In chapter 4 of Rebel Cities, Harvey focuses on what he takes to be the essence of capitalism: the establishment of monopoly rent.
“All rent is based on the monopoly power of private owners over certain assets. Monopoly rent arises because social actors can realize an enhanced income stream over an extended time by virtue of their exclusive control over some directly or indirectly tradable item which is in some crucial respects unique and non-replicable. ” (90)
There are two types of situation where monopoly rent arises: (1) when one exclusively controls some special quality resource, commodity, or location and can therefore extract rent from others. If you are the only one who has a specific Picasso, you can charge people to take a look at it. The same goes if you have a London apartment with an exclusive view over a great Olympic location. Uniqueness is key here long with particularity and tradability. But one has to be careful that one’s product or location or resource is too unique so as to lose tradability. At the same time, using marketing and advertising to increase tradability might reduce uniqueness. So, tradability must never turn into commodification, which involves homogeneity and mass consumption.
On the other hand, marketing and advertising may be used to generate a false sense of uniqueness for mass produced goods and define them as particular enough that monopoly rent can be extracted out of them.
But there is a contradiction here:
“Why, in a neoliberal world where competitive markets are supposedly dominant, would monopoly of any sort be tolerated, let alone seen as desirable?
The fiercer the competition, the faster the trend towards oligopoly, if not monopoly. It is therefore no accident that the liberalization of markets and the celebration of market competition in recent years have produced incredible centralization of capital.
This structural dynamic would not have the importance it does were it not for the fact that capitalists actively cultivate monopoly powers. They thereby realize far-reaching control over production and marketing, and hence stabilize their business environment to allow for rational calculation and long-term planning, the reduction of risk and uncertainty, and more generally guarantee themselves a relatively peaceful and untroubled existence.
Market processes crucially depend upon the individual monopoly of capitalists (of all sorts) over ownership of the means of production, including finance and land. All rent, recall, is a return to the monopoly power of private ownership of some crucial asset, such as land or a patent. The monopoly power of private property is therefore both the beginning-point and the end-point of all capitalist activity.
Pure market competition, free commodity exchange, and perfect market rationality are therefore rather rare and chronically unstable devices for coordinating production and consumption decisions.” (92-4)
However, for Harvey, the left often makes the mistake of associating monopoly rent with large corporations. If location can be a source of monopoly rent, then, small business may very well have a local monopoly out of which they extract rent. Such a monopoly then would be challenged by the opening of the local market to foreign corporations. Here again, the nostalgia for the local, rooted, small business is misplaced.
“In the nineteenth century, for example, the brewer, the baker, and the candlestick maker were all protected to considerable degree from competition in local markets by the high cost of transportation. Local monopoly powers were omnipresent (even though firms were small in size), and very hard to break, in everything from energy to food supply. By this measure, small-scale nineteenth-century capitalism was far less competitive than now. It is at this point that the changing conditions of transport and communications enter in as crucial determining variables. As spatial barriers diminished through the capitalist penchant for “the annihilation of space through time,” many local industries and services lost their local protections and monopoly privileges.” (94)
No doubt though, that these locally-based monopolies were the big losers of globalization (as annihilation of time and space). One can then see the concentration of capital and the political neoliberal push for liberalization at the heart of global governance as the current means to regain the means of monopoly rents on a different scale. Another attempt to recompose monopoly privileges may be over culture by adding originality and authenticity in the definition of what can provide monopoly rent. Arts and culture would fall into that category. Harvey goes at some length over the struggle in the field of wine between French and Australian producers over what makes a wine more authentic and unique than other products. As capitalists look for other way to recreate monopoly powers, they will also create discursive constructs to highlight authenticity and exclusivity (“appellation d’origine contrôlée” in the case of wine, references to “terroir”, etc.).
It is in this context that traditions may be reinvented (as traditions are always invented in the first place) in urban locales, with neighborhood renovation to attract tourists in search of authenticity:
“The most avid globalizers will support local developments that have the potential to yield monopoly rents even if the effect of such support is to produce a local political climate antagonistic to globalization.” (99)
Although that is a fine line to walk as one might want tourists from all over the world to come experience urban local tradition and culture. Sometimes, it might even mean paying tours of slums as happened after the worldwide success of the movie City of God. One could even choose the level of danger to be exposed to. I suspect the success of Slumdog Millionaire might have had a similar effect.
