Learning from the Past: How Local Economic Conventions Influence Responses to Global Crises
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Abstract: Reactions to global crises vary locally, and a specific reaction to a particular crisis does not only depend on structural aspects (such as a city’s placement in the world system), but also on local economic practices. Based on concepts from the ‘Economics of Convention’, we argue that people handle complexity and contingency in everyday life by drawing on knowledge of approved routines and practices of how things are typically done. This knowledge is highly context-specific. Adopting the idea of the ‘intrinsic logic of cities’, which tells us that cities create and maintain their own distinct constellations of knowledge and modesof expression that are reflected in their everyday practices, we conceptualise local economy as a figuration that develops procedurally and depends on the hidden structures that over time become inscribed into urban spaces. Comparable to a series of palimpsests, one can track the history of the conditions that pre-structure this figuration over time. Using material from a comparative study carried out in four cities – two in Germany (Dortmund and Frankfurt), two in the United Kingdom (Birmingham and Glasgow) –, we show that the specific reactions to a crisis and the ability of coping with it can only be grasped by understanding a city’s past.
Keywords: Economics of Convention – Figurational Sociology – Intrinsic Logic of Cities – Cities – Economic Crisis
1. Spatial Variations of Economic Practices
One of the earliest insights of both sociology and economic theory states that the economy is both tied to, and organised by, space. This is true for different levels of aggregation of spatial units, such as the local, regional and national. Max Weber (1980, 1988) and Werner Sombart (1916–1927) had already observed regionally and nationally distinct economic styles.
Notably, French regulation theory, neo-institutionalism and the debate over the book Varieties of Capitalism (Hall and Soskice 2001) all draw on this idea. Institutional approaches over and over again arrive at the conclusion that each nation has its own way of institutionalising the capitalist regime of accumulation, thereby predefining entrepreneurial practice (Hollingsworth et al. 1994). To put it differently, the economy is strongly dependent on local factors. As has been demonstrated, for example by the Varieties of Capitalism debate (cf. Hall and Soskice 2001), influence is exerted on national economic styles by politically informed institutions such as the legal system, the financial sector, typical forms of product market regulation and entrepreneurial control, relations between businesses, typical industry structure, production models, consumption models, systems of innovation, industrial relations, the welfare state as well as the educational system – all of which are intertwined with and attuned to one another.
Moreover, the debate on ‘regional innovative systems’, taken up, for instance, by approaches such as ‘international business studies’ and ‘regional and urban studies’ (Heidenreich and Baur 2015), has demonstrated the persistence of regional differences in economic performance. Europe, for example, can be divided into industrially dominated, administrative and service-sector regions, peripheral industrial regions as well as peripheral service-sector and agrarian regions (Heidenreich 2003).
Cities, too, seem to have an influence on the development of specific business sectors, such as the creative industries (Krätke 2004; Lange 2007), to name just one example. Both hard and soft location factors play an important role in a business’s ability to attract and keep staff (especially in the service sector). Conversely, the failure of a business might have an impact on the living conditions in the city (Herlyn et al. 1982). The ways in which a business is embedded in its socio-cultural context allows us to predict the behaviour of social actors whose behaviour in turn will have a strong impact on the development of the business (Bathelt and Glückler 2002).
These local, regional and national variations in economic practice are astoundingly persistent because according to neoliberal doctrine, there should be much more fluctuation. Insteand, the current differentiation of Europe into, on the one hand, a central and economically successful region, and on the other hand backward and peripheral regions can be traced back to the sixteenth century. When ‘economic success’ is defined structurally (that is, by a combination of high per capita income and low unemployment), it is indeed quite rare that a region changes its position in this overarching figuration (Heidenreich 2003). By comparative and historical sociology, this dynamic has so far been understood as a result of the balance of power (Machtbalance) between established and outsider groups (Mennell 2014a, 2014b) and by locations’ position in the global world system (Wallerstein 2004), which is enforced by for example citizenship rights (Mignolo 2005; Boatcă 2015). Similarly, in economic sociology, regional disparities are typically explained by the interaction of entrepreneurial strategies with the local institutional and infrastructural factors (Heidenreich and Baur 2015) that enforce this power structure.
Just exactly how local institutions work depends on the historical and cultural context of the time in which they were created as well as important turning points in a locality’s history – the so-called ‘formative phases’ (Berking and Schwenk 2011). Over time, these determining influences become more fixed and rigid (sometimes described as ‘lock-in’), which is to say that lifestyles, mentalities and institutions are synchronised, thus mutually stabilising each other and the overarching system. In doing so, a city’s past is rigidified in its structure and affords a competitive advantage over potential or future innovations in the present. Once this rigidification (Verfestigung) has been accomplished, it is very difficult to undo it, which is why we can observe typical, relatively persistent paths of development (Baur 2008). In different fields of academic discourse, these path dependencies have been identified as an inherent characteristic both of cities (Harvey 1978; Krugman 1998; Kuder 2009) and of the development of industries ( e.g. essays in Bonefeld and Holloway 1991). Although the findings of these debates are not integrated, it is evident that both cities and industries are governed by a distinct, historically rooted logic of processes – which is not to say that ruptures and changes in paths of development paths impossible. Such ruptures do occur, but are relatively rare. In general, the processes of urban and economic development are interwoven, resulting in hierarchically structured regions with disparate degrees of prosperity (Massey 1995; Massey and Meegan 1982), as well as segregated cities due to economic concentration (Häußermann et al. 2004). British ‘locality studies’ have demonstrated that multi-national corporations (MNCs) reinforce and stabilise urban and regional paths of development, because the choice of location and the decision to stay are dependent on what the respective city has to offer (Cooke 1989).
