Explaining Uneven

Development
COPYRIGHT © 2013 BY JOHN WILEY & SONS, INC. ALL RIGHTS RESERVED. 1
Class outline

▪ Introduction
▪ Links to previous week
▪ Aims of this lecture
▪ Stylized facts about economic output and change
▪ How does capitalism work?
▪ Value creation and the structures of economic life
▪ Driving Capitalism: Profit, exploitation, creative destruction,
globalization
▪ The production of space and uneven development
▪ Key take home points
▪ References and material
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Last week

▪ We developed a vocabulary for thinking about the role of geography

for understanding economic and business activities
▪ Space, location, territory, scale, relational space

▪ We also looked at different ways of thinking about geography more

broadly
▪ First-nature, second nature

▪ Environmental determinism, production of space

▪ Exogenous, endogenously produced

▪ Today we develop a framework to understand uneven geographic

development

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Aims of this class

▪ Differentiate ways of how we organize our livelihoods

▪ Part I: Why does our current socio-economic system,

capitalism, produce exploitation, technological change and
globalization?

▪ Part II: How does capitalism require the production of

space and in turn, result in uneven spatial development at
multiple spatial scales?

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4
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Capitalism
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 NOTICE: MOST OF OUR HISTORY BEING
POOR MEANT BEING CLOSE TO STARVATION

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 Fossil fuels supplement and/or replace human and animal labor
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Data Source

▪ https://ourworldindata.org/

▪ There is a wealth of information there and many with time

series

▪ An interesting dicussion on the web about the veracity of

these data and how to interpret them can be found at

▪ http://glineq.blogspot.com/2019/02/global-poverty-over-
long-term.html

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KEY PERIOD

Source: Venables 2006

Printed in Hayter, 1997
So what happened at the beginning
of the 19th century?

Industrial revolution – factories – division of labor – productivity increases

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The importance of historical
specificity

▪ The rise of Europe is related to the industrial revolution,

the expansion of capitalist social relations and the
establishment of dependent economic relations through
colonialism
▪ -> so argument is that its not just about the re-organization
of the production process in the factory but that our socio-
economic systems and societies were completely
revolutionized
▪ But what’s capitalism?
▪ How else could we organize our livelihoods?
▪ What kinds of theoretical categories do we need in order
to compare different systems?
Socio-economic systems

▪ In identifying these different systems, we are thinking

about the structures that shape economic processes.
▪
▪ Not just the everyday processes that we participate in,
but the underlying logic of these structures.

▪ Not a search for a grand theory, but only to understand

the imperatives that drive the system in which we live.

COPYRIGHT © 2013 BY JOHN WILEY & SONS, INC. ALL

RIGHTS RESERVED.
Conceptual building blocks

▪ Modes of Production

Factors of
▪ Forces of production (the power to production
transform nature to human ends)
▪ Nature (energy, air, water, raw materials)
▪ Labour power
▪ means of production (machines,
buildings, tools, …)
Changes over
time and
▪ Relations of production (the way the space
production process is socially organized)

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 Other modes of production
is the way we organize socially the production process

▪ Feudalism

▪ Slave economies

▪ Communism

▪ Communitarianism
They are all characterized by specific
relations between dominant social classes
(slave – slave owner, landowner-serf, etc).
These different classes have different
rights and responsibilities, the dominant
class tends to control access to the
means of production, etc.
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Defining capitalism

▪ „A legal system supporting widespread individual rights and

liberties to own, buy, and sell private property
▪ Widespread commodity exhange and markets involving
money
▪ Widespread private owernship of the means of production by
firms producing goods or services for sale in the pursuit of
profit
▪ Much of production organized separately and apart from the
home and family [e.g. from putting out to factory system]
▪ Widespread wage labor and employment contracts
▪ A developed financial system with banking institutions, the
widespread use of credit with property as collateral, and the
selling of debt”
▪ (Hodgson, G. (2015) Conceptualizing Capitalsm, p. 259.
University of Chicago Press: Chicago and London )

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Value creation and structures of
economic life in capitalism

▪ The capitalist economy is a system in which a small group of people own

the assets that are necessary for production and value creation.

▪ These owners of the means of production are termed capitalists, and

they buy labor power from workers.

▪ Both the inputs/outputs of the production process, and the labor power
that participates in it, are bought and sold through a market
mechanism.
▪ Q: Can you think of values not produced and exchanged through the market
mechanism? How important are those “non-market” values today?

