MARKET RESEARCH ARTICLE REVIEW ON SPATIAL ECONOMICS: THE DECLINING COST OF DISTANCE BY BAIN AND COMPANY (2016)

SPATIAL ECONOMICS: THE DECLINING COST OF DISTANCE

SPATIAL ECONOMIC 

Producers and buyers are dispersed in space, and overcoming the distances between them can be costly. Much commercial activity is concerned with “space bridging,” and much entrepreneurship aimed at making good use of locational opportunities and cutting the costs of transport and communication. Spatial economics is the study of how space (distance) affects economic behaviour. Throughout history, transport costs have hampered specialization, and improvements in transport and communications have been among the main driving forces of economic progress. In medieval Europe and China, most ordinary people never moved farther than twenty miles from their birthplaces, and before the advent of book printing, most people knew very little about what happened beyond those narrow horizons. Firms that depended on heavy inputs, such as steel makers, used to locate near the source of major inputs—coal mines, in particular. By contrast, firms that interacted intensively and frequently with customers tended to locate near the demand. Thus, gasoline stations are still found near busy intersections.

Spatial economics deals with what is where, and why. The “what” refers to every type of economic entity, i.e., production establishments, other kinds of businesses, households, and public and private institutions. “Where” refers basically to location in relation to other economic activity, i.e., to questions of proximity, concentration, dispersion, and similarity or disparity of spatial patterns. The “where” can be defined in broad terms such as regions or metropolitan areas, or in micro-geographic terms such as zones, neighbourhoods, or sites. The “why” refers to explanations within the somewhat elastic limits of the economist‘s competence. Location theory describes this kind of analysis when the emphasis is upon alternative locations for specified kinds of activities, such as industry. Regional analysis is concerned with groupings of interrelated economic activities in proximity, within specified areas or types of areas; and the theory of interregional trade refers to the economic relationships between such areas. 

The cost of distance is highly impacting both business and personal decisions. For example, it is one of the considerations companies are taking into account when deciding on the location of their production site(s). According to Bain research, the cost of distance will decrease sharply within the next decades whereas the majority of the companies have not yet thought about the implications for their business. On the other hand, it is also an important factor for families deciding where to live (e.g. proximity of the company they work for). The article gives a very clear overview on the main catalysts driving the drop in cost of distance and can be summarized as follows: 

 1) High-speed connectivity will increase productivity of working at a distance (think about the cloud-based collaboration) 

 2) The cost of physical transport will drop. New technologies, such as autonomous vehicles and drones will improve transportation efficiency 

 3) Increasing efficiency in small-scale production. Increased automation in the production process (robotics, 3-D printing,..) will decrease labor cost, lowering the number of households to be served to break even 

URBAN PLANNING THEORY AND SPATIAL ECONOMIC 

Many urban planners believe that population densities can be fixed by design as cities expand. Many urban development plans aim at compact cities growth. However, compact cities are possible only with very high land prices produced by constraints on land supply. My view that the spatial distribution of land prices and densities are closely correlated and that they follow a predictable pattern produced by market forces. By using models developed by economists, planners could better understand both the pattern of densities in existing cities and how these densities are likely to respond to changes in size of population, households’ income, and transportation speed and cost. 

Concerns for an over-consumption of land by cities are best addressed by identifying possible distortions in the land market caused by an abusive use of eminent domain that under-prices agricultural land. Setting arbitrary spatial barriers to urban expansion, such as green belts and urban growth boundaries, results in higher land and housing prices. Land prices and population densities are closely related and are produced by market forces. We have also seen that there is no optimum density for urban development and that within the same city densities may vary by order of magnitude from the centre to the periphery. The population density in a particular neighbourhood is determined by trade-offs between households’ desire to consume more land and floor space and the commuting cost in time and money. 

Households with different preferences and incomes make different trade-offs. Some low-income households prefer to reduce drastically their land and floor space consumption in order to reduce commuting costs. Other households with similar income may make different trade-offs. Planners cannot possibly know the reasons that households may have in selecting a specific housing location and land consumption. Therefore, planners should abstain from arbitrarily fixing densities through regulations. Neither should they try to distribute population according to a designed spatial pattern no matter how clever the geometric arrangement appears to be. Planners should use the standard urban model to better understand how markets work in the city they are managing. They can use the model to anticipate the effect of regulations and infrastructure on land prices and rents.

They can plan, finance and build the infrastructure that would increase the supply of land and therefore decrease housing cost. They can design transport systems that decrease commuting time and cost, another way of increasing the supply of land and increasing mobility. They should design transport systems that are consistent with the densities set by the land markets rather than design densities that would make a preselected transport system feasible. In general, fixing minimum consumption for land and floor space through regulations such as minimum plot size, maximum floor area ratio, and maximum number of dwelling unit per hectare introduces rigidities in the market that have negative impacts on poorer households for whom these regulations are binding. Urban planner should therefore, abstain from using these regulatory constraints on minimum land and housing consumption as they hurt the poor the most and trigger the growth of informal markets.

