Tag Archives: Germany

Spatial and Local Factors in Understanding Financial Crises

By Benjamin Sacks

Picturesque Pforzheim, Germany belies local and regional financial woes. (c) 2014 Wikimedia Commons.

Picturesque Pforzheim, Germany belies local and regional financial woes. (Image credit: Parlacre (CC 0)

Geography, economics, and finance are intimately linked disciplines, a relationship that is sometimes misunderstood or ignored entirely by contemporary media. Port access, weather, spatial and network relations between various tiers of government, private sector businesses, and third-party (e.g. academic) institutions, even the positioning of financial headquarters – as recent threats from Standard Life and Lloyds to relocate from Edinburgh to London in the event of Scottish independence demonstrate – can all drastically affect financial markets, long-term monetary stability, and the ability of particular precincts or sectors to recover from such recessions as the 2008-2010 global financial crisis.

In the most recent suite of articles in Transactions of the Institute of British Geographers, Reijer P Hendrikse (University of Amsterdam) and James D Sidaway (National University of Singapore) undertook a focused study of Pforzheim, a German city of some 120,000 people in Baden-Württemberg, near the French provinces of Alsace and Lorraine. In ‘Financial wizardry and the Golden City’, Hendrikse and Sidaway critiqued the media’s focus on national-level bailouts, arguing that provincial- and city-level bailouts and financial negotiations were just as, if not more important to comprehending both the scale of the 2008-2010 crisis as well as possible solutions. Further, they recalled and adopted David Harvey’s 2011 argument criticising French and German media pundits and financial analysts alike who saw ‘the crisis in cultural or even nationalist terms’; as somehow a ‘distinctive Anglo-Saxon disease’ based in London and New York City.

The authors chose to examine Germany, in part, because of that country’s apparent economic stability in the face of difficult industrial and economic issues in neighbouring Eurozone states. Berlin famously directed the bailout of several EU member states: Greece, Portugal, and Spain. But a closer examination revealed a significantly more complex and debt-ridden landscape. Various German cities were ‘like Greek islands within Germany’, Die Tageszeitung reported, ‘having slowly but surely drowned in their debts over recent years’ (p. 195). Pforzheim, following a trend blazoned by other cities in the Rhine heartland, bought a large series of Deutsche Bank interest-rate swaps. This speculative maneuvre, popular in the world of hedge funds and day-trading currency exchanges, permits institutions (e.g. a city) to obtain a more cost-efficient fixed-rate interest arrangement enjoyed by another corporation. Ideally, both parties benefit from reduced interest-rate-associated costs. However, the risks are highly variable, and dependent on the financial stability of both parties. As A R Sorkin described, and Hendrikse and Sidaway reiterated, German cities were ‘gambling that [their] costs would be would be lower and taking on the risk that they could be many times higher’ (p. 196).

Theoretically, Pforzheim should have been a model city. After enduring a horrific bombing campaign near the end of the Second World War, Pforzheim’s economic base recovered, thanks to longstanding jewelry and watchmaking industries in the city. But Pforzheim’s geographical location limited its growth. The city shares Baden-Württemberg with Stuttgart, Heidelberg, and Mannheim, each major cities with significant economic and political clout. These cities traditionally attracted major corporations away from such smaller, more specialised urban centres as Pforzheim. Although the financial stresses of the late-2000s put pressure on all German cities, smaller, less economically vibrant communities suffered significantly worse. A Pforzheim administrator summarised the city’s awkward geostrategic situation: ‘We are a jewelry- and watchmaking city that has brought a relatively mono-structured economy’, more sensitive to economic shifts than larger, more diverse cities as Frankfurt-am-Main and Cologne (pp. 198-99). In a dangerous game of financial roulette, Pforzheim and other small German cities engaged in increasingly complicated and risky collaborations with German and EU financial institutions – unaware of these banks’ own instabilities. Pforzheim’s recession, the authors concluded, was demonstrative of how integrated German and continental European financial markets are to Anglo-Saxon banking paradigms, even as they continue to assert a supposedly distinct, fiscally conservative methodology and culture.

