This article follows on from a longer article written for the journal Geopolitics (2022), which can be accessed here. For updates on forthcoming posts, follow us on Twitter here (@TrAtlantic).
The hypothesis goes something like this: Over recent decades, Britain has been turning from a nation-state into something resembling a city-state formation, and the consequences of this have been endless austerity, cultural disorientation, social disintegration, political demoralization, and the rise of a dominant metropolitan oligarchy. For the majority who dwell in the provinces at large, the consequences have not been pleasant.
For over three decades, the dominance of The City has hollowed out industry across the country and contracted the social skill base, with “generally negative macroeconomic effects on the state territory as a whole”.1 Boosterish megaliths like The Shard and The Gherkin have come to tower over a city that is now the world’s greatest tax haven,2 transforming our seat of Government into “a pastiche of the Gulf economy”,3 and making a mockery of national austerity. It has become apparent that we are living in the hinterland of a global city-state.
Now, by city-state we don’t mean somewhere like Singapore or Monaco, but something closer to historical city-states like Florence or Tenochtitlan. Rather than the niche entities we see in Luxembourg or Vatican City, we are dealing with powerful and imperious centers of surplus accumulation and social domination in the world system that draw into their reach the living labour of millions. In fact, it’s best not to picture any particular city-state, but simply to bear in mind the axioms typical to the generic city-state as a social, cultural, economic, and political formation (see Table 1).
Table 1: Axioms of the City-State.
The notion of the city-state offers a way of understanding the British state that takes into account its economic structure, its cultural direction of travel, the political location of its ruling power, and the nature of its relationship with both the polity of which it is a part (UK) and the wider world beyond (world system).
Taken loosely, the city-state concept is once again becoming more useful for understanding our century in general. With 50% of the global population now living in cities (2007),4 a percentage set to reach 66% by 2050,5 urban metropoles have generally emerged as key nodes of distributional authority in the 21st Century world economy. In an advanced capitalist world system, the so-called ‘global city’ in particular is part of a ‘geography of strategic places at the global scale, places bound to each other by the dynamics of economic globalization’.6 A ‘world-cities archipelago’ has been woven together in the processes of globalization,7 with their respective hinterlands relegated into an afterthought.
These processes of planetary urbanization, financialization, and metropolitanization – usually corralled under the term ‘globalization’ – have put great strain on the coherence of the nation-state.8 The effect has been profound and rapid reconfiguration in the role of the state between the global and the national levels. New lines of social stratification, exclusion-inclusion, ideology and lifestyle alignment are emerging from the consequent tensions and fissures.
We can think of these developments as constituting new geographies of centrality and marginality that cut across the old divide of poor/rich countries, and new geographies of marginality that have become increasingly evident not only in the less developed world but inside highly developed countries.9
In the case of the London metropole, the territory of the United Kingdom is the formal political framework through which the forces of globalism have converged, resulting in political, economic, cultural, and even ideological transformations that are “taking place inside the national [framework] to a far larger extent than is usually recognized”.10 The British nation-state is literally being pulled apart by the reconfigurations of the metropolitan city-state as it repositions itself between the world system and its immediate hinterland. Ismail Ertürk summed up this tendency quite well over a decade ago.
The city state metaphor highlights key distinguishing features of autonomy and authority which have strengthened London’s distinctive identity in the last thirty years and made its relation to the national host increasingly problematic.11
All this begs the decisive question: what does it matter? What is the problem with a state-territory dominated by a preponderating global city? The answer lies in the problem of development, with how we characterize the ‘mode of development’ in the British state, and with the implications for development implicit in city-state forms. To understand how the axioms of the city-state have transformed the developmental path of the United Kingdom, we need to consider a little recent history.
The contradictions in capital accumulation that built up in the postwar period came to a head in the crisis of the 1970s, to which Thatcher and neoliberalism were a response in the 1980s.12 Falling profits, sluggish growth, low productivity, global competitiveness problems, and stagflation had discredited the post-war settlement by the late-'70s. In the battle that ensued in Britain over the strategic response to this crisis, the monetarists, neoliberals, and Thatcherites won out. The result was a hastening and intensification of the redirection of the British economy initiated under Harold Wilson in the 1960s away from industrial production and toward financialization through The City of London.
