Can CCI Learn Anything from Marxist Urbanists?

Are all acronyms sinister? Are some acronyms more sinister than others?

The Chinese Communist Party (CCP) needs no introduction and its protégé Tiktok is currently under global investigation.

The Communist Party of Indonesia (PKI) was a less successful cousin of the CCP but had its own share of shadowy international subversion.

The Communist International (CI), better known as Comintern, was established in 1919 by the fledgling Communist Party of the USSR and aspired to ferment the world communist revolution.

The Charter Cities Institute (CCI) was established in 2017 to promote a global revolution in urban governance.

We can easily imagine a sweaty-faced, Senator Joseph McCarthy asking, “Are you now, or have you ever been a member of CCI?”

Whilst sounding suitably and equally sinister does CCI really have anything more in common with the CCP, the PKI, and the CI when it comes to thinking about the social and economic change involved in urbanization? This blog focuses on those writing and researching about cities using a Marxist lens for analysis, and superficially asks, can CCI learn anything from Marxist Urbanists?

At first blush, it would seem a ludicrous question. A simple model of political space, running from Communism on the far left to fascism on the furthest right extreme, would suggest CCI to be far removed from any tingling temptations of Marxism. CCI believes in markets, foreign investment, and the private sector. Check their reading list: they offer the voracious peruser ample literary opportunities in Techno-Libertarianism or Georgist-Libertarianism. No evidence here that CCI worries about the machinations of capitalists, the exploitation of workers, and the nationalization of the means of production.

Such a model of politics is more naïve than illuminating. It is both libertarians and communists who believe the state should wither away, whilst socialists and fascists advocate for a strong state able to actively promote social change.

At the core of CCI’s message is ‘urban optimism’: well-managed urbanization, they cheer, is good for economic growth and human well-being, especially when it involves firms and workers migrating from rural areas. Karl Marx and Friedrich Engels in The Communist Manifesto proclaimed the same sentiment with more liberated rhetorical gusto.

The bourgeoisie has subjected the country to the rule of the towns. It has created enormous cities, has greatly increased the urban population as compared with the rural, and has thus rescued a considerable part of the population from the idiocy of rural life.

Friedrich Engels had already anticipated in the 1840s in his book about workers in Manchester (see below) the economic benefits of cities that non-Marxist economists (especially the work of Alfred Marshall on agglomeration externalities in the 1880s) only re-discovered decades later.

The greater the town the greater its advantages. It offers roads, railroads, canals; the choice of skilled labour increases constantly, new establishments can be built more cheaply because of the competition among builders and machinists who are at hand, than in remote country districts, whither timber, machinery, builders, and operatives must be brought, it offers a market to which buyers crowd, and direct communication with the markets supplying raw material or demanding finished goods. Hence the marvelously rapid growth of the great manufacturing towns.

Clearly, the matter is a bit more complicated than the above naïve linear model would suggest. The question clearly deserves a more thorough investigation, to which end I selected texts from the two most noted Marxist Urbanists to learn more, namely Friedrich Engels and Mike Davis.

Friedrich Engels (1820 to 1895), as the son of a German factory owner, was provided with the opportunity to both witness nineteenth capitalism firsthand and to live comfortably from its profits. Engels, a philosopher, and self-proclaimed communist, was the closest collaborator of Karl Marx; together they wrote The Communist Manifesto in 1848. Engels was based in England between 1842 and 1844, first working in one of his father’s Manchester factories, then turning to radical journalism and the investigation of the conditions of the urban working class. The resulting text from his investigations was The Condition of the Working Class in England, which was published in Germany in 1845 (but not until 1887 in England). His modern publishers describe the book:

this forceful polemic explores the staggering human cost of the Industrial Revolution in Victorian England. Engels paints an unforgettable picture of daily life in the new industrial towns, and for miners and agricultural workers–depicting overcrowded housing, abject poverty, child labour, sexual exploitation, dirt and drunkenness–in a savage indictment of the greed of the bourgeoisie.