60-world2Robert Peston, ‘EU Law may force RBS and Lloyds to become English‘, BBC News, 5 March 2014.

60-world2Robert Peston, ‘Is Standard Life alone?‘, BBC News, 27 February 2014.

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Reijer P Hendrikse and James D Sidaway, ‘Financial wizardry and the Golden City: tracking the financial crisis through Pforzheim, Germany‘, Transactions of the Institute of British Geographers 39 (2014): 195-208.

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David Harvey, ‘Roepke lecture in economic geography – crises, geographical disruptions and the uneven development of political responses’, Economic Geography 87 (2011): 1-22.

books_iconA R Sorkin, ‘Towns in Europe learn about swaps the hard way’, The New York Times 16 April 2010.

Geographers’ Mobility in Academia

By Benjamin Sacks

Travel amongst Chinese geographers has dramatically increased in the last decade. © 2013 Wikimedia Commons.

Travel amongst Chinese geographers has dramatically increased in the last decade. © 2013 Wikimedia Commons.

In a series of mid-1980s studies, Pierre Bourdieu explicated his ethnocentric conceptions of capital accumulation, conversion, and authority. Knowledge and power, he asserted, were deeply related, and used across cultural divides to establish and maintain elites. In France, the United Kingdom, the United States, and elsewhere, academic institutions (e.g., private grammar schools, elite universities, and think tank centres) formed a vital component of state power or, as Bourdieu (1996) described, ‘underlining the central role of the…elite higher education system in perpetuating social domination by the elites’ (Leung p. 314). Academics’ experiences both in and outside the classroom provided them with an ever-expanding “toolkit” to enhance their own perceived value, prestige, and usefulness to state and private requirements. This, as Karl Marx originally, albeit very broadly outlined, and Bourdieu refined, constituted an important form of ‘capital accumulation’ (Leung p. 313).

In her April 2013 article ‘”Read ten thousand books, walk ten thousand miles”: geographical mobility and capital accumulation among Chinese scholars‘, Maggie W H Leung (Utrecht University) complicated and contextualized Bourdieu’s terminology. Relying on a decade of studies by S Robertson and P Blumenthal, amongst other scholars, Leung specified geographical mobility – that is, the role movement across location and space has in cultivating academics’ knowledge – as a valuable form of capital accumulation. Generally speaking, academics gain knowledge and authority through the comprehensiveness of their research, which is (often) intrinsically linked with their ability to travel, conduct field or archival research of primary resources, and to network at national and international conferences. Concerning international migration, academics are ‘[c]onsidered as the best and brightest’, carrying with them highly important ‘social, economic and technical’ data and concepts (p. 312).

Leung focused her examination on the increasingly vital China-Germany route. Academics across discipline travel to German universities, think tanks, and conferences to engage with “Western” technologies, ideas, and publications, before returning to China to teach and implement these approaches for domestic (public and private) audiences. This did indeed comprise a form of Bourdieu’s academic accumulation. However, unlike Bourdieu, Leung stressed the importance of individual experiences and academic maturation, interviewing sixty-five post-doctoral fellows and professors. Zhong Hong, for instance, recalled of her experience:

I was supposed to take a look at how they teach in Germany, how the curriculum is organised and what kind of facilities they have…because our university aims to upgrade itself to a world-class institution…And our university also expected me to elevate my ability in research (p. 319).

By identifying and extrapolating individual experiences, cataloguing them according to approach, motivation, and resulting consequences, Leung provided a more nuanced, carefully considered version of Bourdieu’s previous, rather rigid capital accumulation model. Such theoretical reconstructions can prove enormously useful for geographers studying institutions, power relations, and even exploration. In a 1999 critique, geographer Michael T Bravo (University of Cambridge) re-articulated Bruno Latour’s earlier social science framework, as outlined in Science in Action (1987). Bravo agreed with Latour’s conception of ‘immutable mobiles’, knowledge data transported back to ‘centres of accumulation’ (such as universities or the Royal Geographical Society), but added that scientists’ individual experiences and changes or maturation over time must be considered as well.

