Globalisation as a Political Strategy

In light of the above, invoking globalisation has become part of a powerful political‐economic ideology through which capital–labour relationships and relative class power positions are shifted in profound ways. While neoliberalism’s ascent in the 1980s revolved around strategies of ‘rolling back the state’ and engaging in what Gramsci would call a war of position, the 1990s and beyond have been characterised by a much more pervasive ‘roll‐over’ by the state and other forms of governance aimed at politically instituting neoliberalism as an uncontested and incontestable dogma )Peck and Tickell 2002Peck J Tickell A (2002)‘Neoliberalizing Space’ in: N. Brenner and N. Theodore (Eds)Spaces of Neoliberalism—Urban Restructuring in North America and Western Europe (Oxford, Blackwell)[Crossref], [Google Scholar]). This war of manoeuvre is today decisively in the camp of capital, usually with strong state support, and centres around social wage issues such as direct and indirect labour cost, labour market rigidities, public debt and public spending, trade liberalisation, privatisation, neoliberal re‐regulation, etc.

The hegemony of the globalisation ‘thesis’ extends from the conservative right to even those who claim to pursue a more inclusive, democratic and socially progressive agenda )such as, for example, Petrella’s ‘Limits to Competition’ )Group of Lisbon 1994Group of Lisbon (1994) Grenzen aan de Concurrentie (Brussels, University of Brussels) ) or Tony Blair’s vision of the New Britain). This ideology becomes a vehicle for suppressing possibilities of resistance and the formulation of alternative trajectories. As any good historical geographical analysis would easily point out, resistance and the construction of alternative visions and strategies have always been profoundly geographical affairs. It is not surprising that the most radical contemporary movements that attempt to confront this hegemony of vision often feed off a distinctly geographical ferment in which the reclamation of territorial identity and homogeneity finds fertile ground among those who feel deeply and bitterly disempowered by the disabling strategies pursued by those occupying the loci of power. The top score of the National Front in the recent elections in France is a worrying illustration of this.

Globalisation as Practice

Capitalism has always been a decidedly geographical project and globalisation has been part of the capitalist enterprise from at least 1492, if not before. In fact, in many ways, the world economy and culture of the late 19th‐ and early 20th‐century world were as globally interconnected as, and in some ways more so than, the present time. Even a cursory reading of the cultural, economic and geographical accounts of those days would make this abundantly clear in the same way as a more sober statistical comparative analysis would illustrate.

Of course, many of these accounts have always prioritised time and history over geography. The latter was usually understood as contextual and passive. Spatial or geographical strategies were rarely considered as vital and formative in explaining the dynamics of internationalisation. At best, the feeble attempts to take space seriously really resulted in replacing the process of class exploitation and domination by processes of spatial exploitation and domination in which class alliances in one territory exploited class alliances in other territories )Harvey 1995Harvey, D. (1995). ‘Globalization in Question’. Rethinking MARXISM, 8(4): pp. 1–17 [Google Scholar]). Despite the proclaimed internationalism of much work on the left, most historical materialist analysis was clearly bound up with the national state and class formation. From Lenin’s account of the class struggle in Russia to more recent and innumerable accounts of the formation of working classes and class relations in an equally large number of different places, all presented the illusion of a geographically sensitive historical‐materialist analysis. Yet, much of this literature failed to incorporate the fundamental premise that capitalist geographical dynamics are inherently tied up with processes of territorialisation, de‐territorialisation and re‐territorialisation and have been so for a long time )Harvey 2003Harvey D (2003) The New Imperialism(Oxford, University Press) ). My quotes from the Communist Manifesto and from Zola’s novel indicate as much. I have in recent years rarely come across definitions of globalisation that are significantly better than, let alone differentfrom, the one offered by Marx and Engels, written more than a century and a half ago. In the current phase of profound shake‐up of these geographical processes, ‘globalisation’ is invoked as short‐hand to summarise these processes of de‐territorialisation and re‐territorialisation, but in such a way that makes them equally a‐spatial or a‐geographical and, as such, profoundly disempowering. It is too easily forgotten that while capital expands its geographical reach and breaks through all manner of geographical barriers, new boundaries are created while older ones are broken down or become more porous.

As Hirst and Thompson )1996Hirst P Thompson G (1996)Globalization in Question (Cambridge, Polity Press) ; 1999Hirst P Thompson G (1999)Globalization in Question 2nd edn )Cambridge, Polity Press) ), among others, have pointed out, the process of globalisation is perhaps not as pervasive and total as many make it out to be. They show how—at least until 1913—international interdependence in terms of global trade and foreign direct investment )FDI) was significantly higher compared with the subsequent period of national ‘Fordist’ development )1925–73). It is only in recent years that we have begun to approach again )at least in relative terms) the conditions of integration that characterised the world economy at the turn of the 20th century. This is, of course, not to say that nothing new has happened. The essence of capitalism is, as Schumpeter showed a long time ago, about perpetual creative destruction in which ‘everything that is solid melts into air’, but this always happens through geographical change and geographical restructuring. As Harvey )1995Harvey, D. (1995). ‘Globalization in Question’. Rethinking MARXISM, 8(4): pp. 1–17 [Google Scholar], 5) pointed out, ‘the adoption of the term “globalisation” signals a profound geographical reorganisation of capitalism, making many of the presumptions about the “natural” geographical units within which capitalism’s historical trajectory develops less and less meaningful )if they ever were)’. We have to begin to see how the dynamics of capitalism are about the perpetual reconfiguration of space and spatial organisation in which space is a constitutive moment.

