Citywatch: A tale of two levels of government: today’s debt crunches test tomorrow’s city limits

By Wayne Roberts

Citywatch: Whether it’s action or traction in the food world, cities are stepping up to the plate. The world is fast going urban, as are challenges of social, economic and environmental well-being. Citywatch is crucial to Worldwatch. Wayne Roberts, retired manager of the world-renowned Toronto Food Policy Council, has his eye out for the future of food in the city. 

One way to make out a slim ray of hope from today’s global financial crisis is to look from the vantage point of 2008, and — forgive me for going so far back into the mists of time — 1973.

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Judged by the standards of the 2008 banking crisis, western governments have jumped from the frying pan into the fire.

The 2008 banking crisis seemed catastrophic at the time. But looking back, 2008 was about a relatively defined set of problems faced by bankers and borrowers during an economic downturn. That banking crisis during a recession has now morphed into a recession compounded by financial crises of nation states – the banks are now doing very fine, thank you. And the problems faced by nation states are as severe amongst well-regulated and social democratic countries in Europe as in the relatively de-regulated USA.

That’s a major system-wide setback in just three years. As we get a sense of what’s behind the cuts to social and environmental programs touted in 2011, we may see the outlines of a new politics that brings cities, food and green jobs together.


What intrigues me about comparing responses to 2008 and 2011 is the sheer chutzpah of political and financial leaders in both times.

Former British Columbia premier Dave Barrett defined chutzpah as the ability to grin at someone after stealing their false teeth.

People who hyped multi-billion dollar bail-outs of banks and auto companies and multi-billion government spending programs in 2008, who lived to see that these measures didn’t stimulate jobs in the auto industry or do much to stimulate the world’s stock of human, social or natural capital, who know they didn’t keep a banking and mortgage credit crisis and slowdown in economic growth from escalating into a full-blown debt crisis of nation states  – if they were like most people I know, they would feel  humiliated, apologetic and keen to make amends.

Since I haven’t yet seen a politician, auto magnate or banker fess up to spectacular misspending of hundreds of billions in public savings, I can only conclude that chutzpah means never having to say you’re sorry.  It’s one thing they get full credit for.

To pay for previous government giveaways to big business by taking away long-established government-funded social security programs from vulnerable people is quite the about-turn. It forces those who least benefitted from either found money made available to mismanaged banks and auto companies, or from later stimulus projects that created a small number of regular jobs, to make up for the money that’s gone missing.  I had a hard time realizing that politicians actually had the gall to do that.

I kept thinking that someone beside the usual suspects would call for a stop to this. Surely some Wall Street financial mogul will give marching orders to the Tea Party on the critical importance of reputation for a national economy, or some banking lord on Threadneedle Street in London will warn the British Conservatives that massive cutbacks undermine efforts to prepare people for a complex economy, or  some Bay Street big shots in Toronto will read the riot act to whackjobs who want to balance budgets by eliminating crucial jobs and vaporizing billions of dollars of spending power, or some worldly-wise baron from Deutsche Bank in Frankfurt Germany will shout Achtung! when cuts threaten social cohesion and stability.

Warren Buffett stands out as one of the few super-wealthy people in the world to take such a stand.


My false expectation probably comes from my misspent youth when I was educated in old-time political economy.  Way back in 1973, sociologist James O’Connor wrote a prophetic book called The Fiscal Crisis of the State.

With his view of ideal surfing beaches from high in the hills of University of Santa Cruz, O’Connor wrote just as the post-war wave of prosperity was about to break. Until that time, there had been 25 years of slow but steady improvements in the happy day living standards of everyday working people, and in social programs sponsored by governments.

O’Connor explained these good times using the radical jargon of the time, referring to state functions of “accumulation” – measures that made it easier for businesses to make money by raising the educational level and productivity of workers, for example – and of “legitimation.” By this, O’Connor meant that western governments introduced reforms that made capitalism seem positive and legitimate, thereby offering hard-working people a chance to make something of themselves and give their families a few good things in life.

Such legitimation was considered mandatory at a time when both democratic socialist and undemocratic Communist parties were gaining strength around the world, including Europe and Canada.  It’s hard not to get nostalgic for the good old “happy days” of exploitation under capitalistic accumulation and legitimation, and for capitalists’ need to compete with Communism when it came to delivering the goods to ordinary people.

O’Connor noted, however, that capitalist governments were caught on the horns of a dilemma. On the one horn, spending public money for items such as old-age pensions and unemployment insurance allowed people to spend more freely during good times, instead of saving for the dreaded downturn, thereby providing the security necessary to support a high-spending consumer economy. On the same horn, public money to train a sophisticated workforce and to open up career opportunities that allowed children of workers to become professionals eased the transition from a manufacturing to a service economy.  Judged by this horn of the dilemma, accumulation and legitimation added up to a virtuous circle that enriched peoples’ lives, enriched government coffers, and enriched corporate executives and owners.

Every dilemma has two horns, and the second horn – resistance against higher taxation, especially from the rich who paid higher rates in the days of progressive taxation – came to the fore after the 1970s, O’Connor noted.  This applied pressure on senior levels of governments to cut spending on accumulation and legitimation expenditures, which by then were generally recognized as functions of national governments.

Globalization – the steady decrease in the ability of industrially-advanced nations to feed, clothe and house themselves using national resources and labor; the steady increase in the importance of exports and imports in the Gross National Product; and the rapid rise of multinational corporations which sourced labor, resources and services wherever in the world they were cheapest — reduced the incentives for governments to invest in what O’Connor called accumulation and legitimation.