60-world2 Leung, M W H, 2013, ‘Read ten thousand books, walk ten thousand miles’: geographical mobility and capital accumulation among Chinese scholars, Transactions of the Institute of British Geographers New Series, 38, 311-24.

Also see:

books_icon Bourdieu, P, 1988, The forms of capital, in Richardson J ed, Handbook for theory and research for the sociology of education, Greenwood Press, New York, 241-58.

books_icon Bourdieu, P, 1996, The state nobility: elite schools in the field of power Polity Press, Cambridge.

books_icon Bravo, M T, 1999, Ethnographic navigation and the geographical gift, in Livingstone D and Withers C W J, Geography and enlightenment, Chicago, University of Chicago Press.

books_icon Latour, B, 1987, Science in action: how to follow scientists and engineers through society, Cambridge, MA, Harvard University Press.

RGS-IBG New Content Alert: Early View Articles (25th May 2012)

The following Early View articles are now available on Wiley Online Library.

Original Articles

Soil hydrodynamics and controls in prairie potholes of central Canada
T S Gala, R J Trueman and S Carlyle
Article first published online: 23 MAY 2012 | DOI: 10.1111/j.1475-4762.2012.01103.x

Paying for interviews? Negotiating ethics, power and expectation
Daniel Hammett and Deborah Sporton
Article first published online: 23 MAY 2012 | DOI: 10.1111/j.1475-4762.2012.01102.x

Domestication and the dog: embodying home
Emma R Power
Article first published online: 23 MAY 2012 | DOI: 10.1111/j.1475-4762.2012.01098.x

Adapting water management to climate change: Putting our science into practice

Runoff attenuation features: a sustainable flood mitigation strategy in the Belford catchment, UK
A R Nicholson, M E Wilkinson, G M O’Donnell and P F Quinn
Article first published online: 22 MAY 2012 | DOI: 10.1111/j.1475-4762.2012.01099.x

Commentary

Geography, libertarian paternalism and neuro-politics in the UK
Mark Whitehead, Rhys Jones, Jessica Pykett and Marcus Welsh
Article first published online: 21 MAY 2012 | DOI: 10.1111/j.1475-4959.2012.00469.x

Subaltern geopolitics: Libya in the mirror of Europe
James D Sidaway
Article first published online: 11 MAY 2012 | DOI: 10.1111/j.1475-4959.2012.00466.x

Original Articles

Faith and suburbia: secularisation, modernity and the changing geographies of religion in London’s suburbs
Claire Dwyer, David Gilbert and Bindi Shah
Article first published online: 22 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00521.x

Mobile nostalgias: connecting visions of the urban past, present and future amongst ex-residents
Alastair Bonnett and Catherine Alexander
Article first published online: 22 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00531.x

Dalits and local labour markets in rural India: experiences from the Tiruppur textile region in Tamil Nadu
Grace Carswell
Article first published online: 22 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00530.x

The Korean Thermidor: on political space and conservative reactions
Jamie Doucette
Article first published online: 18 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00528.x

‘Faith in the system?’ State-funded faith schools in England and the contested parameters of community cohesion
Claire Dwyer and Violetta Parutis
Article first published online: 18 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00518.x

The short-run impact of using lotteries for school admissions: early results from Brighton and Hove’s reforms
Rebecca Allen, Simon Burgess and Leigh McKenna
Article first published online: 16 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00511.x

Learning electoral geography? Party campaigning, constituency marginality and voting at the 2010 British general election
Ron Johnston and Charles Pattie
Article first published online: 16 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00527.x

Hidden histories made visible? Reflections on a geographical exhibition
Felix Driver
Article first published online: 16 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00529.x

‘Read ten thousand books, walk ten thousand miles’: geographical mobility and capital accumulation among Chinese scholars
Maggi W H Leung
Article first published online: 15 MAY 2012 | DOI: 10.1111/j.1475-5661.2012.00526.x

Bearing the scars of change: post-socialist Poland and divided Germany

by Fiona Ferbrache

August 1961, and East and West Germany were being physically divided by soldiers of the German Democratic Republic (East Germany) starting construction on the Berlin Wall, a boundary that was to be in place for 28 years (The journal.ie, 2011).  As the wall was erected, families were split apart, as Evans (2011) reveals, unable to reconnect between West and East Berlin.

