The market-economics approach to local economic development is patently one-sided. Indeed, this could hardly be otherwise since this perspective recognizes only one legitimate form of social control competition. Authority of any sort is viewed from this perspective with suspicion, particularly governmental authority, since it further regulates markets. In place of authority, the market perspective forces an ecological understanding of the problems brought about by economic restructuring, such that they appear to result from a "natural" (i.e., blameless) competition over limited resources. This is only one of the more basic presumptions of the market perspective. Similar presumptions "constitute the rules that constrain alternative and oppositional theoretical formulations" (Beauregard, 1993: 275). To adopt this the dominant perspective of urban development politics is to become a prisoner of various presumptions that are ever present, but are rarely made explicit. However, staunch supporters of the market perspective have, inadvertently, indicated how, in theory and practice, the market-economics perspective:
(a) grants privileges to the dominant institutions of capital (Peterson, 1981). These would include commercial banks, pension funds, and venture capitalists. Others would include developers, contractors, mortgage bankers and related real estate businesses (Molotch, 1976). Ethnic or family savings associations are generally ignored, and even community banks are not usually considered "essential" (Beauregard, 1993: 270);
(b) includes, but subordinates, the democratizing influences of the state (Peterson, 1980; Kantor & David, 1988; Bingham & Mier, 1993; Beauregard, 1993). The main function of local government, as a "junior partner" within what Molotch (1976) calls the "growth machine," is merely to promote low business taxes, a sound infrastructure of municipal services, vigorous law enforcement, an eager and docile labor force, and a minimum of business regulations (Molotch, 1976; Beauregard, 1993);
(c) views "jobs" as ideologically and politically useful, but presumes the interests of investors and business owners deserve more attention (Beauregard, 1993: 270). As such, this perspective is frequently inattentive to either the quality of jobs being produced, their geographic location, or who holds them. Instead, it implies workers are, or should be, as "disposable" as other, physical, commodities. Evidence of this lies in the institutional separation of economic development from employment and training activities and the weak linkages between them (Van Horn, et al., 1986);
(d) assumes capital investment is unproblematically linked to job creation, while empirical evidence suggests capital investment in certain technologies (e.g., computer-aided-drafting, engineering, communications, etc.) might well reduce the pool of available jobs. And, while simply having a job is of vital importance, the quality of employment and the wage rate also have consequences that are significant for the effectiveness of economic development and the quality of urban life (Beauregard, 1993: 270) particularly for those who have, historically, been victimized by public and private institutions;
(e) rejects the democratic notion that value inheres in democratic processes (e.g., accountability, interest aggregation, compromise, participation, etc.), and the idea that, at some point, these processes make material differences in our political lives (Mayo, 1960); and most importantly, it presumes
(f) where one "feeds the horse enough oats, some will eventually pass through, and onto the road for the sparrows" (Galbraith, 1992).
Though humorous, this analogy, which compares developers to horses and residents to sparrows, refers to a concept which is very basic to the logic of market-economics. This is the concept of "unitary interests," one which I will expound upon at a later point. Logan and Molotch (1987) argue at length, and contrary to this concept, that there is very little empirical evidence which suggests capital investment eases problems of unemployment, of high housing costs, or of impoverished city budgets. In short, the idea that residents are any more interested in "horse remains" than are developers is highly questionable.
Author: Steven A. Maclin, Ph. D.
About the Author: Dr. Maclin has been a university professor since 1994, but from 1998 - 2004, he lived and worked with American military troops in Japan, Okinawa, and South Korea. He has previously edited and published dozens of articles in professional administrative journals and recently, in his ‘spare time,’ he’s been building websites for distributing materials to his graduate students. Hes now stateside, teaching graduate students online, writing articles and developing a small online business (see
http://buyfromart.com); he can be reached at info@buyfromart.com.