Since the 1980s, de-industrialization and financialization have worked hand in glove to transform the political economy of Britain. Financialization has entailed a massive growth in the FIRE sectors – Finance, Insurance, Real Estate – and the economic predominance of financial markets and institutions. The switch from the productive to the financial economy has “entailed shifting the balance of power and interests within the bourgeoisie from production activities to institutions of finance capital”.13 The flip side of financialization – de-industrialization – has concentrated and centralized the distributive power of capital flows through the new financialized structures of the British economy centered on the metropole, whilst denuding the regions of the capital necessary for development across the rest of the United Kingdom.14
The prolonged neoliberalization of the British political economy that encompasses and gives direction to these strategic transformations has been feebly opposed since the early '90s and it has been deeply enervating for provincial Britain. The added boost of endless Austerity since 2010 has not merely deepened the neoliberal terraforming project, but has quite clearly solidified a new idiom of political economy for the British state that even neoliberal ideologues did not envisage – a quasi-feudal city-state riding the rough waters of a world-system in chronic accumulation problems.
The response of the city-state to accumulation problems in the the post-2008 world economy has been to continue the tendency toward disinvestment. There is an investment crisis in Britain today, and the city-state dynamic is directly implicated in the chronic tendency toward disinvestment in the provinces of the country. The strategic ratio of investment to savings in the British economy is stuck at historically low levels. Investment is an expenditure that increases the actual or potential output of an economy thus leading to stronger growth, but investment in the non-financial economy is the lowest of the G7. An over-swollen financial sector has acted as “a cuckoo in the nest that is crowding out other sectors”.15 In the early 20th Century, 80% of bank lending went to businesses outside of finance. That figure is now closer to 10%.16 Martin Wolf’s metaphor is perhaps the most apt – "An out-of-control financial sector is eating out the modern market economy from inside, just as the larva of the spider wasp eats out the host in which it has been laid".17
Of course the privatizations that have accompanied de-industrialization have entailed a massive transfer of capital and ownership out of the country. Globalisation has helped denationalize asset ownership and market regulation in many countries, with Britain being a prime example.18 The concomitant is that The City of London is a site for global finance, but is no longer a British institution.19 The effect upon how the country is governed are stark, and give rise to serious reflection upon the nature of self-determination for the population of the British polity today. The implications for the quality of life are there for all to see and experience, and are evident across a whole range of strategic problems.
The provision of housing is no longer governed according to the principle of expanding access to it as a use-value for those who actually live where such housing can be found,20 but is treated now according to the exchange-value it can render to its owners in the transnational property-power nexus (Housing and Planning Act, 2016). Obviously, London is the notorious epicenter of this trend, where upwards of 36,000 homes are currently unoccupied.
We live today on a country where access to higher education is increasingly the preserve of privileged social fractions, increasingly from outside the UK, in institutions that seem increasingly in step with the ideological priorities of the metropolitan elite. Such an HE system bears little relation to the public rhetoric of social investment and more to the gate-keeping function of social distinction and elite reproduction familiar from the works of Pierre Bourdieu.21
The strategic investment in the transport infrastructure is being considered for the first time in generations, but the mundane needs of the majority of the population feature little in these plans. Irrespective of the rhetoric around a Northern Powerhouse Strategy (2016), or indeed the more sincere agenda of the Local Democracy, Economic Development and Construction Act (2009), it is not the restructuring of provincial towns, cities, and the integrated regions that surround them to which our governors cast their eyes. With 66.5% of total expenditure on planned regional transport infrastructure projects going to London and 2% to the North of England,22 investment goes not to the spaces where most of our citizens are domiciled and work, and where mounting problems of commuting, congestion, parking, mutual alienation and social parcellization are apparent in our daily lives. It is instead the axial and arterial conduits of capital and elite motility that are instantly prioritized (HS2, Crossrail, Heathrow Terminal 6, etc.), which of course befits a state in which government decisions are not for the people but for the interests of large capital and a global class of jet-setters and businessmen.23
In all these areas of government responsibility, the imprint of metropolitan dominance over an increasingly squeezed, impoverished, and inert territory of expendables and parochial malcontents is visible everywhere. From our subordinated positions across the territory of this city-state, we must reassess the reconfigured social relations of our increasingly post-national state and find historically informed ways to model what it is that we are witnessing. That model is the city-state, and it gives us the most important political tool for grasping the nature of the British polity today.
So, in a state that is now the unambiguous and naked product of de-industrialization and financialization, there is a growing sense that the dismantling of our national state is subjecting us to a new political economy calcified around axioms of the city-state. In this financialized city-state, a kind of anti-development mindset has come to pervade our metropolitan political class. Professor Robert Cox sums up the situation well:
This addresses the basic issue of government accountability: the increasing accountability of governments to international finance, which means their decreasing accountability to their own electorates. This is a salient aspect of the internationalisation of the state, the transformation of the state from a power that aims to develop internal economic and social potential into one that sees its primary function as the adaptation of domestic forces to the tendencies and perceived exigencies of the global economy.24
A glance at Map 1 should be enough to make the point. The comparative geographical distribution of venture capital in the 2000s in Germany and the UK is striking. This proportions have only accentuated up to the present. While Frankfurt might be primus inter pares in Germany, there is no single metropolitan hub of capital disbursement in the Federal Republic that has the disproportionate weight to dominate the state as there is in Britain.
