The Dictionary of Human Geography (135 page)

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neo-classical economics
A school of eco nomics defined by the study of rational economic choice and the price based optimal allocation of resources, using a body of ana lytically rigorous and mathematically sophisti cated theory and techniques. It is the school of economics, at least in Anglo America, ubiquitous, hegemonic and mainstream. The economist Roy Weintraub says, ?we are all neoclassicists now?. (NEW PARAGRAPH) Robbins (1932, p. 16) provided the iconic methodological definition of neo classicism: ?a science which studies human behaviour as a relationship between ends and scarce means which have alternative uses?. The origins of neo classicism are earlier, however, with the writings of a troika of late nineteenth century European economists: the Englishman Wil liam Stanley Jevons (1835 82), the Austrian Carl Menger (1840 1921) and the French man Leon Walras (1834 1910). Alfred Marshall (1842 1924), the first economist at Cambridge, codified, systematized and elab orated their works (including inventing supply and demand diagrams: see figure) in his enormously influential textbook Principles of economics (published in eight editions between 1890 and 1920). After the Second World War, the centre of neo classical economics crossed the Atlantic to the USA, taking its now famil iar abstract, mathematical form. A key influ ence was MIT?s Paul Samuelson (1915 ), the second winner of the Nobel Prize in econom ics (1970), and author of the canonical text of formal neo classical theory, Foundations of economic analysis (1947). (NEW PARAGRAPH) Neo classical economics is neither mono lithic nor static, but there are a number of core concerns that continually surface: (NEW PARAGRAPH) (1) The focus on rationaL economic choice, the belief that individuals have (NEW PARAGRAPH) both the mental agility and access to in formation to obtain the most for the least, and applying both to consumers who maximize utility, and producers who maximize profits. (NEW PARAGRAPH) A concern with determining conditions for equilibrium. Rational responses by producers and consumers to market sig nals produce equilibrium such that there is no incentive for any individual to change their decision: market equilib rium is the solution to the problem of individual maximization. (NEW PARAGRAPH) An emphasis on defining competitive market efficiency such that there is an optimal allocation of resources among competing uses. If not, there is competi tive market failure, requiring correction. (NEW PARAGRAPH) An assertion of the methodological sov ereignty of independent, rational individ uals, and who form the back stop of neo classical explanation. Everything institutions, firms, social classes is redu cible to the law of individual rational choice (methodologicalindividualism). (NEW PARAGRAPH) Criticisms of neo classical economics are endless. They include objections that neo classicism is nothing but an ideology, a sop for market capitalism; that the rational choice assumption is empirically false, logically in consistent and morally suspect; that equilib rium, with its assumption that time has stopped, holds at best in Heaven and never on Earth; that sociETY is always more than the sum of its rational agents (there is such a thing as society); and that the use of math ematics is primarily for internal sociological purposes and not for meeting scholarly ends (even Samuelson said that his intensive know ledge of mathematics made him feel like an Olympic trained athlete with no race to run). (NEW PARAGRAPH) Neo classical economics entered economic geography as part of the quantitative revo lution from the late 1950s, and also at the same time through an allied movement, rEGioNAL sciENcE (King, 1979). The central intellectual problem was to introduce space to a theoretical system that had never systemat ically included it. While economic geograph ers and regional scientists made attempts to do so via location theory, there always remained fundamental problems in couching neo classical competitive equilibrium models within an economy distributed over space (see space economy), because the spatial constitu tion of an economy inherently confers mono polistic advantage. Consequently, the core (NEW PARAGRAPH) Price (NEW PARAGRAPH) Quantity (NEW PARAGRAPH) neo-classical economics Supply and demand (NEW PARAGRAPH) neo classical postulate of competitive market efficiency is violated (see (3) above). This is yet another example of what Harvey (1985b, p. 142) identifies as the ?numbing effect? of space on the ?central propositions of any social theory?. In any case, economic geographers were never as mathematically astute as neo classical economists, nor did most of them share their penchant for ABsTrAcTioN and rig our. Consequently, the importation of neo classical theory was frequently half hearted, incomplete and prone to mistakes. From the late 1990s, there was a second wave attempt to link economic geography to neo classicism through the new economic geography, but this has been even more unsuccessful as meas ured by the degree of disciplinary acceptance than in the first go around. TB (NEW PARAGRAPH) Suggested reading (NEW PARAGRAPH) Robinson (1962). (NEW PARAGRAPH)
