Postmodern time-space compression - Time-Space Compression: Historical Geographies - page 201

The state, public policy, and space in the
age of capital hypermobility
As late twentieth-century capitalism entered its postmodern phase, it wit-
nessed a renewed aggressiveness of corporate elites against the working
classes of the industrialized (and industrializing) world. One phenomenon
that motivated and enabled this sea-change was capital's acquisition of a
spatial freedom qualitatively greater than that characteristic of manufactur-
ing. This fluidity was generated in part by widespread deregulation, for the

lack of regulation at the global level greatly facilitates such

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flexibility. The
mobility of capital was also accentuated by the generalized reduction in pro-
tectionism, including the World Trade Organization, the primary mechanism
used worldwide to minimize national threats of protectionism, as well as a
series of regional trading blocks such as the European Union and NAFTA
(Gibb and Michalak 1994; Michalak and Gibb 1997).
Another source of capital's newfound mobility was the introduction of
telecommunication networks and the digitization of information, which give
many

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firms markedly greater freedom over their locational choices. Trans-
national corporations—the networks' primary users and bene

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ciaries—rely
heavily upon such networks to coordinate and monitor international transac-
tions, which can be monitored across the globe as easily as if they were in the
same building. In dramatically reducing the circulation time of capital, tele-
communications linked far-

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ung places together through networks in which
billions of dollars move instantaneously across the globe, creating a geog-
raphy without transport costs. The e

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ectiveness of national controls was
markedly reduced by the ease with which hypermobile

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fi financial capital moves

through global markets. Thus, as large sums of funds flowed with mounting

rapidity across national borders, Keynesian monetary policies became increas-
ingly ine

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ective. In a Fordist world system, national monetary control over
exchange, interest, and in

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ation rates is essential; in the post-Fordist system,
however, those same national regulations appear as a drag on competitive-
ness, or so they were represented by conservatives. For example, “As pri-
vate capital began increasingly to circuit globally on a deregulated basis,
Keynesian nation-states progressively lost control of one of the most import-
ant macroeconomic levers—the setting of interest rates” (Peck and Tickell
1994:291).
Essentially, as capital began to circulate on an increasingly global scale,
and with drastically shorter time horizons, the Fordist-Keynesian production/
regulation regime collapsed, with profound political e

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ects. The relations
between Fordism-Keynesianism and the global economy in the waning years
of late modernity were always problematic. Essentially, the global economy
under Fordism consisted of a series of linked national economies, not a
seamless world devoid of barriers to the

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flow of capital. “One of the funda-
mental tensions of the Fordist regime was the uneasy interface between
national forms of regulation and the globalizing dynamic of accumulation”

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