Though written when Engels was only 24, the reputation of the book has endured, it is still regarded as a

masterpiece of committed reporting and an impassioned call to arms… one of the great pioneering works of social history.

While Engels had family connections that compelled him into sober business, Mike Davis (1946-2022) – writer, activist, historian, and urban theorist – had a dissipated youth that involved drag racing, copious alcohol consumption, and bullfighting classes, from which combination he acquired a rather long and jaunty scar on his left leg. Davis acquired his radicalism from a fellow cook during a stint at a Chicken Shack restaurant and, especially after participating in a 1962 demonstration organized by the Congress of Racial Equality (CORE). Despite the nearly 160-year gap between the two books, The Planet of Slums, published in 2005 by self-identified Marxist Mike Davis, covers nearly identical ideas to Engels, though, with a much greater geographical sweep. As his publishers describe: 

According to the United Nations, more than one billion people now live in the slums of the cities of the South. In this brilliant and ambitious book, Mike Davis explores the future of a radically unequal and explosively unstable urban world. From the sprawling barricades of Lima to the garbage hills of Manila, urbanization has been disconnected from industrialization, and even from economic growth.

Likewise, the reputation of the book has endured and transcended existing capitalist-critical audiences. The UK-based (and traditionally conservative, pro-business) newspaper, the Financial Times, described the book:

The astonishing facts hit like anvil blows … Davis has produced a heartbreaking book that hammers the reader a little further into the ground with the blow of each new and shocking statistic.

Inevitable Urbanization

Many commentators talk about urbanization as though it is a policy choice, adjusting a few policy levers here and there could promote an alternative, such as small-holder agriculture, secondary cities, small towns, or self-contained urban villages. CCI don’t agree¹, they see urbanization as an inevitable process. Urbanization will happen and we need to engage with it, and while productive or sustainable urbanization can be influenced by economic policy, the fact of urbanization is not a policy choice.

The world is projected to add 2.5 billion more urban residents by 2050. Much of this growth will be concentrated in the Global South, but many of these cities and governments struggle to meet the challenges posed by this rapid urbanization.

Davis agrees completely. Cities he argues will “account for virtually all future population growth” for the remainder of the twenty-first century. This urbanization will be characterized by the burgeoning numbers of million plus populated cities (from 86 in 1950 to 400 in 2004), the rise of megacities (8million plus residents each), hyper-cities (20million plus residents each), and urban industrial megalopolises such the Pearl River Delta in China (comprising Hong Kong and Guangzhou) or Tokyo-Osaka region in Japan. Those historical impediments to urbanization – such as the European colonization of Africa which restricted urban migration to keep cities white and European, the most extreme version of which was South African apartheid, or the utopian communist rural experiments which sent urbanites back to rural areas, such as the Cultural Revolution in 1960s Maoist China and Year Zero in 1973 Cambodia – have been swept away by the tides of history.

CCI and the Marxist Urbanists are in complete agreement, urbanization is unleashed and here to stay.

Labor as Exploitation

 
For CCI, the crucial mediating force between economic growth, investment and poverty reduction is the creation of employment: “more jobs” will “improve the livelihoods of residents”.

Here we run up against a very different tradition among the Marxist Urbanists, for Marx all labor was founded upon exploitation, in his aptly named The Revolutionary Ideas of Karl Marx, Alex Callinicos explains this contention. The worker sells the capitalist his/her labor power in exchange for wages, labor then becomes a commodity to be bought and sold. Competition between workers and the presence of a reserve army of unemployed labor keep wages at subsistence level (known among Marxists as the ‘iron law of wages’). Capitalists extract a surplus from workers measured as that part of the working day when workers are producing output to a value beyond their own subsistence-level wage. This is the’ surplus’ which is derived from the exploitation of workers by capitalists. For Engels the nostrum that employment under capitalism is exploitation is self-evident; the ‘choice’ of employment is no choice at all. For Engels a worker has

no other choice than that of accepting the conditions which the bourgeoisie offers him, or of starving, or freezing to death.