However, as noted in recent research, everything cannot be explained by solely focusing on power, institutions and strategic management decisions. The use of such reductive explanations degrades localities into passive entities in an externally enforced power game (Sassen 2006). Exactly how spatial context and economy interlink and how and when localities are able to shape and change their economic fate has rarely been the object of academic investigation – a blind spot that has consequences because localities (e.g., cities, regions and nations) and economy are not always in synch as they move through their respective developmental paths. As Bade (1987) and Krätke (1995) have noted, some cities, regardless of favourable industrial structures, and despite pursuing consistent political paths, will lose some of their economic power and job growth. Here the city – against all prognoses – does not benefit from its flourishing economy. On the other hand, the shutting down of production sites is often explained with unfavourable conditions that hinder business development, among them high transportation costs, poor work ethics or insufficient quality of life (Begg 1999).
It remains an open question what other local factors (besides institutions) there are that both shape the development of a city and impact its industrial sectors, making them more distinguishable from those in other cities. If each city copes with economic decline in its own individual way (Taylor et al. 1996), we can assume that the same is true for economic crises. The (re-)organisation of labour, the interaction with customers as well as patterns of consumption will differ from city to city (Spitzer 1991: 221–5; Zhang 2002).
In conclusion, economic sociology has long understood that cities, regions and nations do not only differ with regard to their economic performance, but also with regard to their ability to successfully cope with economic crises, or rather to use a crisis as an opportunity to reinvent themselves. Attempts to explain why cities differ in their capacity to address and move through a crisis have remained unsatisfactory. However, in order to develop appropriate solutions to the current economic and social crises facing Europe, for example, it would be favourable to better understand these mechanisms.. To do so, one has to begin by analysing the interplay between global and local phenomena (Sassen 2006).
In this paper, we want to contribute to filling this research gap by examining the role of knowledge (‘Wissen’). Similar to Norbert Elias, we argue that knowledge has grown historically (cf. Burke 2012) and is an important factor in understanding the interconnectedness between the local and the global (cf. Mennell 2014b). The knowledge we focus on is not the academic knowledge typical of specific scientific communities on which e.g. Burke (2012) focussed and which is at least partially reflected and can be mostly verbalised. Instead, we examine everyday knowledge, such as was investigated by Elias (1997 ) in On the Process of Civilisation. For the field of the economy, there have been great advances in recent years in refining theories of the ways in which knowledge shapes economic life, particularly in French sociology. One of the most promising approaches for the issues relevant to this paper is concerned with the ‘economics of conventions’ (EC) (Diaz-Bone 2007; Diaz-Bone and Thévenot 2010; Diaz-Bone and Salais 2011, 2012). As we shall elaborate in more detail, this theoretical approach argues that, for everyday people, it is by no means clear what ‘economic success’ means – it could, for example, mean either ‘high income’ or ‘high revenue’ or ‘not going bankrupt’ or ‘the lifespan of a business’ or ‘making your customers happy’ or ‘wellbeing’ or ‘low unemployment’ and so on. Because of this ambiguity, in everyday social interactions people negotiate both the meaning of ‘economic success’, and which means are suitable for achieving this success. This results in locally divergent belief systems and associated practices, known as ‘conventions’ (Baur et al. 2014a).
Combining the economics of convention with figurational sociology, we thus argue that, in addition to local institutions, local practices as well as local knowledge are important factors that contribute to the reproduction of distinctly local characteristics. More specifically, we argue that people handle complexity and contingency in everyday life by drawing on a body of knowledge of approved routines and practices of how things are typically done.
This knowledge is highly context-specific. In order to better understand local dynamics, we will also draw on the concept of the ‘intrinsic logic of cities’ (‘Eigenlogik der Städte’) (Berking 2012; Löw 2012), which tells us that cities create and maintain their own distinct constellations of knowledge and modes of expression that are reflected in their everyday practices. Based on these concepts, we conceptualise the space of local economy as a figuration (Elias 1986) that is developed procedurally and depends on the hidden structures that over time become inscribed into urban space. Comparable to a series of palimpsests, one can track the history of the conditions that structure the sociogenesis of this figuration over time.
Using material from a comparative study carried out in four cities: two in Germany (Dortmund and Frankfurt am Main), two in the United Kingdom (Birmingham and Glasgow), we show that the specific reactions to a crisis and the ability to cope with it can only be grasped by understanding a city’s past. Our analysis will focus on the responses to the economic crisis of the 1970s, as there is a strong consensus in academic discourse that, firstly, this crisis was one of the severest global crises and, secondly, that many cities are still struggling with the structural changes enforced during that time (cf. e.g. Bell 1973; Lash and Urry 1994; Jarausch 2008; Blomert 2012; Osterhammel and Petersson 2012; Schimank 2013). Thirdly, because enough time has passed since the beginning of this global crisis, it is empirically possibly to observe crisis responses and their effects.