“Urban entrepreneurialism has become important both nationally and internationally in recent decades. By this I mean that pattern of behavior within urban governance that mixes together state powers (local, metropolitan, regional, national, or supranational) with a wide array of organizational forms in civil society (chambers of commerce, unions, churches, educational and research institutions, community groups, NGOs, and so on) and private interests (corporate and individual) to form coalitions to promote or manage urban or regional development of one sort or another.” (100)
In this case, these different actors all look to generate what Harvey calls collective symbolic capital (using Bourdieu’s concept but extending it beyond individuals):
“The collective symbolic capital which attaches to names and places like Paris, Athens, New York, Rio de Janeiro, Berlin, and Rome is of great import and gives such places great economic advantages relative to, say, Baltimore, Liverpool, Essen, Lille, and Glasgow. The problem for these latter places is to raise their quotient of symbolic capital and to increase their marks of distinction so as to better ground their claims to the uniqueness that yields monopoly rent. The “branding” of cities becomes big business.16 Given the general loss of other monopoly powers through easier transport and communications and the reduction of other barriers to trade, this struggle for collective symbolic capital has become even more important as a basis for monopoly rents. How else can we explain the splash made by the Guggenheim Museum in Bilbao, with its signature Gehry architecture? And how else can we explain the willingness of major financial institutions, with considerable international interests, to finance such a signature project?
The rise to prominence of Barcelona within the European system of cities, to take another example, has in part been based on its steady amassing of symbolic capital and its accumulation of marks of distinction.” (103 – 4)
But Harvey considers that there is, in this process, space for contestation of the logic of capitalism:
“The struggle is on to accumulate marks of distinction and collective symbolic capital in a highly competitive world. But this brings in its wake all of the localized questions about whose collective memory, whose aesthetics, and whose benefits are to be prioritized. Neighborhood movements in Barcelona make claims for recognition and empowerment on the basis of symbolic capital, and can assert a political presence in the city as a result. It is their urban commons that are appropriated all too often not only by developers, but by the tourist trade. But the selective nature of such appropriations can mobilize further new avenues of political struggle.” (105)
But there is also the potential for reactionary nationalism which is equally anti-globalization as some localist movements can be. The risk then is for communities to advocate turning inwards and retreat into imaginary nostalgia and advocate exclusionary politics (see all these movements at work in Europe right now). At the same time, the branding of a city, as that’s what it is, might require the exclusion and evacuation of any category of people that does not fit with the new local environment (see the cleaning up of the slums in Rio in anticipation of the Olympic Games, or as was done in Beijing, the muzzling of political opponents during the same events, and London might not have enough security forces to ensure perfect conformity with the branding). And in all cases, all actors have to navigate the double risk of too much commercialization or too much specificity that is no longer tradable. But for Harvey, this is where there is a weapon for class struggle (which can swing both ways).
“But monopoly rent is a contradictory form. The search for it leads global capital to value distinctive local initiatives—indeed, in certain respects, the more distinctive and, in these times, the more transgressive the initiative, the better. It also leads to the valuation of uniqueness, authenticity, particularity, originality, and all manner of other dimensions to social life that are inconsistent with the homogeneity presupposed by commodity production. And if capital is not to totally destroy the uniqueness that is the basis for the appropriation of monopoly rents (and there are many circumstances where it has done just that and been roundly condemned for so doing), then it must support a form of differentiation and allow of divergent and to some degree uncontrollable local cultural developments that can be antagonistic to its own smooth functioning. It can even support (though cautiously and often nervously) transgressive cultural practices precisely because this is one way in which to be original, creative, and authentic, as well as unique.
It is within such spaces that oppositional movements can form, even presupposing, as is often the case, that oppositional movements are not already firmly entrenched there. The problem for capital is to find ways to co-opt, subsume, commodify, and monetize such cultural differences and cultural commons just enough to be able to appropriate monopoly rents from them. In so doing, capital often produces widespread alienation and resentment among the cultural producers who experience first-hand the appropriation and exploitation of their creativity and their political commitments for the economic benefit of others, in much the same way that whole populations can resent having their histories and cultures exploited through commodification. The problem for oppositional movements is to speak to this widespread appropriation of their cultural commons and to use the validation of particularity, uniqueness, authenticity, culture, and aesthetic meanings in ways that open up new possibilities and alternatives.” (109 – 10)
But again, the warning against local, traditionalist fetishism:
“This does not mean that attachment to “pure” values of authenticity, originality, and an aesthetic of particularity of culture is an adequate foundation for a progressive oppositional politics. It can all too easily veer into local, regional, or nationalist identity politics of the neofascist sort, of which there are already far too many troubling signs throughout much of Europe, as well as elsewhere.” (111)
So, it is important to never forget that a great deal of what capitalists do is to look for ways to recompose monopoly privileges out of which they can extract monopoly rents. There is a lot that makes sense right now if one keeps this basic principle in mind.
Or, as Lambert Strether would say, “it’s all about the rents.”