a city’s tale ~ GFC considerations ~ 5 cent trends
{notes taken from the GriffithREVIEW 25}
The globally connected, technologically enabled economy we have been experiencing in the last decade was born out of the ashes of the recession of 1982-83.
A common pattern was repeated throughout the developed world.
Technology transformed old industries, squeezing undreamt-of productivity from them, replacing antiquated mills and workplaces with new factories and offices; unionisation plummeted; deregulation reduced costs and increased organisational flexibility; women joined the workforce in unprecedented numbers; and multinational companies explored economies of scale and comparative advantages (resources, labour costs, market size, infrastructure, educational levels) wherever they operated.
For Australia it meant services and resources.
That era was captured with Oliver Stone’s Oscar-winning Wall Street, most often remembered for Gordon Gekko’s defining credo: ‘Greed is good’.
Yet at the heart of the movie was a battle that now seems impossibly old-fashioned between the local enterprises that rewarded workers with secure reasonably paid jobs and clever schemers who could make a quick buck from mergers and acquisitions.
The schemers won.
It did not take long before Sydney became one of the global beneficiaries of the new era. The New South Wales government was profoundly shaken by the collapse of manufacturing in 1982, and escalated the exploration of economic alternatives for the state, which had already begun in a less urgent, almost ad hoc way.
Within a decade the capital of the Premier State had been transformed from a raffish, provincial industrial city – where small factories lined the roads to the airport – to a regional financial capital with dark-windowed hire cars zipping along sleek tunnels from the airport.
Sydneysidders became accustomed to the income disparities that characterise these cities everywhere.
The process or remaking Sydney as business capital was incremental. It was not without social cost, but it was a product of a deliberate political strategy informed by shrewd advocates of the new global order. As an example, this is how the will to create an investment-banking sector in Australia became a reality.
It was a bet that paid off.
The city was transformed. For many years its growth and activities fuelled the nation. Trickle-down economics took on real meaning, as the divide between the wealthy harbourside suburbs and the west widened, and then narrowed as the good times rolled on year after year.
Were the 2000 Olympics the pinnacle, the Climax of this show? Maybe. Some would argue that it all went downhill afterwards.
Sydney has now lost its crown.
It has stalled, and as the growth in the resource-rich states slows NSW is falling behind. There is little evidence of the urgency that characterised the debates of the 1980s.
It is likely that in another twenty to thirty years we will look back at the global financial crisis as another watershed. The precise shape of the new economy that will emerge is of course impossible to predict, but there are some early pointers.
It is likely to be knowledge intensive, to value sustainability, to be less tolerant of global inequality and, in a sea of instant communication, to demand greater regulation.
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