If I am not mistaken, the term ‘globalisation’ was first coined in the financial press, and not surprisingly so. If anything, the de‐territorialisation/re‐territorialisation of financial markets has been by far the most significant economic‐regulatory change. ‘Real’ capital flows )i.e. those associated with international trade and FDI) dwarf in comparison with flows of purely financial capital. Where total world trade in 1994 amounted to circa US$4.3 trillion )on an annualised basis), total average daily turnover in the financial markets in 1996 skyrocketed to a gigantic US$1.4 trillion, 90% of which was broadly moving around the earth in search of speculative gain )Swyngedouw 1996Swyngedouw E (1996b) ‘Producing Futures: International Finance as a Geographical Project’ in: P. Daniels and W. Lever (Eds) The Global Economy in Transition (Harlow, Longman) [Google Scholar]b). In 2003, this has increased to well over US$2 trillion. This profound internationalisation and de‐nationalisation of money in the aftermath of the breakdown of the Bretton Woods system and the subsequent monetary disorder has become, as it were, a pars pro toto to stand for the globalisation of the whole economy.

Furthermore, the technological and information revolution has increased and intensified cultural globalisation. As mentioned before, while global media flows have become more dense, the actual direct interchange in economic terms with many of the remote places that fill our TV screens on a daily basis has actually disintegrated. The image of the global village may have become a standard cultural icon of the time, but many places have in fact suffered from a diminished interdependence. Of course, the speed of commodity flows has accelerated and this in itself propelled the process of de‐territorialisation and re‐territorialisation to new heights. Undoubtedly, this acceleration of the ease by which people and commodities overcome the barrier of space is unprecedented.

Arguably the most profound geographical restructuring that has taken place lies in the combined process of acceleration of working class formation in many parts of the world, the hyperurbanisation process that still continues at an intensifying pace, and the mass movement of people )and mainly workers) across space. Of course, this brings with it growing cultural, ethnic, gender and other differentiations among the working class )something that much of recent analysis really does not take into account), but also intensifies the geographical processes that are so central to the current restructuring.

It is in this context not surprising, therefore, to find a great number of geographical tensions, conflicts and struggles arising in many parts of the world, many of which are not even remotely emancipatory, liberating or empowering. Consider, for example, the formidable barriers erected to dissuade migrating labour forces to move freely in search of a livelihood. It is not only events such as the labour unrest in South Korea, the emergence of the first European‐wide strike and workers’ action against the closure of the Brussels Renault factory )a closure that had everything to do with overproduction in the sector and little with globalisation), the genocide in Central Africa, the resistance against the draconian austerity programme in France, Italy and Germany, and the rise of anti‐internationalist and deeply regionalist struggles that bring out the profound spatial tensions and contradictions that arise out of the maelstrom of spatial transformations wrought from recent changes in the organisation of capital circulation processes, but also from the recent waves of plant closures, company restructuring and bank collapses.

Scale, Governance and the Mediation of Power

The political economy of capitalism is, as alluded to above, a process of continuous transformation of its temporal and spatial horizons. The molecular strategies of capital as mobilised by a myriad of atomistic actors produce rhizomatic geographical mappings that consist of complex combinations and layers of nodes and linkages, which are interconnected in proliferating networks and flows of money, information, commodities and people. The flows that shape and define these networks are of course local at every moment )Latour 1993Latour B (1993) We Have Never Been Modern (London, Harvester Wheatsheaf) ). Over the past few years, the networked ordering of the economy has become simultaneously more localised or regionalised, on the one hand, and transnationalised, on the other. Authors as diverse as Krugman )1995Krugman P (1995) Development, Geography and Economic Theory(Cambridge, MA, MIT Press) ), Ohmae )1995Ohmae K (1995) The End of the Nation State—The Rise of Regional Economies(London, HarperCollins) ) and Scott )2000Scott A (2000) Regions and the World Economy (Oxford, Oxford University Press) ) have pointed out that economic growth is predicated upon locally and/or regionally networked clusters of companies that are globally organised and active. Whether one considers the archetypical example of Silicon Valley, the geographical clusters of companies in ‘the Third Italy’ or the concentration of financial services in Manhattan or the City of London, each illustrates this process of intense territorial concentration combined with a global reach and outlook. In other words, a scalar transformation of the networks of economic organisation has taken place. Of course, the tensions, conflicts and socio‐spatial power geometries that infuse the networks render them inherently unstable, permeable and prone to conflict.

In addition, these economic )and partially cultural and social) networks cannot operate independently from or outside a parallel political or institutional organisation, i.e. a set of territorially constructed institutional arrangements that simultaneously provide some social coherence while permitting and encouraging the extended rearrangement of these economic networks )Jessop 2002Jessop B (2002) The Future of the Capitalist State (Cambridge: Polity Press) ). In other words, the economic moment requires its own ‘outside’ in order to function. Without territorially organised political or institutional arrangements )like the state or other forms of governing) that regulate markets, money and ownership, and organise security and parts of service delivery, the economic order would irrevocably break down.

It has always been the terrain of the political where these tensions were fought, mediated and negotiated, resulting in ever‐changing forms of territorial or geographical organisation and the emergence of territorially shifting forms of governance. For a long time and still today, the national state has been singled out as the pre‐eminent locus for the crystallisation and resolution of these tensions and conflicts. This has been and still is an important scale for the regulation and negotiation of social, economic and cultural life and for the articulation of the aforementioned processes of de‐territorialisation/re‐territorialisation. Yet, the historical geography of capitalism and its restless wrestling with the more enduring characteristics of social and political space have always made existing forms of territorial organisation porous, unstable and prone to transgressions and transformations. The production of space through the perpetual reworking of the networks of flows of capital circulation and accumulation discards existing spatial configurations and scales of governance, while new ones are produced. For example, as soon as the Westphalian order was completed by the mid 20th century, it had already begun to transcend itself as national boundaries became more porous and both sub‐ and super‐national scales of governance and organisation became more prominent )Brenner et al. 2003Brenner N Jessop B Jones M Macleod G (Eds) (2003) State/Space—A Reader(Oxford, Blackwell)[Crossref] ).