Only after they have a good understanding of how local real estate markets function can planners anticipate future land market values to plan infrastructure networks that will be consistent with anticipated densities. Constant monitoring of land prices and rent could provide planners with feedback that could help them amend their infrastructure plans if their projection appears to diverge from reality. Unaffordable housing is a plague affecting many large cities. Monitoring the ratio between median income and median housing price allows us to constantly measure housing affordability. When the price to income ratio becomes higher than 4, planners should take immediate action. This action could be to increase land supply through new infrastructure development or to audit land use regulations and building permit practices that may make developed land and housing prices abnormally high.  

Urban planners should be held responsible for unaffordable high price/income ratios in the same way that public health officials are held responsible for infectious disease epidemics, or police are held responsible for high crime. The standard urban model is a very crude instrument that provides an understanding of the basic movement of land prices and rent when income, transport costs, and land supply change over time. Planners could design more complex models to anticipate price movements or commuting patterns in cities with specific constraints, in particular topographical constraints like bodies of water or steep mountains. However, no infrastructure or regulatory design decision should be taken without accounting for its impact on the land market.

MY BOOK REVIEW : A NEIGHBOURHOOD THAT NEVER CHANGES GENTRIFICATION, SOCIAL PRESERVATION, AND THE SEARCH FOR AUTHENTICITY

Author : Japonica Brown-Saracino
A Neighbourhood that Never Changes : Gentrification, Social Preservation, and the Search for  Authenticity
Year of Publication: February 2010

Place of Publication: Chicago, USA

Publisher: University of Chicago Press

Pages: 352

ISBN: 9780226076638

Over the past several decades, numerous books and articles have appeared on the topic of gentrification. A Neighbourhood That Never Changes, however, breaks new ground by questioning the methods and assumptions of prior work in two important and refreshing ways.  This book starts with the story of Mary, a Portuguese-American resident of Portuguese-American resident of Provincetown, Massachusetts who feels she is being forced out of her job, home and social network by a wave of urban regeneration. This book paints a colorful portrait of how residents new and old, from wealthy to Portuguese fishermen, think about gentrification. This book looks at four different neighbourhoods, both urban and suburban, and argues for three types of gentrifiers: the pioneer, the social preservationist, and the social homesteader.

As page 99 reveals, the book primarily attends the term of social preservationists: gentrifiers who move to live near long-timers with whom they associate “authentic” community, and who work to preserve the local social ecology. For social preservationists, who like most gentrifiers tend to be affluent, a place’s value is contingent on the presence of certain long-timers. Page 99 details preservationists’ criticism of their own participation in gentrification and affluence – a central claim of the book. This self-criticism borrows from longstanding and widespread concern about the threat affluent people pose to “authentic” people and places as well as from heightened public awareness of gentrification’s consequences. Beyond page 99 the book explores long-timers’ reactions to social preservation and why preservationists work to preserve some – but not all – long-timers.

Based on the gentrifiers’ accounts of their beliefs and behaviors, she reveals that many such individuals “deviate from the frontier and salvation ideology long held to be the sine qua non of gentrification” (p. 250). All of this is accomplished through a richly descriptive prose—“Gripping a cup of tea, Leslie fought tears as she described . . . ” (p. 100)—that is the hallmark of good ethnography, yielding a text that is both insightful and engaging. Brown-Saracino distinguishes herself from other works on gentrification in several important ways, specifically her approach and analytical focus. Furthermore, urban and cultural sociology thrive on comparative approaches, and this beautiful book will serve as an exemplar of this perspective for years to come. Newcomers to older neighborhoods are usually perceived as destructive, tearing down everything that made the place special and attractive.

In an era of rapid change, this book absorbed study reveals the unexpected ways beliefs about authenticity, place, and change play out in the social, political, and economic lives of very different neighborhoods. The last chapter of this book demonstrates how distinct ways of thinking about place and change play out in gentrifying neighbourhoods and towns. Its also offers a sophisticated reinvention of the classic community study by emphasizing how local residents interpret contemporary economic and political forces through the lens of culture and the imagination of authenticity. Brown-Saracino examined the varied residents think about gentrification and the process counters common stereotypes about the motivations of gentrifiers. This book challenges conventional wisdom, which holds gentrification to be the simple outcome of new middle-class tastes and a demand for urban living.