Why worry whether local underpaid workers could afford to spend good money on consumer goods if the same consumer goods could be both produced and sold cheaper to a huge middle class in Asia?

Canadian economist Greg Albo describes this as a shift to “competitive austerity.” The country that cuts its benefits the most attracts the most jobs, he argues – almost the opposite of the virtuous circle that was becoming the norm during the 1950s and ‘60s. Some call it “the race to the bottom.”

There’s not much to slow the race down.  Even those with more money than most people would know what to do with get outraged by progressive taxes, and certainly don’t raise a peep about cutbacks in basic services undermining social cohesion or the spending power of the masses.


In a globalized economy, accumulation can be managed by outsourcing jobs once performed by the local population to countries where low incomes and environmental pollution are the norm, and by importing the best-educated and healthiest workers from those countries to displace local workers in the domestic economy. The world market handles the challenges of accumulation.

And what about legitimation, the need to give meaning and promise to ordinary people as a means to win their loyalty and commitment to hard work? Since the scandals around Fox Networks abuse of its elite networks exploded at about the same time as the debt and credit crunches, it occurred to me that it had escaped public notice that the legitimation function of the state had been contracted out and privatized to media empires. They, not government, gave people a sense of place, meaning, identity, via celebrity gossip, game and survival shows, political angertainment – nothing that smacked of peoples’ rights or community needs.

The decline and fall of state management as practiced during the post World War 11 days, I’ve come to believe, is the story behind the story of deep dysfunction in established national (UK, Germany and US, for example) and international (UN and OECD, for instance) governments.  Leading politicians are telling everybody loud and clear: your problems are not my problems.

Indeed, the costs and burdens of accumulation and legitimation functions have been downloaded to municipalities. The “riots” throughout England show it’s cities that bear the costs and injuries of lack of national government investment in human, social and cultural capital.


But cities aren’t just places where trouble is brewing. Quite the contrary.

Cities have long been the level of government where mutual interdependence of all residents is most forcefully felt. During the 1800s, everyone who lived in cities shared an equal benefit from dealing pro-actively with life-and-death problems caused by fire, cholera, contaminated water, rat-infested garbage, and the like.

Urban reformers of the late 1800s and early 1900s believed that solving these common problems  required people to solve the problems in common, either by strict regulations or community ownership.  No-one made the case that construction companies should compete by offering people a choice in sidewalks they might choose to walk on from day to the next. Nor did anyone gain peace of mind when thinking of a neighbor who didn’t pay the yearly fee for a firefighting company and who therefore wouldn’t get service in event a fire broke out. Ditto for police. Such services almost automatically came to be managed under public ownership.  In economic sectors where individual citizens or private companies hold sway, strict building codes, fire codes, health codes, noise bylaws, public garbage collection and restaurant inspection are the norm.

This historic municipal tradition remains vibrant, relevant and resilient to this day. People from all walks of life and widely different backgrounds depend equally on the commonwealth to manage and protect a hundred and one services crucial to each and every person – food safety in restaurants, clean water, accurate traffic signs, ongoing road maintenance, well-maintained green space, public education, low-cost recreational opportunities, public safety, campaigns against bedbugs and mosquito-borne diseases, and so on.

These services are essential because of the inherently sociability of cities and the inevitable co-dependence of all people who live in cities.  Few political candidates run openly on a platform of eliminating core civic services. Some may complain about high costs of good services, but everyone knows that the cost of poor services is much higher. Common need protects against dysfunction and polarization that are becoming the norm at other levels of politics.

Environmentalists, out to protect natural resources and services also shared by all – clean air and water come immediately to mind — have a natural home in city politics.

It’s hard to miss the blatant contrast between well-financed national and international government bodies, which are unable to provide basic protections to economic, social and environmental wellbeing, while under-financed city governments carry on with a host of everyday essentials.

I think this stark contrast is an omen that cities will soon be the decisive level of government in terms of services that require public money for accumulation and legitimation functions that once belonged to “senior” levels of government.


Old-style national governments used to call control of banking, resources and heavy manufacturing the “commanding heights” they needed to own or regulate. New-style city governments may well identify water, soil, food, shelter, education and social services as the – to borrow a phrase from Alex Prudhomme’s new book on water — axis resources” of the future. Food is especially well-suited as an axis resource, because agriculture is the major ongoing user of water and because food underpins both economies and communities.

During the 1950s, many used to talk about the need for public control over the “commanding heights” –  banks, crucial resources and heavy industries – considered strategic and essential in a national economy.

Perhaps more people will start to think in roughly similar ways about municipal control over the “community foundations” of city life – safe water, clean air, nutritious food, healthy soil, joyful playgrounds, engaged schools, responsive health clinics, welcoming libraries, thriving main streets, resilient neighborhoods.

These are core services in at least two ways. They are core in the sense that they are imperatives in the city’s mandate and effective functioning. They’re also core in the way I’m beginning to appreciate (if that is anything like the right word) core at gym class, when we work on our core muscle strength around our stomach and lower back – the key to increasingly popular yoga and Pilates practice and a mainstay of exercises that restore back stability. The paradox of a strong and empowering core is that it allows you to reach out with your arms and legs by pulling in at the core. Likewise, I amuse myself why struggling with my core exercises, cities that establish strong core services are freer to reach out with creative and cosmopolitan knowledge economies and welcoming social policies.

Since cities are also the place where most of the world’s people, voters, job creators and taxpayers live, it only takes a little chutzpah to name this shift of political momentum a new moment in history.

To purchase State of the World 2011: Innovations that Nourish the Planet please click HERE. And to watch the one minute book trailer, click HERE.

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