neo-geography
A term coined by a non geographer referring to the bespoke creation of maps using the internet, involving the shared use of mapping resources (such as Google Maps and geographical iNforMA TioN sYsTEMs) to which information is added. Those bespoke maps can incorporate a range of other materials to illustrate the character istics of individual places such as photo graphs. It is seen as part of a movement that is de professionalizing cartography and mak ing map construction feasible for a wide range of users. Such construction can involve the input of data from devices such as GLoBAL positioning systems allowing, for example, the real time mapping of journeys and track ing of movements. rj (NEW PARAGRAPH) Suggested reading (NEW PARAGRAPH) Turner (2006). See also http://platial.com/splash and http://neogeography.net/
neo-liberalism
A doctrine, loosely con ceived, that argues for the desirability of a society organized around self regulating markets, and free, to the extent possible, from social and political intervention (Cypher and Dietz, 1997, pp. 222 32). The term came into prominence in the 1980s, especially in LATIN america, where it referred to agendas imposed by leaders such as Chilean dictator Augusto Pinochet who, with backing from US trained economists, opened the economy to foreign investors while pushing economic deregulation and privatization of state enterprises and to the forms of restructuring promoted under Margaret Thatcher in the UK and Ronald Reagan in the USA (Harvey, 2005, pp. 7 9). The US government, along with the international MoNETARy fund (IMF), the World Bank and the world trade organiza tion (WTO), has aggressively promoted the policies associated with neo liberalism; and with the collapse of socialist and communist projects since the 1980s, US leaders asserted broad agreement over neo liberalism under the heading of ?the Washington Consensus?. Notwithstanding this geographical locus, neo liberal policies have gained adherents around the world (Toye, 1987). (NEW PARAGRAPH) Neo liberalism can be analysed in various ways, including as a set of theoretical proposi tions, as a variety of actual practices and as a manifestation of specific social interests. As a set of theoretical propositions, neo liberalism is to its advocates an update of basic ideas about economic and social life that the clas sical liberal theorists of the eighteenth and nineteenth centuries put forward (see liberal isM). Neo liberals cite favourably Adam Smith?s contentions about the capacity of markets to regulate themselves and to pro duce greater social prosperity than mercantil ism (Smith, 1976 [1776]), as well as David Ricardo?s arguments for the greater aggregate prosperity that trade specialization can pro duce, based upon comparative advantage and minimal tariff barriers (Ricardo, 1992). Theorists such as Friederich von Hayek and Milton Friedman (Friedman, 2002 [1962]; Hayek, 1981) reworked these ideas and used them to argue against a range of Keynesian economic policies especially social welfare and counter cyclical government spending policies that had become prominent in West ern countries since the Great Depression of the 1930s. Their arguments, however, did not gain substantial support in governing cir cles until the 1970s, when some of them came to be advertised as part of the theoretical basis for the policies of the New Right (Harvey, 2005, pp. 19 31). (NEW PARAGRAPH) As policy, many neo liberal practices differ from the theories (Peck and Tickell, 2002; Harvey, 2005, pp. 70 81). While neo liberals have argued the virtues of minimalist or ?night watchman? states, the states that have most aggressively promoted neo liberalism have often been far from non interventionist. Pinochet?s military dictatorship provided a model that was to be replicated in many other developing countries undergoing IMF mandated structural adjustment policies, imposing specific forms of economic liberal ization through a strong state that engaged in political repression. Similarly, neo liberal re forms in China have been accomplished under a one party state that exercises strict control over various aspects of social and economic life. Moreover, actual neo liberal economic measures have typically been selective and uneven. (NEW PARAGRAPH) Contradictions between theoretical proposi tions and actual practice lead some commenta tors to argue that neo liberalism is best seen not as a fully coherent doctrine, consistently ap plied, but as a reflection of the cLAss interests of particular capitalists and their allies (Dume nil and Levy, 2004; Harvey, 2005). In this view, the global economic downturn in the 1960s and 1970s led the most internationally mobile groups of investors especially those involved in international finance to begin attacking state policies that were seen as hindering cap ital mobility and reducing profit rates. Through both reinvesting capital abroad and advertising the allegedly undesirable effects of regulations on capital mobility, these investors attempted