This deconstruction and reconstruction of spatial scales that are often taken for granted as naturalised units for social existence )much of which is perpetuated in some of the geographical and international relations literature, which often unproblematically singles out particular scalar forms—such as the local, the regional, the national or the global—as the pivotal terrain for analysis) reshuffles social power relationships in important ways. During the 20th century, it was undoubtedly the national state that became the emblematic expression of the pre‐eminent political form of territorial organisation.

In the present context of a significant process of rescaling, in which not only the scale of the national state but also other scales of governance and of regulation of social conflict and social reproduction are reshuffled, the ideology of an ungovernable and largely abstract process of global reorganisation takes hold easily. As pointed out above, this ideology has become a powerful weapon in the struggle over the content, democratic accountability and forms of power that emerge in the new scalar configurations that are under construction. It is exactly this revamping of spatial scales and their nested articulation that I believe is central to the current process of geographical reorganisation and may provide a more fertile terrain for coming to grips with the political economy of contemporary change )see also Swyngedouw 1997Swyngedouw E (1997a) ‘Neither Global nor Local: “Glocalisation” and the Politics of Scale’ in: K. Cox (Ed.) Spaces of Globalization: Reasserting the Power of the Local(New York and London, Guilford/Longman) [Google Scholar]a).

Defining Scale: The Dialectic of Territorialities and Networks

In the remainder of this paper, the current process of transformation will be considered from the vantage point of the reorganisation of the geographical scales of economic and political life. In particular, the tensions between the rhizomatic rescaling of the economic networks and flows on the one hand and the territorial rescaling of scales of governance on the other will be the central leitmotiv. Before I can embark on this, I shall briefly summarise the central themes of a ‘scalar’ perspective:

Scale Transformations

In sum, spatial ‘scale’ has to be theorised as something that is ‘produced’; a process that is always deeply heterogeneous and contested. If the capacity to appropriate place is predicated upon controlling space, then the scale over which command lines extend will strongly influence this capacity to appropriate place. More importantly, as the power to appropriate place is always contested and struggled over, then the alliances social groups or classes forge over a certain spatial scale will shape the conditions of appropriation and control over place and have a decisive influence over relative socio‐spatial power positions. All this suggests that the continuous reshuffling and reorganisation of spatial scales are an integral part of social strategies and struggles for control and empowerment. In a context of heterogeneous social, cultural, economic and ecological regulations, organised at the corporeal, local, regional, national or international level, mobile people, goods and capital and hypermobile information )networked) flows permeate and transgress these scales in ways that can be deeply exclusive and disempowering for those operating at other scale levels )Smith 1988Smith, N. (1988a). ‘Regional Adjustment or Restructuring’. Urban Geography, 9(3): pp. 318–24[Web of Science ®], [Google Scholar]a; 1988Smith, N. (1988b). ‘The Region Is Dead! Long Live the Region’. Political Geography Quarterly, 7(2): pp. 141–52[Web of Science ®], [Google Scholar]b). Geographical configurations as a set of interacting and nested scales )the ‘gestalt of scale’) become produced as temporary stand‐offs in a perpetual transformative, and on occasion transgressive, socio‐spatial power struggle. These struggles change the importance and role of certain geographical scales, reassert the importance of others, sometimes create entirely new significant scales, but—most importantly—these scale redefinitions alter and express changes in the geometry of social power by strengthening the power and control of some while disempowering others )see also Swyngedouw, 1993Swyngedouw E (1993)‘Communication, Mobility and the Struggle for Power over Space’ in: G. Giannopoulos and A. Gillespie (Eds) Transport and Communication Innovation in Europe (London, Belhaven Press) [Google Scholar]; 1996Swyngedouw, E. (1996a). ‘Reconstructing Citizenship, the Re‐scaling of the State and the New Authoritarianism: Closing the Belgian Mines’. Urban Studies, 33(8): 1499–521.[Crossref], [Web of Science ®], [Google Scholar]a). This is exactly the process that Smith refers to as the ‘jumping of scales’, a process that signals how politics are spatialised by mechanisms of stretching and contracting objects across space )1993):

The historical geography of capitalism exemplifies this process of territorial ‘scalar’ construction of space and the contested production of scale. Capitalists have usually been very sensitive to and have skilfully strategised around issues associated with the geographical scale of their operations, while paying careful attention to the importance of controlling greater spaces in their continuous power struggle with labour and with other capitalists. Similarly, effective oppositional strategies have equally been sensitive to issues of scale. Consider, for example, how environmental movements have occasionally been successful in mobilising local issues into performative political strategies at higher scales.

Scale emerges as the site for control and domination, but also as the arena where cooperation and competition find a fragile stand‐off. For example, national unions are formed through alliances and cooperation from lower‐scale movements. A fine balance needs to be perpetually maintained between the promise of power yielded from national organisation and the competitive struggle that derives from local loyalties and inter‐local struggle. Similarly, cooperation and competition among capitals is also deeply scaled )Herod 1991Herod, A. (1991). ‘The Production of Scale in United States Labour Relations’. Area, 23(1): pp. 82–88[Web of Science ®], [Google Scholar]; Smith and Dennis 1987Smith, N and Dennis, W. (1987). ‘The Restructuring of Geographical Scale: Coalescence and Fragmentation of the Northern Core Region’. Economic Geography, 63(2): pp. 160–82[Web of Science ®], [Google Scholar]). Of course, the process of de‐territorialisation/re‐territorialisation shatters spatial scales and new‐scaled configurations emerge as boundaries are transgressed and new frontiers erected. During periods of great social, economic, cultural, political and ecological turmoil and disorder, when temporal and spatial routines are questioned, broken down and reconfigured, important processes of geographical rescaling take place that interrogate existing power lines while constructing new ones. Over the past twenty years or so, this is exactly what seems to have happened. The new political‐economic and cultural‐ecological conditions have once again shattered existing boundaries, produced new ones and rearticulated spatial scales in ways that are at times promising and at others disturbing. These new scale formations are never socially neutral. Both scales of regulation/reproduction and of production have changed, but while social regulation tends to have moved to the individual, the private or the bodily, some scales of production and reproduction )but by no means all) have asserted a greater spatial reach and extent. In the next section, some of the central transfigurations of scale and the emerging new ‘gestalt of scale’ will be documented.