Our research design follows that of the process-oriented methodology proposed by Norbert Elias (cf. Baur and Ernst 2011). For the reconstruction of past economic practices, we have conducted a social pattern analysis (Baur 2005) by using documentary analysis (Hering 2018; for more detailed results see Hering 2012). For reconstructing the present, we focused on the local hairdressing and barbering markets (for an explanation of our selection criteria, see Baur et al. 2014a) and mixed an ethnography of everyday routines in six hair salons per city (22 salons in total) with a multi-mode cross-sectional survey with hair salon owners in all four cities (n= 624, response rate, 33 per cent). For detailed results, cf. Baur et al. (2014a, 2014b; cf. Baur and Meier 2017). In order to link the figuration’s sociogenesis with the current figuration, we triangulated the results from the social pattern analysis with those of the ethnography and survey. Furthermore, our study was embedded in a larger research project on the intrinsic logic of cities (cf. Löw 2012). In the project on intrinsic logic of cities (Frank et al. 2014), our analysis of local economic practices was discussed in relation to other local social contexts, namely a reading of the city from the point of view of crime novels (Rauscher 2014), local political discourses (Barbehön et al. 2015; Barbehön and Münch 2015) and urban marketing concepts (Richter 2014; Marent and Rosenbusch 2014). For the following analysis, this larger research context provides contextual data for analysis (for details see Baur and Hering 2017).
Based on these analyses, we will start with outlining the cities’ sociogenesis up to 1970s crisis. We will then briefly show how the crisis affected the cities differently, and then the main part of the paper will analyse crisis responses.
2. The Cities’ Sociogenesis prior to the Crisis
2.1. Commonalities of the Sociogenesis of the Urban Figurations
In order to grasp how economic and local histories and development processes are entangled, we conducted exemplary case studies (Hering and Jungmann 2018) of four cities: Birmingham, Dortmund, Frankfurt am Main and Glasgow. In sampling our locations, we deliberately combined most-similar cases designs with most-different cases designs (Behnke et al. 2006: 184–200).
The most-similar cases design focusses on criteria that appear to be constant and similar, which makes it possible to identify traits specific to each city. As we were interested in economic practices, we aimed particularly at selecting cities that were as similar as possible on a structural and institutional level – empirically observed differences in the cities’ sociogenesis thus cannot be explained by structural and institutional aspects, but instead must be caused by other factors (for example, economic conventions). In our particularly study, we selected cities that were so similar on a structural and institutional level that one would expect both similar effects of and reactions to the 1970s crisis (which, as we will show, was not the case). More specifically, the chosen cities were similar concerning their growth, density, heterogeneity as well as on similar structural conditions, most importantly comparable historical traditions and similar formative phases (Berking and Schwenk 2011), and including similar problems in the present. These similarities can be summed up as follows (for more detail, see Hering 2012):
During the Middle Ages, all four cities grew to be important regional, even supra-regional commercial centres. In the course of the nineteenth century, they developed into booming industrial towns, with a population of more than 100,000, an increase that may be partially explained by the influx of immigrants from neighbouring regions or from abroad. Even today, population sizes are quite similar. All four cities are among the biggest in their country and in their region (but we purposefully did not select the biggest cities). As exceedingly dense and heterogeneous spaces of interaction and communication, the chosen cities offer a common space for people of different nationalities and religions, including lively and dynamic cultural milieus. Furthermore, they are important inland transport hubs for land, air and water traffic (Glasgow and Frankfurt feature river ports, Birmingham and Dortmund canal ports), and as such, they play an important role as leading national and regional commercial centres.
2.2. Differences in the Sociogenesis of Urban Figurations
As in any comparative case study, despite trying to keep as many factors constant as possible, differences between the cities remain. As similar as they may be, each of the four cities still is characterised by unique economic development and unique formative phases. In order to better to control these differences methodologically, we combined the most-similar cases design described above with a most-different cases design. In other words, we purposefully selected the cities in a way to made sure that these differences allow for multiple comparisons. With regard to institutional frameworks and structural conditions, three comparative levels are most relevant (see Table 1):
Firstly, in order to be able to examine the effects of the national framework on a city’s sociogenesis, we selected two German and two British cities.
Secondly, with respect to economic traditions (ties to the past), Dortmund and Glasgow on the one hand, and Frankfurt and Birmingham on the other hand are quite similar, as the following comparison of the cities’ sociogenesis illustrates:
|City||National-Institutional Framework||Ties to the Past (Traditional Economic Orientation in the19th/20th century)||Crisis Response(Responses to Structural Changes since the 1970s)|
|Economic Reorientation||Crisis Successfully Tackled|
|Frankfurt||Germany||Diversification of Economic Structure||X|
|Birmingham||UK||Diversification of Economic Structure||X|
As one of the most loyal members of the Hanseatic League, Dortmund experienced its first economic and urban growth in the early fourteenth century. After a period of stagnation, the Gründerzeit (‘founders’ period’, a phase in German history between 1848/49 and 1866/1871) brought another burst of economic growth to this Ruhr area city, which greatly benefited from the combined economic power of the iron and steel industry. The brewing trade, too, benefited from the economic upswing and soon Dortmund became famous as the ‘number one beer city’.
As an episcopal seat, the city of Glasgow, situated on the river Clyde in the Western Central Lowlands of Scotland, became involved in regional trade from the beginning of the twelfth century. Later, the so-called ‘Tobacco Lords’ built a deep-water port on the Firth of Clyde and were able to establish the port as a highly profitable hub of transatlantic trade with the British colonies. Initially, due to the high import of cotton, the textile industry became the mainstay of Glasgow’s economy. During the Industrial Revolution, shipbuilding became the city’s signature industry, later complemented by the iron and coal industries. Visually, this is symbolised by the Clyde being surrounded by smoking chimneys.
In summary, both Dortmund and Glasgow were shaped by the development of heavy industries during the Industrial Revolution. Today, these economic structures play a very minor role in the cities’ everyday life, but they nonetheless continue to define the urban landscape.
