Henry McLaughlin
Department of Politics, University of California, Santa Cruz

The term “global city” is geographic and sociological; it refers to a city which has significant financial power and is a focal point or “node” in the global economy. While the associated term “world city” has been used since at least the 1910s (Geddes 1915), “global city” began to appear in the 1980s, when scholars such as Jonathan Friedmann and Saskia Sassen argued that the rise of high finance was contributing to a new international division of labor, and a hierarchy of “command and control” cities in the global economy (Friedmann and Wolff 1982; Friedmann 1986; Rodriguez and Feagin 1986; Sassen 1991). These authors also saw transformations within global north urban society itself: industry was making way for the agglomeration of financial institutions and related services (performed by the upper-middle class) on the one hand, and low-wage service jobs (performed by the urban precariat) on the other (Sassen 1991; Knox 1997).

The global cities research paradigm essentially began with Jonathan Friedmann and Goetz Wolff”s “world city hypothesis,” or the “spatial articulation of the emerging world system of production and markets through a global network of cities” in a hierarchical system of capital accumulation (1982, 309). Rooted in international political economy (IPE) and world-systems theory, Friedmann and Wolff, along with a variety of scholars in the same period such as Stephen Hymer (1972), Fernand Braudel (1982), and Jane Jacobs (1984), argued that cities rather than states were the driving force of global capitalism.

Having established this, however, Friedmann and Wolff were fundamentally interested in the socio-spatial stratification between the urban ‘citadel and ghetto,’ and asked how planners might serve the interests of residents, transnational corporations, and nation-states within the emerging system (Friedmann 1986, 69). They place seemingly local questions of urban capital accumulation and class conflict, as articulated by Manuel Castells (1972) and David Harvey (1973), within the context of the globalizing world system. Friedmann argued that the global control functions of respective cities affect their production and employment dynamics, and that “World city growth generates social costs at rates that tend to exceed the fiscal capacity of the state” (1986, 77). Corporations are often exempt from local taxes while the “the social classes that feed at the trough of the transnational economy insist… on the priority of their own substantial claims for urban amenities and services” (79). 

This new paradigm also introduced the idea that city specialization occurs at a world-systemic level rather than a regional one, and that this spatial structure is rooted in political economy rather than a naturalized ecology as the Chicago school (of sociology) had suggested. Nestor Rodriguez and Joe Feagin, for example, provide comparative historical evidence that specialization takes on different forms in different eras, and that urban studies in the past had been too concerned with local and cultural explanations. Terms like “node” and “division of labor” had been mistakenly “understood in a natural or technological sense rather than a political-economic context” (1986, 189). The authors see a relationship between financial and industrial cities (Amsterdam-Leiden, London-Manchester, and NYC-Houston) in eras preceding postwar globalization, and argue that specialization occurs through the global search for urban land and labor pools, and through globally-connected growth coalitions (Molotch 1976). For example, they note that “London developed as a world financial center even before it developed as a national financial center” (199) and that the New York financial district grew from the nearby port and Erie Canal rather than the city’s mid-Atlantic hinterland (204). Houston’s subsequent rise is then explained by the need of New York’s surplus financial capital to find a profitable outlet through industrial production and real estate (212). Specialization is not an outgrowth of natural processes or an invisible-hand type of logic, rather it is grounded in the (international) political economy of development.

Saskia Sassen further developed the concept of the global city by emphasizing the role of high finance in its formation. In The Global City: New York, London, and Tokyo (1991), Sassen explains that in the post-Fordist era there has been a shift in ‘economic gravity’ away from transnational banks and toward financial firms and their advanced producer services (the supporting firms of legal, accounting, and economic consulting) agglomerated in global cities (84). Financial institutions outsource highly specialized services in respective city spaces, while spreading their own internal business structures across a global archipelago of major cities. Sassen has four main arguments:

1) “the territorial dispersal of current economic activity creates a need for expanded central control and management” (4)

2) this new logic effects economic order within cities themselves as they must produce new supporting services and financial tools (and infrastructures) (5)

3) the city and the nation therefore take on a new relationship; there is a disjuncture between urban and national economic growth (8-9)

4) the growth of the global city produces new social orders as firms still tend to agglomerate to harness innovation and highly specialized, contractual labor markets (11)

Cities remain important because of the combination of knowledge and labor they provide, but they now have a tendency to disconnect from their regional economies and urban elites are denationalized. The city is more than a concentration of capital, people, and nature surrounded by a hinterland, but a concentration of financial forces (and all of the capital, people, and nature that entails) in a global network. Global cities’ financial districts became political-economic focal points for accelerating transactions through easy access to information, a well connected community, and backroom dealing.

Despite the seemingly political nature of these assertions, Sassen claims that she is not concerned with “power,” nor the political capabilities that global cities afford banks, large corporations, and supranational organizations (1991, 6). Rather than concentrating on the political-economic “drama” of corporate power, Sassen is concerned with the operational space where financial processes develop; the impenetrable world of futures and risk management has given rise to an operational zone where financiers buy highly-specialized labor at a moment’s notice (meaning no more “in house” specialization). Writing in the early 1990s, Sassen saw this new economy as loose, “intermediate” and “networked sector,” but because it has taken over the development of city space and continually implements massive redevelopment projects, it has perhaps become something more concrete, permanent, and powerful today. Furthermore, if we were to offer a political addition to Sassen’s argument, we might begin by noting that both financial districts as spatial agglomerations, and the financialization of global-urban real estate as a process, are sanctioned and supported by local and national governments hoping to win out in a global economic competition.

