As Nations Retrench Modern City-States Emerge

As the world grapples with the consequences of an inwardly focused U.S. and UK, both of which rejected multilateralism in 2016 with the Brexit vote and the election of Donald Trump as the 45th U.S. President, the return to nationalism obscures another, more important fissure. The decoupling of national interests from the interests of de facto city-states will be one of the major contests of our time. These battle lines have been slowly etched over the last 67 years, during which time the world went from 2 megacities with populations of 10 million or more in 1950 (New York and Tokyo respectively), to more than 38 today. This city-state nation-state divide is only expected to grow as the pace of urbanization continues due to the inexorable movement of people in pursuit of their economic mobility, for which cities are often their last beacon of hope. According to the UN, by 2050 66% of the world’s population will be urban dwellers, which profoundly shifts the role of the modern city-state not only in city-level administrative matters, but increasingly in issues of sovereignty typically relegated to state houses.

Brexit underscores this tension, where there was a deep cleavage between the whims of the City of London, which was vigorously pro-EU and the rest of the UK, which called bluff on the value proposition of status quo. This, despite the reality that the post-EU plan is clearly an on the job learning exercise for Theresa May, the UK’s Prime Minister. This same dialectic is playing out in many European capitals, such as Brussels, the EU’s waning seat of power, Amsterdam, the capital of what is likely the next nail in the EU’s coffin, Paris and Berlin, where the tension to remain integrated or to return to nationalism are playing out in ballot measures and manifestations – interspersed with an alarming rise of mass-casualty events. Cities are the crucibles where these tensions are coming to a head, in no small measure because cities have always commanded the lion’s share of national economic output, value captured and the concentration of political power. Consequently, cities are the least likely to support dislocations of global trade and economic ties. Moreover, cities are the very definition of cosmopolitanism, plurality and progressive social tendencies. Status quo has favored cities in the post-war era and the world’s flirtation with the return of nationalism may very well be the last gasp of this political philosophy. Urbanization and population growth are two incredibly strong forces that will likely overcome nationalistic gravity to retrench.

In the U.S. for example, there was a two-speed economic recovery since the Global Financial Crisis. On the one hand cities benefited handsomely from national recovery efforts, while suburban and rural areas were left behind. This tension and economic dislocation was the raw nerve that the Trump campaign uncovered leading to his improbable rise to power. The challenge, however, is that the shift in U.S. economic output – from agriculture, industrial production to services – has been cruelest to traditional working class jobs. In short, populism cannot restore coal mines and automotive assembly lines no matter how much companies are cajoled on Twitter to do so; for one is increasingly obsolete in the face of a renewable energy standards war and the other is largely automated and off-shore. For these reasons the rural-urban divide is not merely a political demarcation, but very much a dividing line of increasingly polarized societies. These divisions are at once political, economic and social, as we have seen in the first few weeks of President Trump’s administration, which have been marked by the largest protests in U.S. history.

Where London is a so-called “sanctuary” city for economic integrationists, such as bankers, insurers and the pro-EU elite, many U.S. cities, like New York, Los Angeles, Washington, D.C., among others, stand in defiance to national policies they deem to be against their own interests. President Trump’s controversial and potentially unconstitutional travel ban barring citizens of 7 predominantly Muslim countries (including green card holders), as well as the threatened cull of illegal immigrants are but two examples for which many U.S. cities and states are sharpening their legal defenses. Within the first 2 weeks of the new administration, this city-state versus the nation battle is increasingly acrimonious, with bitter point scoring, uncommonly persistent rallies and threats to siphon off Federal funding for sanctuary cities who defy the President’s executive orders.

The world has been rocked by a battle between populism, pluralism and urbanism and modern city-states, much like multinational corporations, are largely pursuing their best interest, even if it flies in the face of their host countries. Urban dwellers now exceed 50% of the world’s population. According to Cambridge research for Lloyd’s, 301 cities around the world comprise more than 50% of global economic output. Increasingly plucky city leaders recognize their economic and cultural clout as they defy their national governments on a wide variety of issues from trade, legislation, social mores, among others. The tide of diverse, urban and hyper-connected people cannot be stopped, even by the temporary – if shocking – return of nationalism. Urbanites would be wise to remember that their suburban and rural countrymen also have a vote and their voices and values, both of which have been largely unheard or dismissed, still matter.