“There are many principles in the fiscal economy which, though at first blush might appear to be evil, are tolerated in a developing economy in the interest of long-term development.”—Indian Supreme Court ruling in 2003 on question of legality of tax havens for Indian capital.Footnote 1
“We make all our money on liquidity; As soon as things begin to look illiquid, we pull out … there's no money in the illiquid.”—Hedge fund managerFootnote 2
“The logic of biopower is the production of wealth through the daily use of the population.”—Stefano LucarelliFootnote 3
IntroductionFootnote 4
Pundits from Thomas FriedmanFootnote 5 to Jagdish BhagwatiFootnote 6 predict that as the Indian economy matures, labor's significance and value will increase, and poverty will become history. But what if the opposite is true: What if the “maturing” and globalizing economy depends upon the declining significance of labor? What would this dynamic portend for the future of Indian labor and for how we understand the workings of the new global economy in Asia?
Related to this question of labor is the question of capital: The British economist Joan Robinson once remarked that economic growth creates demand for financial instruments, and where enterprise leads, finance follows.Footnote 7 But what if the opposite is also true, that at times the “real” economy is pressured to follow the lead of the “parasitic” financial sector? One of finance's biggest projects in Asia today is global-city making, seemingly a labor-employing endeavor.
This article builds upon recent scholarship documenting a “new structure of labor” in IndiaFootnote 8 by analyzing the collective influences of three interrelated political-economic trends. With roots in the economic crisis of the mid-1980s, in the liberalization jolt of 1991, and under recent pressures to globalize its major cities, the first of these trends—well documented in the Indian labor literature—is the informalization of labor, meaning the demise of secure jobs in the public sector and in large-scale manufacturing, and their replacement by contractualized and precarious employment practices, resulting in wage stagnation amidst high cost-of-living increases.
The second trend, which the labor literature has only briefly noted, is the national (and all-Asia) focus on investing in urban infrastructure in general and the making of global cities in particular, accompanied by a shift in state supports and subsidies away from the rural and industrial sectors of the economy into a capital-intensive urbanization process. Although one might imagine that the stimulus of new urban-infrastructure investment would lead to a flowering of well-paid, long-term formal employment, what flourishes in India today is a much more uneven and insecure employment landscape. Those working to physically build the city tend to work under “nineteenth century” labor contracts and often live on-site in makeshift housing, with minimal access to basic services or rights.Footnote 9 David Harvey's concept of “accumulation by dispossession” has been used to explain why millions have been wrenched from their livelihoods on rural and urban land in the name of that land's commercialization and financialization, just since India's liberalization.Footnote 10 The lion's share of the displaced has come from the violent conversion of the rural landscape into speculative urban real estate.
The third trend, mostly absent from discussions on labor, is the financialization of the economy, or the shift of profit making from the productive sectors of industry, mining, and agriculture to finance, real estate, and the stock market. Financialization reflects “a pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production.”Footnote 11 Identifying where profits are generated can be a useful measure of whom (or what) controls the modern corporation, for understanding the shift in power in capital-labor relations, and assessing changes in the role of labor in profit making in the national economy, as Krippner argues.Footnote 12 If more firms' profits come from new sources of (and scarcities related to) financial rents, rather than from investments in the surplus-generating, productive capacities of labor, then the role and significance of labor in the economy diminishes.
The role of finance is often understood as parasitical to the capitalist production process, in the sense that it does not constructively contribute to the economy, as it typically invests in financial opportunities that do not produce consumable goods per se and instead pursues higher returns on investments in money itself, for example, through mergers and acquisitions, land speculation, debt servicing, currency swaps, derivatives, and hedges. If begetting money from money reflects a small fraction of the economy, then one can imagine it to be a marginal exercise in speculation, rent seeking, and the losses and rewards of a handful of players. Indeed, back in the 1950s, US corporate profits from finance represented a tiny fraction of GDP, while profits from manufacturing were more than 50 percent. By the 2000s, this ratio had reversed.Footnote 13 Similar patterns exist in many OECD countries.Footnote 14 Hence today, it is less clear which sector is the parasite and which the thriving host. This article explores the recent financialization of India's economy and its impact on labor and the spaces in which the workers in the sprawling informal economy ply their trades, on what we can call the “urban commons”: the expansive public marketplaces adjoining the city's largest slums and major transit hubs, as well as the many parks, plazas, and streets where pavement dwellers, hawkers, and mobile small-goods producers set up their workshops, and through which coolies and cart pullers weave, moving the economy's goods and resources. However much the rise of the IT economy has transformed the Indian city, the vast majority of the urban population still relies on the informal economy and its informal but central locations in order to live, work, consume, and socialize.
These three postliberalization politico-economic trends—labor's declining significance, global city making, and financialization—converge on the streets of the Indian city to create a highly volatile social environment. As the mandate to build “world-class” infrastructure intensifies in rapidly transforming cities (e.g., Istanbul's Bosporus canal, Rio's Olympic and World Cup village/stadia, New Delhi's Commonwealth Games village/stadia), and to renovate crumbling infrastructure in deteriorating cities (city halls, roads, and schools in Stockton, Detroit, and Philadelphia), governments engage in large-scale debt financing and hope the arrangement does not become more expensive than the project's revenues. Major urbanization projects are being built on these speculative hopes of finance. This is the case for India's largest cities—particularly Bangalore, which is the focus here.
This article explains the effect on labor, capital, and urban space of this concatenation of trends. In Part 1, I review the scholarship on each of these trends, focusing on India as a whole. Part 2 is a case study of Bangalore, where these phenomena have significantly shaped the city's development trajectory, transforming it (unevenly) into a global city. In my analysis, I challenge the specific conclusion of labor and global cities' scholars who emphasize how labor has been largely excluded and bypassed by the growing urban economy. Rather, I argue that while city elites implement capital-intensive projects, urban workers must increasingly rely on subsistence practices and depend more upon the city's public spaces and goods (i.e., the urban commons) to survive, in what SanyalFootnote 15 suggests is the “need economy,” tapping into Partha Chatterjee's concept of the “political society,” emphasizing the large domain of daily political practices that occur outside the realm of official or elite political discourse (i.e., the legislative, judicial, and administrative arms of the state, civil society, and so on).Footnote 16
Unlike the idea of public space and goods, which is typically used to connote management by government, the concept of the urban commons suggests that certain public spaces are constituted through social relations and political perspectives that find private property to be obstacles to social well-being and hence are reproduced “through action to create/preserve common grounds.”Footnote 17 In their explanatory note on India's urban commons, Vinay Gidwani and Amita Baviskar argue that in both cases, capitalist production and commons-based social reproduction—or the “commodity” versus the “commons”—“[denote] a logic of social relations that entails particular deployment of labor's use-value.” They contend that “in one instance, labour's use-value is directed to the production of a community resource and part of its capacity for surplus-labour is returned to the commons; in the other, labour's use-value is captured primarily as use-value for capital.” Both include the contributions of wageless labor, but social relations are starkly different in commodity production as compared to commons production.