MY BOOK REVIEW - THE NEW URBAN FRONTIER: GENTRIFICATION AND THE REVANCHIST CITY

Author : Neil Smith
Title : The New Urban Frontier : Gentrification and the Revanchist City
Year of Publication : 1996

Place of Publication : London

Publisher: Routledge, London

Pages : 262

ISBN : 041513255X

This book brings together a body of research on gentrification conducted by Neil Smith over a period of nearly 20 years. The book thus reflects developments within Marxian-oriented urban theory from the late 1970s to the late 1990sto the inclusion of aspect of ethnicity and gender and the practice of discourse analysis to reveal, and the practice of discourse analysis to reveal ways of creating frontiers. Two of the ten chapters are new, while eight are updated versions of articles and chapters previously published and often cited in the gentrification literature. The two new chapters (2 and 8) address the issues: “Is gentrification a dirty words?” and “And gentrification experiences in European cities so distinct as to merit development of theories fundamentally different from those used to explain gentrification in North American cities?”This book challenges conventional wisdom, which holds gentrification to be the simple outcome of new middle-class tastes and a demand for urban living.

It reveals gentrification as part of a much larger shift in the political economy and culture of the late twentieth century. Documenting in gritty detail the conflicts that gentrification brings to the new urban 'frontiers', the author explores the interconnections of urban policy, patterns of investment, eviction, and homelessness. The failure of liberal urban policy and the end of the 1980s financial boom have made the end-of-the-century city a darker and more dangerous place. Public policy and the private market are conspiring against minorities, working people, the poor, and the homeless as never before. In the emerging revanchist city, gentrification has become part of this policy of revenge. The reader is able to follow as the reduction and centralisation of social services makes the city both a haven and a scourge. The streets offer a means of support and network, even as local councils and retail traders lobby to `keep the city clean and safe', a semantic shift on the threadbare attempts to rationalise slum clearance.

Nevertheless, there remains much to recommend in this book. Smith writes persuasively. He has a tempo and grip of the argument which allows diverse and demanding subject material to be dealt with in a conversational manner, from the history of `socialist gentrification' in post-Communist Budapest, to scientific appraisals of urban demographics. The conclusion of The New Urban Frontier could easily accommodate a `City of Quartz'-like conclusion to configure a foreseen post-apocalyptic scenario for the West's many physically expanding, but economically declining cities. It is something of a relief that this is not the case. However, Smith draws some concerning parallels between international cases of the revanchist city in its extreme--citing the murder of homeless children in Rio de Janeiro through to the bombing in Oklahoma City--as part of a continuum.

Despite rhetoric of `degentrification', the boundaries demarcated by social inequality show no sign of dissolving. Smith's frequently used frontier motif is turned on its head, as the line between `savagery' and `civilisation' is no longer seen as a one-way, expansionist trajectory, but a contested battleline.  Smith admits a `two-class analysis' to be problematic, yet this is where he returns in the end. So while the issues of revenge politics and urban decline certainly construct an environment of dualistic adversary at work, in the city of decline it is left to the reader to decide whether this is the same city that they have come to know. He is convincing theories about the gentrification of the inner city as an economic process propelled by urban land prices and city land speculation — not a cultural preference for living in the city.

JANE AUSTEN'S CLASSIC NOVELS vs FILM DIRECTORS, JANE JACOBS vs PETER TAYLOR AND JULIA CHILD vs JULIE POWELL

Department of Geography, Loughborough University is sharing a same Martin Hall Building with English and Drama Department. Once in awhile I could listened their students training in acting class or classic movie review. 3 weeks before Christmas, English and Drama Department organised their open day. I read their postgraduate research on English Classic Novels such as Romeo and Juliet, Castle Rackrent,Nightmare Abbey, The Last of the Mohicans etc. I wondered how these novel authors have a such brilliant ideas to write an amazing story that can be shared and heritage to British young generation.

In my 3 months attachment with Loughborough University, Prof Dr Peter Taylor has taught me how to appreciate and understand the British famous writers and their established publication. Prof Dr Peter Taylor mentioned that their publications may be indirectly or directly generate the ideas to us how to deeper our research or may be we become their followers or believers. Later I was discovered that a few greatest writers in the world has changed people daily live or how their thinking about the world today. Here are what did I discover, how famous veteran authors can influence the famous people in world or may be we as normal human being.

JANE AUSTEN'S CLASSIC NOVELS vs FAMOUS FILM DIRECTORS

Last week I watched a movie 'Becoming Jane' directed by Julian Jarrold at Astro channel 411. A story is about an English novelist Jane Austen (16 December 1775 – 18 July 1817) whose works of romantic fiction set among the gentry have earned her a place as one of the most widely read and most beloved writers in English literature. The movie so interesting and the cinema photography is so beautiful. Amongst scholars and critics, Austen's realism and biting social commentary have cemented her historical importance as a writer. The classics of Jane Austen, and adapt them to the big screen as such Sense and Sensibility, Emma, Persuasion,Northanger Abbey,Mansfield Park and Pride and Prejudice.

