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  HOME | Opinion (Click here for more)

Beatrice Rangel: Cities Come to the Rescue of Capitalism
Former Venezuelan Minister of Ministers Beatrice Rangel on the rise of wealth-creating MURS.

By Beatrice E. Rangel

When Cossimo Medici fought to consolidate one of the first working democracies in Europe after the Greek experience, little did he know that he was consolidating a political entity shaped by and anchored in international trade.

It was, of course, the beginning of the city state.

This entity succeeded as a launching board of international trade until the 18th century when trade had succeeded in reshaping geography and a more efficient entity emerged: the nation state.

And while capitalism truly took off with the nation state, its pillars were created by the merchant cities of Europe and Asia.

Today technology cum trade are demanding more effective political organizations and above all the release of institutional burdens that are beginning to halt development of a more effective capitalist system.

Signs of current institutional inefficiency abound.

Inequality is growing whether you are in South Africa, Brazil, Sri Lanka or the United States. Further, while the world economy continues to create new and technology induced jobs, the skill set of most college and high school graduates does not fit employment opportunities. Finally, most matured economies have established their manufacturing arm in China as a means to maintain stable prices so that goods are accessible to their population which is largely middle class.

All these developments have one triggering cause in common: the rise of the clerisy and the decay of the petite bourgeoisie or that human group labeled by Thomas Pikkety as the Merchant Right.

This is the wealth-creating class that thrives on producing and delivering goods and services. This class thrives on innovation and freedom which directly pushed it to conflict with the Clerisy.

Indeed the Clerisy is the social class of legitimizers who thrive on regulation and central control to impose a given vision of the world into which they militate.

The U.S. Clerisy today represents 15% of the work force occupying the highest paying jobs in corporations, NGOs, government bureaucracy and liberal professions such as finance and law.

The growth of the Clerisy explains the maze of regulations that encircle modern and mature economies. This regulatory straight jacket has pushed the manufacturing arm of the supply chain to China.

Enter Covid-19 to do away for a sizable amount of time with international travel and disrupt the world supply chain. Productive effort and political leadership is forced to retreat to the cities. And in the cities, the Merchant Right has greater political power.

Given the mounting and pressing demands for economic efficiency, job creation and economic reignition, those people that earn their living in the market place and through constant exchanges are essential to create wealth.

The Clerisy on the contrary, is a rent extracting class of global nature knowledgeable about the patterns of climate change and completely ignorant of the life routine of towns in their country.

Assuming that jump-starting the world economy is an exercise in aggregate demand, then relative power has shifted in favor of the petite bourgeoisie. Because it entails rebuilding aggregate demand and without the small bourgeoisie, it Is highly unlikely that there will be aggregate demand.

Indeed these are the last mile providers of goods and services. They are the source of employment and the drivers of innovation. This group is urban and recently clusters around what is now defined as Mega Urban Regions(MURS).

MURS are great urban corridors linking several metropolitan areas through transportation and logistics.

MURS are not only the fastest growing economic units in the world but cradles of innovation and trade and the U.S. is the country with more MURS in the world.

The largest and richest MUR is in the North East and links Boston to New York to Washington D.C., to Baltimore and ends in Philadelphia. Then there is the Silicon Valley area, the Fort Worth-Dallas-Houston hub and the nascent Miami-Tampa region.

In Europe MURS are bringing together Central Europe, France and Germany, and Spain and Portugal.

Mayors in MUR cities are slowly realizing their enhanced power and are beginning to redesign regulation, mobility and urban regulations. Most are aiming at making their cities smart cities with integrated systems and data-based service procurement.

In short, MURS are the emerging political entity that will dominate the political landscape in the post covid-19 world. This is good economic news but also good political news as city governments enjoy greater participation of civil society. This is the best antidote against absolutism and bigotry as Cossimo Medici realized when establishing a democratic regime in Firenze.

Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.

For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.

You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.


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