As will be discussed below, Bangalore's key market hubs are defended as urban commons by workers whose livelihoods depend upon these spaces. These spaces are also vital to city life in general; and because of this, and other reasons to be explained below, they are increasingly becoming attractive for their speculative land market value due to the substantial contribution of unpaid/wageless labor of city workers. This article argues, therefore, that the global city is being built in large part through workers' wageless labor and that the struggle between capital and labor reaches far “beyond the factory,” or the farm, to the urban commons, sites simultaneously key to the majority's survival and integral to the speculative project of financialization. This process of speculative displacement has engendered volatility and insecurity but has also provided opportunity for investors, reflecting newly financialized capital-labor relations and a new politics of the urban commons in India today.
New Structure of Urban Labor
This section reviews the latest scholarly literature on labor in India. In “Urban Systems in India,” Amitabh Kundu identifies three major trends in Indian employment that point to labor's declining significance—both as a source of profits and in political terms—due to the government's liberalization policies starting in the mid-1980s.Footnote 18 First, much of India's industrial growth has been, and is currently, in capital-intensive industries and services with low employment. Second, irrespective of sector (e.g., manufacturing, high- and low-end services, construction, public administration), most urban employment is now subcontracted and informal.Footnote 19 Third, urban manufacturing—the economic engine of India's cities after independence—is shrinking and relocating to rural areas where there are discounted land, cheaper and unorganized labor, and fewer environmental regulations. Globalized industries such as garments/textiles have not followed the imagined narrative of entrepreneurial modernization but instead have devolved into a highly exploitative “putting-out” system in which workers and their households bear greater costs of production and are paid less than minimum wage—due to the combined pressures of monopolization of global firms at the top (e.g., Walmart, Gap, H&M) and the fierce competition of decentralized contracted shops at the bottom. Piece work, not regularized wage work (based on hours worked), is the trend in compensation, demanding more of the worker and greater unpaid support from the household and community, including public urban space for workshops and hawking, and public goods and services such as electricity, water, and sanitation, which are necessary for home- and street-based production and trade.
Kalyan Sanyal and Rajesh Bhattacharya argue that within the realm of production, there have been three main labor trends: (1) domestic outsourcing; (2) informal expansion within circuits of capital, including job destruction via efficiency and hypercompetitiveness; and (3) expansion outside of formal circuits of capital and into the informalized realm subsisting inside the capitalist domain.Footnote 20 As Jayan Jose Thomas demonstrates, the biggest change in Indian employment in the latter half of the decade of the 2000s was the large-scale expulsion of women, as agriculture and industry dismissed tens of millions of female workers in the name of efficiency.Footnote 21 The dramatic increase of impoverished rural households is being partially offset for some by the Mahatma Gandhi Employment Guarantee Act, a stop-gap welfare program to inject state-sponsored wages into unemployed households as both farming and industry sectors shift to a much more capital-intensive, and labor-shedding, strategy of production.Footnote 22
As the owners of labor-intensive manufacturing eliminate formal labor commitments, the physical spaces of households and neighborhoods become renewed sites of commodity production for informalized labor.Footnote 23 Social cooperation of labor includes putting-out systems, in which workers utilize public and personal resources in order to engage in piecework commodity production. Although these forms of labor exploitation and control are not new, putting-out practices are increasing across small and large cities, according to recent labor surveys. Furthermore, this is occurring as India transitions into what government officials call the “immaterial economy.” Kundu, Sanyal, Agarwala, and Roychowdhury show in separate studies that government policies to liberalize the economy as well as corporate leaders' demands that the post-independence social contract of formal-sector employment security and benefits be dismantled, have combined to informalize the structure of labor relations.Footnote 24 While there has been job growth in India over the past two decades, formal employment has declined. That is, most employees hired today by government, public-sector manufacturing enterprises, and private corporations are hired through contractors or as casual workers. As a government-commissioned report reveals, 93 percent of India's workers are “unorganized” (government's term) or “informal” (academic term), which means workers are without formal representation of trade unions and without job-based protections and benefits.Footnote 25
Amitabh Kundu's research demonstrates that the four fastest-growing sectors in employment in urban India do not include the high-end sectors of IT engineering or finance; rather, they comprise domestic services (e.g., maids and drivers), construction, real estate, and restaurant and café work.Footnote 26 These employment areas reflect the widening gap in livelihoods in Indian cities, between the small professional class of IT, real estate, and finance professionals and the ex-industrial and ex-agrarian workforce, who now work in retail and domestic service. But neither domestic service nor retail work pays a living wage. As these scholars show, the social contract of employment in India has changed: What was formal has been informalized while the informal has become formalized, creating a new normal.
Although the term “informal” suggests disorganization and spontaneity, Jan Breman contends that, in fact, one can see a high level of organization and intentionality in the ways that capital directs the state and spurs labor informality, resulting in higher rates of return and productivity.Footnote 27 The structural shift from formal to informal and the elimination of the social contract of formal public-sector employment were some of the biggest accomplishments of the liberalization era, and the necessary preconditions for foreign capital's entrance into Indian markets.Footnote 28 As the Sengupta Commission report explains, this new economic era generated higher productivity through employment stagnation (i.e., an increased workload with less compensation). “Of crucial importance in the progressive intensification of the workload is wage payment not based on time rate but on piece rate.” On record as “self-employment,” this type of informal work “easily boils over into self-exploitation.” In many cases, laborers who do not own the means of production (land, equipment, and investment capital) sell their labor power in advance to pay off onerous debts, in what Breman calls “neo-bondage.” Breman estimates the numbers of Indian workers in neobondage debt to labor brokers are in the tens of millions, many of whom circulate in and out of temporary urban construction jobs, in what he calls the “relentless influx of footloose contingents driven out of the agrarian-rural economy.”Footnote 29 These labor trends are manifest in Bangalore, as part of the process of transforming it into Asia's next global city.
India's critical labor scholars have documented the stark shift starting in the mid-1980s—the liberalization era—when labor as a surplus- and commodity-generating force was pushed aside as mandates for growth and internationalization lead to increased productivity, competition, and capitalization, but not increased incomes or wealth for the working majority. After the general strikes in Bombay and Bangalore in the early 1980s, labor's voice through India's many public-sector unions and affiliate political parties diminished substantially.Footnote 30 With liberalization, they argue, the economy has excluded labor from surplus-generating growth and new urbanization processes have bypassed the working-class and poor majority.Footnote 31
Making through Displacing: The Global-City Phenomenon
Whereas the earliest literature on global cities emphasized the transnational political power of great cities linked through economic networks,Footnote 32 the next generation of scholars reset the agenda by focusing on the economic power emanating from urban centers such as Paris, London, and New York. Friedmann and Wolf,Footnote 33 followed by Saskia Sassen,Footnote 34 and Peter Taylor and colleagues,Footnote 35 observed the tendency of major corporations to cluster in a handful of “alpha cities” and then established their multilayered effects on subsidiary cities networked globally. Sassen argued that a catalytic spark for global-city making occurred during the 1980s, when the world economy became financialized.Footnote 36 This was in part triggered by the “Big Bang” of the deregulation of finance in London in 1986, a liberalization policy that rippled across the business world. It was not just the location of the major firms that mattered, according to these scholars, but the political, economic, and social forces that were generated by the agglomeration of these firms' financial and commercial services. Global cities scholarship thus shifted from studies of the place-bound city to studies of capital dynamics and urbanization processes in and across global cities.