For Engels, the rural to urban migration of the industrial revolution and the resulting opportunity to ‘choose’ employers from a multitude of factories did not alter the essential element of exploitation intrinsic to capitalism:

The only difference as compared with the old, outspoken slavery is this, that the worker of today seems to be free because he is not sold once for all, but piecemeal by the day, the week, the year, and because no one owner sells him to another, but he is forced to sell himself in this way instead, being the slave of no particular person, but of the whole property-owning class.

While CCI laud competition as a twin spur whereby workers compete amongst themselves for jobs and factories compete to hire the most productive workers, for Engels competition only works to the detriment of workers:

This competition of the workers amongst themselves is the worst side of the present state of things in its effect upon the worker, the sharpest weapon against the proletariat in the hands of the bourgeoisie.

Here CCI and the Marxist urbanists are never going to agree. Instead of obsessing about the philosophical nature of employment under capitalism (the freedom to choose vs exploitation) a more fruitful focus is to think about the conditions under which urbanization is most likely to boost the employment, productivity, and wages of poor rural migrants.

Cities are miserable

 
CCI are urban optimists in the sense that good urbanization will offer a better alternative than rural employment at a moment in time, which is why people vote with their feet – they migrate from rural to urban areas in search of employment – the lure of the urban. Good institutions argue CCI can ensure cities create more jobs in factories and offices, and tighten so tighten the link between urbanization and economic growth.

Engels by contrast is an urban miserable-ist. The overwhelming theme of his narrative is that cities are miserable places in which to live and work. The streets are miserable, “generally unpaved, rough, dirty, filled with vegetable and animal refuse, without sewers or gutters, but supplied with foul, stagnant pools instead.” The toilets are miserable, and “so rare here that they are either filled up every day, or are too remote for most of the inhabitants to use.”. The houses are miserable, and “no cleanliness, no convenience and consequently no comfortable family life is possible”.

While the optimists might mutter about having one’s cake AND eating it², for miserable Marxist urbanists like Davis, the only thing worse than being exploited in factory employment is not being exploited at all. For Davis, 160 years later, cities – and in particular the slums that dominate them – are still miserable places, but it is the loss of formal sector industrial employment in cities such as Mumbai, Johannesburg, Buenos Aires, and Sao Paulo that created the “locust years” of misery in the 1980s and 1990s for urban workers. In the extreme, he notes, during these decades, in countries like Tanzania, Cote D’Ivoire, and the Congo, while their economies were contracting by 2-5% p.a., urbanization was still growing at 4-8% p.a.

Engels has been justly derided over the decades for his faintly ludicrous notes on the rural idylls that prevailed before rude industrial-urbanization ripped up merry olde village England. Prior to the industrial revolution, the weaver, Engels claims, sat in villages “leading a righteous and peaceful life in all piety and probity” and their “material position was far better than that of their successors.” They were “good husbands and fathers” and “led moral lives because they had no temptation to be immoral, there being no gin palaces or low houses in their vicinity.” Such happy weavers “went regularly to church, never talked politic” and “lived in idyllic simplicity and intimacy with their playmates until they married”. Ok, not just faintly ludicrous, completely ludicrous: in 1765, prior to the industrial revolution, life expectancy in Britain was under 39 years.

While CCI is correct that people are voting with their feet for a better (urban) life, a lesson here is to be more circumspect about the perhaps naïve assumption that migration decisions are always based on the pull factor – the lure of a better life in the urban economy. Davis instead argues that much urbanization is driven by a push factor; rural life deteriorates because capital intensive agriculture displaces farm workers from employment or a reduction in government subsidies or investment in the rural economy makes farming less viable. If people are pushed into urban migration because of deteriorating rural livelihoods, there can be no presumption that lives are getting better over time as a consequence of that migration.