The films offer spectacular views into the lives of her greatest heroines--punctuated by the vibrance of costume and the eloquence of music and language. The best film directors in world such Simon Langton (Pride and Prejudice),Patricia Rozema (Mansfield Park), Ang Lee (Sense and Sensibility),Roger Michell (Persuasion) and Douglas McGrath (Emma) have successfully adapted the Austen's book to movie.. By the 1940s, Austen had become widely accepted in academia as a "great English writer". The second half of the twentieth century saw a proliferation of Austen scholarship, which explored many aspects of her novels: artistic, ideological, and historical. In popular culture, a Janeite fan culture has developed, centered on Austen's life, her works, and the various film and television adaptations of them.

JANE JACOBS vs PETER TAYLOR

When I was in Loughborough University, Prof Dr Peter Taylor has introduced me to Janes Jacobs (1916-2006). He asked me to read and review on her book - The Economy of Cities. Prof Dr Peter Taylor said that her book is related to my research. I found that Jacobs try to explain how capitalists strive for efficiency to beat the competition and make high profits. Well yes and no. It depends what kind of work is being discussed. With production work, what Jacobs calls ‘old work’, the work can be done by any firm willing to invest in the necessary human and physical capital. Here efficiency will mark out the winners. But much important for economic life, and for Jacobs it is the defining feature of cities, is new work.

Janes Jacobs was an extraordinarily insightful writer who anticipated many of the themes that have become foundations for contemporary social analysis – complex adaptive systems, emergence, social capital and social networks, just to name a few. Her Death and Life of Great American Cities is regarded as one of the most influential books published in the 20th century. It was the first of several books in which she developed a vision of the economy as a complex, adaptive system, driven by the cumulative efforts of mostly ordinary people whose creativity flourishes in the free air of cities. (Other books include The Economy of Cities (1969), Cities and the Wealth of Nations (1985), and The Nature of Economies (2000), as well as an article in the prestigious American Economic Review (September 1969).) For Jacobs, population density plus diversity in skills and tastes generates, without too much fuss, dynamic economic development and entrepreneurial discovery. With that vision came a withering critique of intervention by all levels of government and in nearly all its forms—from urban renewal and zoning to price controls and monetary policy. She argued that these undermine the civic basis of economic and cultural creativity.

Systems of Survival is Taylor's favourite book and within it the chapter on ‘Trading, taking and monstrous hybrids’ was the particular eye-opener for him. A Dialogue on the Moral Foundations of Commerce and Politics (Jacobs 1992) is considered by Jacobs (1997, 161) to be her ‘most serious book’. She argues that there are just two basic ways of making a living: ‘taking’ from environment and society (hunting, raiding, governing, protecting) and ‘making’ using environment and society (trading, producing). These are reproduced through two contrary moral syndromes: the guardian (heroic virtues such as shunning trading) and commercial (bourgeois traits such as shunning force) respectively. Although seemingly a departure from past work, in fact it is her way of understanding the necessary conditions for both reproduction of city economies, and the planners and national government economic regulators that put the former at risk.Not widely appreciated, it has been used in public policy and in corruption studies. He has found it indispensable for exploring the relations between cities and states.Now I understand why Prof Dr Peter Taylor's book or articles so influenced by Jane Jacobs ideas.

JULIA CHILD vs JULIE POWELL

My flight back to Malaysia (MH003) on 1 Jan 2010, I watched a movie Julie & Julia is a 2009 American comedy-drama film written and directed by Nora Ephron. I found that the movies is so interesting and Meryl Streep played Julia Child character so wonderful. No wonder she been nominated for 15 times in Academy Awards. She is the best actress in the world and my forever idol. The film depicts events in the life of chef Julia Child (August 15, 1912 - August 13, 2004) in the early years in her culinary career, contrasting her life with Julie Powell, who aspires to cook all 524 recipes from Child's cookbook during a single year, a challenge she described on her popular blog that would make her a published author.Julia Child was an American chef, author, and television personality. She introduced French cuisine and cooking techniques to the American mainstream through her many cookbooks and television programs, notably The French Chef which premiered in 1963. Her best-known cookbook is Mastering the Art of French Cooking, published in 1961.

Meanwhile, Julie Powell (born 20 April 1973) is an American author known for the book Julie & Julia: 365 Days, 524 Recipes, Tiny Apartment Kitchen.While working for the Lower Manhattan Development Corporation in August 2002, Powell began the Julie/Julia Project, a web log (blog) chronicling her attempt to cook all the recipes in Julia Child's Mastering the Art of French Cooking. The blog quickly gained a large following, and Powell signed a book deal with Little, Brown and Company. The resulting book, Julie and Julia: 365 Days, 524 Recipes, Tiny Apartment Kitchen, was published in 2005. The paperback edition was retitled Julie and Julia: My Year of Cooking Dangerously.Powell's second book, Cleaving: a Story of Marriage, Meat, and Obsession, which details an affair she had after the first book's publication, as well as her experiences learning the butcher trade, was published November 30, 2009.

For me, from the above this will motivate me to keep continue complete my PhD research because I have only 1 year to finish m writing. Wish me luck.