In contrast, Birmingham’s and Frankfurt’s economies have always been much more diversified:
During the Middle Ages, Birmingham became famous as an international trade centre for metal wares (such as buttons, buckles, and weapons). The city’s trademark was the manufacturing of high quality goods. Birmingham did very well despite its rather unfavourable geographical location – an inland town far away from major transportation hubs and trading routes. This situation was alleviated by development of English infrastructure in the eighteenth and nineteenth centuries. The early onset of the Industrial Revolution was initially driven by flexible and well-interconnected small and moderate-sized businesses, which strengthened Birmingham’s characteristic diversity of both goods and production facilities. These businesses were in turn themselves strengthened by the Industrial Revolution. However, as competition intensified, the standardisation of mass production transformed the city’s economic structure. New industries established themselves at the city’s periphery and the service sector grew. Even in 1910, metal and engineering industries still provided 31 per cent of jobs (Berghoff 1991: 46). In addition, other, smaller-scaled industries (for example jewellery, watches, and technical instruments) played an important role in the urban economy which continued to be characterised by diversity and a high degree of specialisation.
Similarly, from the very beginning of its history, Frankfurt was known both for financial services such as government bonds and IOUs (precursors of shares at the soon to be established Frankfurt Stock Exchange), and as an ambitious trade centre for a wide variety of goods (such as books, foodstuffs, raw materials etc.), which were sold at Frankfurt’s prospering fairs. In the course of the Industrial Revolution, Frankfurt rose to become a hub for banking with the Frankfurt Stock Exchange one of Europe’s leading bourses. At the same time, the chemical industry established itself on the city’s periphery – for a long time Frankfurt was famous for not welcoming the primary and secondary sector. The chemical company Hoechst was to become one of the world’s leading pharmaceutical companies. In the twentieth century, the airport was to complete Frankfurt’s profile as a leading service sector city.
3. The Economic Crisis of the 1970s
All four cities were in equal measure and yet differently affected by the global economic crisis of the 1970s and the structural change it caused, as the onset of the crisis, its temporal extension as well as the degree of negative consequences (such as unemployment and derelict land) varied from city to city:
Glasgow experienced a long and gradual period of economic decline and de-industrialisation caused by a lack of investment and increasing competition. This period of decline began right after the end of World War II – earlier than in the other cities – but reached its nadir only in 1995.
Dortmund had to face the onset of structural change at the end of the 1960s. The first signs of the crisis were that workers in the coal mines had to be laid off. Combined with the steel crisis of the 1970s, this wave of dismissals resulted in the transformation of Dortmund from a full employment city to a mass unemployment city by the mid-1980s.
Frankfurt was hit by the crisis only in the 1970s, and also had to handle severe job losses – in this case in the chemical industry.
In Birmingham, the crisis set in even later: during the recession of the 1980s, the local automobile industry collapsed. Owing to economic restrictions imposed by the British central government, the automobile industry had become the mainstay of Birmingham’s economy after World War II, putting an end to the diversity for which that the city was known.
Despite the different timing of the crisis in the four cities and regardless of the fact that the crisis affected some cities more severely than others, the consequences all cities suffered were the same: industrial decline, high unemployment rates, population decline as well as the on-going deterioration of urban (working-class) neighbourhoods.
4. Responses to the Crisis
In all four cities, the past three decades have been characterised by comprehensive efforts to create new employment sectors, especially in the service sector. The goal has been to fight unemployment and poverty, to promote economic regeneration, to boost the image of the city as well as the quality of life there through extensive urban improvement programmes and the building of new architectural landmarks.
As discussed above, the cities were selected because of their great similarities on the structural level. According to the state of the art of research on spatial variation in economic performance (as discussed in the introduction to this paper), in theory there should be no or only little differences in the cities’ responses to the crisis or concerning their ability to cope successfully with situations of radical economic transformation. However, empirically this is not the case: Frankfurt, Birmingham, Glasgow and Dortmund differ significantly in how and how well they mastered the crisis. In the following, we first describe both the local patterns of the crisis as well as local practices of crisis management. As discussed above, the cities also differ on a variety of dimensions concerning their institutional framework and structural conditions. Taking these differences into account additionally allows us to analyse the relationship between economic conventions (Diaz-Bone 2007; Diaz-Bone and Thévenot 2010; Diaz-Bone, Salais 2011, 2012), institutions and the capacity to move through a crisis.
4.1. Reactions to Structural Change
As far as reactions to the structural changes induced by economic crisis are concerned, Frankfurt is the only city that has remained loyal to its established economic structure. The structural transformations in the chemical sector were motivating rather than threatening to Frankfurt, and they have led to attempts at internationalisation. Without much difficulty, Frankfurt compensated the job loss in the chemical sector by new jobs in the service sector. The expansion of the airport is also credited with having had beneficial effects on all industries (Baum et al. 2005).
By contrast, Birmingham, Glasgow and Dortmund were forced to reorientate their economies.
Dortmund was perhaps hit hardest by the crisis. An important turning point, which also represents the beginning of economic reorientation, was the conjunction of the founding of Dortmund University (in 1968) with efforts to transform a city that relied on heavy industry into a technology and science hub (mainly in the mid-1980s). In order to keep the collective memory of its urban economic tradition fallow, industrial sites and buildings have been converted into office and business centres. Beer is still being brewed in Dortmund, and the local beer museum welcomes visitors to learn about the history of the city’s breweries. However, that this is mostly nostalgia (Meier 2016) is illustrated by the fact that – similar to other middle-European modern cities – today’s Dortmund has a thriving service sector which makes up more than 80 per cent of the city’s economy. In city marketing, the city presents itself as a centre for sunrise industries such as IT, micro- and nano-technology, logistics and, increasingly, for biomedicine and robotics (Stadt Dortmund 2015).