to restore profitability by driving down wages and production costs in core areas of the global economy, selectively making use of lower wages, production costs and emerging markets in countries of the global south. (NEW PARAGRAPH) These efforts to restore profitability through neo liberal globalization have been partially successful, but they have also generated various forms of backlash. First, the attacks on state programmes that enhance social wel fare have generated responses from popular forces that see neo liberalism as antithetical to improved life chances for the least privil eged members of society (Harvey, 2003b, pp. 137 82; Harvey, 2005, pp. 198 206). Second, neo liberalism has come under in creasing attack from within the ranks of the elite after Washington Consensus policies were seen to have been inappropriately applied during the Asian economic crisis of 1997 8 (Stiglitz, 2002, pp. 89 132). Third, the rise of neo conservatives to power in Washington since 2000 has generated new contradictions, since many supporters of neo conservatism claim in principle to favour free trade while openly calling for high tariff barriers and other forms of protection for national indus tries threatened by foreign competition (Harvey, 2005, pp. 81 6). (NEW PARAGRAPH) The purported hegemony of US led global neo liberalism the neo liberal grand slam as one commentator put it came crashing to a halt in late 2008 with the failure of a number of major US investment banks, the bankruptcy of a number of insurance houses, the discrediting of the credit rating agencies and the Security and Exchange Commission (purportedly or ganizations designed to regulate financial insti tutions) and a $700 billion bailout by the outgoing Bush administration. While triggered by a US housing bubble and a crisis in the mortgage industry, the crisis quickly became global in scope. It remains unclear whether massive infusions from central banks will un freeze the credit sector, and most commenta tors expect the world economy to enter into a deep recession comparable perhaps to that of the 1930s. The high tide of neo liberalism has passed, and many of the G8 countries now openly talk of the need for Keynesianism and more government regulation. jgl (NEW PARAGRAPH) Suggested reading (NEW PARAGRAPH) Cypher and Dietz (1997); Dumenil and Levy (2004); Friedman (2002 [1962]); Harvey (2003b, 2005); Hayek (1981); Peck and Tickell (NEW PARAGRAPH) ; Ricardo (1992); Smith (1976 [1776]); Stiglitz (2002); Toye (1987). (NEW PARAGRAPH)
neo-Ricardian economics
A modern school of economics that draws upon and reworks the ideas of the English classical economist David Ricardo (1772 1823). The founding text is a slim monograph by an Italian economist at Cambridge University, Piero Sraffa (1898 1983), The production of commodities by means of commodities (1960). Sraffa?s model of the economy consists of two components: (NEW PARAGRAPH) Production is conceived as circular and interdependent where the output in one production period is used as an input for the next production period. (NEW PARAGRAPH) When outputs exceed inputs, a ??sur plus?? exists that forms the basis of the social conditions of income distribution. (NEW PARAGRAPH) Sraffa subtitled his book Prelude to a critique of economic theory. Although he did not engage in the critique himself, his model has provided the basis for subsequent criticisms of both neo cLassicaL economics and marxist eco nomics. These were first taken up in the ?cap ital controversy?, where the neo classical theory of profit (profit is the marginal product of capital) was shown to be logically unten able, and later in the ?value controversy?, where the Marxist Labour theory of vaLue was shown to be redundant in calculating prices. A number of economic geographers have elaborated Sraffa?s work since Scott?s (1976b) pioneering paper linking SUraffa?s model of production with von thunen?s the ory of agricultural rent. But the formal, min imalist style of Neo Ricardianism is out of synch with the more expansive, empirically grounded, and less formal economic geog raphy of today, and connections have been few, and even more rarely taken further. tb (NEW PARAGRAPH) Suggested reading (NEW PARAGRAPH) Sheppard and Barnes (1990). (NEW PARAGRAPH)
network society
A term coined by Manuel Castells (1996b, 1997, 1998) in an influential trilogy of books to describe globalizing soci eties dominated by accelerated economic, cultural and social fLows, mediated predom inantly by information technologies (see also gLobaLization). The trilogy explored the growth of networked enterprises, global pro cesses of sociaL excLusion and the changing nature of time and space, identity and state formation. Its key argument was that network societies are dominated by a separation of the space of flows the globalized and accelerated domains that are orchestrated through new information and communications technolo gies from the space of places geographically confined sources of individual and collective identity. sg (NEW PARAGRAPH) Suggested reading (NEW PARAGRAPH) Castells (1996b). (NEW PARAGRAPH)

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