the most favorable investments from anywhere in the world; the faster the monetary transactions and the more of them, the more money created; the creation of new markets increases the vertical gaps between societies, while the markets themselves are horizontal.
“When the ‘creative destruction’ process takes place at the international level, the intermixing of national interests with competitive strategies becomes explosive” (27).
(Oh, and so why did we have a major deficit in the 80s? Because foreign capital was so attracted to our high interest rates, thus driving up the dollar’s exchange rate, plus post-manufacturing production/export deficits.)
Spatial Implications – the Milieus of Innovation & Division of Labor
The IT industry could be footloose, except it can’t. On the one hand, IT’s can locate anywhere, provided they’re near an innovative labor pool. On the other hand, they need to be near their users. Moreover, while at the micro level, we see just the operations of the firm, at the macro level, there is a distinct milieu driving the IT industries. [Artists, Lloyd!] A milieu here is a “specific set of social relationships of production and management based upon some common instrumental goals, generally sharing a work culture, and generating a high level of organizational synergy” (72).
There are four spatial implications unique to the IT industries. (1) There are discrete spatial divisions of labor according with their own labor and functions. (2) There is a spatial hierarchy around “milieus of innovation” centered in specific locations. (3) The decentralized production functions drive and reproduce the spatial hierarchies. (4) The central “milieus of innovation” notwithstanding, the industry is otherwise location-flexible.
Where do the milieus form? Near universities, places of higher education (e.g. Silicon Valley); government sponsored R&D sites (e.g. Cold War LA), R&D divisions of corporations already associated with technology (e.g. IBM’s New York), and networks of R&D centers (e.g. Austin). Hearkening what we are now learning about creative cities, they are not replicable — the specific sociohistorical context matters.
And why can they be anywhere? Critically, IT’s technology and social division of labor cause spatial segregation and the respective spatial characteristics contradict one another. The four reasons for this decentralization: (1) varying labor needs, (2) ease of shipment, (3) industry is already one of its biggest users, (4) and owing to the process-focus, the designers need to be close to their users. This decentralization occurs internationally, inter-regionally, and intra-regionally.
The Space of Flows
Castells doesn’t care for the terms “post-manufacturing” or “post-industrial” because they intimate some relationship with the industrial mode of development, that it is still the basis for our economy. The informational mode, however, derives from information-processing. Its obstacle, the “application gap” unleashes “the productive forces in our informational age” (137).
According to Quinn (as cited on pp. 141-2), technology has had six effects: (1) increased economies of scale, (2) increased economies of scope, (3) increased output complexity, (4) increased services/functions offered (e.g. Sears went into financial management), (5) increased international competitiveness, and (6) increased wealth through productivity.
Spatially, technologies have reinforced the importance of CBD’s as they demonstrate the “importance of business milieux and face-to-face, cultural connections” (151), as well as suburbanized services and processes. Why get suburban? Cheaper land prices/rents, proximity to workers, proximity to resident customers, and educated labor pool (here, married women).
But neither centralization nor decentralization is dominant: it’s their relationship that is crucial. The space of flows is not placeless, but with a specific organizational logic. Critically, while flows are directional, as world economies become increasingly interdependent, the logic becomes increasingly abstracted, beyond any particular agency’s dominion. So it’s not about the flows of power, but the power of flows.
Spatial Implications – the Dual City
High tech does encourage more jobs, but it does so in such a way that creates a polarized and segmented labor force. Qualitatively, the management-labor power balance has shifted well in the favor of employer. In addition, labor at all levels is now more flexible, espousing the “just-in-time” system. Quantitatively, there are fewer unskilled clerical jobs, the number of skilled clerical jobs is shrinking, and the number of middle-income households is decreasing. The downgrading of most of these jobs maps directly with the change and gender and ethnic characteristics of the work force. Namely, uneducated women and ethnic minorities perform the lowest-level labor in the informational economy.
There are three phenomena contributing to the complex nature of the dual city’s social makeup. (1) The rise of the informal economy, the unregulated income-making process which would otherwise be government-regulated. (2) A decreased proportion of a participatory labor force (the diminution of the unions). (3) An increase in the criminal economy. [Wonderful on an academic level and harrowing at a social one is how prescient Castells is about the dual city, which in The Information Age becomes the Fourth World.]
Per Saskia Sassen, immigrants come to New York because of the job opportunities in the informal economy. They live in “interstitial space[s]” (216), either ethnically segregated areas or enclaves in white cities. The dual city:
“represents an urban structure that exists on the basis of interaction between opposite and equally dynamic poles of the new informational economy, whose developmental logic polarizes society, segments social groups, isolates cultures, and segregates the uses of a shared space” (218).
Comparing the formal and informal sectors, we see: (1) one benefits immensely from state intervention while the other suffers, in favor of capitalist processes, from no labor protection; (2) that they are equally dynamic and connected through symbiotic relationships, though there is little social mobility between them; and (3) the more the middle class shrinks, the more we realize chances for upward mobility further diminish. The upshot: a spatial structure integrating segregation, diversity, and hierarchy” (226).
From the Urban Welfare State to the Suburban Warfare State
I will skip the details here in favor of the larger point: that the move from redistribution to power-building was and is not a neo-conservative move but a “fundamental tendency” (304). The transformation of the state is an essential outcome of the technological revolution and maps with the social restructuring and production outlined in previous chapters. (For example, military R&D is just as suburban today as it was then, and some social groups are obviously preferred. Cosmopolitanism doesn’t jibe well with hawkish policy.) The welfare to warfare state transition (1) institutionalized the dual city / informational city dichotomy, (2) exacerbated uneven regional development, and (3) contributed to suburban development such that there are more affluent, denser suburbs.
The Internationalization of the Economy
The more internationalized an economy, the more technologically reliant and networked it must become. The dimensions of the internationalization process: trade, offshore production, foreign investment, global financial flows. “The global city is also the dual city” (343).
Following Sassen, global cities are so because of the information technologies and networks. In New York, a global city, we observe the place-based paradox. While it is a “global city,” its place is essential. Its information services brace its “command and control” center status, which supports the immediacy needed by its highest-level financial players’ milieu comprises highest-level financial players [though these are later debunked by Currid (2006)]. Remember, the most important decisions are made by individuals in private. “The global city collapses information flows into social matter” (344).
What Can We Do?
“People live in places, power rules through flows” (349).
“The reconstruction of place-based social meaning requires the simultaneous articulation of alternative social and spatial projects at three levels: cultural, economic, and political” (350).
We can affirm our cultural identities, organize communities, and occupy places in such a way to make them meaningful. Castells sees fundamentalism either on the horizon or just beyond, and cautions us to make our identities not in vacuums, but in relation to others. We must build communication codes with other identities, cities and regions must reassert themselves in the new informational economy (check), localities must shape the central place in determining “the social control of places over the functional logic of the space of flows” (351), and local governments must organize community engagement and civic participation” (352).
“But sometimes, a utopian vision is needed to shake the institutions from shortsightedness and status and to enable people to think the unthinkable, thus enhancing their awareness and their control of the inevitable social transformations” (353).