The Urban Dichotomy: Capitalism and Urbanization

Evolution of Capitalism

The transition from Primitive Communism to Feudalism and then to Capitalism in Europe and some parts has changed the world in many different ways impacting every individual life across the globe (Sweezy, 1950). The shift in mode of production has always proven to be the driving force in transition of the functioning of the society and its systemic stratification. As we all know the capitalism has emerged by overthrowing the Monarchy and the landlords in order to decentralize the resources from monopoly of the then higher strata. This gave rise to the Bourgeoisie class. The bourgeoisie class with recently attained wealth (through revolution) started investing in many different areas (supported by Industrial revolution) with a strong motive of profit earning. This gave the rise to capitalism in which the profit is the major concern rather than the need-based factors like importance or the necessity of the product. Capitalism does influences people’s consciousness and manipulates them to fall to its marketing strategy by making them believe that they actually need the product, offered by the market, in reality they may not.

Capitalism in order to survive it has to grow and create new markets. Without attaining growth or market expansion it ceases to exist. So, Capitalism relentlessly attempts to find new areas to invest and create markets. After its full-fledged expansion in Western Europe and most of the North America, it spread to Post-socialist Russia and Eastern Europe and then to China by the end of 20th century. China’s economy grew tremendously like no other country did ever in the history (Harvey, 2015). But after expanding to China and Russia capitalism may be left with few other nations in Africa and Latin America (which are experiencing Bureaucratic Capitalism). If capitalism succeeds in expanding to these regions then there is no other region is left to accumulate. Possibly, there comes the decay or downfall of capitalism (Ibid).

Urbanisation Policy

Influence of Capitalistic forces on urbanization

In a similar pattern, with a motive of profit earning, capitalism has misled the urbanization process of the world by deflecting it from egalitarian and need based to more stratifying and profit oriented process. The urbanization has evolved as, prime land value based, speculative demand driven phenomenon regulated by market forces. We can conclude so, through historicizing the initial city building activities which influenced the process itself since last century. Bonaparte in the post-revolution France had used urbanization process to keep the economy employed by putting surplus capital and distressed labor in city building. Most of the Paris city that we can see today is built during his reign. In the “Urbanization Process” the proletariats of the city were driven out of the city to peripheries in order to create the cityscapes for mobile Policing and spacious and planned boulevards for newly emerged Capitalist class. The process is still carried in so called urbanization in every market driven city in the world. It has many names like Redlining, Relocation, Steering, Rehabilitation, Gentrification, Eviction or Social Cleansing depending on the factors affecting it. