A critical examination of Sassen’s (1995) ideas, and their relevance with regards to the development of Mexico City

A critical examination of Sassen’s (1995) ideas, and their relevance with regards to the development of Mexico City



Sassen’s (1995) account of global city concentration and altered production intensities, underpin the notion of globalization’s ability to ‘disembody spaces’ within the city from that which is geographically proximate. At the same time, a wider set of actors have embedded and gained ‘belonging’ through time-space compressional processes of globalisation, which include new networked connections by means of ‘digital highways’ and ‘advanced telematics’. Accordingly, Sassen (1995) states the ability of large corporations to assert their influence over distance in such ways has altered the geographies at the core of the city. This has peripheralized and distanced the poorer, disadvantaged, and/or less globally influential populace, whilst embedding and concentrating the ‘urban elites’ and professionals who possess the ability to harness the instruments of freer flowing trade and finance. Mexico City’s developmental path during the later twentieth and early twenty-first century denotes the relevance of the globalization phenomenon upon a developing metropolis of approximately nineteen million inhabitants (Massey, 2001). With reference to neo-liberalism, trade deregulation, and economic globalisation, and in consideration of historical precedence, this essay will critically examine the relevance of Sassen’s ideas with regard to Mexico City.

Historically, Mexico City’s development has long been interlinked with wider networks of interaction, and La Plaza de las Tres Cultures monumentally stands testament to the influential inputs which have prevailed at different times. Such city spaces offer each member of that society an ‘imagined membership’, and a historically ‘collective mirror’ (Lefebvre, 1991 p.220). However, as old cultures give way to new, architectural functionality progresses to meet the demands of the present, and the current culture of globalization has created new foci of centrality within the city (Massey, 1999). Notably, financial structures begin to dominate as neo-liberal forces and freer trade regulations allow the market forces of capitalism to embed. Meanwhile, those members, which may be historically connected, can begin to feel distanced through their inability to access the realm of ‘urban elites’ and professionals, which take prosperous advantage of growing global interconnections (Sassen, 1995). Evidentially, Mexico City’s integration into various world markets in the early 1990s, heralded the insurgence of economic globalization with a new and developing urban core ‘fed by the deregulation of financial markets’. This neo-liberal opening of the stock market aided foreign investment and privatization, which created a ‘new core’ with new global interconnections powerful enough to transform the ‘urban social order’ of the broader city (Sassen, 1995). However, in critical examination of the new geography of the core and associated urban reordering, the facts surrounding Mexico’s assimilation into world markets must be considered.

The implementation of the 1994 North American Free Trade Agreement (NAFTA), made Mexico’s border porous to foreign investment, with numerous trans-national companies able to embed within Mexico. In line with Sassen’s (1995) assertion, large US corporations out-sourced various comparatively unskilled manufacturing and repetitive production processes. These processes become distanced from the point of sale (usually in US cities), although the proximity to the US border enabled ease of filtration under NAFTA regulations. Meanwhile, the processes needing highly specialized inputs from several industries, i.e. designing, marketing, and accounting, remained embedded in innovative and intensely concentrated major US cities. During subsequent years, numerous companies followed suit, moving labour intensive manufacturing processes, and ‘perhipheralizing’ the less skilled aspects of product development to Mexico in order to lessen costs and heighten profit margins at point of sale in the first world economies. Burgeoning foreign operations, called for regional headquarters in order to control increasingly complex out-sourcing processes. These producer service segments of business benefited from embedding in the capital of Mexico, where legal agglomeration economies, services and public relations were concentrated, and advanced telematics could simultaneously connect the peripheral operations in what Sassen (1995) calls the ‘new production complex’ of globalization.

The headquarters of large multi-nationals thus occupy Mexico City’s economic core, redefining the centre as a trans-territorial hub, constituted via digital highways of intense business interaction. Alongside this, nodes of activity stem into the manufacturing plants of Mexico City’s hinterland, and internationally towards global multi-national headquarters, intricately connected by state of the art electronics. Despite this, Sassen (1995) argues that the new economic core, with its multitudinous global connections, equally serves to disconnect the disadvantaged populace which lack the educational tools of empowerment, and access into the realms of the prosperous urban elites. Massey (2001) highlights the growing poverty and increasing amount of ‘parachute settlements’ in Mexico City when interviewing local resident Juan Esovado who states that ‘the poor are always relegated to the outskirts’. The inability to access the advantages of the ‘connected’ cause’s social dislocation and a vastly increasing disparity between the rich and poor. Silvia de Haisus states ’there are no resources for us’ and ‘no work’, leading to a huge shift into the informal economies of the city, as families struggle to find enough money to sustain their existence. Massey (2001) elaborates on this increase stating that the informal economy accounted for 4% of workers in the 1980s, compared to an estimated 25% in the 1990s. Sassen (1995) relates this occurrence to a ‘growing intensity’ of marginalized areas which operate outside of world-market orientated systems.

The spatiality of the city is therefore changing the human geographies of interaction, with those of close proximity, albeit financially disadvantaged, being increasingly distanced from the new social order of the centre. The dense strategic nodes of the core, articulated through digital highways, represent a new geographic correlate which peripheralizes those without access. Trade liberalizations, such as NAFTA, enable large corporations to embed wherever they find an economic validity to do so, with an emergent geography of centrality that connects their operations across the world. In this effect, ‘the centre of two separate cities are often for practical purposes closer to each other than to their own peripheries’ (Mulgan, 1991, p.3) In concurrence, growing urban poverty parallels the geographies of economic growth, as the disadvantaged find difficulty in accessing the benefits of the urban elites (Sutherland, 2006). What perhaps differs in Sassen’s (1995) expression is the relationship of power between developing and developed cities. Mexico City’s new economic core, although increasingly powerful, is nethertheless a subsidiary of the major nodal cities such as New York or London, where the main financial market forces concentrate and filtrate. According to Sassen (1995), this is relevant within developing cities such as Mexico City, which do not yet hold the historical embeddedness, and ‘place boundedness of significant components of the global information economy’. Large corporations, with their economies of scale, possess the ability to withdraw operations in the developing cities of the world, such as Mexico City, if they find a weakening of economic validity. For example, in recent news, Delphi, a major US General Motors car component manufacturer, with regional headquarters and operations in Mexico City, has opted to effectively ‘move out of Mexico’ due to an increasing cost of shipping, and lowering of wages in the US due to new labour agreements. (Hartley, 2008). Hence, the fluidity of trans-national corporation migration in and out of the developing capital of Mexico, demonstrates the vulnerability of the new Mexican city core to outside influences.

Sassen’s (1995) work emphasises the need for a concentration of business activity within a city core proximate agglomeration economies, and the presence of a highly innovative environment. In the face of globalization, the spatial concentrations change due to the new production complex, with the centrality of the centre no longer limited by geographical distance from different sections of production. The out-sourcing of unskilled and repetitive segments of production, often find settlement in developing nations, due to cost benefits. This growing industrial peripheralization, is enabled via ‘state of the art digital highways’ and ‘advanced telematics’, which enable time-space compression of otherwise geographically distant business interactions. In control of this new expansive production methodology, regional headquarters are embedded within cities, producing a ‘new geography of the centre’. An exemplar of this is demonstrated through Mexico, a nation-state which lies directly south of the hegemonic US, and where NAFTA trade liberalizations have seen a significant alteration in Mexico City’s economic core. It has become orientated around foreign investment, multinational regional headquarters and world market systems, which are monopolistically controlled by cities belying the first world. Sassan (1995) notes that many regional, and national operations become overpowered and displaced from their previous centrality by the new market forces of global influence, open only to urban elites and professionals. In concordance, the economically disadvantaged populace become marginalized from the city centre, unable to directly access its benefits. The rapid growth of Mexico City ‘parachute settlements’ and huge increase in ‘informal sector workers’ (Massey, 2001) indicate a growing disparity in the capital. Those members and businesses not connected to wider trans-national and global markets find themselves distanced, whilst the centre of Mexico City and other cities, may be ‘closer to each other than their own peripheries’ (Lefebvre, 1991 p.220). Within the city itself, these connections bypass the disadvantaged, reaching out through cyberspace from the regional headquarters of the centre to peripheral production areas, thus forming what Sassen (1995) calls a ‘metropolitan grid of nodes’. The changing spatiality of these organizational and productive infrastructures, coupled with local marginalization of the poor and unconnected demonstrates Sassen’s (1995) idea regarding new spaces of centrality in the context of the developing metropolis of Mexico City,