In recent decades, Glasgow, too, went through a period of reorientation, focusing on the service sector, with special attention accorded to finance and management services, retail, tourism, creative and cultural industries as well as to research on shipbuilding, marine technology, energy and the biosciences. The last four deliberately draw on Glasgow’s glorious history as an academic and scholarly centre. Furthermore, thanks to the Glasgow School of Arts, the city has experienced an architectural renaissance which has significantly improved Glasgow’s image.
Something similar is true for Birmingham. The city has invested much effort in reviving its former economic diversity, concentrating on professional, financial and business services. In addition, Birmingham presents itself as location for advanced product engineering, health, transportation technologies and low carbon technologies, while also advertising opportunities for tourism, retail and leisure. But still, the high number of unqualified youths and young adults is a reason for concern in this most multicultural city in our sample.
4.2. Successfully Coping with Structural Change
How cities reacted to the crisis does not automatically guarantee success in the sense of keeping the local per capita income high and unemployment low, or even increasing per capita income and decreasing unemployment. On the contrary, we found that the cities vary largely in their ability to successfully manage structural challenges, and the patterns of success are different than those of crisis response.
Frankfurt stands out the most. Both data on the cities’ economic history and current comparative data (from EuroStat and Urban Audit Statistics of the European Commission) confirm that Frankfurt’s transformation has been most successful. Compared with the other cities in our sample, problems related to adapting to structural changes have been few and far between. Frankfurt survived the structural changes of the 1970s thanks to an economy that was already firmly rooted in the financial and service sectors. Even though many jobs were lost in the industrial sector, Frankfurt continues to keep its position as a leading financial and service city. Last but not least, Frankfurt’s airport has now become Germany’s largest, and is also the largest local employer, emphasising the enormous importance of this international air transportation hub for the city.
Glasgow too is credited with having moved through the structural changes successfully, even though the outcome is not as unambiguous as it is in Frankfurt.
By contrast, Birmingham and Dortmund continue to struggle with the consequences brought about by the many years of crisis.
5. Variations of Local Conventions
Most interesting for the issue that concerns us here is the fact that historically similar economic structures have led to different coping mechanisms that vary in degree and duration of success. As stated in the introduction, we further investigated this issue by focusing on the hairdressing industry (for an explanation of our selection criteria see Baur et al. 2014a).
Having compared the four cities on the basis of the aforementioned methodology, our data consistently and explicitly point to the existence of locally distinct conventions of economic activity. All four cities differ in the ways in which they define economic rationality – that is, what counts as ‘economic success’, and what one needs to do to be economically successful and to integrate oneself into the city’s economic structure. However, actors are only partially aware of the extent to which their everyday practices and activities are shaped by local conventions. Instead, conventions are reproduced interactively via everyday workplace routines and recurring conflicts. Economic practices are embedded in an interpretative framework consisting of silent agreements (unique for each city) that are enacted (rather than talked about) through explicit or implicit sets of belief, specific forms of workplace organisation and interactions, for example in the hairdressing salons both among the hair stylists and between hair stylists and customers. These conventions become both institutionalised and materially consolidated through space–time arrangements (Baur et al. 2014a). Within this given interpretative framework, actors collectively and collaboratively generate a dynamic that is both dependent on and shapes the situational context. By simultaneously and continuously criticising and drawing on the supra-situational conventions (that are located between structure and practice), actors generate social stability.
It is precisely those conventions – collaboratively negotiated over time – that allow insight into why one city is able to easily and swiftly overcome a crisis while another finds itself bogged down in a long and complicated process of crisis management. Our data suggest that the idea of what it means to be a hair stylist, the presentation of the salon, the sense of community, and the time–space strategies not only differ from place to place but are based on past conventions of economic practice. Everyday routines in the cities systematically differ in how competition, efficiency, flexibility and personal responsibility are defined, as well as in the relationship between the economy and other social spheres (Baur et al. 2014a).
In order to be able to better explicate how local conventions unfold and how the cities differ, we focused on differences in time management in the following discussion (see Baur et al. 2014b for more detail). By ‘time management’, we mean how inhabitants of a city specifically relate to the past, the present and the future and how this determines their attitude towards innovation. This relationship to time is of utmost importance for economic performance, because in times of crisis, it shapes both the horizon of expectations (Erwartungshorizont) and the space of knowledge (Erfahrungsraum) (Baur 2005: 88–92). The horizon of expectations is important as actors are required to both anticipate and reflect upon a potentially insecure and unsafe future in order to develop strategies for action. By ‘space of knowledge’ we mean that, typically, past conventions shape experience and with it the available repertoire of possible actions. In other words, both the actors’ knowledge of, and the way they relate to, the past, present and the future influences ways in which actors respond to a crisis.
Time management also refers to the ways in which actors ‘manage’ or deal with time in everyday routines. For instance, the time a stylist needs to render his services and the time a customer spends in the salon may differ quite significantly. Our data reveal that, for men’s haircuts, the difference in some cases amounts to more than an hour. Moreover, the cities included in our study seem to differ with regard to their pace of life – the rate of acceleration and deceleration (Rosa 2005), the timing of work, and the significance actors attribute to time management. All these factors are closely intertwined with the degree of marketisation (Hirsch-Kreinsen 2009: 451), flexibility requirements for stylists as well as opportunities to balance work and personal life.
Our case study reveals typical patterns of local time management as well as typical strategies to improve one’s competitive position in the future (for more detail, see Baur et al. 2014b). However, one needs to keep in mind that, in each city, time strategies are closely interwoven with other dimensions (such as the stylists’ relationships among themselves and to their customers), and that they empirically occur in typical local constellations. Therefore, these other factors weave themselves both into our analysis and the following presentation of results.