The ‘Fordist’ Production of Scale and Its Contradictions

The pivot of West European ‘Fordist’ regulation centred on the national state. This was the pre‐eminent scale at which conflicts were contested and compromises settled )Swyngedouw 1990Swyngedouw, E. (1990). ‘L’Espace, Le Fordisme et le Limbourg’. Contradictions, 58–59: pp. 115–51 [Google Scholar]; Altvater, 1993Altvater E (1993) The Future of the Market—An Essay on the Regulation of Money and Nature after the Collapse of ‘Actually Existing Socialism’ (London, Verso) ; Jessop 1993Jessop B (1993a) ‘Fordism and Post‐Fordism: Critique and Reformulation’ in: A.J. Scott and M.J. Storper (Eds) Pathways to Regionalism and Industrialis Development (London, Routledge) [Google Scholar]a; 2002Jessop B (2002) The Future of the Capitalist State (Cambridge: Polity Press) ). The foundations of the Fordist state and the social regulation of labour relations resided specifically in the struggle of the labour movement to transcend local shopfloor struggle and to ‘jump scales’ through gaining increasing power at the level of the state. Similarly, the Keynesian view of macro‐economic policies constructed a precarious but increasingly important bond between the state and national private capital. An institutionalised tripartite setting was created whose main focus was on treading a fine line between competition/struggle on the one hand and cooperation/compromise on the other, particularly around the production/consumption nexus.

Quite clearly, command over the accumulation process remained firmly in the hands of private capital that took an outspoken agglomerated urban‐regional form, while the reproduction process became increasingly centred on the nuclear family and its associated sexual/gender divisions. The regulatory homogenisation across national space of a series of socioeconomic aspects )wages, social policy, state intervention, socioeconomic norms, rules and procedures) was articulated with a highly uneven local and regional development process. Although ‘the local state’ scale lost much of its power, it remained the arena for a whole host of centrally important ‘community politics’. Consequently, the national state became, both in theory and in practice, the pre‐eminent and almost naturalised scale through which both subnational and international processes were articulated and understood.

This state‐based regulation altered the form and structure of competition, partly as a result of the greater scale at which individual capitals began to operate. The productivity/consumption nexus permitted a steady expansion of the ‘national’ economy. However, the gradual internationalisation of production and accumulation contributed to more intense competition in the international arena )Moulaert and Swyngedouw 1989Moulaert, F and Swyngedouw, E. (1989). ‘A Regulation Approach to the Geography of Flexible Production Systems’. Environment and Planning D: Society and Space, 7(3): pp. 327–45[Web of Science ®], [Google Scholar]). This growing internationalisation of production—particularly from the mid–1950s onwards—amidst a mosaic of nationally regulated consumption spaces would prove to be a fundamental dilemma. While the networks of capital ‘jumped scales’ for the organisation of production through both intensification and extension of their flows and networks, consumption and reproduction remained fundamentally nationally regulated. In addition, the regulation of the various functions of money operated at a variety of scales. During the inter‐war period, money was predominantly nationally regulated, without an international anchoring value. The collapse of the financial system in the early 1930s reinforced calls for some form of international cooperation to prevent beggar‐thy‐neighbour devaluationary policies without, however, sacrificing international competition.

The Bretton Woods agreement embodied such compromise; a compromise that remained shaky, contested and subject to change as the economic internationalisation process accelerated during the post‐war period. Only the hegemonic power of the US could maintain some sort of relative cohesion. This compromise was anchored on the dollar–gold standard, which stabilised the international monetary system by providing a relatively secure container of value. However, while regulating the value of money was cemented into the rules of the Bretton Woods agreement and policed by the International Monetary Fund )see Swyngedouw 1992Swyngedouw E (1992a) ‘The Mammon Quest. “Glocalization”, Interspatial Competition and the Monetary Order: The Construction of New Scales’ in: M. Dunford and G. Kafkalas (Eds) Cities and Regions in the New Europe (London, Belhaven Press) [Google Scholar]a; 1996Swyngedouw, E. (1992b). ‘Territorial Organization and the Space/Technology Nexus’. Transactions Institute of British Geographers N.S., 17(4): pp. 417–33[Web of Science ®], [Google Scholar]b; Leyshon and Tickell 1994Leyshon, A and Tickell, A. (1994). ‘Money Order? The Discursive Construction of Bretton Woods and the Making and Breaking of Regulatory Space’. Environment and Planning A, 26(12): pp. 1861–90[Web of Science ®], [Google Scholar]), credit or the issuing of money, in contrast, remained firmly at the level of the nation‐state. In short, different forms and functions of money were regulated at different scales, which, of course, would result in serious tensions and friction due to the conflicting nesting of these various spatial scales.

In short, ‘Fordism’ was not a condition or stable configuration. Rather, it refers to a dynamic, contested and always precarious process of socio‐spatial change during which a nested set of new or redefined spatial scales were produced. During the decades of the making and breaking of Fordism, new scale forms and new tensions between scales have gradually emerged. Out of this maelstrom scales have been redefined, restructured and rearticulated.