CHAPTER REVIEW ON THE ECONOMY OF CITIES BY JANE JACOBS

On second meeting with Prof Dr Peter Taylor dated 5 October 2009, 10am , he said " Well, Azmi before we go further, I want you to read a book by Jane Jacobs - The Economy of Cities (1969). I want you to read only Chapter 2 - How New Work Begins. You can find this book in the library.Then we will meet again next week" Oh my god I hate to do book / chapter review.

Then I went to Pilkington Library, Loughborough University to look for that book. I look at this small book. I think have this book that I bought in Singapore February 2007. I read only chapter 1- Cities First - Rural Development later... then I ignored this book for 2 years. Now I have to read again. This book was published 2 years after I was born. Its takes 4 days for me to understand Janes Jacobs's idea. And it is not easy. I read twice chapter 2 then I understand her vision and wisdom on city by Janes Jacobs.

I discussed with one of PhD student at Department Geography, Loughborough University. She said "Jane Jacobs's books are Prof Dr Peter Taylor and Dr Kathy Pain main references. Even though Janes Jacobs's books are classic books, many authors on global city such as Peter Hall etc always refer her books. If you work with them you should read Jane Jacobs's books." Kindly read my review below.

The Economy of Cities is about the importance of cities as the source of innovative economic change, a point that she believes economists have not understood, going back at least to Adam Smith, whom she chides for having misdirected subsequent thinking by glibly adopting the view that successful urban commerce must be founded on a successful agricultural economy. There are five major processes at work in a growing city economy:

(1) Anascent city finds a market in older cities for its initial export work and builds up a collection of numerous local businesses to supply producers’ goods and services to the initial export work;

(2) Some local suppliers of producers’ goods and services start exporting their own work. New local businesses begin to supply various goods and services for this new export work, and some of them eventually begin to export their own work. In the process, the city imports a growing volume and diversity of goods and services;

(3) Many of these imports are replaced by locally produced goods and services through “import replacement”, which is not the same process as the “import substitution” policies adopted by the leaders of various developing economies in the 1960s and 1970s. For one thing, import replacement must take place in logical stages, beginning with the parts or inputs most in demand, and must be self sustaining. For example, Japanese imports of bicycles from the West gave an incentive to local entrepreneurs and mechanics to open repair workshops, to begin manufacturing the most sought after bicycle parts, and eventually to assemble and later export bicycles entirely made of local components. For economic and practical reasons, successful import replacing can only be a city process. Import replacement creates a powerful multiplier effect and, as result, cities built their diverse economic foundations in “boom” phases. After an import-replacement boom, a local economy contains rooms for goods and services that were formerly neither imported nor locally produced, including unprecedented goods and services;

(4) The city’s greatly enlarged and diversified local economy becomes a potential source of numerous and diversified exports. The city’s exporting organizations arise by a) adding the export work to other people’s local work; b) adding the export work to different local work of their own; c) exporting their own local work. The city earns more imports by generating new exports, but many of the new exports merely compensate for declining lost work through obsolescence of older exports, transplants of some organizations into the rural world and replacement of exports by goods now produced in former customer cities; and,

(5) The city continues to generate new exports and earn imports, replaces imports with local production, and so on.

THE CLASSICAL THEORY OF LOCAL GOVERNMENT

Almost a month I did not write in my blog because I am busy preparing working paper for 5th International Conference on Sustainable Human and Social Development, updated my thesis proposal and assist my sons for their mid term exam. While I am preparing my thesis proposal on urban governance, I read two books on history of local government. The purpose I read these books, we should study on local government before we look further on good urban governance. The classical theory of local government based on the books of The Six Books of the Commonwealth by Jean Bodin in 1576 and The Spirit of Laws by Baron de Montesquieu in 1748.

The Six Books of the Commonwealth

In the earlier part of the Six books of the Commonwealth when he is discussing the commonwealth as such, he not infrequently uses the term 'natural justice', without however explaining what he meant by it. The context generally suggests however that he meant respect for the rights of the subject to his liberty and property. In this last chapter on the other hand it is political justice and not natural that he is talking about. He had noticed the difference when he observed that Plato thought of justice as a philosopher and not as a jurist. In this last chapter Bodin is speaking as a jurist. He defines it in legal terms, as the principle upon which rewards and punishments are distributed in the commonwealth, that is to say the working of the criminal law, and the administration. But whereas natural justice is presumably in his view constant and universal, here the proper order of justice is relative to the type of commonwealth.

Commutative justice, or the strictly equal distribution of honours and penalties preserves a democracy but would destroy an aristocracy. Conversely distributive justice, or award in accordance with the quality of persons, safeguards an aristocracy but would corrupt a democracy. In a monarchy where a more elastic social system is possible than in either of the other two types, since in it classes are at once distinguished and yet not mutually exclusive, harmonic justice is the appropriate form since by it honours are given not in accordance with the status of persons, but with their particular suitability.