▪ While there still may be people that live under slave-like conditions
(currently estimated to be 40 million world wide) or from subsistence
agriculture, value creation through the production of commodities for
sale on a market (capitalism) is the dominant social form of organizing
value creation -> capitalist social relations have become generalized!
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Pre-conditions and implications

▪ Labor must be available in form of wage-labor

▪ This means that workers need to be separated from their means
of subsistence (land, water, environment, etc.) Тобто не рабство
▪ Sometimes people are searching for better opportunities
somewhere else and sometimes they are forcefully separated
from them („accumulation by dispossesion“ such as enclosure
movements, elimination of community land holdings (eg. Mexico),
„slum clearance“, etc)
▪ Once separated from their means of subsistence workers
have no other possibility of survival but to sell the only
commodity they possess, their labor power on a market for
this commodity (labor market)
▪ It means that money needs to be generated in order to
employ labor on competitive labor markets (you cannot buy
people (slavery) or force people to work through military
force / political pressure / ideological means (feudalism)

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Institutional pre-conditions
For the Wage-Labour

▪ Existence of a legal system supporting widespread

individual rights and liberties to own, buy and sell private
property
▪ That means that there must be institutions that guarntee
those liberties and private property – usually the nation
state
▪ Without states and other rule-giving and –enforcing
entitities there cannot be markets

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Value creation under capitalism

 LP
M → C ....P....C → M + m → etc.
'

MP
M = money
C = commodity set of commodity input that is bought by capitalist
LP = labor power
MP = means of production (usually called capital such as machines,
buildings, raw materials,…)
P = Production (dots means it takes time to transform inputs into output)
C‘ = new commodity produced
m = profit
Goal is to make a profit in order to keep the wealth creation process going
Question: What possibilities do you have to increase those profits?
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Fundamental logics that drive
contemporary capitalism

1. Capitalism is profit-oriented.

2. Growth in value rests on the exploitation of labor in the

production process.

3. Capitalism is necessarily dynamic in technological and

organizational terms.

4. AND: Capitalism is at once, spatially expansive

(globalization) and produces spatial difference (investment
in buildings, infrastructure necessary for value creation)

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Profit making: “Exploitation”

▪ Capitalists make a profit by selling the

commodity that is produced by labor

▪ Keeping the difference between the market

value of whatever was produced by labor on
the one hand and the wages of labor on the
other.

▪ This is called “exploitation”

▪ Capitalism is thus about a structural

relationship between different social classes: a
capitalist class that owns the means of
production and a working class that owns the
labor power it “sells” to the capitalist
▪ BUT: That does not mean that workers get paid
little!

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Profit making: technological change

▪ Possibilities for accumulating profit

mean that system-wide incentives
exist to create new products,
markets, materials, ways of
organizing the production process.

▪ There is a fundamental logic or

urge in capitalism toward “creative
destruction.”

▪ Describes the capitalist process of

generating new growth through the
destruction of old products,
processes, and markets and the
creation of new ones. (example of
TV set production in book!)
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Creative destruction

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The need to be innovative

▪ The reason why capitalism is much more efficient and

dynamic than any other mode of production
▪ If capitalists want to stay in business, they have no choice
but to innovate – why?
▪ They have to sell their products on competitive markets
▪ They can try and control the market (monopoly), but that will be
temporary
▪ They do not know how competitive their competitors are at the
time they bring their products to the market (uncertainty) – the
dots in the equation! Delay between the decision to invest and
sale of the product on the market (production versus realization
of surplus value!)
▪ For those reasons, they can only be certain that everybody else
will try to be as efficient as possible to obtain the highest possible
price on the market and thus, they have no choice but to be as
efficient as possible (through investment in new technologies)

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 Scale of technological progress

▪ Just to illustrate the role of technological change for the

creation of competitive advantage for British and in turn,
European producers

▪ Whereas an Indian hand spinner of the 18th century had taken

more than 50,000 hours to process 100 pounds of cotton,
Crompton’s mule cut the time to 2,000 hours while
powerassisted mules around 1790 reduced this time further to
300 hours. In 1825, Robert’s automatic mule reduced the time
further to 135 hours per 100 pounds. The number of mule
spindles rose from 50,000 in 1788 to 4.6 million in 1825.
Questions for discussion (discussion
window)

▪ Why is technological change not a systemic feature in

Feudalism?

