The Dictionary of Human Geography

Comp. by: LElumalai Stage : Revises1 ChapterID: 9781405132879_4_R Date:2/4/09
Time:21:12:31 Filepath:H:/00_Blackwell/00_3B2/Gregory-9781405132879/appln/3B2/re-
vises/9781405132879_4_R-new.3d

profound social pathologies. The parallels

between perestroika in the former Soviet

Union and capitalist restructuring are marked:

Perestroikais inevitable when existing eco-

nomic conditions do not respond to ... the

needs of development of society and the de-

mands of the future. Here it is necessary to

change the economic system, to transform

and renew it fundamentally. For this trans-

formation restructuring is necessary not just

of individual aspects and elements, but of

the whole economic system. (Anganbegyan,

1988, p. 6)

This strategy for development – fatefully for

Soviet socialism– presumed uskorenie,an

acceleration of economic growth, andglasnost,

or openness, to be achieved by the spread of

democracyand local self-management.

The more insidious, continuous and wide-

spread social and political consequences of

restructuring driven by the imposition of cap-

italist social relations and the norms, direc-

tions and criteria of evaluation that go with

them within thethird worldare dramatically

illustrated in Michael Watts’ (1992) harrowing

account of ‘fast capitalism’ and the exploit-

ation ofoilin Nigeria.

Less dramatic but still profound changes

may occur within the dynamics of particular

forms of social reproduction, such as capital-

ism (e.g. Harris, 1988). Manuel Castells

(1989, pp. 21–8) suggests that certain trans-

formations of the capitalistmode of produc-

tionon a global scale during the twentieth

century are structural in form. Certainly, they

serve to exemplify the point that restructuring

is qualitative as well as merely quantitative.

The Great Depression of the late 1920s and

early 1930s and the associated disruption of

the Second World War ‘triggered a restructur-

ing process that led to a new form of capital-

ism very different from the laissez-faire model

of the pre-Depression era’ (p. 21). The new

model relied on restructured relations bet-

ween capital and labour whereby stability in

capitalist production was exchanged by the

recognition of union rights, rising wages

and the development of welfare states;

Keynesian regulation and intervention in cir-

cuits of capital articulated primarily at the

national scale; and the creation of a new set of

international regulatory institutions around the

international monetary fund, underwritten

by thepowerof the economy of the USA.

The limits of this model – manifest, for

example, in rampant inflation, increases in

returnsto labour andfiscal crisesof thestate–

were formative influences (for an attempt to

assess the articulation of these formative pro-

cesses, see Yergin and Stanislaw, 1998) on the

creation and imposition of a restructured model

of the circuit of capital involving the appropri-

ation of an increased share of the surplus by

capital based around increases inproductivity,

changes in thelabour processand restructur-

ing oflabour marketsin terms of: deregulation

and reductions in the power of trades unions; a

shift in the role of states from intervention

to facilitation of capitalaccumulation;andfur-

ther deregulation and opening up of local and

national spaces to global competitive processes –

not least through the increasing significance

of globally sensitive and active spheres of re-

production (seeeconomic geography), acting

through global financial centres.

Restructuring may involve one or more of a

number of transformations:

. structural adjustment,whichStreeten
(1987, p. 1469) defines as ‘adaptation to
sudden or large, often unexpected changes’
to an economic geography. Such changes
may, however, be forced by powerful
institutions such as the World Bank in,
for example, making aid dependent on
profound changes in macro-economic
policy. Structural adjustment programmes
have been designed to open up underdevel-
oped economies to the global economic
geography in order to maximize their poten-
tial for development. In this sense, they may
be viewed as a means through which the
social relations of capitalism may be spread
through the underdeveloped world in ways
that make them secure for the future by
insisting, for example on:

• transformations in the modes of coord-
  ination and exchange within circuits of
  social reproduction (by, for example,
  opening up economies to the pressures
  ofmarketforces and international com-
  petition) with the objective of removing
  local rigidities and reducing vulnera-
  bility to shock through means such as
  increasing the flexibility of markets, the
  provision of productiveinfrastructure
  and the development institutions orien-
  tated to export markets;


• switches of capital between forms of
  investment (direct/indirect), sphere of
  circulation of capital (reproduction/
  production/realization) and sector (e.g.
  deindustrialization);


• geographical switches of capital (here/
  there – seenew international division

Gregory / The Dictionary of Human Geography 9781405132879_4_R-new Final Proof page 652 2.4.2009 9:12pm

RESTRUCTURING