SASE’s Global Futures: Report from the Third Japanese Political Economy Workshop (October 2018)

In 2018, the Annual SASE Conference took place in Kyoto, Japan. This was the first major SASE conference to take place in Asia, representing a move on the part of SASE to increase the Society’s global reach. As part of SASE’s continuing effort to compose a truly global community of socio-economics research, one of our editors, Kostiantyn Ovsiannikov, reports back from the 3rd Japanese Political Economy Workshop. The workshop took place on 15 October 2018 at Musashi University, Japan, where Saskia Sassen was its keynote speaker.

The Japanese Political Economy Workshop: Some Background

The launch of the first Japanese Political Economy (JPE) Workshop in March 2018 was devoted to the rejuvenation of a journal of the same name, previously known as “Japanese Economic Studies” and later “Japanese Economy”, whose history dates to 1972. The first two JPE meetings featured one of the most renowned Japanese political economists, Makoto Itoh (Kokugakuin University, Tokyo, Japan), the new Editor-in-Chief Nobuharu Yokokawa (Musashi University, Japan), as well as the ‘eurosceptic’ economist Costas Lapavitsas (School of Oriental and African Studies, University of London, U.K.). These two workshops were mainly targeted at editors and patrons of the journal, in addition to young scholars interested in publishing their thematically appropriate research. These initial meetings mapped the scope of the project of reviving JPE, which is intended as “a resource for scholars, students, policymakers and practitioners who seek to better understand the contemporary and historical, transnational and internal processes of social and economic change in Japan, Asia and the world.” The third JPE Workshop, which took place on 15 October 2018, was quite different from the previous two. From a cozy gathering of committed supporters of the journal, it moved toward a format that involved a wider audience of professors and students working in various fields of socio-economics. It resonated with themes taken up at the recently held 66th Annual Conference of the Japan Society of Political Economy (JSPE), entitled “Transforming Capitalism and the Perspective of Political Economy”. Both the conference and the workshop featured lectures and discussions with Professor Saskia Sassen (Columbia University) – a world-famous scholar in the study of globalization and political economy.

3rd Meeting: Saskia Sassen on Urban Spaces as Cradles for Intermediation

The topic of Professor Sassen’s talk at the JPE Workshop was “The Global City: Enabling Economic Intermediation and Bearing its Costs.” The main argument of the lecture was that, against the general tendency of capitalist flows to deterritorialize, certain cities have increasingly gained renown as ‘knowledge hubs’ well-suited to a globalized economic environment. From the 1980s to the present, Professor Sassen has been closely observing the series of stunning changes to the urban and economic landscapes of what would eventually become Global Cities. “Global City,” as she uses the term, does not simply refer to a geographic entity: in her view, it is “a production function inserted in complex existing cities” (Sassen 2016: 97). In other words, in modern New York, London, Tokyo, Paris, Frankfurt, Zurich, Amsterdam, Los Angeles, Sydney, and Hong Kong, for instance, strong legacies of economic intermediation that constitutes these cities’ “global” dimension clashes with a variety of locally rooted communities (Sassen 2000).   

Importantly, for Sassen, the Global City function also has a tangible spatial dimension. One feature of the growing demand for high-profile small companies that offer business know-how in operating in various national environments across the globe has been a rapid concentration of urban property in the hands of a wealthy few. Acting in a mutually beneficial alliance with multinational corporations (MNCs), together they have woven a dense net of offices in urban downtowns. “One example is the acquisition of Atlantic Yards, a vast stretch of land in New York City, by one of the largest Chinese building companies for $5bn. Currently, this land is occupied by a mixture of modest factories and industrial services, modest neighbourhoods, and artists’ studios and venues that have been pushed out of lower Manhattan by large-scale developments of high-rise apartment buildings. This very urban mix of occupants will be thrown out and replaced by 14 formidable luxury residential towers – a sharp growth of density that actually has the effect of de-urbanising that space.” (Sassen 2015).

This has ultimately led to the displacement of lawyers, consultants, and even retailers not affiliated with the MNCs, and to the formation of relatively homogenous oligopolistic clusters furnished with globally recognizable franchises. From a socio-economic perspective, the consequence has been a rapid shrinking of middle classes. The rise of new wealthy owners has been accompanied by a rise in “low-wage manual and service workers.” (Sassen 2000: 83)

Financializing materiality

Upon completing their material expansion within cities, thus reinforcing their global function, MNCs and their specialized consulting partners have moved to more financialized types of wealth accumulation. Nowadays, one can frequently observe numerous empty buildings in some of the most prestigious districts of large U.S. and European cities. For example, “a survey conducted by Douglas Elliman found that about 20 percent of all retail space in Manhattan is currently vacant, compared with roughly 7 percent in 2016.” (Kilgannon 2018). Bearing in mind the devastating consequences of the 2008 U.S. subprime mortgage crisis for the least wealthy groups, proliferating images of abandoned and empty urban space constitutes glaring evidence of increased social inequality.