Cities and Immiseration

CCI are urban optimists, not just in the sense that good urbanization will offer a better alternative than rural employment at a moment in time, but that life in cities tends to get better over time. This is the self-proclaimed mission of CCI: to get governance and institutions right, which are the “key factors for long-term economic development and major determinants of a country’s standard of living.” Once accomplished, improved governance represents “one of the most effective ways to lift people out of poverty” because subsequent urban growth will “improve the livelihoods of residents.”

For Marxist urbanists, there is no upward trajectory of prosperity and cities funnel workers into a path of increasing misery over time, immiseration. The optimism about rural to urban migration for the migrant can be usefully supplemented by the lessons from the Marxist urbanists about the impact of this migration on the existing residents. For Engels, the influx of impoverished migrants from Ireland, accustomed to very low subsistence incomes, allowed factory owners, through the forces of competition to “now (make) the English workers acquainted with it” such that the “whole character of the working class assimilates a great part of the Irish characteristics.”  While migration may be beneficial for an individual migrant, migration in the aggregate is a means for capitalists to keep wages at subsistence level through the forces of competition in the labor market.

For Engels, the narrative of urbanization is about gradual decay. His description of the town of Ashton describes cottages that are disintegrating over time, with “walls cracking” and the ambience acquiring a “dirty smoke-begrimed aspect.” Davis echoes these sentiments; he notes that the favelas (slums) of Sao Paulo were home to 1.2% of the population in 1973 and almost 20% by 1993, and that those slums were characterized by “dilapidated housing, disease, poverty, vice, and overcrowding.”

There is a real lesson for CCI here: while CCI accept that bad governance and bad institutions can lead to dysfunctional urbanization, they are too ready to accept that good governance and good institutions leads to welfare enhancing urbanization for all.

Slums – created by capitalism

 
For CCI slums are an aberration of free markets, bad capitalism creates bad housing.

By creating public goods and enabling an environment for markets to function effectively, charter cities can introduce broad-based economic growth that reaches all segments of the population. Low-quality public services and overbearing regulation are extremely regressive, inflicting substantial time and pecuniary cost on the lowest-income segment of the population, while also subjecting this group to perpetual informality.

CCI argue that urbanization in the absence of good governance, “leads to continued slum growth and poverty, poor living conditions, and limited job potential for city residents.”

For Marxist Urbanists slums are a product of raw capitalism. According to Engels, the Manchester slums he was studying were the location where the “manufacturing proletariat presents itself in its fullest classic perfection.”

Slums are not an aberration according to Engels but the inevitable consequence of capitalist urbanization, slums emerge because slums are profitable to build,

wherever a nook or corner was free, a house has been run up; where a superfluous passage remained, it has been built up; the value of land rose with the blossoming out of manufacture, and the more it rose, the more madly was the work of building up carried on.

And again, Engles notes that the “wretched, damp, filthy cottages” were in the most “miserable and filthy condition” and built “solely to the profit secured by the contractor.”

Davis focuses not on the launch of the industrial revolution, but on the 1980s and 1990s when governments across the world endeavored to re-invigorate their economies through market-oriented reform. Much of this reform was engendered through structural adjustment loans from the IMF and World Bank in return for those market-oriented reforms. Davis focuses on policy, but agrees with Engels on the problem of slums and urban immiseration, concluding that these were the “years when slums became an implacable future not just for poor rural migrants, but also for millions of traditional urbanites displaced or immiserated by the violence of adjustment.” Reductions in food subsidies, in state employment, in efforts to increase cost-recovery from public health and education, and the unleashing of markets, led to the “creation of a huge global class of immiserated semi-peasants and farm laborers lacking existential security of subsistence.” Market reform for Davis was re-creating the world that Engels had been so bitterly critical of.

