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The Spatial Fix Revisited Erica Schoenberger Department of Geography and Environmental Engineering, The Johns Hopkins University, Baltimore, MD, USA;
[email protected]
Introduction I first met David around the time that The Limits to Capital was published. In fact he gave me a set of galleys to read before disappearing off to Paris for the summer. Little did he know that I had intermittently earned my living in the past as a copy editor and proofreader. Tragically, I didn’t stop to think that this was the second set of galleys and that the corrected proofs had long since been sent back to the publisher. I was simply horrified by the mass of errors I found and, stoutly determined to ward off this impending disaster, I proofread the entire thing. But, I wanted to keep the galleys, who knows why, so I laboriously transferred all the corrections by hand to sheets of yellow lined paper and sent the resulting immense bundle posthaste off to Paris. David, the soul of discretion, forbore to comment, but I trust he was amazed. I comfort myself with the thought of what posterity would have owed me had these indeed been the real galleys. The other contributors to this collection have mostly written about what David and Limits have meant to them in the 20 years since the book’s publication. All I can say here is that they have meant too much for me to write about in public. So I have pursued the second approach suggested by the session organizers, and I have tried to take a look back at one of the key arguments of the book 20 years on.
The Spatial Fix, 20 Years On It seems probable that the single best-known phrase from The Limits to Capital is ‘‘the spatial fix’’. It is a concise and elegant gesture to an entire history of geographic structuring and restructuring under the aegis of capital—a history accomplished and a history in the making. It also seems possible to me that it is often misunderstood. This could be in part because of the intuitive appeal of the formulation, which creates the impression that its meaning is more or less self-evident; something like spatial fix must mean fixing the spatial distribution of Ó 2004 Editorial Board of Antipode. Published by Blackwell Publishing, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA
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things, hence relocation. It may also be in part because of the timing of its entry onto the scene. Limits appeared at more or less the same moment as other influential works focused far more specifically on the contemporary restructuring of manufacturing industries in the advanced capitalist economies and the relocation of some of this activity to low-wage, underdeveloped regions of the globe. In this context, I think that ‘‘spatial fix’’ became closely identified conceptually with other formulations such as ‘‘the new international division of labor’’, ‘‘deindustrialization’’ and ‘‘capital mobility’’, meaning, specifically, spatial mobility (see, eg, Bluestone and Harrison 1982; Frobel, Heinrichs and Kreye 1980). There’s no doubt that the concept of the spatial fix overlaps meaningfully with these other ideas, but it is by no means limited to their single notion that capital solves problems of profitability and politics by moving from the problem location to new and more malleable locations. That was about solving a profit squeeze caused by rising costs in traditional industrial regions, especially labor costs, and envisaged solving a spatial problem (the high cost of Place A) with a spatial solution (relocation to Place B). Limits, on the other hand, was constructing a general theory of capitalism in all its historical and geographical complexity, not an analysis of the ‘‘present crisis,’’ and its conceptual apparatus, including the spatial fix, was far richer and, importantly, more flexible than notions such as the new international division of labor. The larger and more basic idea of the spatial fix is that it provides a way to productively soak up capital by transforming the geography of capitalism. Overaccumulation, of course, is the great problem of capitalism that threatens its very existence. Because it is inherent in the system, it is unavoidable over the long run, and the system is periodically thrown into more or less violent crises during which the excess is savagely devalued at great cost to people and places. But although there is no permanent solution to the crisis tendencies of capitalism, the system does generate some important ways of delaying them or diverting them into reasonably productive pathways. Harvey’s great insight in Limits was that restructuring the geography of capital— altering its very earthly foundations—was a particularly effective way of productively absorbing these excesses. This is the spatial fix. It is a very general notion that can have different expressions historically and geographically. The geographic spread of investment, output and consumption is one critical avenue for the absorption of excess capital. Thus, incorporating more and more of the territory of the globe into the ambit of capital, transforming relations of production and ways of life on an expanding scale, and generally trying to keep ahead of the shock wave of crisis are all ways of accelerating the pace at which capital can be plowed back into Ó 2004 Editorial Board of Antipode.
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productive investment rather than uselessly piled up. If this works in the short run, it of course magnifies the problem over the long run as more and more capital is accumulated worldwide. Still, it’s better than an immediate crash. Another form of the spatial fix is the creation of an expanded and improved built environment—investment in the whole suite of physical installations that sustain and enhance the system’s ability to create wealth. This includes, for example, transportation networks, water supply, waste disposal systems, communications systems and the like. The beauty of this form of the spatial fix is that it is so intensely grounded. The investments required are typically large and longlived, so immobilizing a significant tranche of accumulated capital in the earth while using it to support the further accumulation of capital. Because of its temporal and spatial properties, much of this investment used to be considered the ‘‘natural’’ sphere of the state, but of late that has changed dramatically with important consequences for how the spatial fix may be playing out now. Unsurprisingly, the spatial fix can be expressed in seemingly contradictory ways, either by spreading capital out over the surface of the earth or deepening its presence in place. It is impossible to predict a priori what will happen and even apparently obvious expectations— for example, that capital will tend to flow from expensive to cheap labor areas—may not be fulfilled in practice. This means that we must continue to pay close attention to how it actually works.