Turning to Sassen’s third thesis on the new relationship between the city and nation state, it seems that global city concept does not only describe a new set of social relations, an integrated community of experts, and a “nodal point” in the global economy, but it is also signals the reterritorialization of space in a global archipelago of financial enclaves. Any given global city space is more properly connected to global city spaces across the world than its hinterland, and each casts a “shadow” on smaller cities and regions. In urban geography, this manifests as a global connection of financial fortresses, but also of enclaved communities, of export processing zones, and of American securitized ports. Whether one is in Dubai, London, or Shanghai, the core of the global city reads as the same space (see also Beaverstock, Smith, and Taylor (2000)). What we might mistakenly read as integration and national connectivity is therefore best understood as a layer of financial, material, and informational flows separate from (but casting shadows on) regional economies.

In an important addition, David Bassens and Michiel van Meeteren (2015) take up this metageography, suggesting that a wider “world city archipelago” (beyond New York and London) remains essential for the realization of capital and the propagation of global uneven development against claims of “convergence.” For these authors, the command and control function for production has been “subsumed in a logic of financialization,” the financial services hold a “class monopoly” on the “the necessary and seemingly sufficient authority and expertise”  necessary for realization, and through their service fees earn “class monopoly rents” (754). The advanced producer service complex (APS) ‘aggregates service interventions in the production space, socially constructs material circuits of value, and enables capital switching’ (761). The APS complex constructs accumulation strategies through applied economic geography, centered on “emerging markets,” but also in carbon emissions markets and in pension funds (and thus in urban real estate) (763-764). 

Outside of the academy, geographer Peter Taylor and the Globalization and World Cities Research Network (GaWC)’s work on city hierarchy have had perhaps the most influence. The GaWC produces formal models of the global city network, and further elaborate on the subnodal intra-service firm networks which complement the supranodal geography of command and control (2001, 182-183). These models then allow the GaWC to rank cities within the global hierarchy. Regardless of its analytic value, the GaWC’s indexing of cities has become incredibly important because of how it is used by financiers, consultants, and city boosters themselves when opening offices and allocating capital (today we can also look at sustainability rankings)

Joshua Leon (2017) argues that the global city concept and indexing have been appropriated by neoliberal city managers and corporate power, that these elites ignore its complexity and internal academic debates, and that they create a discourse of competition to influence city governments’ actions in the world and degree of economic exposure to the world. States and cities provide generous tax incentives and subsidies to attract global capital, a process which Leon calls “municipal mercantilism” (14). Global cities do not rely on a “creative class” to compete (Florida 2003), rather “deploy state power to insulate themselves from markets” altogether. New York City, for example, has used public financing to attract and retain firms like Goldman Sachs and Bank of America, and skyscraper developers–a form of global city boosterism (Leon 15). Furthermore, cities in the global south like Shanghai, Dubai, and Doha (and even Tokyo) have gained “Alpha” status characteristic of free-market, cosmopolitan cities while being very much state development projects (Richard Child Hill and June Woo Kim (2000); see also Acuto 2022). Leon concludes that we should not disparage global cities research, rather understand how corporate sponsorship reduces it to a simplified “‘how to’ manual” (2017, 20-21).

There are numerous other additions to global city theory, such as various postcolonial critiques which challenge the appropriateness of “global city” in the global south and its potential to exclude cities that are not financial centers but nonetheless important for global production circuits (Robinson 2002; Smith 2002). Lusaka, for example, is thoroughly connected to the global economy through copper exports, even though it lacks access to financial markets and foreign currencies (Robinson 2002, 537). Another type of related scholarship complicates Sassen’s third thesis on the shifting relationships between the global city and the state. For example Neil Brenner (1998) and Eric Swyngedouw (2004) both effectively make the point that global city theory erroneously presupposes the declining power of the nation state in global political economy. The breakdown of the Bretton Woods system (itself a product of tensions in global economic scale) and the subsequent globalization of financial capital and currencies leads to new arrangements in production, planning, and regulation (Swyngedouw 2004, 39) where the state “glocalises.”

In sum, whereas for Friedmann and Wolff, “global city-territorial state relations are expressed as a geoeconomic battle between globally mobile TNS [transaction network services] and immobile state territories” which leads to fiscal crises in the latter (Brenner 1998, 8-9 on Friedmann and Wolff 1982, 312), and where for Sassen there is “systemic discontinuity” between the rise of global cities and declining industrial cities in the US, UK, and Japan (1991, 129-167) and a decline in territorial state sovereignty over global cities (1996), for these last authors, city-state and city-city political relations are not zero-sum: scholarship should not conflate the “withering away of state territory” with the reconfiguration of national scale to the global city.

(See Capitalist State, De/Reterritorialization, Enclave, Geopolitics, Growth Machine, Production, Urban Political Economy)

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