In response to this literature, those studying cities of the Global South noted with concern that these criteria necessarily excluded their subjects, leaving them, once again, in the “waiting room of history.”Footnote 37 These scholars recast the debate within a postcolonial framework, maintaining that urban theory excluded “ordinary cities,” where the majority of the world's urbanites dwell, and erased the global and local practices that emanate from and across “off-the-radar” cities such as Johannesburg, Lagos, and Manila.Footnote 38 As both Smith and MasseyFootnote 39 note, these dense and complex urban worlds need to be studied from below in order to reveal local and translocal practices of agency and structure.Footnote 40 Hence, postcolonial urban analysts study cities in relations, highlighting powerful dynamics among cities, such as London-Johannesburg and Manchester-Bombay, and note the distinctive characteristics of cities often off the global-city scholars' map.
Meanwhile, as the power of financial firms became more solidly embedded in the global political economy, the desire of states to build global cities collided with interest from large infrastructure firms and financial intermediaries to expand into the “risky” terrain of the Third World. An optimistic global-city rationale and plan of action have evolved from a transnational policy network with global platforms and newly cultivated global-city expertise.Footnote 41 Since the mid-1990s, the international finance institutions—particularly the World Bank and Asian Development Bank—have refocused their efforts on an agenda of global urbanization, arguing that “we” can solve our most pressing problems of impending ecological disaster and entrenched urban poverty by working for economic growth through best practices global-city planning (i.e., the best of Berlin, Barcelona, London, Tokyo). Celebrating the notion of rapid urbanization, UN-Habitat director Joan Clos proclaimed at a 2012 workshop on global cities held in Barcelona,
We're in an exponential phase of urbanization, more infrastructure will be built in the near future than has been in all of human history! What does this mean for the UN and the World Bank? There are huge needs and large amounts of work in the next thirty years. … In fact, urbanization is a huge engine of growth; every day, there are thousands of people who come to the city looking for their chance, and we owe it to them to provide the wealth that cities can offer.Footnote 42
This keynote address was music to the listeners' ears, as the audience included infrastructure and finance firms such as Siemens, Deutsche Bank, Cisco, Veolia, and J.P. Morgan, as well as select city mayors and transnational policy experts who circulate through similar meetings held in Singapore, Hong Kong, Toronto, and London, such as the World Cities Summit, Cities Alliance annual meetings, World Urban Forum, C40 Cities conference, and the Global Cities Summit. McKinsey and PricewaterhouseCoopers publish reports on the making of global cities (“Cities of Opportunity” and “Global Cities of the Future”Footnote 43 ) and have assisted in the drawing up of India's major cities' master plans over the past decade, albeit amid controversy around foreign intervention and boilerplate plans.Footnote 44
These global-city boosters highlight the inevitability of the trend: China is building 100 global cities, and countries are putting up land for international collaborators to build eco-cities, smart cities, knowledge cities, and greenfield experimental cities. Cisco wants to be the sensor-based “big data” collector, Goldman Sachs is keen on being the early (entry and exit) investor; Siemens hopes to build the airports; Macquarie, the tollways; Limitless of Dubai and Temasek of Singapore want to build the new private townships; and China hopes to export its Shanghai growth model along with its construction firms and labor force. And Bangalore, the IT city of Asia, is touted as an exemplar.Footnote 45
In postcolonial India, beginning in the late 1940s, large-scale foreign investment was highly regulated, with exceptions related to the productive side of the economy, such as industry, mining, and energy, in which foreign firms could be minority investors. It was only recently, in 2002, that foreign direct investment (FDI) could put its capital in real estate, and only for socially productive endeavors such as a new township (of more than 100 acres) that could add much-needed housing and jobs. (Township size was a supposed deterrent for investors only interested in speculation.) In 2004, that logic was extended to special economic zones (SEZs) allowing for capital to invest in manufacturing on large swathes of rural or peri-urban land. Government would provide the land and services, such as roads, water, electricity, and, of course, multiyear tax breaks. As Levien, Jenkins, and Goldman illustrate, in many cases, it is the government service of sweeping people off land that is most dear to investors, with many SEZs evolving illegally into real estate projects that privilege high-end residential complexes over manufacturing.Footnote 46
By 2013, under pressure, national regulation was rolled back once again, allowing SEZs to be as small as seven acres, with only a small percentage of the total area allocated for production; furthermore, SEZ land could be bought and sold like any other commodity.Footnote 47 In this way, the foundational premise of a special economic zone, one in which the state will offer large subsidies in exchange for extraordinary job-creating commitments from firms, disappears. As one finance expert declared in the press, “It will now be easier to exit from SEZs.”
Under pressure from chambers of commerce, real estate, and finance interests, SEZs have transitioned from industrial to real estate purposes, from productive to financial enterprises. In the first sixteen months of the 2005 SEZ Act's passage, 464 sites were approved, but as Levien notes, in contrast to the Chinese model, in which the government developed the zone for industries, in India the government's sole job is to acquire land, leaving the construction and maintenance to private developers, so that the zones themselves have become the primary source of profit for investors, not necessarily the production that could occur there.Footnote 48 SEZs today are being financed by real estate and finance firms and, increasingly, by the world's largest private equity firms, the main facilitators of financialization in India. According to VC Edge research firm, foreign private equity firms started to invest as soon as the laws changed in 2005, with $136 million; in 2013 alone, private equity firms invested more than $910 million in fresh capital, with Blackstone and Xanders Group leading the pack. Blackstone invested $700 million in just two years (2012–2014), amassing 24 million square feet of office space in India's cities, at a time when occupancy rates were low, as were office space costs. In 2015, Blackstone became the largest owner of office space in India, and its main rival, the aggressive Wall Street firm Kohlberg Kravis Roberts (KKR), is trying to catch up, having invested more than $123 million in two realty projects since 2013.Footnote 49
India's largest developers (DLF, Unitech, Supertech) have taken on unsustainable debt while accumulating large land banks and promising world-class, super-sized residential complexes to buyers from all over the world; following the 2008 crash, they have been forced to sell off their assets at bargain prices, and, more recently, foreign private equity (PE) firms have purchased substantial shares (including in unoccupied SEZ projects) in exchange for preferential treatment and guarantees of short-term exits.Footnote 50 The government reported that 60 percent of land acquired for SEZs lay vacant as of 2014, either because financing has slowed or investors have become more keen on making money from driving up land prices than on building infrastructure.Footnote 51
As the SEZ morphs into real estate ventures fueled by speculation, some are becoming privately held townships, such as the 12,000-acre Sri City in Andhra Pradesh, and the proposed cities outside of Mumbai and Gurgaon, each to cover 25,000 acres (an area much larger than Manhattan). These rapid shifts require that we rethink outdated notions of city government and public life, if cities may be owned and managed by offshore funds (with a revolving door of exiting and entering shareholders), ruled less by the pulsations of democratic process and more by the “natural” drive for some to sell when investments are perceived to be becoming illiquid and better opportunities beckon elsewhere.