In Frankfurt, time management is based on acceleration (Beschleunigung) and systematically planning for the future. Market orientation is paired with a preference for the planning and exact timing of work and appointments. Exclusivity is seen as a means to success, all of which is to say that the pace of work is high and time management is tight. To give one example, appointment schedules are generally quite realistic – that is to say, appointments are allocated more time than in the salons in the other cities. This in turn reduces delays and thus systematically eliminates unnecessary waits for customers. On the downside, hair salons have little capacity for walk-ins. Moreover, realistic time management also allows the stylists to more or less have their lunch breaks and have them on time. Thus, Frankfurt has always been and still is a city with a strong market orientation. Opening and working hours are long but flexible, and they differ from salon to salon.
Planning for the future has always been important in Frankfurt. It is probably unsurprising that Frankfurt’s self-image is shaped by flexibility and self-reflection: new trends are discussed and factored in, but only if they are really perceived as new. Just to jump on any new trend (and copy it) is not something of which the city’s hair stylists approve. Simply to adopt an idea from a competitor seems implausible to them. And nobody welcomes a surprising change in the salon’s marketing concept. To be different, to distinguish oneself from the market, to be seen as out of the ordinary – those are the visions the salons embrace. To change constantly is seen as neither innovative nor new. Rather, it is seen as an integral part of the profession. Thus, Frankfurt’s hair salons are not just well prepared for potential crises, but being prepared is their default attitude even if they have never or rarely been subject to a crisis – which means that salons are in a position to respond swiftly and efficiently to future crises.
Dortmund’s time management is based on constancy and deceleration. High flexibility within established rules is seen as common sense. Selling additional products is seen as an effective strategy for increasing revenues. Constancy shows, among other things, in the fact that in Dortmund, the average lifetime of a salon is 24 years, much longer than in the other cities in our study. Frequently – and more often than in other cities – successors take over their predecessors’ concept of the salon, its furniture and name. Stories about the salon, the neighbourhood and the city shape the salons’ everyday routines. And yet, Dortmund’s hair stylists do see themselves as much less bound by tradition than stylists in other cities. Rather, tradition is understood as the source from which action springs, and so deeply anchored in everyday knowledge and routine that actors are not aware of the extent to which it shapes both their outlook on the future and their future actions. Even though Dortmunders are open to future-orientated capital expenditures (taking out a loan to improve the salon does not seem far-fetched), they are quietly proud of their history and often insist on it.
Work days are shortest in Dortmund and flexibility of the staff is not a priority. Compared with other cities, salons open and close earlier, which means opening hours adhere to a long-established conventional schedule, and the working day is less flexible. Very rarely are customers served outside regular opening hours, and stylists are naturally compensated for working overtime. The pace of work is comparatively low, and weekly working hours are fewer than in the other cities in our study. In Dortmund, one is likely to find salons that are open only four or fewer days of the week. And yet, Dortmund’s stylists preserve a high degree of flexibility within clearly defined rules. Compared with the other cities in our study, work is less tightly organised and customers who arrive late for their appointments disturb the daily routine the least.
In Glasgow, time management is aligned with communicative settings as well as with a well-balanced attitude towards innovation and risk, which in the local context means that advertising – that is, investing in communication (as opposed to product innovations) – seems a particularly obvious instrument for securing or increasing earnings. By ‘communicative settings’, we mean that sociability is a trademark of Glasgow’s hair salons. It is not at all difficult to find a hair salon that is open seven days a week. In both the ethnographies and survey, stylists have pointed out that customers chat while they wait and that they sometimes come to the salon not to get their hair done but to gossip for a little while.
In Glasgow, future-orientated capital expenditures include paying close attention to the needs of the customer in the ‘here and now’. Glaswegians seek balance and equilibrium: taking risks is okay as long as it is done moderately. Innovations are deemed important, but not the sole focus of a business. Setting up new businesses is nothing unusual, but entrepreneurs do not feel they are struggling for survival. In Glasgow, hair stylists are self-confident: much more so than in other cities, each stylist perceives their own salon as doing exceptionally well.
Time management in Birmingham is based on both trust in the future and on the idea that Birmingham is a city of innovation. Contradictions are often either ignored or tolerated. For instance, not only do Birmingham’s hair stylists believe they are more successful than stylists in other cities (not unlike their colleagues in Glasgow), but they also perceive themselves as among the first to pick up a new trend and are convinced that in ten years’ time their salon will be completely remodelled. Even though the average Birmingham hair salon has a life expectancy of 15 years, hair stylists feel less threatened by closings or bankruptcy than stylists in other cities. In a similarly paradoxical vein, stylists tend to describe themselves as adhering to tradition while at the same time perceiving themselves as trend setters. And yet, while this contradiction seemed obvious contradiction to us researchers, Brummies do not seem to register it.
Views on the work–life balance are equally positive. Compared with stylists in the other cities, Birmingham’s hairdressers feel they have the least problems with balancing work and private life. At the same time, stylists report that it is not unusual to see clients outside regular working hours, that lunch breaks are often cancelled and that they come to work when the salon calls them at their home. Overtime is almost the rule and the pace of work is quite fast. Despite a preference for planning (precise instructions as to how long a haircut may take, strong effort to make subsequent appointments, paying close attention to the appointment book, agreeing with the statement that time is money), Birmingham stylists are convinced that economic success cannot be planned – perhaps because the years of crisis are still fresh in the city’s collective memory.
6. Economic Conventions and Responses to Crises
If we switch from the level of the salon to the level of the city, the question arises as to how exactly local conventions and institutional frameworks interact. What role do local conventions play in the ways a city reacts to a crisis, fares economically, and negotiates agreements in conflictual situations?