For example, Davis writes of the slum of Ciudad Nezahualcoyotl that had 10,000 residents in 1957 and by the early 2000s, it was a poor suburb of Mexico City with 3 million inhabitants. Similarly, he also mentions the Karachi hill slum of Orangi/Baldia, which was founded in 1965 then rapidly filled with refugees from India and Afghanistan. In cities in Ethiopia, Afghanistan, and Chad, when Davis was publishing, 99% of the population lived in slums. Freeing markets, argued Davis, unleashed the drive to build slums for profit. In Karachi slums were built in collaboration between politicians and bureaucrats, often by illegally sub-dividing land and houses to squeeze more people in – a practice which Davis calls ‘Slumlordism.’ Slumlordism argues Davis was widely practiced in Nairobi, which has essentially become “vast rent plantations owned by politicians and the upper middle classes”. In one Nairobi slum almost 60% of shacks were owned by politicians and civil servants, but it represented the most profitable housing in the city. Slums are no aberration argues Davia, but are a permanent, structural feature of cities. The 2 billion slumdwellers forecast for 2030 or 2040 he calls a “monstrous, almost incomprehensible prospect”.

CCI are perhaps too ready to assume that slums and their associated informality are the consequence of bad institutions. When slums offer the powerful lure of enormous profits, good institutions are not enough to provide a solution.

Is Investment a Good Thing?

This is perhaps a surprising question and one to which CCI give a very unsurprising answer. Good institutions argue CCI “will help create a competitive business environment, attract investment, foster entrepreneurship and create more jobs, manage rapid urbanization, improve infrastructure and accelerate economic growth in developing countries, and therefore, improve the livelihoods of residents.”  “Good institutions” require that “registering a business, investing in a business, resolving disputes, trading across borders, paying taxes, and other such activities should be free of overly burdensome regulations or compliance processes.” CCI are inveterate investment optimists. Good institutions are GOOD because they help boost investment, and investment is obviously a good thing!

For Engels, technology (and by one remove the investment that introduces it into production) is THE most important factor – he is a technology determinist. Engels provides an account of the technological innovations that pioneered the growth of the cotton-textile industry in and around Manchester. These included Hargreaves Spinning Jenny 1764, Arkwright’s Spinning Throstle 1767, Crompton’s Mule 1785, and Watt’s Steam Engine developed in 1764, and used to power spinning since 1785. As Engels argues, the “proletariat was called into existence by the introduction of machinery” and that machinery then transformed “tools into machines, workrooms into factories, and consequently the toiling middle class into the toiling proletariat.”  

But rather than follow the CCI-line that all investment is good, Engels is much more ambivalent; technology created in a capitalist economic system he argues is prone to benefiting the capitalists at the expense of the workers – no investment-led inclusive economic growth for Engels. From his view, technology drives the ever-increasing scale of production in farming and industry and so continually destroys the independent craftsman, small-farmer and small-business owner, hitherto counted as middle class, and turned them into impoverished proletariats. Prior to the industrial revolution, argues Engels, a working person was in a point of transition towards the middle class, but now for the “first time a permanent class of the population”. Engels is clear, that every “improvement in machinery throws workers out of employment, and the greater the advance, the more numerous the unemployed.”

Much contemporary thinking places particular value on the expansion of employment opportunities in the modern-factory setting for young women, connecting this phenomenon to increased individual and generational independence, empowerment, health, life expectancy and status, as well as reduced poverty for women and better survival chances for female children. Engels, ironically, is more conservative about the implications of employing women in factories. Whilst acknowledging that the process is driven by technological change that reduces the need for ‘physically strong’ male labor in preference to ‘physically dexterous’ female labour, Engels deplores the social implications of this change, arguing, the “last trace of the working man’s independence thus destroyed” and in all “directions the family is being dissolved by the labour of wife and children, or inverted by the husband’s being thrown out of employment and made dependent upon them for bread.”

CCI rightly disagree with the Victorian conservativism of Engels regarding women’s employment and see the charter city model as a liberating opportunity for women. CCI can be more nuanced about investment and ask, under what circumstances will the investment unleashed by good institutions generate benefits or costs for the poorest members of the population?