But the story gets even more complicated. As Professor Sassen stresses in her analysis of this conjuncture, “material assets lose their ability to speak”. In short, the massive glass boxes that shape the image of Global Cities are increasingly turning into abstract “fields” of material wealth. High-priced real estate concentrated in the hands of MNCs since 1980s is increasingly turned to asset-based securities, which involves sophisticated financial intermediation. The ownership and value of these properties are determined through complex mathematical patterns and therefore require exclusive financial expertise. Hence, the alliance of MNCs and specialized consulting services is reinforced with refined knowledge of financial instruments that can only be comprehended by a dozen of specialists. Indeed, thinking back to 2008, obscure schemes leading to the financial crisis were designed by these very same high-profile economists from Wall Street. Along with top CEOs, these actors have been bailed out by the government, thereby reassuring their status as untouchable, lucrative business-partners. In a nutshell, having taken on a financial dimension, the Global City becomes more pronounced in its extractive rather than just commercial role. 

Tokyo as a Global City

Professor Sassen first visited Japan in the 1980s. Identifying Tokyo as one of the largest and fastest-growing property sites in the world meant that it could be an extremely significant case of a Global City. The upcoming trip felt like an adventure: “I was not ready for this, especially the notion of having to go to Tokyo and learn Japanese. I had never been in Japan, and the ethnographic side of it all was only one aspect. Mostly I was doing an analysis of structures. But I could not escape the need of having to go and spend time in… Tokyo to get at the heart of the matter . . . to have, so to speak, lunch at midnight with the cleaners of buildings in the financial center [of] Tokyo.” (Sassen 2016: 104). Sassen told the JPE meeting that she conducted her field research in Tokyo, Yokohama, and Osaka, observing processes such as business consolidation and the shrinking of the middle class, which had parallels with New York City.

The memories of the strong opposition movements of the 1960-70s were still alive. The most significant protests were against the amended U.S.-Japan Security Treaty of 1960, anti-Vietnam War movements, activities against the construction of Narita Airport in 1968, and violent protests during 1970-71 such as the Koza riot against the U.S. military presence in Okinawa. These events were echoed by the intense discussions on immigration policies amid the shortage of the domestic workforce during the so-called “economic bubble” period from 1986 to 1991. Workers from Southeast Asia as well as from countries such as Iran and Pakistan were in high demand, particularly due to the construction boom. However, the large majority of these laborers were illegal. Professor Sassen spoke to these “illegal immigrants in Tokyo and in Yokohama in an attempt to learn how and why they decided to migrate to Japan, given its reputation as a closed society.” (Sassen 2001: 314).

In her works, Professor Sassen mentions Tokyo as one of the Global Cities. However, its role is quite different from New York, Chicago, or even Hong Kong and Singapore. Let us recall that the most common Global City function is intermediation based on complex financial instruments. Tokyo has acquired this role thanks to being a home to numerous large companies that have been on the rise due to successful export-oriented efforts aimed at American, as well as European and East Asian, markets. In addition, Tokyo occupies the third place in the list of cities with the highest rates of national and foreign investment in property acquisitions.

Professor Sassen’s lecture was followed by a discussion that involved both students and professors. In this respect, the extended comment by Professor Itoh was particularly useful for the critical positioning of Tokyo in the context of global cities. Firstly, he pointed at such global city features as the polarization of inhabitants into “wealthy specialists and low-wage workers.” Whereas, according to Itoh-sensei, this tendency has been apparent in London since the 19th century, Tokyo did not experience such developments until very recently, although it was already the most populated city in the world during the Meiji era (1868-1912).

Secondly, although the observation concerning the predominance of low-paid jobs among migrant workers of global cities holds true for Japan, the situation differs considerably in the U.S. and the U.K. Professor Sassen documented the influx of labor migrants to Japan during the “Heisei Boom” in the late-1980s. However, the regulations for foreign laborers were subsequently severed, impeding their integration into Japanese society. Against this background, the major socio-economic divide in Japan (regardless of migrant background) is between regular and non-regular employees, with the latter group having considerably lower wages and poorer benefits. Professor Itoh reminded us that the phenomenon of labor bifurcation is a common consequence of neoliberal policies across various states, rather than just an attribute of a global city.

Finally, Itoh-sensei provided some detailed insights into the role of Tokyo as a money exporter to the U.S. Differently from companies in London and New York that accrue substantial profits from financial intermediation (the function of a global city), Tokyo-headquartered firms mainly receive funds from productive activities as well as via employees’ pension and insurance plans. In addition, despite massive corporate investments abroad, including with the establishment of subsidiaries, these latter are not considered “a proper place to work in the main route career escalator for top managers.” In other words, the international expansion of MNCs supported by intermediation in the U.S. and the U.K. context is different from the case of Japan, whose companies place strategic value on their headquarters located back home. Lastly, the rise of urban land prices in Tokyo is largely driven by the pace of a national economic development rather than a concentration of financial intermediaries. In a nutshell, Professor Itoh’s comments revealed that the exact profile of Tokyo as a global city like others still remains to be seen.

Such discussions at the third JPE Workshop came as a valuable platform for discussing socio-economic problems in their comparative context. In particular, they prompted participants to critically reassess the mechanisms of globalization in play in urban transformations. The main issue at stake was the role of the Global City in transforming urban landscapes and in influencing wealth redistribution both among city dwellers and on a larger, national scale. It remains a challenging task to link Tokyo to Global City narratives, but the rich theoretical and empirical base developed by Professor Sassen will certainly come in handy for future researchers dealing with this topic.  


* This article is taken from the SASE Winter Newsletter 2018/19 – Click here to go back to the Contents Page*


This article is taken from
SASE Winter Newsletter 18/19
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