Book Review (Daniels et al. 2007)
Geographies of the New Economy: Critical Reflections
Peter Daniels, Andrew Leyshon, Mike Bradshaw and Jonathan Beaverstock (Editors)
Routledge: London (2007), 198 pages, Hardcover (£55), ISBN: 978-0-415-35783-8.
Reviewed by Karen Lai, School of Geography, University of Nottingham (11 February 2008)
Although it is difficult to pin down when did the ‘New Economy’ enter into business, political and academic lexicon, the term is most strongly associated with the dot com era of the 1990s and with activities such as e-commerce, venture capitalism, and entrepreneurialism, localities such as the Silicon Valley, and new technologies such as the Internet and related products and applications. The New Economy is often juxtaposed with the Old Economy and is characterised by a dematerialisation of production and a shift away from dealing with raw materials and machinery to dealing with new ideas, new technologies and the production of diverse knowledges. More than just an economic process, the New Economy was also a strongly political and cultural movement that came to shape business practices, communities of mobile and highly skilled individuals and the policies of national and regional economies. This book reflects on theoretical developments as well as empirical studies on the New Economy, in both developing and developed economies.
The editors of this volume set out to answer a series of questions such as: what does the New Economy really represent? What determines its characteristics and are these separate (or different) from the Old Economy? How is it manifested in different geographical contexts? What is the New Economy in relation to issues such as the nature of work, social inclusion and exclusion? Following the dot com boom and bust and the unravelling of the New Economy from 2000 onwards, this book aims to reassess the claims of the New Economy and its lingering impact in terms of the nature of economic activity and the geographical organisation of contemporary developed capitalism.
Although the heyday of the New Economy is over and some might argue that it was not particularly distinctive from other ‘bubble economies’ characteristic of capitalism, I concur with the editors that it would be erroneous to dismiss the New Economy entirely. If one agrees that, as economic geographers, we need to avoid the “fickle, magpie-like” (Peck, 2005: 129) tendencies that seem to characterise the sub discipline to some extent, this book is an appropriate intervention to encourage critical reflections on the issues, geographical impacts and theoretical implications highlighted by the New Economy, instead of abandoning it for another bandwagon. The introductory chapter puts this firmly in perspective by laying out the various reasons why studies of the rise and fall of the New Economy has been important to efforts at understanding economic change. The editors argue that this is evident in the New Economy’s lasting legacy of new business practices, new types of markets and the reconfiguration of power structures, the process of financialisation that has been integral to the New Economy, and its highly geographical nature that has been overlooked in much of the business literature.
The rest of the chapters are arranged in pairs or couplets. Chapters 2 and 3 by Ron Martin and Roger Lee question the claims of the New Economy by assessing its impact on political discourse and action, and its degree of ‘newness’. Chapters 4 and 5 by Andrew Pratt and Matthew Zook focus on the core activities commonly associated with the New Economy (new media and e-commerce) to critique its claims to the creation of new value and contribution towards persistent patterns of uneven development. Chapters 6 and 7 by Diane Perrons and Andrew Herod reinforce the notions of widening social and spatial divisions in the New Economy by highlighting labour issues in the UK and USA that arise from New Economy business structures and practices. The final two chapters, 8 and 9 by Micheal Leaf, and Julian Cooper and Mike Bradshaw, switche the empirical context to the developing world by examining how the New Economy has travelled as an economic development strategy in Southeast Asia and Russia.
Although the importance of processes of financialisation to the New Economy was highlighted in the introductory chapter, I feel that this aspect has been somewhat neglected in the book. Although Chapter 5 by Matthew Zook deals with e-commerce, it focuses on the digital divide and landscapes of inequality for producers and consumers rather than issues related to funding and capital markets.
I feel that the book has been most successful at highlighting the moral and social dilemmas and impacts brought on by the New Economy. This is highlighted by Roger Lee who argues for a moral imperative in analysing economic transformations, as these are shaped by the moral geographies that emerge from and in turn define social relations of value. In this case, the New Economy reflects a continuation of processes of accumulation. Could a new ‘New Economy’ be conceived that go beyond accumulation to take into account other forms of value? This challenge is extended by Diane Perrons and Andrew Herod who highlight how landscapes of inequality has been reworked rather than reduced by the New Economy as it is sustained a low-paid and flexible underclass of service workers, and impacts on labour organisations in restructuring power relations.
The policy implications of New Economy thinking and ideas are also well exemplified by Michael Leaf, Julian Cooper and Mike Bradshaw as they step out of the ‘core’ regions of the UK and USA to examine New Economy influence on developing economies. Their studies show that the notion of New Economy is specific to a particular time, the late-1990s, and place, Anglo-America and Western-European, and associated with neoliberalism. The New Economy is the product of a very different political economy from Southeast Asia or Russia. Its historical and geographical specificity means that policy recommendations to replicate its success need to be much more modest and cautious in their claims.
The chapters in this book are based upon invited presentations given during a two-year seminar programme on Geographies of the New Economy between 2001 and 2003. This could explain why the number of chapters seems a little limited. However, this edited collection raises provocative questions and highlight pressing issues with regards to the lingering impacts, theoretical developments and policy implications associated with the New Economy and is useful in opening up debates about new modes of economic behaviour and how they travel across time and space, the nature of contemporary capitalism, and the distinctive and pervasive geographies to economic processes and changes. The book has definitely achieved its goal of engaging in critical reflections on the geographies, politics and social moralities of the New Economy. It is a slim volume at 198 page; unless there are plans to issue this in a paperback edition, the £55 price tag is rather steep (a common issue for hardback volumes). But this will be a good addition to the library of postgraduate students, academics and policy-makers in geography, sociology, political economy, urban studies, planning and policy studies. I can also see this book as being particularly useful in advanced classes and postgraduate seminars in generating discussions around processes of global economic change and contemporary capitalism.
Peck, J. (2005) ‘Economic Sociologies in Space’, in Economic Geography 81 (2): 129-175.