Cities, Disease, and Public Policy

CCI acknowledge that there can be severe health costs of dysfunctional urbanization, noting that “many of these cities and governments struggle to meet the challenges posed by this rapid urbanization, lacking critical infrastructure, jobs, and effective governance for economic development. This leads to continued slum growth and poverty, poor living conditions, and limited job potential for city residents.” These outcomes are not an intrinsic consequence of urbanization argue CCI, but specifically a consequence of urbanization that occurs in the context of poor institutions and bad governance. Improve governance and institutions and people in cities will flourish, particularly so when compared to rural areas. This accords with urban optimists more generally who note that public services (such as education, clean water, and health care) are much easier to provide in an urban setting than for a dispersed rural population.

For Engels the logic is clear, technology drives industrial-urbanization with atrocious working conditions; capitalism creates slums, and slums lead to poor living conditions. Together the twin horrors of working and living conditions mean that urbanization is associated with poor health outcomes. Engels provides a litany of the disease and deformity associated with Victorian urbanization: scrofula, smallpox, measles, scarlet fever, whooping cough, and the machinery-induced loss of fingers. Davis is in full accord. Davis records the spectacular health disasters such as the chemical explosion in Kolneg Toey Bangkok that killed hundreds in 1989 and the 1985 chemical leak at the Union Carbide plant in Bhopal, India, that ultimately killed more than 15,000 people. Davis also argues that the health consequences of capitalism and urbanization are an insidious and permanent structural feature, not a consequence of single disasters. Disease, argues Davis, is caused by the “interaction of poverty with toxic industries, anarchic traffic, collapsing infrastructure” Disease resulting from poor sanitation, such as diarrhea, enteritis, colitis, typhoid, and paratyphoid, are notes Davis, the leading cause of death in the world. The Laini slum in Kibera had ten working pit latrines for 40,000 people and in the 1980s privatized toilets had become a “gold mine of profitability”. In Luanda, Namibia, the poorest households were forced to spend 15% of their incomes on water supplied by private companies, that was merely pumped from the nearly and heavily polluted Bengo river.

Ever the moralist, Engels blames urban-industrialization for social ills, blaming drunkenness on the horror of the working environment:  

Drunkenness has here ceased to be a vice, for which the vicious can be held responsible; it becomes a phenomenon, the necessary inevitable effect of certain conditions upon an object possessed of no volition in relation to these conditions.

CCI focus on the role that good governance and good institutions can play in promoting investment and so turning dysfunctional urbanization around, and boosting economic and employment growth. CCI do need to learn here from Marxist urbanists and think more about how good institutions and good governance can better utilize the opportunities of urbanization to provide better public services.

To conclude….

Politics is more complicated than a straight line running from communism to fascism. An unwarranted conclusion from such naivety is that CCI, with its market-oriented inclinations can happily ignore its ideological nemesis – the Marxist urbanists. This blog does agree that the two approaches to urbanization are fundamentally different. CCI and Marxist urbanists are never going to agree about the nature of employment (choice vs exploitation) or the welfare benefits of urbanization (inclusive economic growth vs immiseration). But CCI should always remain open to thinking and learning from those it disagrees with. The Marxist urbanists do offer valuable points to inspire thinking. It is much easier to assume that welfare has improved when rural migrants are drawn to cities by the pull of urban employment opportunities than if migrants are pushed out of rural areas by the loss of livelihoods. Under what circumstances does the investment unleashed by good institutions benefit the poorest? Yes, bad institutions may drive much of the economy into the informal sector, but slums may still be profitable to build and rent even with good institutions. Cities may benefit business through agglomeration externalities but how can the implied opportunities of cities be best used to provide good public services?  On these questions, and many others, the market and Marxist urbanists may very well learn from one another.

¹ A quick readers note, the concept of charter cities is a broad school and offers a myriad of interpretations, across economics and politics. To simplify matters I am taking the CCI view as the formal presentation on the homepages of the Charter Cities Institute (CCI) website (https://chartercitiesinstitute.org/).

² An English origin expression, with due apologies to my American reader(s).