The contradictions of neo‐Keynesian local economic strategy

Abstract

The last twenty years have seen the rise of local economic initiatives in the developed capitalist countries. Despite the dominance of neo‐liberalism at the national level, most of these local programmes are neo‐Keynesian, seeking to use non‐market coordination pragmatically to address market failures and to use localism to develop active cooperation, between the state, capital and sometimes labour and residents. This article argues that, despite their promise, neo‐Keynesian local strategies suffer from major problems and unintended consequences. These originate in the attempt to privilege the productive, coordinated, socialized and territorially defined aspects of capitalism over private ownership, value discipline and geographical mobility; these two sets of traits in reality are both mutually dependent and inevitably in conflict. The limits of neo‐Keynesian localism are ultimately set by struggle within and between classes, structured in important ways by geographical scale.

Keywords:

• Locality
• globalization
• socialization
• class
• Keynesianism
• neo‐liberalism