Financializing the Economy
This section reviews the main trends in India's privileging of finance. One important offshoot of India's liberalization since the early 1990s has been the recent, gradual but consistent easing of constraints on the role and nature of financial capital.Footnote 52 In a rare and important study of India's foreign direct investment (FDI), K.S. Chalapati Rao and Biswajit DharFootnote 53 asked if FDI is investing fresh capital into areas of the Indian economy that will foster innovation, productive growth, and job creation. A partial review of the report's conclusion is as follows: Starting from the common assumption that “good” FDI is that which stimulates employment, growth, productivity, and perhaps even infrastructure development, they find that a substantial proportion of officially tracked foreign capital inflows comprise reinvested capital and not fresh money. Significantly, less than half of FDI in India goes into the same sectors from which the investment originated, suggesting that most FDI is not building up capacity through experience or for the long term within a particular sector, but instead is searching for higher earnings elsewhere. Most foreign direct investments in India flow into the stock market, real estate/construction, and telecommunications.
A similarly large percentage of foreign capital invests in mergers and acquisitions, which can create short-term share price spikes as they promise efficiencies, but also typically translates into worker layoffs (and outsourcing, in the case of foreign mergers and acquisitions). There has been a substantial shift away from manufacturing and into finance since the 1980s, as today less than 20 percent of India's FDI flows into manufacturing. (This trend is worldwide: Across developing countries between the 1980s and the 2000s, the proportion of FDI flowing into the financial sector grew from 6 percent to 21 percent.Footnote 54 ) These FDI practices typically do not generate secure and robust employment, except at the top of the pay scale.
Finance capital has also generated significant savings by relocating offshore in tax havens, thus reducing transaction costs and lessening its contribution to public goods via taxes. In India, a majority of capital is routed through tax shelters—50 percent of FDI flows to India from Mauritius alone. As private equity investors have explained, they only enter India with a clear and short-term exit strategy, meaning that they only commit their money for two to five years.Footnote 55 This is one of the main reasons that the Indian government's ambitious plan of the mid-2000s to create global cities with world-class infrastructure is developing in fits and starts. As a majority of FDI flows into real estate and the stock market, and 40 percent of freely traded stocks in India's main stock market are owned by a handful of Wall Street firms, one can infer that the oligopolistic practices of the US are emerging in India. These practices create new forms of capital scarcity, as the cost of doing business with financial firms goes up and competitive options for access to capital shrink.
Globally, as the base of economic power shifts toward finance, its influence over politics has increased, effecting urban governments. For example, to generate revenue from a shrinking manufacturing tax base, as many financial firms have relocated their offices offshore to avoid taxes, US cities have had to raise capital for public infrastructure by using new and risky financial tools, such as interest rate swaps. As Rachel Weber explains,
[I]n the last quarter of the twentieth century, certain changes stand out as marking a new era of increasing integration between financial markets and the day-to-day operations of local governments. Local governments moved beyond simply financing collective infrastructure and doing so with general obligation bonds, backed by their full faith and credit. Municipalities added new, risk-laden instruments to their debt portfolios, including variable rate debt, interest rate swaps, auction bonds, and derivatives—often with disastrous effects.Footnote 56
These swaps have not panned out for US cities, and since the early 2000s, dozens of city governments (as well as school districts and transit authorities) have been paying back their investment losses by diverting much needed public revenues to Wall Street. City halls, parking meters and lots, toll roads, theater and business districts have been converted into collateral on defaulted high-stakes bonds and loans.Footnote 57 New York's Metropolitan Transit Authority (MTA) has had to raise its rates 7.5 percent for three consecutive years since 2010 and lay off more than 1,000 employees to pay off its debts. Despite the appearance of a competitive free market of unlimited financial tools from which to choose, by 2013, only four firms controlled 93 percent of the $184 trillion interest rate swap market that has rested heavily on municipal borrowing.Footnote 58
As Morag Torrance notes, these investment strategies have cut across national borders as well as different government and property regimes:
Not only are we seeing the connection of highly valued spaces and zones within cities through the creation of urban infrastructure, but also such local spaces are becoming part of a system where infrastructure networks can be seen as a hub and spoke system, with global owners of the hub, connecting their spokes over various continents. Footnote 59
When majority ownership of shares of local public infrastructure is held by hedge funds based virtually on the stock exchange with offices offshore in the tax havens of Mauritius or the Bahamas, the nature of government and oversight and public participation changes. Institutional investors buy shares of infrastructure and combine them with other assets—a toll road in Sydney, a water service in South Africa—making it increasingly difficult for the public of service users to know where and how to voice their concerns. The question of who owns our local urban infrastructure is obfuscated by the fact that that responsibility could change with daily trading on the stock market. The biggest infrastructure investors today (e.g., Macquarie and Goldman Sachs) enter and exit share holdings based on share price fluctuations; hence, the traditional notion that “our” water system, road, or town hall is run and owned by local government and is responsive to local citizens is quaint but less and less accurate. As noted earlier, critical to this transition has been the relaxation of controls over foreign investors and the informalization of the structure of labor; regulations are continuing to be relaxed, especially since 2008.
After the 2007–2008 global financial crisis, credit was scarce. In India, the largest real estate developers and infrastructure projects were on the verge of bankruptcy; yet, this precipice riding created an opportunity for global private equity firms, which after a time aggressively invested in undervalued or overextended infrastructure projects as debt financiers. Since 2008, many global-city projects have languished in debt and delay; and institutional and equity firms have purchased stock shares and debt. But as NagarajFootnote 60 shows, capital markets in India have had little positive effect on corporate fixed investment (e.g., factories) or on the country's output.Footnote 61 Many foreign equity firm investors generated substantial profits when they exited a few years later, as I will show in the case of Bangalore. Nagaraj wonders why India is pursuing the Anglo-Saxon model of the primacy of capital markets, emphasizing liquidity and short-termism of corporate management, when other alternatives exist, especially in a labor-surplus society like India.Footnote 62 When looking closely at the role of finance in city projects large and small, one sees that not only is government's decision making greatly influenced by the power of finance, but also that foreign private equity firms are playing a larger role in city governance since the 2007–2008 crisis.
