ECONOMY
Economic forces are regarded as the dominan influence on urban change. Since its emergence in the sixteenth capitalist economy has entered century, the three main phases. first from the late
The phase, sixteenth century until the late nineteenth century,was an era of competitive capitalism characterised by free-market competition between locally oriented businesses and laissa-faire economic (and urban)development largely unconstrained by governmentregulation. In the course of the nineteenth century the scale of business increased. consumer markets
expanded to become national and international, labour markets became more organised as wage-rate norms spread and government intervention in the economy grew in response to the need for regulation of public affairs. By the turn of the century these accumulated trends had culminated in the advent of organised capitalism. The dynamism of the economic system the basis of profitability was enhanced in the early i decades of the twentieth century by the introduction of Fordism. This economic philosophy was founded on the principles of mass production using assembly-line techniques and 'scientific" management (known as Taylorism), together with mass consumption fuelled by higher wages and high-pressure marketing tech-niques. Fordism also involved a generally mutually beneficial working relationship between capital (busi-ness) and labour (trade unions), mediated by govern-ment when necessary to maintain the health of the
national economy The third and current phase of capitalism developed in the period following the Second World War. It was marked by a shift away from industrial production towards services (particularly financial services) as the basis of profitability Paradoxically, the explanation for this shift lay in part with the very success of Fordism As mass markets became saturated, and profits from mass production declined, many enterprises turned to serve specialised "niche markets'. Instead of standard-ised specialisation required flexible pro-production, duction of capitalism is systems. This current phase referred to as advanced capitalism or disorganized capitalism (to distinguish it from the organised nature of the Fordist era). The transition to advanced capital-ism was accompanied by an increasing globalization of the economy in which transnational corporations (TNCs) operated often beyond the control of national governments or labour unions (see Chapter 14).The evolution of the capitalist economy is of funda-mental significance for urban geography, since each new phase of capitalism involved changes in
what was produced, how it was produced and where it was produced. This meant that new industrial spaces'(based, for example, on semiconductor production rather than shipbuilding) and new forms ofeiy (such as a technopole instead of a heavy industrial centre) were required.'