Urban Decline

Glimpses of Britain and USA history

The expanding power of the long-dominant U.S. monopoly-capitalist corporations-now bigger, more productive, more cunning and more mobile-extending their grip over new regions at home and abroad, has affected the economic and political life of the capitalist world in new ways. The fate of our cities cannot be understood without understanding, their global magnitude, concerns, strategies and methods of operation.

As the transnationals expanded their operations from world trade to technologically-advanced world manufacturing, they increasingly altered the established economic functions of cities. For they formed new global production-trade complexes through worldwide networks of subsidiary companies controlled from the commanding heignts of their central head­quarters. From these headquarters, where they concentrate their closely guarded business and technical secrets and make their strategic decisions, the transnationals can move capital and production from place to place. The mobility and access to enormous material resources, labor and mar­kets thus gained enable transnationals to bend political-economic develop­ment at home and abroad, bypassing, evading, or altering political re­straints over their profit-maximizing ventures.

The enormous economic power the transnationals wield may be seen in the following facts. The 100 largest of them control two-thirds of the capi­talist world’s industrial production. About 340 of its industrial enterprises hold two-thirds of its assets and reap two-thirds of its profits. This high concentration of capital sharpens world competition among the transna­tionals and drives them to seek ways to higher productivity. In the process, transnationals often choose to close outmoded plants in unionized old in­dustrial cities and shift production to new, technologically advanced, plants in geographic locations offering maximum profitability.

In this dominance, we find the roots of the growing plight of our cities. Responding to growing international competition, monopoly corporations have been shifting their manufacturing operations, especially in heavy in­dustries, to new low-wage and least government-regulated centers all over the non-socialist world.

This explains the increasingly common plant closings in steel, auto, rubber and just about every mass production industry, the rise in per­manent unemployment and the spreading decay in the working-class dis­tricts of our old cities.

Increasing imbalance between production capacity and markets in the capitalist world sharpens the general crisis of capitalism and the competi­tion and conflicts among transnational corporations.

From: Political Affairs, 1983