▪ Possibility of falling back on subsistence production

(production of food, clothes, etc. on land and machines
accessible to workers and not own by any specific class) …

▪ Why do markets discipline inefficient producers in

Capitalism but not in Feudalism?
▪ What happens if you show up with a qualitatively poor or
inefficiently produced commodity? How would you know
whether this is actually the case?
▪ What would happen to the producer under Feudal social
relations?

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NEXT: The role of geography

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Globalization and the
production of space
Profit making: Globalization and
production of space

▪ Another way to increase profits

▪ Geographic expansion (globalization)

▪ New markets, new resources, cheaper
labor,…also one way to displace crises

▪ -> precondition: Development of appropriate

transportation and IT infrastructure

▪ In order to make a profit, capital must

be sunk in a place

▪ Factories, office buildings, roads, fibre-

optic cables
▪ Represent the requirements for profitable
actitivity (we will look at that more
carefully later)

▪ SPACE IS PRODUCED!!!!

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-> Key processes discussed in class

▪ Globalization

▪ Production of Space (Urbanization and Localization)

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Globalization – unequal exchange

▪ Unequal exchange (Emanuel 1972): „Unequal exchange

theory posits that economic growth in the „advanced
economies“ of the Global North relies on a large
appropriation of resources and labor from the Global South,
extracted through price differentials in international trade“
(Hickel et al. 2022: p.1).
▪ What is new are the methods to trace resource and value
flows (as in the recent paper by Hickel, Dorninger, Wieland
and Suwandi 2022).
▪ According to them the North appropriated 10.8 trillion US
Dollars in Northern prices from the South (this could end
extreme poverty 70 times over!).
▪ Over the period 1990-2015, according to their calculations,
the drain from the South totalled 242 trillions US$ in
constant 2010 dollars !!!! This represents a quarter of
Northern GDP
▪ It outstrips aid by 1:30

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Inherent uneven geographies of
capitalism

▪ Since the beginning of the

Industrial Revolution, the capitalist
global economy has been in
constant flux.
▪ With each era, capitalism creates
landscapes that match its changing
requirements—i.e., “territorial
production complexes.”
▪ Landscapes eventually become
impediments to future growth and
must be devalued to make way for
new growth.
▪ Capitalism is constantly searching for
a geographical solution for over-
accumulation—i.e., a “spatial fix.”

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What is the „Spatial fix“

▪ Two meanings:

▪ To fix a a problem (of overaccumulation: too much idle money,

too many idle workers, too many idle machines)

▪ To fix surplus capital in place (think back to China‘s concrete use)

▪ Investment in new infrastructure, housing, factories, offices,

IT, high speed rail lines, better hospitals to improve quality of
workforce, etc. are all strategies designed to use idle money
(money that cannot be invested profitably at a particular
moment), sink it in a particular place (transform liquid
financial capital into fixed capital stock) with the hope that it
will improve productivity of workers and companies in future
rounds of production (reduced turn-over times, lower
commuting times so that saved time can be used
productively by firms and workers, etc.)

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Capital switching

Source: Harvey (1989) The Urban Experience, p. 78

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Example: Erie Canal (finished in
1825)

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Growth and decline of cities along
main routes of „sunk capital“

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Point…

▪ Investment in fixed capital (production of space) is a necessity to

produce profits

▪ At any given time, investment decisions reflect the requirement of

current needs of capital (most efficient at time of investment)

▪ As technological change progresses, the existing spatial resource

system may no longer be efficient (we may need new multi-story
office spaces instead of single floor, spatially extensive, factories,…/
or rail access become more important than access of canals,…)

▪ But, because investment needs to be written off, it cannot be easily

destroyed and newly rebuilt -> BUT: if the infrastructure no longer
serves its purpose it may be devalued / destroyed….. Cities might
begin to shrink, etc….. -> process of regional/urban decline

▪ Probably best example to see why there is no instantaneous

adjustment to economic shocks (dots in the equation)

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Point….

▪ The process of urban/regional growth and decline is

uneven (investment in spatial resource systems is lumpy)

▪ It is rooted in the general logic of capital accumulation.

▪ But of course, in order to explain why particular cities or

regions grow or decline in particular periods, we need to
study those particular places (why do some cities recover,
others decline long-term or other grow over very long
periods?)