The Spatial Fix in Practice From talk of the new international division of labor to globalization, our attention has been focused on the spatial fix as the geographic spread of full-fledged industrial capitalism. Indeed, the conditions for such a spatial realignment of capital from the core to the periphery seem to be firmly in place. Commodities and investment capital do flow globally and they do so ever more speedily and cheaply. Improvements in transportation and communications mean that money can literally flow worldwide at the touch of a button, and that components manufactured in Taiwan can be assembled into a product in Mexico and sold in Europe at an acceptable cost. Big Macs, cell phones and CNN are inescapable wherever on earth one goes. This must surely mean that capitalism has found a way to resolve its problems of overaccumulation through its inexorable diffusion over the surface of the earth. Yet, we remain in many ways startlingly unglobalized. Direct investment, portfolio investment, output, trade and consumption are still overwhelmingly concentrated in a relatively tiny part of the earth. Three countries—the US, Japan and Germany—still account for Ó 2004 Editorial Board of Antipode.
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some 60% of total global output. From 1953 to 1995, the developed countries’ share of global manufacturing output declined from 95% to 80%. True, this is a decline and just what we would expect from a new international division of labor. But note how small it is over nearly a half century and how small compared to the share of territory and population in the developing world. Developed countries still account for roughly three-quarters of merchandise trade, and most of the rest is accounted for by a handful of Asian newly industrialized countries. Developed countries still receive roughly three-quarters of total direct investment inflows and the rest is again highly concentrated in a small number of developing nations. The 49 least developed countries received 0.3% of direct investment in 2000. The top 30 host countries, meanwhile, received 95% of inflows and possessed 90% of stocks in the same year. And, as we all know, the developed countries consume vastly more than their share of the globe’s output (Dicken 1997; UNCTAD 2001). I don’t wish to imply that people and nations have been left unmarked by what we all thought was a global tide of capitalism. It’s remarkable, in a way, how much impact capitalism can have even when it is hardly trying. But if there is a spatial fix operating here, it is mostly not operating in the way we expected it—through geographic spread and relocation. Why not? Quite probably, one reason is that it is harder than we thought. Cheap transport and communications internationally and cheap labor locally don’t necessarily make up for poor infrastructure, poorly functioning labor markets, difficult politics and extremely weak demand in developing areas. It seems quite possible also that there is a fundamental incompatibility between vacuuming resources out of the developing world and investing in it. In short, you can’t effectively do both at the same time and we have arguably concentrated on vacuuming resources out. In his remarks to the conference sessions that gave birth to this set of papers, David proposed a new term—accumulation by dispossession—to apply to the analysis of uneven geographical development. It is a generalization of Marx’s notion of primitive accumulation, one that recognizes the continuing importance of wholesale transfers of resources from certain areas or social groups that are not themselves fully integrated into the capitalist system as a way of augmenting the powers of accumulation of that system itself (see Harvey this issue). Primitive accumulation seemed to be a necessary but bounded moment in the history of capitalism that got everything up and running and then faded away as an engine of development. Accumulation by dispossession recognizes the continuing significance of asset flows wrested from people and areas peripheral to the system. We may feel very modern with our laptops and cell phones, but the Ó 2004 Editorial Board of Antipode.
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ancient resource grabs are still going on and they still matter for the system. Because the grabs are so big and because they matter so much, they have plausibly displaced the possibilities for the orderly development of genuine capitalism in the areas being dispossessed— perhaps not permanently, but at least until now. This may be considered another face of the spatial fix insofar as significant resources are acquired cheaply in one part of the globe to sustain the general process of accumulation centered elsewhere. In short, the spatial fix of the latter half of the 20th century continued to be more about the relocation of resources than of investment, output, accumulation and consumption. But, of course, it wasn’t limited to this. The flows of financial capital that ricocheted through a series of tremendous booms and busts in particular hot spots of the global economy since the 1970s can be seen as a series of frantic efforts to soak up capital by moving in and out of different types of market in different corners of the globe. Property booms in global cities such as London, New York and Tokyo; ballooning debt in eastern Europe, Latin America and Asia; stock market bubbles—all may be part of an attempted solution to the problems of the system through the sequential sectoral and spatial rerouting of capital flows. The very speed at which the bubbles succeeded one another hints at the desperation of the underlying situation. Their spectacular collapses, on the other hand, hint at the futility of this effort. Most recently, the spatial fix has taken on a new incarnation. This involves the privatization of elements of the urban and industrial built environment that used to be largely in state hands—either as direct producer or regulator of private monopolies—including transportation infrastructure, telecommunications, energy supply, and the provision and management of environmental inputs and wastes (eg water supply, wastewater treatment, solid waste management). The World Bank describes the privatization and internationalization of these sectors as ‘‘a revolution’’, so we must take it seriously (Sader 2000). The sectors involved with environmental management have become more internationalized and more consolidated over the last decade or so. Although much attention has focused on privatization of, for example, water supplies in developing countries, it is again the case that most of this investment has been highly concentrated in the developed countries where a lot of existing infrastructure is available to be acquired—often at extremely good prices from friendly governments, environmental regulations ensure a growing market, and high incomes ensure effective demand (Schoenberger 2003). The private sector has long been involved in these activities as provider of materials and services, but ownership of the underlying assets, when not in the hands of a regulated monopoly, seemed better Ó 2004 Editorial Board of Antipode.