The Spirit of Laws

Montesquieu spent nearly twenty years researching and writing De l'esprit des lois (The Spirit of the Laws), covering a wide range of topics in politics, the law, sociology, and anthropology and providing more than 3,000 citations. In this political treatise Montesquieu advocates constitutionalism and the separation of powers, the abolition of slavery, the preservation of civil liberties and the rule of law, and the idea that political and legal institutions ought to reflect the social and geographical character of each particular community.

In its classification of kinds of political systems, Montesquieu defines three main kinds: republican, monarchicl, and despotic. As he classifies them, Republican political systems vary depending on how broadly they extend citizenship rights -- those that extend citizenship relatively broadly are termed democratic republics, while those that restrict citizenship more narrowly are termed aristocratic republics. The distinction between monarchy and despotism hinges on whether or not "intermediate powers" (such as the nobility, the clergy, etc.) exist that can restrain the authority of the ruler: if so, the regime counts as a monarchy; if not, it counts as a despotism.

Driving each classification of political system, according to Montesquieu, must be what he calls a "principle". This principle acts as a spring or motor to motivate behavior on the part of the citizens in ways that will tend to support that regime and make it function smoothly. For democracies (and to a somewhat lesser extent - for republics), this spring is the love of virtue -- the willingness to put the interests of the community ahead of private interests. For monarchies, the spring is the love of honor -- the desire to attain greater rank and privilege. Finally, for despotisms, the spring is the fear of the ruler. A political system cannot last if its appropriate principle is lacking. Montesquieu claims, for example, that the English failed to establish a republic after the Civil War (1642–1651) because the society lacked the (democratic) requisite: the love of virtue.

THE THEORY OF NETWORK SOCIETY

On 4 April 2008 lecture on Globalization and Development by Assoc Prof Dr Hamzah Jusoh of National University of Malaysia (UKM) had mentioned about Manuel Castells and The Network Society. He explained how a network society is a society where the key social structures and activities are organized around electronically processed information networks.The network society goes further than the information society that is often proclaimed. Castells argues that it is not purely the technology that defines modern societies, but also cultural, economical and political factors that make up the network society. Influences such as religion, cultural upbringing, political organizations, and social status all shape the network society. Societies are shaped by these factors in many ways. Below is my summary preliminary study and findings about MANUEL CASTELLS :THE THEORY OF NETWORK SOCIETY.

INTRODUCTION
Information has been a central theme in 21st century research, just as capital was in the 20th century. It is frequently said that society is now living in an information age, which has provided various information technologies (i.e. the internet and cellular phones). However the "information age" has not been clearly defined. Although many define the current economy as an information economy, there is still no universally accepted definition to refer to the current society. Currently, over thirty different labels for referring to contemporary society are used in academic fields and casual conversation (Alvarez & Kilbourn, 2002). Some of these labels include: information society, global village, digital society, wired society, post-industrial society, and network society. Some of the terms describe the same phenomena, while others do not.

WHO IS MANUEL CASTELLS?

Manuel Castells was born in Spain in 1942 and grew up in Valencia and Barcelona. He studied law and economics at the Universities of Barcelona and Paris. He received a doctorate in sociology and a doctorate in human sciences from the University of Paris-Sorbonne. He moved to the United States in 1979. Among the numerous scholars trying to define this new society, he is the most foremost and unique, in terms of at least two aspects:

a. He is an incredibly prolific and energetic theorist on the subject of the information age. He has written over twenty books, published over one hundred academic journal articles, and co-authored over fifteen books. He is currently a professor of Sociology and City and Regional Planning at the University of California, Berkeley. He has also served on many national and international organizations such as: the Advisory Council to the United Nations Task Force on Information and Communication Technology, the International Advisory Council to the President of South Africa on Information Technology and Development, the United Nations Secretary General's High Level Panel on Global Civil Society and the United Nations, and UNESCO.

b. His critical viewpoint toward networks and the information economy has made him more unique than other information economists and sociologists. Castells is distinguishable from “the Utopians who have taken over the information society camp” (Duff, 1998, p. 375), since he believes that the dark side of a new economy is embedded in the intrinsic characteristics of new technologies. Thus, Castells maintains a deterministic view of technology, whereas the Utopians regard information technologies as instruments for human evolution.

THEORY OF THE NETWORK SOCIETY

Manuel Castells’s theory of the network society has a unique place among the many attempts by social scientists to come to terms with the contemporary dynamics transforming the fabric of everyday life around the globe. It provides the single most comprehensive framework through which to connect, in an integrated analysis, very diverse phenomena, from the globalization of production to the renewal of democracy at the local level. This makes it the lone contender as the grand narrative of the present, signaling the return of sociological macrotheory after years of postmodern pessimism about the possibility, or even desirability, of such a project.

