Saturday, May 28, 2016

Gentrification: Uneven by Nature

At this point, I'm basically just gloating.  Public opinion has turned from ra-ra save Birmingham gentrification to some middle path that the revitalization is uneven (NPR's words) like somehow we can make it even.  Capitalism is uneven by nature.  Look at the globe.  The defining feature of the globe is uneven development, hell, we even have a name for it - the first world and the third world.  This is how capitalism works.  It develops the places that are profitable and underdevelops the places that aren't.  People invest in New York City over Ghana because you can make a lot more money in former than the latter, and people invest in downtown because you can make a lot more money there than West End.  Why would any capitalist invest in West End?

There are two processes to uneven development - differentiation and equalization.  When capitalists see a geographic area in which the potential profits are higher than the actual profits, they sink money into that area.  The City of Birmingham signaled this by investing in Downtown.  Early adopters and first to market in these areas are generally the most profitable, the pioneers if you will.  Eventually, because of competition, profits equalize in that geographic area and investors leave it to rot until there is a large gap between the potential and actual profits and the cycle starts over.  So, it's sort of capitalist whack-a-mole.  They dump money into a geographic area until it's not profitable and then move and it happens from the global scale to the local.

In Birmingham there were and are three distinct phases of this.  First, heavy investment into a new city creating the steel industry; the steel industry left as did whites and the era of suburbanization (investments in interstate highways and other infrastructure to support suburbs) and people commuting to downtown Birmingham for medical and financial jobs began.  Finally, capital returned to invest in the three Rs of gentrification - retail, real estate, and restaurants and bars.  The latter two invested very little into working class and poor communities which, in Birmingham, are almost exclusively black.  The popular narrative is that white flight killed the city, but I would argue that deindustrialization hurt worse.  The white folks that left weren't spending their money in black businesses anyway.  Thus, the shape of development throughout the region and across the globe is and always has been unstable and uneven, subject to boom and bust cycles even between adjacent neighborhoods in the city.

It's funny that NPR would choose the word uneven to describe Birmingham's development, I think suggesting that it should be even.  But, their observation is apt.  Gentrification is uneven by nature and nothing is going to change that, nothing.  The only way to change it is to change development strategies to a new economy strategy.  It needs to be cooperative, small, sometimes cottage industries, small loans from community controlled banks, novel methods of land management controlled by the community such as community land trusts, and a branding strategy that sells the city as a model city for the 21st century.

And tell Brookings Institution to go take a hike.

2 comments:

  1. What are the benefits for those with means to invest in thes ideas, cooperatives, community land trusts and such. I am an Organizer for the things what can I tell them or what can other whites who are social justice organizers tell the rich what they can gain from giving money and resources to these ideas?

    ReplyDelete
    Replies
    1. I do not believe in initially taking investment from the rich. I believe in using public money to help create institutions controlled by the poor. For instance, a city could capitalize a community development financial institution serving a certain geographic area with low income people at about $1 million a year for ten years, which is not a lot of money. The CDFI could then begin making microloans to existing small scale production or cottage industries. Once this system is stable and the CDFI has strong assets, then bring in the private sector to collaborate with the CDFI to create larger industries that produce livelihoods for community members and also serve a specific community need (such as food). Importantly, the CDFI's board and members if it is a credit union are made up of mostly community members, so they control it.

      Of course, if the system grows, private investors are going to want to invest anyway because now the geographic area is profitable, but it is key that the development is community-led.

      There is a previous post on this blog called Now is the Time: Building Black Wealth that I think answers some of your questions, which is from about a year ago, and if you have further questions, I would be glad to answer them here. Feel free to ask anything.

      Delete