As late as the 1970s, most consumer commodities were produced in one national economy either for consumption there or for export to a different national market. By the 1990s, that model was obsolete, definitive sites of production for specific commodities became increasingly difficult to identify, and the old language of economic geography no longer made sense. In autos, electronics, garments, computers, biomedical, and many other industrial sectors ranging from high tech to low, production is now organized across national boundaries to such a degree that questions of national “import” and “export” are supplanted by questions of global trade internal to the production process. The idea of “national capital” makes little sense today, because most global trade across national boundaries is now intrafirm: it takes place within the production networks of single corporations.
There is little doubt that in strictly economic terms, the power of most states organized at the national scale is eroding. This in no way invokes a “zero-sum” conception of scale (Brenner 1998; MacLeod 2001), nor is it a simplistic argument that the nation-state is withering away. In the first place, the political and cultural power of national-scale power is not necessarily eroding at all and may be hardening in many places. Second, the erosion of economic power at the national scale is highly uneven and not necessarily universal, with the US or Chinese state enjoying a quite different fate from Malaysia or Zimbabwe. For example, Mészáros (2001) has argued that the ambition of the US state seems to be its transformation into a global state, and the conduct of the brutal “war on terrorism”—in reality a war for global hegemony (Smith forthcoming)—seems to confirm this analysis. Yet the sources of increased economic porosity at the national scale are undeniable: communications and financial deregulation have expanded the geographical mobility of capital; unprecedented labor migrations have distanced local economies from automatic dependency on home grown labor; national and local states (including city governments) have responded by offering carrots to capital while applying the stick to labor and dismantling previous supports for social reproduction; and finally, class and race-based struggles have broadly receded, giving local and national governments increased leeway to abandon that sector of the population surplused by both the restructuring of the economy and the gutting of social services. The mass incarceration of working-class and minority populations, especially in the US, is the national analogue of the emerging revanchist city.
New Globalism, New Urbanism: Gentrification as Global Urban Strategy