Capital and Space: Capital’s ‘Normal’ Spatiality
Each phase in the circuit of capital has a corresponding spatial form. There are thus spaces of production, spaces of realization (capital realizes the surplus or profit when the product is sold), and spaces of accumulation (where a part of the surplus/profit is reinvested). An interesting aspect of these spaces is the mutual incongruence between these spaces: commodities produced in California (spaces of production) may be sold in China (spaces of realization) and the profit made may be invested in Canada (spaces of accumulation). Value can be produced in a less developed country through exploitation of its labor but may be transferred to advanced countries, leading to unequal development between nations.
The logic of value – the logic coercing every capitalist to produce commodities at a competitive price – presupposes a spatial network. While concrete useful labor produces use values at a particular place (e.g., labor producing shirts), acts of exchange spatially connect these particular place specific instances of concrete labor. It is indeed only through the exchange can one know what the average cost of production is or what the socially average labor (or value) is. It is not enough to say that capital 'requires' a spatial framework. We must understand how capital also 'produces' this spatial framework. Let us return to the capital circuit. The circulation of capital from M to M 0 has to be completed within a definite time span, which has two components. One is the time needed to actually produce a commodity. Another is the time spent in the spatial circulation of commodities necessary for the completion of the circuit of capital. Competition among capitals generates pressure to reduce these two components through technological and organizational changes. This means that not only production time is to be shortened but also the spatial circulation time. Raw materials, finished products, and money have to move in space, and move they must fast. Marx beautifully expressed this idea in Grundrisse: this is that while capital must on the one hand strive to overcome every spatial barrier to exchange, it strives on the other hand to annihilate this space with time. The imperative to accumulate implies the imperative to overcome spatial barriers (the 'friction of space').
Like most processes under the rule of capital, the production of space is contradictory. Transformation in the cost, speed, regularity, and efficiency of movement over space alters the relative distances of places of production from the larger markets. This can potentially lead to the deterioration of old and rise of new centers of production and a perpetual shifting and relocation of places of production, and of markets as a result of changes in their relative positions, and with it the relative fortunes of capitalists – as well as that of labor – based in different locations also changes. It is this sort of 'constant' changes in spatial relations that Storper and Walker call ''the inconstant geography of capitalism.'' The chronic instability in spaces of capital is something that no amount of state regulation can permanently overcome. Capital creates a physical landscape in its own image at a given time and undermines/destroys it at a later time.
Production of space is a contradictory affair in at least two more ways. A part of the total social capital at a given point in time has to be immobilized in the form of social and physical infrastructures, in the form of the built environment (e.g., transport network), for the remainder of the capital (e.g., capital in the form of raw materials or finished products) to be mobile. The viability of capital invested in the production and maintenance of the immobile infrastructure can be assured only if the remaining capital generates the intended profit. If, for example, sufficient traffic fails to be generated to make a railroad profitable, then capital invested in this can be potentially devalued. The production of space is contradictory in an additional manner. The production of space shrinking technologies and efficient spatial configurations open up more 'distant' markets, new sources of raw materials and new opportunities for the employ ment of labor under social relations dominated by capital. But this, however, increases the spatial circulation time (unless there are compensating improvements in the speed of circulation).
Space has both mobility and fixity aspects. Capital's production of space is characterized by its requirement for spatial mobility (which has been stressed so far) as well as spatial fixity. Although capital seeks to overcome space through the use of space shrinking technologies, technology defined spatial constraints exist (and this applies to multinational companies), but some fractions (e.g., real estate capital) are more spatially constrained than others (e.g., money capital). The need to reduce the cost/time of movement between spaces of production, between the spaces of production and spaces of consumption, and between workplaces and living places remains, which means that the production and reproduction of capital is indeed location bound. In terms of production only, capital (in the form of means of production) and labor (of different types) must be brought together in space. Spatial expression of this is imperative, for example, a factory at one scale and an industrial city at another and an industrial region at a higher scale. It is true that from the standpoint of capital as a whole (i.e., capital in general), free spatial mobility of labor is a necessary condition, so that labor is available in the spaces where capital needs them. But the situation is different for individual fractions of capital (e.g., individual firms) located in specific places. They need a stable reliable captive labor force which is accessible on a daily basis. Capital is also dependent on an industrial reserve army (an army of unemployed and underemployed people) in situ in order to control those who are employed and keep local wages down. All this means that capital 'may' support basic reproduction processes such as education and health, geared toward production and preservation of labor supply 'within' a given space. This also means that capital may support state policies to constrain free mobility of labor in space. Like capital, labor (as a variable capital) has a need for certain degree of fixity. It is locally dependent for the satisfaction of many of its needs. Labor needs to find and work for an employer 'within' a circumscribed space; and women and child laborers tend to be particularly spatially circumscribed. Labor makes use of social and physical infrastructures, including institutions of community and social network and state regulatory institutions, none of which is easily substitutable and portable in space. Thus, urbanization of capital–spatial concentration of productive forces – including social and physical infrastructures in specific places – is an inherent tendency in capital. The need to minimize the cost of movement of commodities promotes agglomeration of production and spatial concentration of specific fractions of capital such as textile capital or IT capital within a few large urban centers (the concentration effect of capital). We know this from the attempt of different capitals to locate close to one another to minimize costs of movements of inter mediate products, to take advantage of a large labor pool within a definite space and to share knowledge. Agglomeration is about reducing cost and time of spatial movement.
There are limits to spatial concentration/agglomeration, however, in part because spatial concentration of workers is conducive to labor struggle which threatens profit rates, and this may lead to capital moving out. Also, revolution in technologies can liberate production and consumption from their local roots, so the spatial constraints of the past become less stringent. This makes the boundaries of urban/regional economies porous and unstable. In addition, transformation in capitalist organization – multinational corporations (MNCs), rise of financial capital, etc. – may permit control over progressively larger spaces by capital. To the extent that the production of a distinct efficient spatial landscape for/of capital itself promotes greater profit making activities, this produces surplus of capital, the overaccumulation problem (discussed later) putting pressure on some capital to leave for profitable opportunities elsewhere or even to pull in laborers from elsewhere to depress local wages by increasing the labor supply. Labor also follows a similar logic. If wages are not adequate here, labor may want to move there, a type of behavior that fits in with the needs of capital in general to coordinate supply and demand of labor power in space but that may hurt specific fractions of capital which tend to be more spatially constrained. Thus while capital and labor require and realize fixity, they, beyond a point, are vulnerable to the imperative of mobility.
In order to address this tension between the need for fixity and the need for mobility on the part of capital and labor, a regional cross class alliance between them may develop. It is usually organized through the state to protect the investment in place bound physical and social infrastructures and to promote further accumulation within given territories (e.g., attracting extra local capital). Different fractions of capital and labor have differential stake in the territory depending on the nature of their assets. Land developers, like state functionaries dependent on local tax base and local votes, have greater stake in the regional space economy, because they are less mobile and may be forced to buy local labor peace and skills through compromise over wages and working conditions. Fractions of labor that have through struggle or out of scarcity managed to create spaces of privilege will also support the alliance. The community, regional and national level boosterism may be used as an ideology to strengthen the alliance. What is observed is spatial competition between cities, regions, and nations, that is, between different spaces of capital accumulation at different scales, for inward investment, which threaten to supplant (international) class struggle between capital and its oppositional other. Capital's action/logic thus leads not only to spaces of economy but also to spaces of politics.
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- Explaining the Growth of Business Service Firms
- Characteristics of Business Service Firms
- Measuring Business Services in National Economies
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