Part Two: Speculation and Labor on the Urban Commons—The Case of Bangalore
Building the Public City
This second part of the paper explains how the concatenation of these three trends (labor's declining significance, global-city making, and financialization) plays out in Bangalore. In it, I argue that labor is not only being displaced physically from the city, but also is losing access to formal employment and urban public space for home and workshop. Labor has become less necessary for surplus generation, less significant in the political leadership of the city, and less able to earn a living. But as a point of contrast to the literature, I contend that labor contributes to the vitality of the city, in particular in urban public spaces, which in this moment of hegemonic liberalization, has become attractive to and creates value for global investors. Consequently, labor feels the squeeze from its reduced power in the economy, in the political realm, and on the urban commons. No wonder that in Bangalore (but also in Cairo, Istanbul, Madrid, and Athens) struggles over the urban commons are becoming increasingly commonplace. As noted earlier and developed in this section, the speculative city is being built in large part with workers' unpaid labor and “wageless life,” and the urban commons has become key both to the majority's survival and integral to the speculative valorization project of global-city making.Footnote 63 Since liberalization did not occur on a blank slate, it is useful to appreciate the extent of change occurring in the city by starting with a brief history.
The once-small city of Bangalore has a rich and cosmopolitan history. By the late 1700s, Bangalore was the thriving commercial and manufacturing capital of the Mysore state under Hyder Ali and Tipu Sultan, exporting a wide variety of cotton, wool, and silk textiles, producing agricultural goods and pressed oils, and manufacturing armaments for Mysore's military. With the fall of Tipu Sultan in 1799, the British settled outside of the small market town of Bangalore and established a cantonment, cordoned off from the “pete” marketplace. Although located within the independent Mysore Kingdom, the British governed the cantonment where it housed its military and invited laborers and craftspeople from outside of Mysore to settle and ply their trades. By the 1850s, the British began to transform the Bangalore economy by building up an export-oriented industrial landscape to feed the British economy and gradually undermining local artisanal craft systems.Footnote 64
In the early 1900s, the Dewan (or prime minister) of Mysore, the reputable engineer M. Visvesvarayn, chose Bangalore as the site for science and technology research institutes (such as the Indian Institute of Science) and state-sponsored manufacturing enterprises. Post-independence, during the1950s and 1960s, following Prime Minister Nehru's policy of national industrial development and import substitution, the national government set up production units such as Hindustan Machine Tools (HMT), Bharat Electronics Limited (BEL), Bharat Heavy Electricals Limited, Hindustan Aeronautics Limited (HAL), and Indian Telephone Industries (ITI).Footnote 65 Bangalore became strong nationally in design, engineering, and manufacturing of heavy electrical equipment, manufacturing tools, telephone and communication technology, aircraft, radar and defense equipment, train engines, watches, electronics, car motors and batteries, and eventually space equipment.
By the early 1980s, the HMT watch and BHEL heavy electrical factories alone employed well over 80,000 workers, and HAL aeronautics more than 42,000.Footnote 66 Most of these jobs existed within the formal sector in that they were secure, supported with benefits, and backed by the factory acts and a variety of labor laws that did not protect “informal” work. Employees were represented by an assortment of competitive trade unions, and union leaders filled city council seats as well as political party leadership, helping set the city's political agenda.Footnote 67 Sprawling public-sector campuses originally situated on the rural periphery of the small city provided much-needed housing with easy credit, English language schools, parks, bus service, temples and shrines, cricket fields, and health clinics. The major industrial townships covered hundreds of acres each; the Aircraft Township of Hindustan Aeronautics, once on the periphery, has become part of the city core, sitting on 3,000 acres of public land.Footnote 68 As the city grew outward, these rural campuses became the central pillars of the densely populated city, revealing how “central nodes” within a city can shift under different urban regimes.
As the city's main employers, these public sector enterprises, along with the government's large administration and military, offered retirement schemes, incremental wage increases, medical and accident coverage, and access to cheap credit and housing. Their production facilities generated regular demand for small commodity production from workshops encircling the factories, and hence spawned working-class neighborhoods and workshop-based manufacturing and service businesses nearby. Together, government and industry built up both the physical and sociocultural landscapes of Bangalore.Footnote 69 The city's topography of neighborhoods and housing blocks; schools, parks, and sports fields; industrial layouts and peripheral workshop areas, as well as the government's expansive and uncommodified public spaces for parades and processions, were the physical manifestations of the postindependence social contract in Bangalore.
As one of my interviewees, a retired public-sector industry senior manager, joked that managers spent more of their day on providing housing and credit to staff than on the producing for these businesses' bottom line. He noted about the culture of management during this period,
There was a feeling in those days … being a government-owned company, it … should … act like an ideal employer. [Employees] should be paid well, they should have housing, they should have transportation, they should be fed well. And, you know, the idea was to generate employment, therefore overstaffing was accepted as … one of the responsibilities of public sector. … in other words … they were supposed to be model employers, but hardly a model company.Footnote 70
Negating the Social Contract
Starting in the mid-1980s and mimicking major reforms sweeping across the post-Cold War world, India's liberalization policies sought to eliminate this social contract through a “dis-investment” campaign aimed at privatizing public sector industries and an “informalization” campaign that ended the growth of formal government employment. The central government also enacted policies to encourage foreign direct investment (FDI) in manufacturing, services, natural resource extraction, water, and urban land. Meanwhile, a significant corporate rupture in employment practices in Europe and the US aided Bangalore greatly: The outsourcing of white-collar and professional work, which undercut labor conditions at home as once-secure and well-remunerated jobs moved abroad. Bangalore, with its talented computer engineers, benefited hugely from this shift, especially from the Y2K computer “crisis” of the 1990s.Footnote 71 Since then, India's economic future has been pinned to the phenomenal rise of information technology (IT) and information technology enabled services (ITES), with Bangalore firms Infosys and WIPRO and the US firm Texas Instruments originally paving the way. Pundits, business schools, and the international finance institutions have heralded the spirit of this new capitalism and its catalytic potential for hitching the future of Indian cities to the IT growth machine as the means to successfully overcome Asia's intractable conditions of poverty.Footnote 72
But the reality on the ground belies this dream. The IT and ITES sectors employ less than 6 percent of the city's workforce;Footnote 73 of these hires, the industry's primary employment practice is by contract or subcontract, on an as-needed basis.Footnote 74 The turnover rate for IT employees can be as high as 30 percent annually, reflecting both the negotiating capacity of the marketable engineer and the new “culture of liquidity” of the firm,Footnote 75 which works much differently for the clerks and janitors than it does for engineers. For example, the low-caste workforce of groundskeepers, janitors, and porters had much greater job security and benefits, including housing, in its public sector employment than it does today in both the casualized public sector and in IT.Footnote 76 One person's flexibility is another's precarity, and the enjoyable risks the engineer takes when s/he quits a job in Bangalore to take one in San Jose, California (or, these days, the reverse) is nothing like the insecurity experienced by an ill-paid janitor or clerk working on a temporary and without-benefits basis to support the IT class. The city's slum population (now comprising 30 percent of the city's population, by some estimates) continues to fill with employees of construction firms, domestic servants, restaurant workers, public sector workers, drivers, cleaners, and the workers on the low end of the pay scale in the IT sector. In her survey of six Bangalore slums, Roychowdhury found that low-level employees of the public sector suffered a 50-percent wage reduction once they were rehired on private contract.Footnote 77 Across occupations, slum dwellers suffered wage compression and reduced access to basic public services postliberalization, compared to preliberalization.