6.1. Elective Affinity between Economic Conventions and Economic History
There is an evident elective affinity (‘Wahlverwandtschaft’) between a city’s current economic conventions and its economic history and traditions. For formerly wealthy commercial centres like Frankfurt and Birmingham – cities that have been characterised by a small-scale and diversified economy – profit maximisation, time management and market differentiation are the logical continuation of a long historical tradition.
When Dortmund and Glasgow, two cities historically shaped by heavy industry, focus on workmanship and a long working-class tradition, proudly celebrate these working class traditions, it appears that they are harking back to long established routines, readapting them to address present conditions, if necessary.
6.2. Conventions and Ways of Coping with Structural Change
However, while economic conventions and respective economic practices referring to a city’s past and historically-grown economic traditions might well explain why cities reacted to the crisis the way they did, the same conventions do not explain the cities’ current levels of economic success. Against all economic truism, profit orientation does not automatically guarantee economic success (see Birmingham), and honouring the traditions of a blue-collar society does not automatically lead to economic failure (see Glasgow). Rather, successful coping strategies seem to draw on other factors, namely on conventions and practices which are external to the economy, but weave themselves into economic activity. Instead of interfering with economic success on the structural level (in the sense of achieving high per capita income and low unemployment), these conventions seem to boost and reinforce it – and they, too, seem to have established themselves gradually over time.
If one examines how the economy and other social spheres are intertwined, the first thing one can observe is that the balance between the economy and social life (Lebenswelt) is different in each of the four cities.
Frankfurt is not only the city in which the economy dominates social life, but also the first city to successfully address the problems posed by structural change. How deeply competition informs the city’s economic practices can be seen in the fact that even in the same salon, stylists compete with each other. They approach their management and work strategically. Turning a profit is seen as a way of increasing one’s quality of life, which does not mean the same thing for everybody. In upper and middle-class salons, spending leisure time for ‘wellness’ and ‘leisure’ is sold as a product to customers stressed – for example, from financial markets – while to the hairstylists themselves, ‘quality of life’ means first and foremost an increase in sales and earnings. In contrast, at the more down-to-earth working-class salons, ‘quality of life’ means that hairstylists organise their work life as efficiently as possible in order to have more time for leisure activities. This profit orientation comes at considerable cost to the stylists in all market segments: in no other city are workers struggling as much to draw a line between work and private life as they do in Frankfurt. The economic sphere has colonised (‘kolonialisiert’) the private sphere deeply.
In contrast, in the Birmingham, Dortmund and Glasgow hair salons we studied, the social sphere resists economic pressures to a certain extent. Our data clearly show that the idea of a homo economicus, a concept which typically figures strongly in neoliberal economic theories, empirically does not exist in these cities: economic actors are not solely self-interested or egoistical and they do not (only) rationally optimise their personal gains. Instead, in all three cities, economic actions are also always orientated towards the community’s needs. However, what ‘community’ (Gemeinschaft) means differs from city to city, and therefore ‘community-orientation’ also is defined and expressed in very different ways.
Our data also reveal that it is false to conclude that only cities that put the economy above all else can succeed – almost the opposite is true. As our case studies have shown, Frankfurt is not the only city that has successfully mastered the challenges posed by structural change – Glasgow, too, did (relatively) well. Although Birmingham and Dortmund are still in the process of coping with their respective structural changes, this does imply failure. There is still a chance that crisis management will eventually lead to positive outcomes – continuing the trend of the past several years.
What is unique about Frankfurt is that it is the only city that was not forced (or did not want) to economically re-orientate itself, but was able to follow well-established economic paths. More interesting than the question as to why Frankfurt has been more successful than the other cities, is therefore another question: why Birmingham has not yet moved through the crisis (even though there are similarities to Frankfurt with regard to favourable structural conditions, the belief in economic success, organisation and time management), and why Glasgow is much more successful than Birmingham and Dortmund (although Glasgow and Dortmund are structurally similar to each other)? In short: what distinguishes Frankfurt from Glasgow, Birmingham and Dortmund?
One important aspect seems to be the timing and duration of the crisis. In Glasgow, the crisis began in the 1950s, right after World War II, which means that compared with Dortmund, Glasgow has had 15 more years and, compared with Birmingham, 35 more years to respond to the crisis.
Another important aspect comes into view when considering the case of Glasgow with its specific way of doing community: in contrast to Dortmund and Birmingham, in Glasgow, community is mostly defined via informal relationships and social networks.
Yet another difference seems to be connected to the ways in which employers relate to their employees’ individuality as well as to what being ‘professional’ means.
Despite the many similarities between Frankfurt and Birmingham, marketisation is most advanced in the Frankfurt salons, where individuality is almost completely suppressed and white-washed – for example by communication training, rigorous schedules and meticulously planned, perfect service that is delivered in a high division of labour almost resembling an assembly line. This could be interpreted as consistent continuation of what has been called ‘Frankfurt Capitalism’. This high degree of marketisation is a (frequently self-imposed) burden, which leaves stylists very little personal freedom. In their professional capacity, stylists keep their distance from customers – and this reserve is exactly what is expected and valued by Frankfurt customers.
