Saskia Sassen calls for a democratic approach to globalization’s impact

Growing up in Buenos Aires, Argentina, Saskia Sassen would sneak out of the house, hop on a cross-town bus, and deliver bags full of food and clothing to victims of seasonal floods. Today, as a noted scholar of the effects of globalization, she is no longer clandestine about her efforts to help others. But she is still motivated by strong convictions.

“I can accept the fact that we will always have inequality,” she says, “but what I find extremely unjust is when a system produces enormous wealth and fails to redistribute a good part of it in the face of extreme poverty—and when people who are very well off have no idea of what misery is and do not bother to understand.”

Sassen, born in the Netherlands, ultimately chose academia as the means to promote such an understanding, earning a joint Ph.D. in sociology and economics from Notre Dame. In October, she joined the Chicago faculty as a professor of sociology following 13 years at Columbia University. Next year she will be a visiting scholar at the American Bar Foundation and deliver the distinguished Simmel lectures at Berlin’s Humboldt University.

Her most recent book, Globalization and Its Discontents: Essays on the New Mobility of People and Money (New Press), came out this fall. It stems from two earlier works—The Global City and The Mobility of Labor and Capital—in which she laid out a novel understanding of the emerging global economic matrix. She is now expanding her theories in the January 1999 issue of Foreign Affairs and in a forthcoming book on what regulatory mechanisms are needed, nationally and internationally, to govern the global economy most effectively—and most democratically.

“It is not only a new governing architecture for finance that we need, but also one for international workers and environmental standards,” she says, warning that “if the growth of the global economy goes unchecked, there will be devastating consequences for the poor, and also for large sectors of the middle class. If we can better regulate and govern markets and cross-border capital flows, then we can have better outcomes overall.”

Sassen’s contributions to the study of globalization challenge shorthand notions of “the global economy” that have captured the popular imagination. She takes issue with the common perception that the global economy is “somehow ‘out there,’” forcing a nation’s businesses to change their practices. Rather, she believes that the global economy has been created, in part, by national industries, with help from their own countries’ legislative and regulatory bodies. Her definition of the global economy goes beyond the production and distribution of goods and services to encompass a worldwide system of governance and power. Far from being passive and merely reactive in the trend toward globalization, she contends, “national firms and national institutions have participated in the process.”

Sassen conceptualizes the global economy as a network of some 40 “global cities,” characterized by world-market orientations and significant concentrations of company headquarters, specialized corporate services, and asset-management institutions. They typically have central “glamour zones,” she says, where everything is happening: “fancy offices and hyper-urban professionals living nearby.” For example, notes Sassen, New York’s “sanitized” and “beautified” Times Square now serves as a hub for the global media industry with the presence of companies like Reuters, Disney, Bertelsmann, and Sony.

“These companies choose to locate not just in one city, but in one particular place within it,” she says. “It’s not just about real estate and having the correct address, but about how the more globalized a firm becomes, the more its central functions will tend to concentrate in places with assured access to a vast complex of the most sophisticated infrastructure and human talent. It won’t do to have just one top law firm or accounting firm. They need several, and they need the interaction among top talent.”

Together, the global cities provide the management, coordination, and servicing needed to move capital and goods around the world, Sassen explains. While their interdependence distinguishes them from the spoke-of-the-wheel capitals of old-style empires, she points out that the cities are not all equal players. The network has a distinct hierarchy, which she plans to detail in her Foreign Affairs piece. London, New York, and Frankfurt represent the top tier because of their assemblage of leading experts and their information infrastructure. Their sophistication goes unmatched in most of the other global cities—including Seoul, South Korea; Bangkok, Thailand; Santiago, Chile; and Bombay, India. But the network needs these other cities, she explains, to manage foreign capital in their national systems and to pump their own capital into the world economy.

The inhabitants of global cities are also not all equal players, Sassen argues. Much of her work seeks to draw attention to the harmful effects that such concentrations of power and money can breed. A global city’s glamour is most often supported, she observes, by large populations of immigrant workers who perform the blue-collar, industrial, low-wage, dirty work of the global economy as the valets, the coffee-stand servers, the janitors. The cultural split between the two very different stakeholders in the global network—the well-off, educated workers running the global firms and the poorer, less educated workers servicing them—has led to what Sassen calls “an unbundling of the national unit.”

As a result, she says, the network of global cities cuts across the traditional north-south divide, making it no longer of use to consider northern countries as the world’s richest and southern countries as its poorest. The professional and corporate elite in New York may now, she maintains, have more in common with, say, their counterparts in Sao Paulo than with the poor and middle class in Brooklyn. She fears that the elite—typically 20 percent of a global city’s population—will continue to benefit from globalization while the middle class gets increasingly squeezed and economic inequalities accelerate.

“The elite are visible and have a voice, which makes it difficult to understand the mostly negative effects for much of the rest,” she says. “The question becomes, ‘How does the global city reconcile creating demand for the lower-paid workers, but yet rendering them invisible?’” Sassen advises policymakers to consider that at least half the business and activities conducted in global cities have nothing to do with globalization: “You can’t allow the urban economy to become a plantation economy where your top cash crops—the high value-adding financial and other corporate services—are the only ones you’re going to care about.”

In her next book, to be published in 2000 and titled Governance and Accountability in the Global Economy, Sassen will wrestle with how decisionmakers in the financial and immigration arenas can respond to the potential pitfalls of globalization, hoping her work will lead to at least an understanding of “how we govern the global economy and introduce some accountability to the system.”—C.S.