Map 1: Spatial Structure of the Venture Capital Market in Germany and the UK (c. 2005).
But the matter is not simply material. The economic power of the metropole encases itself with cultural and ideological protection. We are not just dealing with a ‘hypertrophied rent-seeking financial sector’,25 which is devastating enough for the prospective wellbeing of the political nation. The constant cultural promotion of property-power, the return of Old Etonians to dominate the cabinet, and the proliferation of metro-centric cultural propaganda – from Harry Potter, through Downton Abbey, all the way to The Crown – points to the generally under-appreciated restoration of cultural elites in a way unseen since the Interwar period.
The economic and cultural features of the city-state formation are bound together. As you can see in Map 2, the disproportion in how resources for the arts are allocated by our state is glaring, when you think of how our population is distributed geographically (Greater London accounts for only 13.3% of the UK population). Whose voice gets heard? Whose lives get expressed? Whose culture is visible? Whose mores become hegemonic? Whose world-view is sponsored by the state?
Map 2: Regional Funding of the Arts in England (2016)
Let us then acknowledge to ourselves that the government of the United Kingdom is now conducted primarily for financiers, mediacrats, and property spivs that are culturally reinforced by a cadre of ideological cheerleaders sourced from across world's professional elite spaces, and whose social, cultural, and political ‘loyalties now link them to other financial centres than to their nominal home states’.26 The metropolitan power might pivot on the interests of the 1% and cohere around a cabal of bankers, politicians, and oligarchs who control the principal organs of executive decision-making, but their dominance is only possible because of the amniotic social fluid that surrounds them.
An encompassing cultural and ideological professional elite buttresses the financial interest through their manipulation of the new metropolitan vantage points of surplus appropriation and opinion formation. They are entailed in an expanded vision of the ‘state–finance nexus’,27 which has incorporated much of the media, academia, intelligence, and other organs of information and lifestyle dissemination.28 Despite their nominally progressive politics, cosmopolitan pretensions, and trans-nationalist leanings, they are metropolitan agents of global capital and act as globalist auxiliaries for the new metropolitan oligarchy. As such, they should be considered as part of the 'transnational capitalist class' write large,29 whose interests are increasingly at odds with the populous of the metropole's hinterland. Again, this is a governing dynamic that one finds not in self-determining national states, but in the imperial city-state.
The tendency toward oligarchy illustrates an even more fundamental similarity in city-state cultures: the claims of those who made up the ruling groups, living in close proximity to each other, to regulate the affairs of state encouraged a particularist form of government.30
Why is the concept of city-state helpful for us? Why do we need yet another new term for something that we are familiar with? The reason is that political criticism requires concepts around and through which we can think, analyze, cohere, organize, and act. More than that, we need concepts, in order even to understand things. Between the subjectivity of our perspectives and the experiences that give rise to them, on the one hand, and the objectivity of the material data and objects among which we live and which come to us through the senses, on the other, human understanding requires the production of concepts that act as mediating and regulative frameworks for that understanding to take place.
New concepts are therefore not just jargon, but necessary tools to understand a new relationship between what we experience individually and what others experience. What is decisive is whether or not the concept is successfully taken up by others. If it is then it is valid. The question you have to ask yourself is a simple one. Does the concept resonate with what you subjectively experience and perceive, and does the evidence with which you are presented convince you that the label city-state is more or less objectively accurate? Does it encapsulate the state of affairs more effectively for you than the next best alternative? If the answer is yes to these questions, then the concept has validity as a regulative idea in the Kantian sense. A regulative idea is not the truth, fact, or the only way to understand something, but neither is it something merely conjured from the imagination.
We have come to a chronic impasse in British political life. Quite simply, the productive powers of our society, understood in the broadest and most generous sense, are being wasted and retarded in order to perpetuate the existing social relations of production dominated by the state-finance nexus. Politically, this impasse is symptomatized by our acute and widespread alienation from the political process, from established parties, from fashionable cultural discourses, and from dominant ideological concepts. The rise of UKIP, the motion toward an independent Scotland, withdrawal from the European Union, and a succession of either hung or marginal majority governments all seem to indicate a kind of Gramscian crisis in the British state that emerges between paradigms of societal organization.31
We need to start thinking differently about our state. What the city-state concept or metaphor does for us is provide a framework for rethinking the realignment of political, ideological, and even cultural forces in British society that we are currently witnessing. Moving away from the cleavages and associations that we have inherited from the industrial age and the post-industrial late-20th Century, we can find more plausibility in the metropole/hinterland schematic. When this view is adopted, a whole range of political developments make more sense, whether it be attitudes toward mainstream media, Brexit support, political party affinities, social media loyalties, lifestyle attraction, shifting speech patterns, or the Scottish independence movement.