Making Bangalore into a Global City
Precarious city work is not new, and many in the laboring class have typically had one foot in the village and one in the city, working high-demand seasons on the farm and in the urban workshop.Footnote 78 But over the past fifteen years, global-city projects have expanded Bangalore's metropolitan boundaries by expropriating large tracts of rural land. City territory has tripled in size since 2007, from 226 km2 to 696 km2, incorporating a few hundred villages and a dozen towns. Private investors have ambitious plans to connect Bangalore and Mysore, 140 km apart, into one consolidated megalopolis, imagining a Tokyo-Yokohama cityscape. Three global-city projects alone consume more than 260 km2 of land, which is larger than the entirety of pre-2007 Bangalore. These three projects—the international airport and its surrounding development area (its acronym is BIAL), the IT corridor, and the Bangalore-Mysore Infrastructural Corridor (BMIC)—have been promoted as public goods, and officials have invoked the country's law of eminent domain to acquire land and clear out villages, farm land, village commons, forests, pastures, and a few hundred lakes.Footnote 79
Yet, each project plans to use only a fraction of its designated land for runways, IT office space, or a toll road, with much of the land acquired fueling a rising industry of land speculation.Footnote 80 The BMIC infrastructural project promises to displace more than 200,000 villagers, their farms, and the village commons, so that a share-held holding company can sell the rights to build seven corporate-owned private townships along a toll highway linking Mysore and Bangalore. The development area stretching far around the international airport may house an aeronautic industrial complex, but in the meantime, tens of thousands of rural families are being displaced and upper-class villa estates and high-end hotels are being built.Footnote 81 While the government acquires an acre from farmers for as little as five lakh rupees (approximately US$8,000), developers such as Brigade and Sobha sell individual villas on one-tenth of an acre near the airport for five crore rupees each (approximately US$834,000). In these high-activity areas, land prices have risen about 30 percent per year over the past decade, making land acquisition the most lucrative investment in India, even without adding a penny in construction or employment. Investors such as India's Reliance have already exited their investments in the BMIC project, having earned more than 30 percent in annual returns from 2006 to 2011, while JP Morgan has increased its shares substantially. (Notably, only a tiny fraction of the road, and no townships, have been built since 1996, reflecting the seemingly odd pattern of private equity investors profiting from the movement of capital through stalled mega-projects.) Most non-IT profits in Bangalore today come from real estate speculation and project financing. Can this trend build the city and sustain its workforce?
Ground Zero: the Churning CommonsFootnote 82
The day after New Year's 2014, Bangalore's mayor publicly announced he had mortgaged the city's classic-era town hall, six major public markets, two historic and central public buildings, a maternity hospital, a cemetery, and some slaughterhouses, to pay off debts to the city's major creditors, India's major public banks.Footnote 83 Bangalore was broke, the mayor confessed, despite overseeing construction of multibillion dollar infrastructural projects in special “tax holiday” zones. In theory, these should be highly productive sites generating substantial municipal revenues. Bankrupt, the city had little choice but to take what remained of its public infrastructure and give it to the banks as collateral in order to finance the yet-to-be-built global-city infrastructure. This was a gamble of extraordinary proportions, one that is not unique to Bangalore, as recent negotiations between indebted city governments and institutional investors in Detroit, Barcelona, and Buenos Aires reveal.
A 2013 audit of the Bangalore City Corporation, the body that runs the city, found that monthly expenditures for basic maintenance, salaries/pensions, and the like, were being paid from high-interest bank loans and not property taxes and user fees. This startling discovery is also true of a few Spanish cities since Spain's financial collapse in 2008 and of some US cities such as Stockton and Detroit, so this development cannot simply be attributed to an “Indian” or “Third World” administrative culture of mismanagement. Whether in Spain, the US, or India, the solution proffered to the problem of fiscal insolvency is not to contain the process of financialization, but to expand it by mobilizing “under-valorized” public goods and assets as collateral in exchange for new forms of finance. In the search for collateral, city governments are auctioning off their public markets and converting workers' settlements, public bus transit hubs, and public-sector factory sites into tools of speculation and displacement.
The next section highlights how Bangalore's public spaces are being converted into speculative real estate and how this troubles conditions for many urban laborers. My argument is as follows: Legitimated by the global-city discourse of upgrading old city space into world-class infrastructure, public lands are being converted into speculative real estate by government agencies to generate revenues and, in response to lucrative market incentives, spurring a process of speculative displacement. In other words, the urban commons are becoming not only monetized, but financialized, especially the city's public markets, pavements, and workers' neighborhoods. As employment practices squeeze labor out of the formal market and reduce workers' purchasing power and income security, labor depends more on the urban commons. But since these latest financial decisions have reduced access to public goods and commons and opened them up as potential windfall investments, the commons have become sites of labor-shedding value creation. In sum, the very same finance-led forces that are restructuring the economy into a low-employment, highly liquid investment platform create the “surplus” population forced onto the commons, joining those people who have been maintaining these sites over the long term, contributing to the city economy in a multitude of ways. Because these are prime spaces of consumption, since the early 2000s they have attracted the interest of the (indebted) government as well as speculators capitalizing on institutional vulnerabilities and potential value margins. Consequently, the commons have become sites of conflict and opportunity for precarious social reproduction as well as for value creation for financialized gain.
Bangalore's major city markets and slums are two central sites of contention, and they reflect the convergence of the three major trends of the current era of liberalization: labor displacement, global-city making, and financialization. The following examples of the enclosure of public markets, slums, pavements, and the associated “clean-up Bangalore” campaigns and finance strategies highlight this convergence.
Markets for Speculation
How fair is it to collect just Rs. 150 per shop, per month on two acres in the heart of the city, when it can generate crores (i.e., tens of millions of rupees)? As the city (government) we are mandated to utilize land in such a way as to realize its true market potential. We have given away public land to a few vendors at throwaway prices.Footnote 84
This is how one elected city councilorFootnote 85 explained a controversy over a decades-old famous street market on two acres of government land in the heart of one of Bangalore's old neighborhoods, Malleswaram, where street shopping (on Sampige Road, for example) has been a long-standing community attraction. Since 2011, the city government has planned to convert the “dirty” and “encroaching” vendor stands into a sleek commercial mall complex with fee-based parking and high rents. Officials are working with a new liberalized definition of shared public space, using the business discourse of “unlocking value” wherever it can be found.