Rescaling ‘Glocal’ Disorders: The Post‐Fordist Conundrum

What is generally referred to as ‘post‐Fordism’—a problematic generic term that now seems to cover almost everything and thus nothing in particular )see Amin 1994Amin, A. (Ed.) (1994) Post‐Fordism: A Reader ()Oxford, Blackwell) )—is a series of a highly contested, deeply contradictory and variegated processes and power struggles that often revolve around scale, the control over particular scales, the content of existing scales, the construction of new scales and the articulation between scales. Indeed, the so‐called ‘crisis of Fordism’ implies a significant territorial rescaling of a series of regulatory practices )see Moulaert et al. 2001Moulaert F Swyngedouw E Wilson P(2001) ‘Spatial Responses to Fordist and Post‐Fordist Accumulation and Regulation’ in: B. Jessop (Ed.)Regulation Theory and the Crisis of Capitalism (Cheltenham and Northampton, MA, Edward Elgar) [Google Scholar]; Peck and Tickell 1994Peck J Tickell A (1994) ‘Searching for a New Institutional Fix: The After‐Fordist Crisis and the Global–Local Disorder’, in: A. Amin (Ed.) Post‐Fordism: A Reader (Blackwell, Oxford)[Crossref], [Google Scholar]; Jessop 1994Jessop B (1994a) ‘Post‐Fordism and the State’ in: A. Amin (Ed.) Post‐Fordism: A Reader (Oxford, Blackwell)[Crossref], [Google Scholar]a). In particular, regulatory codes, norms and institutions are spatially shifted from one scale to another. These rescalings are invariably highly contested and the outcome varies considerably from scale to scale, both horizontally and vertically. The nature, substance and configuration of the new scales and their ‘nesting’ attest to changing relative power positions of social groups and classes. Nevertheless, the accumulation imperative )which is, of course, always place bound) and the quest to sustain the circulation of capital seems to be of paramount importance, although the specific mechanisms through which this takes places can vary enormously from one scale to another. The overall pattern is one that I have termed elsewhere ‘glocalisation’ )Swyngedouw 1992Swyngedouw E (1992a) ‘The Mammon Quest. “Glocalization”, Interspatial Competition and the Monetary Order: The Construction of New Scales’ in: M. Dunford and G. Kafkalas (Eds) Cities and Regions in the New Europe (London, Belhaven Press) [Google Scholar]a; 1992Swyngedouw, E. (1992b). ‘Territorial Organization and the Space/Technology Nexus’. Transactions Institute of British Geographers N.S., 17(4): pp. 417–33[Web of Science ®], [Google Scholar]b; see also Luke 1994Luke, TW. (1994). ‘Placing Power/Siting Space: The Politics of Global and Local in the New World Order’. Environment and Planning D: Society and Space, 12(5): pp. 613–28[Web of Science ®], [Google Scholar]) and refers to )1) the contested restructuring of the institutional level from the national scale both upwards to supra‐national or global scales and downwards to the scale of the individual body or the local, urban or regional configurations and )2) the strategies of global localisation of key forms of industrial, service and financial capital. In what follows, we shall first consider the networked rescaling of the economy and then move on to articulating the territorial rescaling of scales of governance.

The Rescaling of the Economy

The economic success of cities and regions is highly dependent on the local sectoral and institutional configuration and on the framework of governance in which regional or urban economies are embedded. As locational opportunities expand and locational capabilities increase, so does the importance of ‘local’ characteristics of cities and regions in maintaining or asserting their global competitive advantages. Indeed, the enduring economic success of regional configurations such as Ile de France, London, Bavaria, Flanders, Randstad Holland and others suggests that competitive success is indebted to specific and historically created forms of territorial and socio‐institutional organization )Swyngedouw 2000Swyngedouw, E. (2000a). ‘Authoritarian Governance, Power and the Politics of Rescaling’. Environment and Planning D: Society and Space, 18(1): pp. 63–76[Web of Science ®], [Google Scholar]a). These regional economies are characterised by often highly specialised local or regional fillières that are embedded in local institutional, political or cultural frameworks. They often cooperate locally but compete at a global scale )Salais and Storper 1993Salais R Storper M (1993) Les Mondes de Production. Enquête sur l’Indentité Economique de la France(Paris, Editions de l’EHESS) ; Swyngedouw 2000Swyngedouw E (2000c) ‘Territories of Innovation—Innovation as a Collective Process and the Globalisation of Competition’ in: H. Lawton‐Smith (Ed.) Technology Transfer and Industrial Change in Europe (London, Macmillan) [Google Scholar]c). A variety of terms have been associated with such territorial economies, such as ‘learning regions’ )Maskell and Malmberg 1995Maskell P Malmberg A (1995)‘Localised Learning and Industrial Competitiveness’ paper presented at the Regional Studies Association Conference on ‘Regional Futures’, Gothenburg, 6–9 May ), ‘intelligent regions’ )Cooke and Morgan 1991Cooke P Morgan K (1991) The Intelligent Region: Industrial and Institutional Innovation in Emilia‐Romagna—Regional Industrial Research Report 7 (Cardiff, University of Wales) ), milieux innovateurs )Aydalot 1986Aydalot P (Ed.) (1986) Milieux Innovateurs en Europe—Innovative Environments in Europe (Paris, Groupement de Recherche sur les Milieux Innovateurs en Europe, Université de Paris I. Sorbonne) ), ‘reflexive economies’ and ‘competitive cities’ (Philo and Kearns 1994Philo C. and Kearns G. (Eds) (1994)Selling Places (Oxford, Pergamon Press) ), etc. At the same time, new organisational strategies have been identified, such as the ‘embedded’ firm )Grabher 1993Grabher, G. (Ed.) (1993) The Embedded Firm: On the Socioeconomics of Industrial Networks (London, Routledge) ), vertical disintegration )Scott 1988Scott A (1988) New Industrial Spaces(London, Pion) ), strategic alliances and so forth. Similar processes can be identified in the service sector )Moulaert and Djellal 1990Moulaert F Djellal F (1990) ‘Les Firmes de Conseil en Technologie de l’Information: Des Economies d’Agglomération en Réseaux’ paper presented at the conference on ‘Métropôles en Déséquilibre’, Lyons, 22–23 November ).