Endnotes
John Agnew, “Sovereignty Regimes: Territoriality and State Authority in Contemporary World Politics,” Annals of the Association of American Geographers 95, no. 2 (2005): p. 444; See also Saskia Sassen, “The Global City: Strategic Site/New Frontier. American Studies 41, nos. 2/3 (2000): p. 82.
Shaxson, N. (2012) Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens. New York: Vintage.
Simon Jenkins, Who Let This Gulf on Thames Scar London’s South Bank? Mayor Boris. The Guardian, 11 July (2013).
UNFPA. (2007) “State of the world population 2007.”
United Nations, “Department of Economic and Social Affairs, Population Division,” (2014). World Urbanization Prospects: The 2014 Revision, Highlights (ST/ESA/SER.A/352).
Saskia Sassen, “The Global City,” p. 80.
John Friedmann and Götz Wolff, “World City Formation,” International Journal of Urban and Regional Research 6, no. 3 (1982): pp. 309-344.
Fran Tonkiss, Contemporary Economic Sociology: Globalisation, Production, Inequality (London: Routledge, 2006), pp. 3–4, 56–61.
Saskia Sassen, Territory, Authority, Rights: From Medieval to Global Assemblages (Princeton, NJ: Princeton University Press, 2006), p. 1.
Ismail Ertürk, et al. (2011) “City State Against National Settlement: UK Economic Policy and Politics after the Financial Crisis,” CRESC Working Paper Series, Working Paper No.101 (Manchester: Manchester Metropolitan University, 2011), p. 7.
Ertürk, et al. “City State Against National Settlement,” p. 7.
David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2005).
Harvey, A Brief History of Neoliberalism, p. 63.
Andrew Gamble, The Spectre at the Feast: Capitalist Crisis and the Politics of Recession (Basingstoke: Palgrave Macmillan, 2009).
Nicholas Shaxson, The Finance Curse: How Global Finance is Making Us All Poorer (London: Vintage, 2018).
Christine Berry, Duncan Lindo, and Josh Ryan-Collins, “Our Friends in the City: Why Banking’s Return to Business as Usual Threatens Our Economy,” New Economics Foundation, 23 February (2016), p. 21.
Martin Wolf, “Comment on Andrew G. Haldane, ‘Control rights (And wrongs)’,” Wincott Annual Memorial Lecture, 24 October (2011).
Saskia Sassen, “Global Financial Centers,” Foreign Affairs 78, no. 1 (1999): p. 82.
Richard Sennet, The Culture of the New Capitalism (New Haven, CT: Yale University Press, 2006), p. 38.
David Harvey, Rebel Cities (London: Verso, 2013); Watt and Minton, “London's Housing Crisis and its Activisms,” City 20, no. 2 (2016): pp. 204-221; John Welsh, “The Politics of ‘Parental Co-Habitation’” Housing, Theory & Society 38, no. 1 (2018): pp. 1-19.
John Welsh, “Tolling Academics: Rent-Seeking and Gatekeeping in the University Space” Capital & Class 45, no. 1 (2021): 93-121.
Jeffrey Henderson and Suet Ying Ho, “Re-Forming the State: The Over-development of London and the Under-Development of Britain,” Renewal 22, nos. 3-4 (2014): p. 29.
Ed Cox and Bill Davies, “Still on the Wrong Track: An Updated Analysis of Transport Infrastructure Spending,” Institute for Public Policy Research (Newcastle: IPPR North, 2020).
Robert Cox, “Debt, Time, and Capitalism,” Studies in Political Economy 48, no. 1 (1995): p. 167.
Bob Jessop, “The Organic Crisis of the British State,” Globalizations 14, no. 1 (2017): p. 136.
John Agnew, “Sovereignty Regimes,” p. 444.
David Harvey, The Enigma of Capital, and the Crisis of Capitalism (Oxford: Oxford University Press, 2010). p 48.
Kees van der Pil, States of Emergency: Keeping the Global Population in Check (Atlanta, GA: Clarity Press, 2022).
Leslie Sklair, The Transnational Capitalist Class. (Oxford: Blackwell, 2001).
Robert Griffeth and Carol Thomas (eds.), The City-State in Five Cultures (Santa Barbara, CA: ABC-Clio, 1982), p. 187.
Jessop, “The Organic Crisis of the British State,” pp. 133-141.