In late 2012, having received rent from the more than 250 stall owners for years, the Bangalore Development Agency (BDA) designated the site as unsanitary and the vendors as unruly, as they apparently blocked the sidewalks in “dangerous” ways to sell their wares. The BDA invoked its new “Wake up, Clean up Bengalaru” city clean-up campaign.Footnote 86 Although the market had not been considered prized real estate until recently, its reputation and popularity made it a significant contributor to street life. In March 2013, the BDA gave one day's closure notice, and afterward vendors complained that their stalls were demolished and their inventory stolen. They were offered no alternative site where to work and were shocked at being treated as criminals for breaking codes and rules never before invoked.
A few lanes away from the former site of this fruit, spice, flower, and vegetable market sits a smaller one, built on government land, and recently condemned for being dilapidated and unhygienic. It is next door to a newly built Foodworld supermarket, and this proximity has spawned a series of protests from vendors whose livelihoods depend upon these public spaces.Footnote 87 During a series of clashes with the police, vendors threw tomatoes at the supermarket's windows to highlight the corporate tactic of sacrificing profit in order to wipe out the competition. The air-conditioned Foodworld consistently sold tomatoes at lower prices than the cart and stall vendors next door (i.e., “loss leaders”), whose owner/workers manage their overhead costs through wageless labor—waking up before dawn, pushing their carts across town to fetch goods from farmers and wholesalers, cleaning the stalls, giving routine bribes to the police, paying the BDA rents, and covering their unsold losses.Footnote 88
This displacement is being challenged: “Can't we preserve the few local spaces we have in the city?” asks one neighborhood activist. “We already have two malls—the Orion and the Mantri. Do we need another one?” One journalist reported that “Residents are rallying … ‘The market is part of this cultural ecosystem,’ says Shivaram Meenakshi Bharath, a civic activist.”Footnote 89
Bangalore's largest market places, KR Market and Johnson Market, have also come under fire since 2008, as they have been plagued by the city government's aspirational plans to upgrade and modernize markets, wiping them clean of “illegal and squatting” traders. As noted above, by 2014, these two robust markets were the centerpieces of the package of public goods given over to the banks as collateral for the city's mounting and unpaid debt. Surrounded by working-class neighborhoods, these markets reflect the organic nature of “unplanned” working-class Bangalore. As marketplaces grow on public land, bus stands crop up nearby based on heavy demand, and informal housing gets constructed to accommodate the poorly compensated market workers, many of whom would otherwise have to commute from a village hours away. City government offers some services (in response to pressure or bribes), but not others, so garbage dumps pile up nearby, and no public sewers or toilets are built.Footnote 90 Maintained by the large workforce of vendors, traders, coolies, and their family members, these neighborhoods are central to the city economy's wellbeing.Footnote 91
Due to the pressures of debt and high interest loans from high-stakes global-city projects, Bangalore's public spaces are now under threat. One obvious strategy has been to convert these undervalorized plots (owned by the government) into upscale enclosed shopping malls, clearing the pavements for the consuming middle class. But this strategy of converting public markets (and private property) into India's enclosed shopping mall industry is not what it appears. Aside from a few lucrative prestige malls in prime commercial spots, the sector is not thriving or productive. Instead, it has been mostly fueled by the short-term demands and motivations of finance capital: More than 50 percent of investment capital for Indian malls comes from a mix of domestic and foreign private equity firms, and they have been pulling their money out soon after the retailers move in. As of 2013, 60 percent of India's 650 malls were financially broke, and many of these stand on valuable urban land as empty shells.Footnote 92 In other words, enclosed shopping malls are fast entry, fast exit enterprises; the profit comes in the initial years of (often state-subsidized) land acquisition and dispossession, construction, and leasing. Even though 30 percent of new shopping malls in Bangalore were vacant as of 2013, many investors profited handsomely from the initial share prices; therefore, conversion of public markets into malls reflects a financialized business move, not a simple commercial upgrade of retail markets.
Speculative finance is the driving force: the land flipping, commons clearing, and mall construction have resulted in substantial profits for their financial investors; the initial profits come not from the much-heralded fount of middle-class consumption, but rather from the devaluation of these urban spaces by government agents in charge of land conversion. That is, profits are created by government officials setting below-market compensation rates for the displaced land owners, land brokers who resell or build on these land “gifts,” and financial investors who capitalize on the development but then exit before projects shift into a rent-collecting endeavor.Footnote 93
In addition to clearing out public markets, the city is widening approximately 400 kilometers of road, forcing many pavement vendors, hawkers, and workshop laborers to relocate—another form of market clearance since the streets are integral sites of commerce in the informal city. A 2010 study of Bangalore's street hawkers documented a heightened anxiety by vendors whose corners, sidewalks, and lanes were being targeted for road widening as part of the global-city campaign.Footnote 94 Even though fewer than 3 percent of the city's hawkers travel to work by car, the corners and sidewalks on which they work are being demolished for wider auto thoroughfares. At the nine locations researchers surveyed, chosen because they were popular sites for street shopping across Bangalore, vendors were being displaced for “flyovers” (highway overpasses and ramps), and for larger commercial projects such as an expensive metro system and enclosed shopping malls.Footnote 95
What can we conclude from street displacements occurring across the city? The lakes, bylanes, pavements, and marketplaces are government land and provide public goods through a combination of public land use and the labor of craftspeople, traders, and laborers who work without much compensation. With no alternative sources of social reproduction, these groups are dependent upon public space to survive. Their labor helps meet the city's consumption and entertainment needs (e.g., shopping, strolling, socializing), and offers a version of city life and culture that differs substantially from that experienced in the enclosed shopping malls and gated communities sprouting up on public lands.Footnote 96
Roychowdhury demonstrates in her study of six slums in Bangalore that many of their residents' chief responsibility is maintaining the streets; among them are rag pickers, drain cleaners, scrap collectors, cart vendors, coolies/porters, and tea and snack sellers working at public markets. Collectively, they represent one large segment of the severely ill-paid urban labor force, providing services that keep the streets (and the commons) alive.Footnote 97 These workers contribute to the city's vitality and affordability, while surviving through the bargains they negotiate in their illegal settlements, unlicensed shops, and illegally tapped electricity and water; the street, after all, is workshop, sales office, bed, kitchen, and source of income.Footnote 98 The slum as home and workshop is closely tied to the street as market, and together they could be considered to comprise the labor-based dimension of the urban commons.Footnote 99
As global city projects eat up so much rural and urban government land and displace tens of thousands annually, the slum and the street become overburdened with the dispossessed. Even as Bangalore is one of the largest contributors to India's GDP, its number of slums has increased over the past decade, from 473 in 2003 to 597 in 2013. Some scholars and activists count the number much higher, arguing that Bangalore's slums have more than doubled over the past decade. Hundreds of migrant workers move to the city every day and live in makeshift housing on construction sites, in cars, and in vacant lots; they are rarely counted. New slums emerge along the railways or on other small government plots; their inhabitants are construction and domestic workers, vegetable vendors, and street hawkers. Many stuff into single rooms, and are not counted as slum dwellers per se. But they fill the open streets and private homes plying their trades. While the slums expand, the urban commons shrink, and this reduction profoundly affects labor.