50 years on and Germany marked the anniversary of the Wall’s construction on 13 August (BBC News, 2011).  However, the Berlin Wall is more than a memory for some people for, as Evans (2011) reveals, it continues to impact the psychological and daily lives of many people.

There are some connections between this media article and Burrell’s forthcoming article in Area – Opportunity and uncertainty: young people’s narratives of ‘double transition’ in post-socialist Poland – where Burrell focuses on the impact that large-scale economic and social changes have had on ordinary people.  ‘Double transition’ refers to the life-course transition from childhood to adulthood (for young people during the 1990s) and the simultaneous societal changes brought about after the collapse of socialism.  Drawing on interview data, Burrell illustrates how the contemporaneity of such changes impacted heavily on her respondents (Polish migrants in the UK) through various temporal and spatial challenges.  Central to this article is a narrative of migration and settlement in a post-socialist society and, just as Evans refers to scars created as a result of the Berlin Wall, Burrell’s article deals with the scars of post-socialist change.

   BBC News Online (2011) Germany marks 50 years since Berlin Wall.  BBC News 13 August, 2011

  Burrell, K. (in press) Opportunity and uncertainty: young people’s narratives of ‘double transition’ in post-socialist Poland.  Area.

  Evans, S. (2011) The Berlin Wall sickness that lingers today.  BBC News  11 August, 2001

  The Journal.ie (2011) In photos: 50 years of the Berlin Wall.  13 August, 2011

A Special Relationship?

By Alexander Leo Phillips

Originally coined by Winston Churchill in 1946, the ‘Special Relationship’ between the United Kingdom of Great Britain and Northern Ireland and the United States of America has been tested in recent months. With splits in Middle East policy, the BP oil spill and anti-UK rhetoric by the US administration; it appears to some that maintaining the closest of ties to the US is no longer in the UK’s national interest.  So much so that a committee of MPs have even suggested that the term be officially dropped in all UK documentation.  They concluded that “the overuse of the phrase by some politicians and many in the media serves simultaneously to de-value its meaning and to raise unrealistic expectations about the benefits the relationship can deliver to the UK.”

It’s been clear for many years now that the balance of global power has shifted away from the once dominate United States to the emerging BRIC (Brazil, Russia, India and China) economies, who look set to dictate the course of the 21st Century.  The UK has embraced this transition with unrivaled vigor and sort closer links with these nations. India in particular has been the target of Britain’s new coalition government; exemplified by Prime Minister Cameron’s visit there last week where he stated his intent to “take the relationship between India and Britain to the next level. [He] want[s] to make it stronger, wider and deeper.”

Britain’s ever evolving relationship with the USA has long been of interest to Human Geographers, focusing in particular on how the UK has situated itself as a bridge between America and European states such as France and Germany.  This relationship has been charted by Simon Tate in Area, who suggests that the diplomatic failures of the former Labour government where the result of an outdated geopolitical strategy.

Tate, S. 2009. ‘The high wire act: a comparison of British transatlantic foreign policies in the Second World War and the war in Iraq, 2001-2003’, Area, 41 (2). pp. 207 – 218.


Islamic Finance

By Alexander Leo Phillips

Public confidence in the banking sector has been significantly shaken over recent years.  Given the turmoil caused by the global financial crisis, the depression and the public bail-outs of banks like RBS and Northern Rock; the raising levels of doubt and mistrust are hardly surprising.  Furthermore, such doubts show little sign of abating this week, as seven EU banks fail newly imposed ‘stress tests‘ by the Committee of European Banking Supervisors (CEBS).  As a result increasing numbers are looking for an alternative form of banking in which to invest and Islamic finance could just fit the bill.