Surely, such territorial production systems are articulated with national, supra‐national and global networks. In fact, intensifying competition on an expanding scale is paralleled exactly by the emergence of locally/regionally sensitive production milieux. Yet, these localised or regionalised production complexes are organisationally and, in terms of trade and other networks, highly internationalised and globalised. The insertion of firms in a dense network of particular regional production milieux is part and parcel of a strategy of globalisation and global integration. In fact, the ‘forces of globalisation’ and the ‘demands of global competitiveness’ prove powerful vehicles for the economic elites to shape local conditions in their desired image: high productivity, low direct and indirect wages and an absentee state )Group of Lisbon 1994Group of Lisbon (1994) Grenzen aan de Concurrentie (Brussels, University of Brussels) ). Companies are simultaneously, intensely local and intensely global.

These ‘glocalising’ production processes and inter‐firm networks cannot be separated from ‘glocalising’ levels of governance. The rescaling of the regulation of wage and working conditions or the de‐nationalisation/privatisation of important companies and public services throughout Europe, for example, simultaneously opens up international competition and necessitates a greater sensitivity to subnational conditions. The bureaucratic regulation of the wage nexus at the scale of the national state )something that the labour movement struggled hard for throughout most of the 20th century) became more problematic as a significant part of the production system super‐nationalised. The globalisation of the firm and of the economy paralleled a decentralisation of the regulation of wage and other working conditions. The lowering of the scales of the regulation of work and of social reproduction coincided with an increasing scale in the organisation of the economy and the forces of production. This is just one of many possible examples of the growing separation between the networked scales of production and the territorial scales of regulating reproduction.

This internationalisation process also questioned traditional forms of oligopolistic competition and inter‐firm collaboration within states, which was increasingly replaced by global strong competition between ‘glocalising’ companies. The nesting and articulation of geographical scales becomes internalised in firm and inter‐firm networks that reach from the local to the global and back again. Surely, success in these matters is always fleeting and permanent restructuring and reorganisation are central to maintaining a competitive position in a world where boundaries are shattered )while new ones are created). This became particularly acute as a number of cities, regions and countries became increasingly less competitive and felt the sting of de‐industrialisation and crisis, while others prospered relatively.

Differentiation and fragmentation at all levels became the corollary of internationalisation, globalisation and the creeping imposition of a total)ising) commodity culture. As Debord argued a long time ago, the commodity as a heterogeneous and perpetually changing and expanding spectacle has attained the total occupation of social life )1970). The tensions between a set of decidedly local/regional cultures, the growing inter‐ and intra‐regional disparities and the fragmentation, pulverisation and proliferation of bodily, local, regional or national identities in a homogenising global cultural landscape and consumption norm prompted more intense resistance to the imposed cultural norms, which revolved increasingly around the tyranny of a spreading market‐Stalinism )Robertson 1995Robertson R (1995) ‘Glocalization: Time‐Space and Homogeneity–Heterogeneity’ in: M. Featherstone, S. Lash and R. Robertson (Eds)Global Modernities (London, Sage)[Crossref], [Google Scholar]).

Perhaps the most pervasive process of ‘glocalisation’ and redefinition of scales operates through the financial system )Swyngedouw 1996Swyngedouw E (1996b) ‘Producing Futures: International Finance as a Geographical Project’ in: P. Daniels and W. Lever (Eds) The Global Economy in Transition (Harlow, Longman) [Google Scholar]b). When the Bretton Woods agreement broke down in 1972 as a result of the tensions associated with differential territorial scalings of regulating money on the one hand and the expanding scale of production and trade on the other, the global financial order was shattered. In the interstices of this mosaic, new global–local arrangements, new money flows and new geographical configurations would emerge. As Jeelof )1989Jeelof, G. (1989). ‘Global Strategies of Philips’. European Management Journal, 7(1): pp. 84–91 [Google Scholar]) has already pointed out, the volatility in the money markets made production planning extremely risky and uncertain. The internationalisation of production and world planning of production chains and input/output flows, which characterised much of the post‐war international division of labour, became a high‐risk strategy. Different locations of production as well as sites of production and sites of commercialisation were located in different currency zones and subject to often rapid and dramatic relative exchange‐rate fluctuations. This made a shambles of long‐term corporate strategic location planning.

A new mosaic of uneven development emerged in which the financial sector itself, now liberated from the cocoon of fixed exchange rates, would itself become an key arena for capital accumulation and feverish expansion. The ‘liberalisation’ of the global financial system signalled the end of an integrated monetary world space and, consequently, reaffirmed a mosaic of different national moneys. Most currencies would fluctuate in relative value vis‐à‐vis each other, depending on the combination of national economic and monetary policies on the one hand and international money flows on the other. Attempts to regulate money at new supra‐national, subglobal )such as the successive attempts to stabilise currencies within the European Union) and geographical scale levels proved to be extremely difficult and rife with geostrategic tensions and inter‐state rivalries. Of course, national monetary and economic policies matter, but in ways that are profoundly different from the mechanisms that operated during the Bretton Woods era. In particular, monetary policy began to figure as a key vehicle in economic growth policies as Keynesian domestic demand‐based expansion policies began to give way to strategies aimed at expanding international trade and at achieving an improved competitive position in the global market place )Drache and Gertler 1991Drache, M. and Gertler, M. (Eds)(1991) The New Era of Global Competition (Montreal, McGill–Queen’s University Press) ).