Often, the production of small goods and services requires collective cooperation to tap electrical lines, dig drainage gulleys, hook up water lines, or install toilets. It requires political patience, deference, muscle, and money to convince the water board to place a public water tap on a particular lane and to mobilize the community good will, time, labor, and money necessary to maintain and service the tap, and so on.Footnote 100 Small open-air markets sprout up anywhere there is an open lot—what Solomon Benjamin, in studying Bangalore, calls “occupancy urbanism”—but only if merchants can mobilize enough labor to carve out and maintain the space, navigate the police, bureaucracy, and community, and keep the area bustling with commerce.Footnote 101
In other words, the urban commons is built upon the skills and wageless labor of a large slice of the urban majority. As AbdouMaliq Simone writes in regard to African cities, the poor majority typically live outside the formal urban infrastructure; making the city livable requires “people as infrastructure,” the active constitution of social institutions by the urban majority to supply the goods and services denied them by the public.Footnote 102 Similarly, Nikhil Anand writes on how the working poor of Mumbai create a fibrous network of “illegal” water pipes and services for their settlements (which house half of the city's population), often with the paid-for consent of the bureaucrats and elites who profit from these infrastructural diversions.Footnote 103 Today, in Bangalore, the laboring majority is caught between the increased commercialization and financialization of the commons and its own increased displacement from the urban labor market. They are more reliant on the shrinking commons for their survival, while their position is more precarious in this competitive environment of debt-driven city planning and debt-finance leveraging.
Therefore, it should be no surprise that some of the biggest protests in Bangalore today are over market clearing, road widening, and street “cleansing” of hawkers and peddlers. The New Delhi government has recently imposed a series of bans on public activities that have led to a crusade to criminalize the use of the urban commons by the poor, eliminating the streets of vendors and the roads of poor people's vehicles (traders' carts and rickshaws).Footnote 104 In Mumbai, India's financial hub, the most contentious political struggle of late is over the world's largest slum, a woven tapestry of public/private holdings and capitalist/noncapitalist (and “commoning”) practices. Peopled by more than one million Mumbaikers, Dharavi produces approximately one-half of the city's GDP, and yet the financial sector hopes to displace its residents and transform it from a productive to a land-based speculative economy. And, in Bangalore, one of the most controversial land evictions will be the governmental acquisition of more than 10,000 acres of precious grasslands north of the city, for which there are plans to both expand and shift the major educational, defense, and industrial campuses from the city center to these rural commons.Footnote 105 This grab would free up “undervalued” public lands within the city core while expropriating precious rural lands, colonizing the land on which 70 villages depend for their livelihoods, and extending the Bangalore city limits another 200 km to the north, an audacious calculation more fitting for a footloose investment banker than a civil servant or city planner.
Conclusion: City as Collateral
Marx never imagined the world of labor as simply divided between the employed and unemployed or torn between the formal and informal. Rather, Marx envisioned the “greater attraction of workers by capital … accompanied by their greater repulsion” (emphasis added).Footnote 106 As Michael Denning observes, today, with so much worker expulsion, “to speak of labour is to speak of the already enfranchised,” by which he means paid labor.Footnote 107 In many urban settings where government bankruptcy goes hand in hand with world-class infrastructure and luxury consumption, the repulsion of labor (and its access to public resources) is getting the upper hand. How can we reconcile the displacement and superfluity of labor with the “growth machine” image, seemingly able to employ all in the building of the twenty-first century globally competitive city?
We can start by thinking of the city as a place of collective crowd sourcing, or socially cooperative labor, existing alongside exclusion and exploitation. As the wage form of labor becomes less significant and less remunerative, people must contribute more labor to generate goods and services for their individual, household, and collective provisioning. Although subsistence production has always existed, today as the city becomes financialized and governments prop up the city's financial position through the conversion of public goods, public space, and land into financial assets, it becomes more difficult for the working majority. The process devalues labor. In India's largest cities, surplus is being generated through labor's dispossession and exclusion. Theoretically, this phenomenon raises questions about the labor theory of value, and politically, about the focus of labor-based organizing.Footnote 108
In the conversations I have heard at conferences, between government elites and their counterparts in venture capital looking to invest in India, one salient theme emerges: The longstanding obstacle of labor as a political counterforce has completely disappeared. Instead, the main hurdle is access to land, without which they say there can be no foreign capital investment. This is the gauntlet thrown down to the government: Only if vast land holdings of government/public land are released to the market will foreign capital invest in urban transformation. The attraction to urban public land is not only because of the raw acreage to come onto the market, but its value as cosmopolitan urban space, the surety of value-growing such landscapes promise. After all, investment capital lives off the perception of the valuable near future, without which there would be no hedging or derivatives, no futures markets, no speculative profits. Finance capital is attracted to special economic zones and creating new urban centers, but not because of manufacturing or production. Because the latest round of regulatory changes has freed up capital, labor, and land, short-term investments in the liquidity of capital are now possible in India, and the tide of excitement to invest in world-class cities has taken off like a market of its own.
Like Kalyan Sanyal, we could argue that the distance workers travel between the commodity-based economy and the need economy is the space where we need to focus our attention to develop an alternative politics that goes beyond the narrow analysis of the need economy as transitional and backward.Footnote 109 Yet, the need economy, which is becoming the basis for the survival of an increasing proportion of the displaced workforce, is caught in the contradictory movements of differing forms of capital and labor: Through distinctive processes, city centers are being created and maintained through wageless life, on the one hand, and destroyed through financialization, on the other.
If the first point of this paper is to acknowledge the declining significance of labor in this moment of economic volatility and financial liquidity, then the second point is to highlight the significance of wageless labor contributing value to the urban commons while also contributing value to the making of the global city. That is, crowdsourcing in the need economy is underwriting surplus production in the speculative economy. Since the differences between paid and unpaid labor, work and free time, home and work, rural and urban, productive and financial sectors have become so blurred, it may be worth our while to look more closely at the role of labor—even wageless labor—in the world of value creation and destruction. From this approach, we may better see how the power of finance depends more and more on the participation of the majority—and not just their exclusion—to produce the financialized social relations that rock our cities. Herein lies the urban majority's growing source of power.
