Reestablishing a Relationship Between Heterodox Economics
and Critical Urban and Economic Geography
Association of American Geographers (AAG) Annual Meeting
29 March - 2 April 2016, San Francisco
Session organizers: Gary Dymski (Leeds University, UK) Marshall Feldman (University of Rhode Island, USA)
Sponsored by the Economic Geography, Regional Development and Planning, Socialist and Critical Geography, and Urban Geography Specialty Groups
Mainstream economics has been widely criticized for failing to predict and adequately explain the current economic crisis (Beker 2010; Krugman 2009; Lawson 2009). In contrast, two other branches of knowledge distinguished themselves by anticipating and even predicting the crisis and by providing substantial insights into the processes underlying it. One is based in critical variants of heterodox economics, mainly drawing heavily from Marxist, institutionalist, and post-Keynesian political economy, and to a lesser degree work descending from Henry George (Bezemer 2011; Goldstein and Hillard 2009). The other is based in a subset of the overlapping areas of critical urban studies and economic geography (Christophers 2011, 2014; Davies and Imbroscio 2010; Harvey 2012).
Yet a remarkable gulf separates relevant heterodox economics and these subﬁelds of human geography. In the 1970’s and early 1980’s urban and economic geography underwent a radical transformation, increasingly rejecting “spatial science” rooted in neoclassical economics and turning instead to geographical approaches related to various strains of heterodox economics, particularly Marxist, institutionalist, Keynesian, and neo-Ricardian variants (cf. e.g., Walker and Storper 1991; Sheppard and Barnes 1990). In contrast to neoclassical economics, with its methodological individualism and consequent microeconomic focus on individual behavior, these heterodox strains emphasized societal structures, social relations, and institutions, leading to a more macroeconomic form of analysis. David Harvey’s (1978; 2006) work was extraordinarily seminal in this transformation, inspiring new areas in economic and urban geography, such as the geography of money and ﬁnance (leyshon2004thelimits). On the other side, prominent heterodox economists – such as Ann Markusen, Barry Bluestone, Bennett Harrison, David Gordon, and Matthew Edel – brought heterodox economic theory to bear on the concerns of urban and economic geography, and in the process transformed heterodox economic analysis itself by making the spatial dimension a fundamental component. If not married, critical urban/economic geography and heterodox economics were at least keeping company.
But in the following decades heterodox economics and critical urban and economic geography drifted far apart. By 2009, when the AAG designated Paul Krugman “an honorary geographer” for his theoretical work on geographical trade patterns and the subsequent research it spawned, the divorce was almost complete. Krugman (1998) described this “new economic geography” as one employing models that are “fully general-equilibrium and clearly derive aggregate behaviour from individual maximization.” In other words, as unabashedly mainstream and largely neoclassical. In a paper delivered at an AAG plenary, Krugman (2011) recognized the distance between mainstream economics and economic geography, attributing it to differences in methodology, questions asked, and kinds of answers sought, while totally ignoring heterodox critiques of these features of mainstream economics.
Today heterodox economics and critical urban/ economic geography exist in almost complete isolation from one another. For example, the index of a collection claiming to serve “as the foundation for understanding the structural and deep-seated nature of current macroeconomic events” (Goldstein and Hillard 2009) has no entries for “built environment,” “capital switching,” “circuits of capital,” “cities,” “race,” “rent,” and most other keywords found in discussions of the crisis by geographers. Similarly, Duménil and Levy’s (2011) review of heterodox explanations of the crisis follows Marx by distinguishing between labor and capital, between ﬁnance capital and productive capital, and between interest and proﬁt; but despite the fact that house-price inﬂation fueled the crisis and land, as a non-reproducible asset, is the prime candidate for house-price inﬂation through ground-rent capitalization, the review does not even mention what Marx considered the third major class of modern capitalism, landlords, and their distinct source of revenue, ground rent.
Geographers have been equally insular. For example, a recent review of “geographies of money and ﬁnance” focusing on “ﬁnancial circuits and the ‘real’ economy” (Hall 2013) refers to no authors recognizable as economists of any sort, while the closest it gets to recognizable economics journals are The Economist and Financial Times.
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