More importantly perhaps, the liberated money markets and the volatility of the international money markets created a new market environment. Buying and selling currencies and speculating on exchange rate fluctuations allowed for the development and rapid growth of a speculative foreign exchange )Forex) and, from the mid‐1980s, a burgeoning derivatives market )see Swyngedouw 1996Swyngedouw E (1996b) ‘Producing Futures: International Finance as a Geographical Project’ in: P. Daniels and W. Lever (Eds) The Global Economy in Transition (Harlow, Longman) [Google Scholar]b). Interestingly enough, making money by buying and selling money and speculating on future currency values )however near this future may be) became a prime vehicle for accumulation. Money as expressions of value‐in‐motion and capital as claims to future )labour) time established an arena for frenzied financial activities. Speculating on future values and the buying‐of‐time proceeded through the creation of new spaces and spatial relations. For example, the Forex market grew from a modest US$15 billion in 1970, when most deals were directly related to settling trade, to well over US$2 trillion today.

The bulk is driven by constant hedging, arbitrage and speculative position‐taking in the international financial markets, which are organised as extensive networks of nodal points and inter‐nodal flows. Almost all deals involve spatial transfers of money as well as changes in the relative positions of a state’s currency values )which, in turn, influence interest rates, buying capacity, competitive positions, trade flows, monetary and fiscal policy and so forth). This volatility enables speculative gain, while the flows of money further contribute to reaffirming these fluctuations. The bumpy history of the European Monetary Union, for example, illustrates how the confrontation of national demands and global financial integration and strategies result in perpetual tensions and continuous friction )Gros and Thygesen 1992Gros D Thygesen N (1992) European Monetary Integration: From the European Monetary System towards Monetary Union (London, Longman) ; Leyshon and Thrift 1992Leyshon, A and Thrift, N. (1992). ‘Liberalisation and Consolidation: The Single European Market and the Remaking of the European Financial Capital’. Environment and Planning A, 24(1): pp. 49–81[Web of Science ®], [Google Scholar]). The hotly contested implementation and adoption of the euro is an example of how a particular politics of scale is inserted in this emerging new scalar gestalt of money.

The Rescaling of the State and Other Institutional Forms

What seems to be of great importance in this context of a glocalising economy, culture and politics is the changing position of the scale of the state. While this was although by no means the only pivotal scale for the regulation and contestation of a whole series of socioeconomic and class practices in the post‐war period, the relative position and importance of the state are shifting in decisive ways. In a context in which the capital/labour nexus was nationally regulated while the circulation of capital spiralled out to encompass ever larger spatial scales, there was a concerted attempt to make the ‘market imperative’ the ideologically and politically hegemonic legitimisation of institutional reform. This took shape through a variety of processes that combined )1) the ‘hollowing out’ of the national state with )2) more authoritarian and often softly but sometimes openly repressive political regimes. Let us consider just a few of these key rescaling processes and identify the shifting power geometry associated with this ‘glocalisation’ of the state or other institutional or regulatory forms.

First, the regulation of capital/labour relations tended to devolve from some kind of national collective bargaining to highly localised forms of negotiating wages and working conditions. The UK, for example, has moved a long way towards this and continuous pressure is exercised to make unions and workers accept ‘local’ pay deals. Similar movements have been documented elsewhere )see Cox and Mair 1991Cox, K and Mair, A. (1991). ‘From Localised Social Structures to Localities as Agents’. Environment and Planning A, 23(2): pp. 197–213[Web of Science ®], [Google Scholar]; Ohmae 1995Ohmae K (1995) The End of the Nation State—The Rise of Regional Economies(London, HarperCollins) ), but, depending on particular political configurations, resistance to these movements toward downscaling has been more successful in some countries, such as Sweden and Germany, than in others. Second, the ‘Schumpeterian Workfare State’ )see Jessop 1993Jessop, B. (1993b). ‘Towards a Schumpetarian Workfare State? Preliminary Remarks on Post‐Fordist Political Economy’. Studies in Political Economy, 40(1): pp. 7–39 [Google Scholar]b; 1994Jessop B (1994b) ‘The Transition to Post‐Fordism and the Schumpeterian Workfare State’ in: R. Burrows and B. Loader (Eds)Towards a Post‐Fordist Welfare State?(London, Routledge)[Crossref], [Google Scholar]b; Peck and Jones 1994Peck, J and Jones, M. (1994). ‘Training and Enterprise Councils: Schumpeterian Workfare State or What?’. Environment and Planning A, 27(9): pp. 1361–96[Web of Science ®], [Google Scholar]) has either abolished a series of institutionalised regulatory procedures to leave them organised by the market )Christopherson 1992Christopherson S (1992) ‘How the State and Market Are Remaking the Landscape of Inequality’mimeographed paper, Department of City and Regional Planning, Cornell University, Ithaca, NY ) and, consequently, by the power of money. Alternatively, they are replaced by more local )‘local’ can take a variety of spatial scale forms from local constituencies or cities to entire regions [or a combination of them]) institutional and regulatory forms. Needless to say, this ‘jumping of scales’ alters relative power positions as inter‐local cooperation is replaced by inter‐local competition. This increases the power of those that can ‘jump scales’ vertically or horizontally at the expense of those whose command of scale is more limited. Third, the restructuring of and often outright attack on national welfare regimes equally leads to a downscaling )in size and space) of public money transfers, while privatisation permits a socially exclusive form of protection, shielding the bodies of the powerful, while leaving the bodies of the poor to their own devices.