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Scaling up the region/city…

▪ So far we looked at regions / places in relation to

proximity to transport infrastructure and built
infrastructure but not about their relations to broader
socio-economic processes

▪ But, we also have to think how cities are integrated (or

not) in the global division of labor

▪ What functions do they have for accumulation at the

global scale and what impact does that have on their
development?

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Spatial divisions of labor (functions of places)

Source: Adapted from Gregory (1989), Figure 1.4.2.

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Placing and scaling capitalism

▪ In order to understand the development over

time of a particular place or region, we need to
understand the previous layering of rounds of
investment and its relations with other places
(is company local owned or by an MNC,…).
▪ Territorial production complexes create their
own social and cultural identity
▪ Once the social and cultural lives of people living
in particular places are added into the analysis,
we begin to see human consequences of uneven
development.
▪ Mining towns, industry towns, etc. often develop
typical working class cultures with specific gender
relations that may be challenged by de-
industrialization
▪ Development in one area is impossible without
simultaneous underdevelopment in another
area—i.e., capitalist restructuring, or “see-
saw” development.
Culture and industrial development
(THINK PLACE)

▪ Example:
Location patterns
of Japanese Car
industry in the
U.S.

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Result: Some regions decline, others grow …. Spatial shift…
Displacement

Decline of
manufacturing
belt

Rise of
sunbelt

Source: Peet (1983), Figure 9. Reprinted from Economic Geography with permission of Clark
University.
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 Sometimes re-
invention of places in
situ

▪ London docklands

▪ Downtown New York

▪ Harbour Areas of
Hamburg and Düsseldorf

Old resource system (port

infrastructure) destroyed

Landscape adapted to new requirements

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 Repurposing of existing infrastructure

Source: www.albertdock.com/, ©Mark McNulty

Photography, reproduced with permission.

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Why is all of that important?

▪ Capitalism (profit-motive, ….) is historically specific,

NOT UNIVERSAL

▪ It is one way of social organizing to guarantee human

survival and (ideally) flourishing

▪ Exploitation, profit-making, environmental destruction are

NOT the result of universal human behavioral traits
/ nature (such as greed) but because greedy behavior is
rewarded under particular social conditions -> There is
nothing natural about that!!!!

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TAKE HOME POINTS

▪ Europe was able to start dominating the global economy because

capitalist social relations were generalized there first -> this
his many different causes but they are, primarily social and not
environmental/natural

▪ Capitalism is the most efficient system in history, because

production for exchange on a market (instead of subsistence) have
become generalized -> this required (often) violent dispossessions,
enclosure movements, gunboat diplomacy in Europe and the Global
South -> making profits through exploitation, technological
change, globalization

▪ Reducing the costs of overcoming space (transport, IT) and the

need to build up territorial production systems for value creation
(factories, offices, schools,..) and the search for a spatial fix to
economic crises necessitates the production, destruction and re-
configuration of space -> uneven geographical development

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RIGHTS RESERVED.
FOR NEXT TIME

▪ Please make sure that you look at all the material for your
home work

▪ It will be on ethical consumption as „solution“ to the

current social and environmental crisis

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 HOW TO READ RESEARCH
ARTICLES

There are two papers on Learn

that provide instructions
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Skim
Read

Results

Think of
future
research
 Consider

▪ Skim article
▪ Author(s), Journal, title, headings, subheadings, figures,
equations

▪ Read introduction
▪ What is the purpose of the paper?
▪ theoretical or empirical paper
▪ What is the topic?
▪ What is the motivation?
▪ What is new?

▪ Key concepts

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 Read

▪ Read the article

▪ What is/are the research question(s)? What does the

author want to know?

▪ Which method is used to answer the research question?

▪ Do you think it is the appropriate method for answering the
research question?

▪ What is the main conclusion of the paper?

▪ Are the hypotheses supported or refuted?
▪ Is it convincing?
▪ Are there any weaknesses?

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 Results

▪ Go back to the results section

▪ How are the results presented?

▪ Tables
▪ Figures

▪ Read the title and legends of the tables and figures

▪ Annotate and re-title tables and figures to improve clarity

▪ Are the results reported and analyzed in an unbiased

way?
▪ Is something left out in the discussion?

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 Think of
future
research

▪ What could be future research?

▪ Which questions remain unanswered?

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