Urban Political Economy

Philip Finkelstein

[Reprinted from the Henry George News, March 1980]

Political economy has had something of a rebirth in these post-Keynesian times. The macro-folk, with their equations, and the value-free researchers with their abstractions, are still very much part of the economic scene, but there is some evidence of respect for, and an interest in, a more form of economics, ranging from our most popular writers on the subject, to the more recent Nobel Laureates.

The very notion of political economy assumes an intimate relation between the distribution of power and material goods. It is this very relation which poses such problems for the political economy of the metropolis. For there is a terrible mismatch between the economic vitality and the political impotence of cities, now that they are no longer nation-states unto themselves. New York, Tokyo, London, Bombay, or any other world-class city, would be hard put to maintain its standing on the performance of their respective municipal machineries. The really significant things take place not in City Halls, but in the markets of commerce, the arts, or of ideas in most countries, city politics are a mere extension of the national, with few stakes and less attention paid to local officials. Our federal system lends some illusion of political power to the local level. But even home-rule is a creature of the state and even our own city is subject to a kind of veto power of the Mohawk Valley and beyond.

To correct this mismatch, we have had a range of nostrums, from the extension of the political jurisdiction to match the might of the metropolitan economy, to the shrinking of political responsibility to conserve municipal resources. Some of our more avid urbanists will argue for both at the same time, like extending the tax base to a tri-state region, while assigning the funding of all H.E.W. functions to other levels of government.

Those of us who are not yet ready for this Utopia of broadened income and narrowed expenditures might borrow a phrase from the people who have been looking closely at the environment and economic development. Following the faddist reaction to waste, in which everything small became beautiful, there has been a growing acceptance of "appropriate technology", an idea which admits the possibility that there are times when bigger may be better. In any event, size is not as significant as the fit and the rightness of the solution. Perhaps we have here a clue for an appropriate political economy at the urban level.

W What kinds of things should cities do that are more appropriate than states, or the national government, or perhaps, even the private sector? What kinds of resources should be available to local governments not provided at the mercy of their political superiors? Should localities be in the redistribution business at all, either by taxing income, or by providing public assistance? What is the right way for a metropolis to hold on to its wealth and make it grow? These are the kinds of questions that need to be raised if there is to be a metropolitan political economy, or even a future metropolis.