EVALUACIÓN GENERAL DE LOS METODOS DE VALORACIÓN MEDIQAMBIEN TAL87

As David Harvey (2001) argues, the need for capital accumulation has created specific spatial structures in the city throughout its historical development. However, expansive capitalism also tends to destroy its own physical, social and political structures, seeking to renew an infrastructural basis for further processes of accumulation, embracing increasingly larger scales. In probably one of their most famous paragraphs, Marx and Engels claimed

The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones.

All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify.

All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life, and his relations with his kind. The need

1 Policy is understood here always in its broadest sense, comprising state-designed plans of action seeking to guide decisions and achieve rational outcomes; more specifically, as “any national, regional, local, or institutional project, program, law, regulation, or rule” (Schmeer, 1999: 7). According to Hardoy (1975a:

84), policy is “a general line of action that seeks to utilise in the best way possible the resources available for a certain society for the fulfilment of certain goals” which respond to the interests of the dominant groups of society.

of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere. (Marx and Engels, 1970: 34-5)

Much inspired by these ideas, Schumpeter synthesised capitalism as a ‘process of creative destruction’ (1976). He claimed that capitalism is a history of revolutions, impossible to observe but in their historical development. Capitalism revolutionises its economic structures from ‘within’, incessantly creating a new one and destroying the old one. Economic agents, namely capitalists, destroy and replace their fixed capital, means of production, physical and social infrastructures, according to the pace of the new technological advance, in order to remain competitive. This is precisely the force that sustains the city as a machine of production and competition (Batty, 2007a). The capitalists’ search for competition embraces

the new commodity, the new technology, the new source of supply, the new type of organisation […] competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives. (Schumpeter, 1976: 84)

Although initially Schumpeter observed this tendency to self-destruction as a fate that would lead capitalism to its inevitable and definitive exhaustion for its tendency to entropy – i.e. collapse of its future room to manoeuvre, as Biel (2006) concludes after analysing capitalism under a thermodynamic perspective – the fact is that capitalism has been so far able “to adapt and mutate, to evolve new forms of industrial organization which are hostile only to an established order which is in constant transition anyway.”

(Batty, 2007b: 2)

Through every structural crisis² of over accumulation, processes of creative destruction have been essential for disinvestment, devaluation and destruction of formerly invested capital, readjusting its organic composition - i.e. the proportion between labour power and means of production, basically the capacity of labour to produce value (Marx, 1995)

2 Crisis is so decisive a concept that the Dictionary of Human Geography (Johnston et al., 2000: 123-5) devotes three pages to define it essentially as “an interruption in the reproduction of economic, cultural, social and/or political life.” Crises are core to the historical-materialist interpretation of development, being outcomes of the dialectic nature of opposed principles of societal organisation, patent in the transitions between historical modes of production (implying an interruption in the accumulation process;

see Harvey 2006a).

– and recalibrating the rate of profit (upwards), in ways to establish opportunities for new rounds of investment. Classical forms of creative destruction have been, for instance, driving down the price of labour through mass unemployment, destroying value invested in fixed capital until production is idled or wars, because they imply subsequent economic reconstruction (Smith, 2000a).

Crises occur when “flows of capital do not expand the basis for the production of surplus value” (Harvey, 1985: 102), forcing the rationalisation of an unbalanced system of production, exchange, distribution and consumption, and financial and state institutional structures. Cyclical crises of over-accumulation produced within the primary circuits of capital (i.e. the productive sectors)³ are generated by overproduction of commodities, falling rates of profit (in pricing terms), surplus capital which manifest itself as idle capacity lacking opportunities for investment and surplus labour, and/or rising rate of exploitation of labour power.

As a general rule, major crises drive capitalists to switch from the primary circuits and invest into the secondary circuits, in forms of fixed capital and, more specifically, built environment and urban space, or even in the tertiary circuits (Fyfe and Kenny, 2005).

This is known as ‘capital switching’. Epitome of this are the over-invested property markets in times of pre-crisis⁴. It is important to stress that these flows of investment have nothing to do with real needs of people (for housing, open spaces, amenities, etc.) but of capital reproduction and expansion. Capital switching is what Marx (1973, Notebook VI) defined as periodical devaluations of fixed capital, which provided one of the immanent means in capitalist production to check the fall of the rate of profit and accelerate accumulation of capital-value through the creation of new capital.

3 Primary circuit of capital is production, secondary is the built environment and tertiary is investment in science/technology seeking to increase labour productivity and guarantee its cooperation. Capital regularly shifts from one to the others as a way to resolve crises of over-accumulation. Within the first circuit, Harvey differentiates fixed capital enclosed within the production process from fixed capital that works as “physical framework for production”, the city and its infrastructures being essential parts of the latter (Harvey, 1985).

4 The sub-prime mortgage financial crisis in the US and its devastating worldwide consequences for low-income, elder and ethnic minority people are the most recent example (Strauss, 2009).