It brings to a close three decades of research on the “postindustrial” or “information society,” two concepts which, as Castells convincingly argues, are inadequate to frame the present. In their place, the theory of the network society opens up new perspectives on a world reconstituting itself around a series of networks strung around the globe on the basis of advanced communication technologies. Indeed, networks, as the name indicates, are what the theory is all about. Its central claim is that in all sectors of society we are witnessing a transformation in how their constitutive processes are organized, a shift from hierarchies to networks. This transformation is as much an organizational as a cultural question. There is a deep relationship between how social processes are organized and the values they embody. An uneasy adaptation of the structural and cultural logic embedded in a myriad of projects, each reflecting imperfectly the particular agendas of its members, is what drives the evolution of the network society.

SPACE OF FLOWS

Traditionally we find a prevalent idea of space being a passive form, while time is considered a separate and active entity. Castells makes the argument that space should not be disconnected from time. He asserts that space is a dynamic entity related to time, and rejects the concept that it will disappear as to create a global city. Space is defined by this idea as "the material support of time-sharing social practices". He goes on to define the space of flows as "the material organization of time-sharing social practices that work through flows" The concepts of the “space of flows” and, somewhat less developed but equally consequential, “timeless time.” Space and time are the foundations of all aspects of social life, and the analysis of their transformations goes a long way toward unifying the theoretical framework. Despite the structural dominance of flows, places do not become obsolete as long as people have bodies as we know them.

Rather, the space of flows and the space of places interact, transforming cities and creating entirely new urban agglomerations, the metropolitan regions. This interaction is at the core of the new, nonlinear character of (urban) geography and the fragmented character of contemporary societies held together less by physical contiguity than by informational networks.

CONCLUSION

Manuel Castells argues that the technological revolution that began in the late 70s in Silicon Valley has had a profound impact on all aspects of society. The changes, he argues are most apparent in the new relationships between the economy, state and society that have been formed. He suggests that an increase in the flexibility of management, a decentralization of production and an increased reliance on networking has caused many of the immediate changes taking place. Castells suggests that it is through the decline in the labor movement and the devaluing of the laborers that capital has become an increasingly powerful network. This, he suggests has caused networks such as labor, criminal or mafia groups, and financial markets to be realized on a global rather than local scale. By looking at how new relationships and identities are being conceived of in what he calls the informational age, Castells is able to theorize about the ways in which technology and information have will continue to transform society.

Through the globalization of the production and consumption of goods, the energies going into the process have become decentralized and fragmented. This is what Castells suggests is a major factor in the uneven development of differing regions. Since productivity and development depend on symbolic communication, information processing and a technological skill, information and technology become the crucial factors in a developed society. From this, he is able to suggest that the new mode of development is informational. Rather than conforming post-industrialism as a way to describe the current period, Castells argues for what he calls informationalism. He suggests rather than being concerned with economic growth or marketing output as the industrialism was, the informationalism era is primarily concerned with technological development. Increased technological development is clearly expected to take place via increased knowledge.

Castells argues that the government or state is one of the primary motivators of technological progress. He uses Russia as an example of how stasis can cause a lack of technological development and therefore a lack of overall development. He suggests that during the 1980s, capitalism went through a restructuring that produced what he calls, "informational capitalism". He shows how the new capitalism has moved beyond the boundaries and space and time to incorporate a global economy based on technology and knowledge.

SOURCES

· The Network Society: A Cross-Cultural Perspective by Manuel Castells,Cheltenham, UK; Northampton, MA, Edward Edgar (2004), (editor and co-author)
· The Network Society: From Knowledge to Policy. Center for Transatlantic Relations by by Manuel Castells (2006) (co-editor)
· The Rise of the Network Society, The Information Age: Economy, Society and Culture, by by Manuel Castells Vol. I. Cambridge, MA; Oxford, UK: Blackwell (1996) (second edition, 2000)

VISIONS OF DEVELOPMENT

After 3 days reading books with title DEVELOPMENT IN THEORY AND PRACTICE : PARADIGMS AND PARADOXES by Jan Knippers Black and ECONOMIC DEVELOPMENT : THEORY AND PRACTICE FOR A DIVIDED WORLD by Stuart R.Lynn, I can make a conclusion in form of questions need to be addressed:

1. What lies behind the development and economic development discourse?


2. What interests and agendas have driven the development and economic development discourse?


3. Do development and economic development theory served served generally to strengthen human cooperation dan improve the quality of life?


4. What way can the relevance of development and economic development studies be revitalised and sustained?

The review attempted here hopefully can contribute towards re-vitalising development and economic development studies as scholarly fields and accord them their deserved status, as well as to provide a strong intellectual foundation to rededicate and reaffirm developent as an historic enterprise to advance human well-being and dignity.