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vested in the state which could absorb the tremendous turnover times on the necessarily large investment. The infrastructure was necessary to private accumulation in other spheres, but not itself easily adapted to the normal rhythms of capital accumulation. Some of those constraints have been relaxed in various ways, including deep discount pricing and innovations in financing, although it is still unclear how the risks inherent in these financial vehicles will be managed in practice. Another important factor was the rise of conservative regimes that saw the state’s role to be primarily in support of private accumulation and that were uninterested in the social exclusions that would accompany the state’s withdrawal from these spheres of activity. The result is that the built environment and the natural environment have been simultaneously opened up to capital in a new way. Because the data are hazy, it is remarkably difficult to estimate the size of the environmental management and services market, but a good guess seems to be somewhere in the neighborhood of US$400–500 billion per year in revenues (European Commission 1999:5; US Department of Commerce 2000:20–28). It is plain that the need for public and/or private investment in this sphere in the developing countries is painfully acute. International private investment in these sectors is also growing enormously. Yet, there is every sign that it is overwhelmingly concentrated in western Europe and North America (Schoenberger 2003). In short, I think we are seeing a new version of the spatial fix. It is highly concentrated geographically. It is also laying the groundwork— through amplification and improvement of essential physical infrastructure and environmental services—for new rounds of productive investment when enough of the existing overhang of surplus capital has been written off. This new growth will be tied to these highly concentrated, firmly grounded investments. The new version of the spatial fix, then, promises even more inequality, an even starker division between the developed and the underdeveloped than we witness at present. Limits didn’t, perhaps, specifically foresee this version of the spatial fix or its consequences. But it did accurately foresee that there were many possible versions, each with its own contradictory and painful repercussions. Therein, I think, lies the importance of continually revisiting the idea to see how it is working out in different historical periods and historical circumstances.
Conclusion The Limits to Capital has been taken, in a sense, as the last word on the historical geography of the capitalist system. But it is not. Limits opens up a whole range of vital questions about how the system works Ó 2004 Editorial Board of Antipode.
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and what this means, and it offers us critical guidance in analyzing these questions. It offers no final answers, however; indeed it cannot and the book is quite clear on this. The dynamics that it describes are contradictory and they produce conflict that is worked out by real people in their real lives. These contradictions and conflict will never go away so long as the system exists. How people live them and struggle against them, the resources and strategies they bring to this struggle, the constraints that hamper them, their successes and failures and renewed efforts—this is history in the making. The beauty of Limits, as I see it, is that it invites us all to join in the effort to analyze this history, to understand its deepest meanings, and to do our own share of history making. This task will never be finished; that much, anyway, is certain. Accordingly, I would venture to predict that the value of Limits will never be exhausted.
References Bluestone B and Harrison B (1982) The Deindustrialization of America. New York: Basic Books Dicken P (1997) Global Shift. 3rd ed. New York: Guilford European Commission (1999) ‘‘The EU Eco-Industry’s Export Potential.’’ Final Report to DGXI of the European Commission (September) Frobel F, Heinrichs J and Kreye O (1980) The New International Division of Labor. Cambridge: Cambridge University Press Harvey D (1982) The Limits to Capital. Oxford: Blackwell Sader F (2000) Attracting Foreign Direct Investment into Infrastructure: Why is it so Difficult? Washington, DC: World Bank Schoenberger E (2003) The globalization of environmental management: International investment in the water, wastewater and solid waste industries. In J Peck and H Yeung (eds) Remaking the Global Economy: Economic-Geographic Perspectives. London: Sage Publications UNCTAD (2001) World Investment Report 2001: Promoting Linkages. New York: UN US Department of Commerce (2000) Environmental technologies and services. In US Industry and Trade Outlook, 2000 (pp 20-1–20-20)
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