Nonetheless, in contrast with other more volatile economic sectors, urban space is an efficient form of capital fixation, allowing the processes of accumulation to work within certain levels of stability. This has been defined as ‘geographies of accumulation’

(Carlos, 2008; Harvey, 2001, 2006a). City space avoids or slows down the capitalist tendency to crises of over-accumulation. Being a commodity, a wealth generator and a mechanism of securitisation of surplus value, urban space is created, transformed, destroyed and expanded as long as periods of accumulation are developed. In turn, when excess of accumulation arise, urban space responds with stability in profit rates (e.g. the constant rent produced by a residential building).

However, cities can – as a last resource – be destroyed in order to clear space for new accumulation in a next round. The organisation and re-organisation of city space is thus not only an expression of the globally-induced crises of capital accumulation, but a device for managing them locally (Harvey, 1973).

Capitalist production is inherently anarchic. The collective interest of capitalists lies in a balance between production and consumption, but the rationality of capitalist competition and technological development makes such a balanced expansion of the economy almost impossible to achieve. The result is crisis of overproduction [which] may be displaced in the first instance by the artful use of the credit system, but only for a time. There may yet be a further displacement […] through the manipulation of geography and space: the spatial fixes of imperialism and the reorganisation of the built-environment. (Katznelson, 1993: 110)

Nonetheless, the capitalist creation of space has plenty of contradictions. Created spatial structures, or geographies of accumulation, act as barriers for further processes of accumulation, since they are fixed and immovable. These stumbling blocks need to be necessarily destroyed as otherwise capital invested in the built environment would be immobilised for long periods of time, being illiquid, entailing high transaction costs upon sale, needing security and not being easily divisible. In general, the inflexibility of the city space resists frequent modification and this makes the urban commodity very sensitive to devaluation, especially compared with machinery and other forms of fixed capital (Weber, 2002).

Urban space never changes as fast as the pace of economic development demands; it usually becomes an impediment for the fast transforming capitalist structures, because

the built environment is fixed, it is a resource system of use values embedded in a physical landscape which can be utilised for production, exchange and consumption. Or, as Rachel Weber adds, the “accumulation process experiences uncomfortable friction when capital (ie “value in motion”) is trapped in steel beams and concrete.” (2002: 519)

The built environment “is especially long lived, difficult to alter, spatially immobile and often absorbent of large lumpy investment.” The city space is resistant to revolutionary change, but at some point, investment in the built environment becomes definitively unproductive. The exchange value⁵ set into urban space must therefore, anyhow, be written down, diminished or even totally lost (Harvey, 1985: 105). However, the devaluation of capital set on built environment does not necessarily destroy its use value (across its ‘useful life’⁶) but can be used as ‘devalued capital’ for as long as it helps to re-establish the base for a new further period of accumulation. The exchange value locked up in the built environment can be recovered only by fully using the built material over its lifetime (amortisation time), though it cannot be easily altered so it fixes only certain level of productivity over the mentioned time (e.g. a limited ground rent produced by a plot, for the ‘quality’ of the structure built on it). However, if new and more productive fixed capital is produced, the old fixed capital devalues even faster and deeper and so it must be transferred into different circuits of capital (Ibid).

One of the deepest and most pervasive cases of global-scale creative destruction generated by capital switching was the de-industrialisation of great part of the industrial cities in advanced capitalist nations, namely UK and the Midwest of USA, since the early 1970s and for over a decade afterwards (Hall, 1999). Post-Fordist flexible production techniques replaced industrial structures and infrastructures developed under the Fordist⁷ regime, while once vibrant industrial regions were emptied and replaced with new landscapes that offered maximum economic advantage for the new functions required in the new global economic order (Mitchell, 1998; Sassen, 1998). These

5 ‘Exchange value’ is understood here as a value of a commodity, determined solely by the market and defined in monetary terms, i.e. price, thus unrelated with the inherent utility of the asset, or use value (Marx, 1973). The dissociation between the two types of values and the subordination of the latter under the former is a central condition of capitalism.

6 Expected period of time during which a depreciating asset will be productive.

7 See Appendix 1-Glossary for definition.

processes considerably affected the abovementioned inner cities. A radical contradiction between fixed, immobile geographies of accumulation and the need of redirecting capital into different spheres of flexible production and expanded accumulation was being experienced across the world.

However, cities are not only geographies of accumulation but also geographies of social reproduction (Castells, 1985b), fields of relations among social agents, interrelated with the dominant mode of organisation of the economy and the spatial organisation of society (Carlos, 2008; Katznelson, 1993). The human dimensions implicit in the destruction and replacement of many formerly industrial inner cities of the first world entailed serious sociological consequences. Workers were deeply affected by these radical infrastructural changes, let alone built facilities for education, health, social services and amusement that got outmoded or simply disappeared from their neighbourhoods in a few years, due to lack of investment and maintenance. This happened because inner cities economies were based on manufacturing production that was departing from those places. Previous social institutions, labour codes, laws and social welfare apparatuses (modes of regulation⁸, in fact) would be reset too in the following years, to be replaced with the new rules of laissez faire accumulation.

Furthermore, as the literature indicates, the effects of this creative destruction associated with post-Fordist de-industrialisation might have been experienced not only in developed but also in developing nations. However, in the latter, it may have entailed different forms and intensities, with widely different consequences. The following two sub-sections address these issues.

2.2.2. Social effects of creative destruction in inner cities of the UK and