Speculative urbanism and the urban-financial conjuncture: Interrogating the afterlives of the financial crisis

Abstract

This article proposes an analytical–methodological approach to understand this historical conjuncture of speculative urbanism in which global finance capital plays an increasingly important role in urban transformation. Whereas the scholarship on urban financialization makes sharp distinctions between what occurs in the global North and the South, portraying the process in the South as one of subordination or peripheralization and in the North as mature and stable (although volatile), this article seeks to demonstrate that the North–South divide is less effective as an explanatory power. Instead, it presents an analytical approach that is attuned to the relentless dynamism and inter-scalar hyper-mobility of finance capital working across the postcolonial map—in other words, a relational–conjunctural approach. The article suggests the method of “following the financial strategy” by analyzing urban forms and projects as processes constituted by the nexus of practices in finance and city planning. It looks closely at finance’s use of inter-scalar financial tools (such as arbitrage, interest rate swaps, collateralized debt obligations, and currency hedges) across borders, sectors, infrastructures, and conditions, as mediated by national and international state actors. The value of this analytical–methodological approach will be illustrated through notable financial transactions occurring in and across cities to emphasize their speculative and financial characteristics—specifically highlighting investments traversing cities of Spain, the USA, and India. The focus here is on financial strategies emerging from the detritus of the 2008 global financial crisis and shaped by the expanding discursive-material formation of speculative urbanism.

Speculative urbanism

“…Such analyses, in which Northern capital "subordinates and peripheralizes southern economies and populations, remaking cities in its own image," adhere to linear trajectories of developmentalism in which the South lags and can only be understood as subservient to the North. As a result, they fail to account for the dynamism and mobility of global finance (which does not originate only in the north), and how elites and the urban majority in postcolonial settings interact with "speculative volatility" (Goldman, 2021: 2) and the resulting politics of futurity. Goldman attunes us to how global finance "sees the playing field as relational" (11) rather than as a fixed and predetermined landscape Fields defined by the North-South divide.…”

“…Third, this research issues a methodological imperative to complicate our approaches to speculative urbanism through conceiving of global finance as relational and requiring imaginative and discursive (in addition to material) work, including by the urban majority beyond investors and developers. Goldman (2021), interrogating the "intertwined, inter-scalar, and conjunctural processes working across cities of Europe, the USA, and Asia" (3) after the last global financial crisis, observes that 2008 did not undo the system of finance-led urban real estate speculation; it created a new one. As accelerating inflation, stock market volatility, and geopolitical uncertainty generate "tectonic shifts" in the global economy more than two years into the COVID-9 pandemic, possibilities of market dislocations loom again, with the investor class anticipating 2008-scale opportunities (Lee, 2022).…”

Deal-making, elite networks and public–private hybridisation: More-than-neoliberal urban governance

“…And some variegations of neoliberalism in particular contexts have contained what appear to be neoliberalism’s opposite: state monopoly power; managed or regulated competition and markets; public–private partnerships as coordinated capitalism; and limited transparency and accountability (Brenner et al, 2010; Peck and Theodore, 2019). If anything, neoliberalism established the policy landscape upon which entrepreneurial deal-making was cemented as a legitimate urban governance technique (Goldman, 2021; Hall and Hubbard, 1996; Prince, 2012), paving the way for the current ascendancy of consultants and the continual courting of the private sector by government.…”

“…To that end, we make suggestions for two additional analytical concepts: coercive monopoly (where entry to a market is closed, and there is no opportunity to compete) and de jure collusion (where regulation reforms codify mutually beneficial alliances between an elite group of high-level actors connected across government, corporate and consultancy worlds). Fuelled by the vast flow of speculative capital flooding global markets (Goldman, 2021), reforms to planning processes now invite de jure collusion over the negotiation of coercive monopolies (McManus and Haughton, 2021). In so doing, mechanisms of hybrid urban governance consecrate senior unelected bureaucrats as deal-makers, who encourage solicitation of ‘exceptional’ ideas from development interests, infrastructure financiers and consultants.…”

Resisting ‘Peripheral Debt Systems’: Housing Movements against Financialization in Chile

“…Although these ideas critically refer to the process by which housing production has moved towards a more financial logic, the literature on peripheral economies, ECEs and the Global South is still in its infancy (Allami & Cibils, 2017), in particular that which analyses the grounded effects of housing financialization. In fact, authors have called to expand researches in these contexts (Steel et al, 2017), where ideas such as 'speculative urbanism' in India (Goldman, 2021) have contributed to understand this phenomenon and build bridges between the North-South divide.…”