THE CLUB OF ROME

On 15 February 2008, Dr Jalaludin Abdul Malek taught us about Power of Globalisation : Nation State vs Open Society. I am so eager when he informed us about the The Club of Rome. He did not give us any detail about this club. This is first time I heard about this club. So try to find in UKM's Library and check with Encyclopedia of Economics and Governance. The Club Of Rome is A Global Think Tank and Centre of Innovation and Initiative. The Club is to act as a global catalyst of change that is free of any political, ideological or business interest.As a non-profit, non govermental organisation (NGO), it brings together scientists, economists, businessmen, international high civil servants, heads of state and former heads of state from all five continents who are convinced that the future of humankind is not determined once and for all and that each human being can contribute to the improvement of our societies.

The Club of Rome was founded in April 1968 by Aurelio Peccei, an Italian industrialist, and Alexander King, a Scottish scientist. Hasan Özbekhan, Erich Jantsch and Alexander Christakis were responsible for conceptualizing the original prospectus of the Club of Rome titled "The Predicament of Mankind." This prospectus was founded on a humanistic architecture and the participation of stakeholders in democratic dialogue. When the Club of Rome Executive Committee in the Summer of 1970 opted for a mechanistic and elitist methodology for an extrapolated future, they resigned from their positions.

The Club identified three major needs that justified its creation:
1. To adopt a global perspective in examining issues and situations with the awareness that the increasing interdependence of nations, the emergence of world-wide problems and the future needs of all people posed predicaments beyond the capacity of individual countries to solve;

2. To think holistically and to seek a deeper understanding of interactions within the tangle of contemporary problems -- political, social, economic, technological, environmental, psychological and cultural in every sense -- for which we coined the phrase "the world problematique"; and

3. To take a longer term perspective in studies than is possible for governments preoccupied with day-to-day problems.

Limits to Growth is a 1972 book modeling the consequences of a rapidly growing world population and finite resource supplies, commissioned by the Club of Rome. Its authors were Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III. The book conclude that:

1. If the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.

2. It is possible to alter these growth trends and to establish a condition of ecological and economic stability that is sustainable far into the future. The state of global equilibrium could be designed so that the basic material needs of each person on earth are satisfied and each person has an equal opportunity to realize his individual human potential.

BOOK REVIEW - DEVELOPMENT THEORY : AN INTRODUCTION BY PETER W PRESTON

Last 2 weeks, I am looking for a book related to Development Theory. Marcella Carole (A student of Master Development Science, UKM) lend me a book with title DEVELOPMENT THEORY : AN INTRODUCTION BY PETER W PRESTON. I find this book comprehensive discussion of the post-Second World War theories of Third World development and review of the work of the major social scientific figures of the nineteenth century and their impacts in the twentieth.

In this invaluable introduction to the major post-Second World War theories of Third World development, Peter Preston takes as his focus the strategies used to analyse change in the Third World and examines the ways in which different conceptions of the nature of change have led to different lines of policy advice. In doing so, the author demonstrates how the various contemporary approaches to development draw upon strategies of enquiry which are lodged deep within the intellectual traditions of the modern world. The author's approach is based on the premise that the reader can only fully grasp the live issues and debates surrounding development through an understanding of the linkages with the broader frameworks of social theory.

This book offers an excellent overview and critical assessment of the meaning and theories of development. The theories--including mainstream economic and sociological theories, Marxist and neomarxist, poststructuralist, and theories of development--are well explained, referenced, and carefully examined. In the process, the author make clear that 'development' is far more than a technical challenge; it requires a clear understanding of social dynamics (including those shaped by spatially linked accumulation processes) as well as socially defined and motivated criteria for change. In fact, one of the strengths of this book is the authors' willingness to present and use their own criteria for development as a reference point for examining other theories and visions. It will be a very useful addition to any class on economic development.

True to its title, it takes the reader through economic, sociological, marxist, post-ist, and critical realist theories. It is thorough and well referenced. Although it gives intellectual space for theories from a wide range of persuasions, it is a partisan book--and all the better for that. A good read for everyone, and an eminently recommendable text for undergraduate and graduate-level courses on development and social change. Development, one of the founding beliefs of the modern world, is in desperate need of reinvention. What better way to do this than through a sweeping and constructive review of conventional and critical theories alike. Shifting their analytical gaze from modernization theory to Marxism, from critiques of post-Enlightment thought to poststructuralism, postcolonialism, and postdevelopmentalism, lay the basis for 'another development.'

Their convincing and eloquent approach reweaves the longstanding traditions of critical modernity and socialism and renews the call for the betterment of the human condition. This book's challenge must be taken seriously by all those interested in the fate of what until now has been known as the third world. This book does exactly that, questioning all sociological, economic, neo-Marxist, poststructuralist, and radical democratic approaches, as well as an array of development models including modernization, dependency, and neoliberalism. An excellent resource for undergraduate and graduate programs in development economics; highly recommended for academic, research, and professional collections.

Peter Preston is presently Senior Lecturer in Sociology at the University of Strathclyde, Glasgow and has taught at the National University of Singapore, and the University of Aberdeen, Scotland. He has held numerous research fellowships, most recently a Canon Research Fellowship at the Institute of Comparative Culture, Sophia University, Japan.