Unlike the traditional banking sector, Islamic banking is based upon a strict set of principles; the central of which is that “money itself has no intrinsic value. [Also] as a matter of faith, a Muslim cannot lend money to, or receive money from someone and expect to benefit – interest (known as riba) is not allowed. To make money from money is forbidden – wealth can only be generated through legitimate trade and investment in assets. Money must be used in a productive way” (IBB).  As a result of this central principle Islamic finance is considered more stable (as the temptation to risk in search of profit is reduced) and more ethically appealing to many private savers and investors dismayed by increased profits and bankers bonuses.  Moreover, Pollard (2010) suggests that many organisations like the IBB, are attempting to market themselves as ‘ethical banks’ in areas such as the EU and USA which could otherwise be sceptical of the Islamic name.

In a recent issue of Area geographers Bassons, Derudder and Witlox detail the global spread of the Islamic finance model in recent years, charting how Islamic financial services have moved out of their historical base in the cities of the Middle East and become “anchored in the more conventional world cities” (2010, 44) of London and Paris, challenging our pre-existing geographical imaginations of the global financial sector.

These changes should be of great interest of all Human Geographers, as they offer a potentially fruitful intersection between social & cultural, political and economic geographical research; as we explore how the actions and values of the individual impact upon these globalised networks.

Bassons, D, Derudder, B and Witlox, F. 2010. ‘Searching for the Mecca of finance: Islamic financial services and the world city network’, Area, 42 (1). pp. 35-46.

Pollard, J. 2010. Faith in Economic Geography: some reflections on Islamic finance. In: Geographies of Religion: a new dialogue, Newcastle University, 9th March 2010.

Radio: Transcending Political Boundaries

HM the Prince of Wales and French President Nicolas Sarkozy lay a wreath at the monument to King George VI and Queen Elizabeth, the Queen Mother (18 June 2010).

by Benjamin Sacks

18 June 2010 marked the seventieth anniversary of one of the most important radio broadcasts of the twentieth century. On 18 June 1940 Charles de Gaulle, then leader of the French Government-in-Exile, announced on the European arm of the BBC Overseas Service (precursor to the modern World Service), that “the flame of French resistance must not and will not be extinguished”. The Daily Telegraph recalled that de Gaulle’s broadcasts were deemed so inflammatory by the Vichy Government that the Allied French leader was court martialled in absentia and sentenced to death. This week, His Majesty the Prince of Wales accompanied French President Nicholas Sarkozy and his wife, Carla Bruni-Sarkozy in commemorating de Gaulle’s momentous radio address.

This anniversary serves as a fitting reminder of the important role radio – particularly shortwave, or world-band radio – played in the development of twentieth century social geography. Indeed, the recognition of radio as an instrument of influencing social opinion and change occurred in the earliest years of international broadcasting. As was suggested in Nation Shall Speak Peace unto Nation, “The development of transmitters capable of broadcasting beyond the confines of regional, disparate cultural groups and national boundaries…presented an innovative medium for the conveyance of socio-economic and political perspectives of nation-state actors on the global stage”. Radio was a dynamic, malleable tour-de-force: warring governments vaulted propaganda at one another, peoples long suppressed found a new voice of survival, and global knowledge ceased to be optional. As international radio expanded, so too did a ‘communications generation’; in a 2001 Transactions of the Institute of British Geographers article, Matthew Farish described the years between the world wars as a “golden age’ of foreign correspondence”. International radio continues to captivate and influence. Unfortunately, this can occasionally have dire consequences. On 8 July 1993 Radio Télévision Libre de Mille Collines (RTLM) demanded that Rwanda’s Hutu majority massacre the Tutsi minority. Hundreds of thousands perished.  The RTLM episode is a reminder of the continuing influence of radio in the changing social geographic landscape.

“Nicolas Sarkozy and Carla Bruni Meet Prince of Wales as they Visit Britain,” The Daily Telegraph, 18 June 2010.

Matthew Farish, “Modern Witnesses: Foreign Correspondents, Geopolitical Vision, and the First World War,” Transactions of the Institute of British Geographers 26 (2001): pp. 273-287.

Benjamin J. Sacks, “Nation Shall Speak Peace unto Nation: International Broadcasting in the Context of Civil Society,” Hemispheres: the Tufts University Journal of International Affairs 30 (2007): pp. 152-155.