In contrast, we found that, in Birmingham, practices geared towards efficiency, planning and time management are being supplemented and even disrupted by an almost spiritual belief in a stylist’s individuality. Hair stylists take it for granted that it is the – preferably striking and highly competent – personality of the stylist which will guarantee economic success. Birmingham is therefore the city which encourages individuality the most and disciplines it the least: a stylist’s individuality is used as a means to compete with other salons, and stylists are free to express their personality through clothes and their way of communicating with a customer. However, this situation is highly ambivalent, as Birmingham also has many franchises and cheap chains, which try to compete via price dumping. Nevertheless, in today’s Birmingham, one finds economic practices and conventions that point to concepts already prevalent during the Industrial Revolution and much geared toward privileging skilled workers or small businesses.
Hairdressing and barbers’ salons in Dortmund and Glasgow, too, allow their stylists more freedom to express their personality than salons in Frankfurt. However, in contrast to Birmingham, they expect that this expression of individuality should be professionally controlled and disciplined. In Dortmund, a stylist has to make sure their individuality is compatible with the salon’s community structure. Glaswegians do not tolerate exaggerated self-presentation either. Here, stylists are asked to submit to the standard of the neighbourhood while presenting their authentic selves, which requires a specific type of emotional work aimed at finding the right balance between professional distance and authenticity.
The case of Glasgow suggests that, in order to be economically successful in the service sector, individuality has to be regulated to some extent, but it does not need to be completely suppressed. Instead, there are many ways leading to economic success. In Glasgow, communicating and networking – in order to make sure that everybody is doing well – was seen and continues to be seen as a sure pathway to economic success.
On the other hand, the case of Dortmund suggests that there may be cases where ‘too much’ community and ‘too little’ individuality hinder economic performance: while it is often possible to find a balance between the needs of employees and the needs of clients, if a conflict arises, in successful companies, client orientation trumps the needs of employees. Since the 1970s, professional contact with customers has become more important and a healthy sense of competition – something that was almost unthinkable in times of heavy industry – has become an integral part of a (successful) stylist’s work routine.
7. Learning from the Past
In conclusion, when reacting to situations of rapid change such as the global economic crisis of the 1970s, for local actors the past is both a resource and a legacy: both economic structure and economic conventions can be either a severe constraint or a valuable resource for mastering crises. Economic conventions provide specific ways of thinking about doing things that restructure the ways actors think about crisis. Deeply rooted in history, each city disposes of each unique and distinct constellation of knowledge and modes of expression that are reflected in everyday practices. Therefore, despite global trends, local responses to crises differ – and our data reveal that these responses matter.
While there seems to be some elective affinity between economic conventions (that is, knowledge) and economic structure, especially concerning crisis response, this is only an elective affinity. In order to truly identify how local knowledge results in structural changes (and vice versa), one would have follow the methodology applied by Norbert Elias in The Court Society (1969). In order to do so, one would have to identify ...
- ... what Max Weber called the ‘social carriers’ (Trägerschicht) (Kalberg 2001: 88–95), which is to say specific actors or groups of actors within the figuration (such as Louis XIV or the French aristocracy in The Court Society).
- ... both these social carriers’ specific knowledge and how that knowledge differs from that of other actors within the city. For example, in this paper we have examined hairdressers and barbers. Their conventions might differ from that of, say, local politicians, stock brokers, artists, car repair, bakers, waitresses or call centres operatives.
- ... these social carriers’ position within the figurations’ power balance. This includes both inter-urban and inner-city competition, and both might be relevant to different degrees to actors in different cities. For example, for Frankfurt, the competition with other cities seems very important, while for Darmstadt, class differences seem more important (Frank et al. 2014).
- ... how and why these social carriers – from the stance of their specific knowledge and by using the power sources provided to them by their position in the figuration – reacted to crises in a specific way and ...
- ... what structural effects this had, and how this influences the figuration over time. For example, in Glasgow, an over-reliance on heavy industry killed off all other industries that might have grown underneath its branches and resulted in economic decline within a generation from 1914 to 1945, resulting in appalling indices of poverty, inequality, morbidity and deprivation (Checkland 1976).
Although such a detailed analysis remains an open issue for future research, our study clearly reveals – similar to Paton ‘s (2004) analysis of community changes in Glasgow – that structure does not determine agency. In other words, local actors are not hapless victims of global crises and neoliberal restructuring. Instead, local actors can at least partially influence their own fate.
Our analysis of how conventions work in times of change suggests that there are many ways to successfully manage a crisis, ways that differ from city to city.
It seems that if, and how, actors successfully master crises strongly depends on how other spheres of social life are interwoven with the economy. One path to success seems to require subordinating all areas of life to the logic of the economy. Alternative paths to success consist of establishing informal relationships and networking as well as balancing authenticity with a professional stance. On a local level, economic success is therefore not so much defined by single specific elements of a value system, but by the overall constellation – by the specific combination of different conventions and their respective elements.
In order to understand how a specific city reacts to a crisis, one therefore needs to look deeply into a city’s past: the local economy can be perceived as a figuration that develops procedurally and depends on the hidden structures that over time become inscribed on the urban space. Comparable to a series of palimpsests, one can track the history of the conditions that pre-structure this figuration over time. So, in this sense, not only do local actors learn from their past, but social scientists, also, can only understand the workings of the modern world, if they learn from the past.
The whole research team consisted of Nina Baur, Linda Hering, Martina Löw, Lars Meier, Anna Laura Quermann and Florian Stoll. While the whole research team participated in collecting and analysing ethnographic data, Linda Hering conducted the social pattern analysis, Nina Baur a documentary analysis of national industry standards, and the survey was conducted by Nina Baur and Linda Hering with the help of a team of student research assistants.
We thank Sybille Frank for designing the criteria for selecting the cases and selecting the four cities that make up our case study (see Frank et al. 2014). However, the following comparative analysis is the result of a subsequent detailed analysis of these case histories (e.g. Hering 2012).
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