In short, the hollowing out of the welfare state rescales relations to the level of the individual body through powerful processes of social, cultural, economic or ethnic exclusion. Fourth, the interventionism of the state in the economy is equally rescaled, either downwards to the level of the city or the region, where public/private partnerships shape an entrepreneurial practice and ideology needed to successfully engage in an intensified process of inter‐urban competition )Harvey 1989Harvey, D. (1989). ‘From Managerialism to Entrepreneuralism: The Transformation in Urban Governance in Late Capitalism’. Geographiska Annaler Series B, 71B(1): pp. 3–18 [Google Scholar]) or upwards to supra‐ or trans‐national scales. The latter is manifested in albeit highly contested and still rather limited attempts to create a super‐national form of governance )such as, for example, the European Union). In a different sort of way institutions such as NAFTA )North American Free Trade Association), GATT )General Agreement on Tariffs and Trade) and others provide testimony to similar processes of upscaling the form of governing. Furthermore, a host of informal global or quasi‐global political arenas have been formed. The Organisation of Petroleum‐Exporting Countries )OPEC) may have been among the first and most publicised quasi‐state organisations, but other examples abound: the G–7 meetings, the Group of 77, the Club of Paris and other ‘informal’ gatherings of ‘world’ leaders attempt to regulate )parts of) the global political economy. Of course, the competitive rivalry among these ‘partners’ prevent some form of effective cooperation that could otherwise ultimately lead to some frightening form of a global authoritarian state‐form.

Fifth, in addition to the socially deeply uneven, socio‐spatially polarising and selectively disempowering effects of the ‘jumping of scales’ that exemplifies this ‘glocalisation’ of the state or of other forms of governance, this rescaling of governance often takes place through disturbingly undemocratic procedures by an increasingly authoritarian governing apparatus. The double rearticulation of political scales )downward to the regional/local level; upward to the EU, NAFTA, GATT, etc.; and outward to private capital) leads to political exclusion, a narrowing of democratic control and, consequently, a redefinition )or rather a limitation) of citizenship. In short, the ‘glocalisation’ or territorial rescaling of institutional forms leads to more autocratic, undemocratic and authoritarian )quasi‐)state apparatuses )Swyngedouw 1996Swyngedouw, E. (1996a). ‘Reconstructing Citizenship, the Re‐scaling of the State and the New Authoritarianism: Closing the Belgian Mines’. Urban Studies, 33(8): 1499–521.[Crossref], [Web of Science ®], [Google Scholar]a; 2000Swyngedouw, E. (2000a). ‘Authoritarian Governance, Power and the Politics of Rescaling’. Environment and Planning D: Society and Space, 18(1): pp. 63–76[Web of Science ®], [Google Scholar]a; 2000Swyngedouw E (2000b) ‘Elite Power, Global Forces and the Political Economy of “Glocal” Development’in: G. Clark, M. Feldman and M. Gertler (Eds) Handbook of Economic Geography (Oxford, Oxford University Press) [Google Scholar]b).

In sum, although the degree of change and the depth of its impact are still contested, it is beyond doubt that the 19th/20th‐century political formations of articulating the state/civil‐society relationship through different forms of representative democracy, which vests power in hierarchically structured transcendental state‐forms, is complemented by a proliferating number of new institutional forms of governing that exhibit rather different characteristics )Baiocchi 2001Baiocchi, G. (2001). ‘Participation, Activism and Politics: The Porto Alegre Experiment and Deliberative Democratic Theory’. Politics and Society, 29(1): pp. 43–72[Web of Science ®], [Google Scholar]; Curtin 1999Curtin, D. (1999). ‘Transparancy and Political Participation in EU Governance: A Role for Civil Society?’. Cultural Values, 3(4): pp. 445–71 [Google Scholar]; Taylor 1999Taylor G (1999) State Regulation & the Politics of Public Service. The Case of the Water Industry (London and New York, Mansell) ). The traditional state‐form in liberal democracies is theoretically and practically articulated through forms of politics that legitimise state power by vesting it within the political gift of citizens. The new forms of governance exhibit a fundamentally different relationship between power and citizenship and, consequently, constitute a new form of governability )Swyngedouw et al. 2002Swyngedouw E Page B Kaïka M(2002) ‘Sustainability and Policy Innovation in a Multi‐level Context’in: P. Getimis, H. Heinelt, G. Kafkalas, R. Smith and E. Swyngedouw (Eds) Participatory Governance in Multi‐level Context: Concepts and Experience (Opladen, Germany, Leske & Budrich)[Crossref], [Google Scholar]).

Contrary to state‐based arrangements, which are hierarchical and top‐down command‐and‐control forms of setting rules and exercising power )but recognised as legitimate via socially agreed conventions of representation, delegation, accountability and control), governance systems are presumably based on horizontal, network and interactive relations between independent but interdependent actors that share a high degree of trust, despite internal conflict and oppositional agendas, within inclusive participatory institutional or organisational associations )Schmitter 2002Schmitter P (2002) ‘Participation in Governance Arrangements: Is There Any Reason to Expect It Will Achieve “Sustainable and Innovative Policies in a Multi‐level Context”?’ in: J.R. Grote and B. Gbikpi (Eds) Participatory Governance. Political and Societal Implications (Opladen, Germany, Leske & Budrich)[Crossref], [Google Scholar]). These are systems of negotiation and convenant that operate beyond the state, albeit not independently from the state. The participants in such forms of governance partake )or are allowed to partake) in these networked relational forms of decision making on the basis of the ‘stakes’ they hold with respect to the issues these forms of governance attempt to address )see Schmitter 2002Schmitter P (2002) ‘Participation in Governance Arrangements: Is There Any Reason to Expect It Will Achieve “Sustainable and Innovative Policies in a Multi‐level Context”?’ in: J.R. Grote and B. Gbikpi (Eds) Participatory Governance. Political and Societal Implications (Opladen, Germany, Leske & Budrich)[Crossref], [Google Scholar], 62–63). These new forms of governance fundamentally transform state/civil‐society relations )see Swyngedouw et al. 2002Swyngedouw E Page B Kaïka M(2002) ‘Sustainability and Policy Innovation in a Multi‐level Context’in: P. Getimis, H. Heinelt, G. Kafkalas, R. Smith and E. Swyngedouw (Eds) Participatory Governance in Multi‐level Context: Concepts and Experience (Opladen, Germany, Leske & Budrich)[Crossref], [Google Scholar]).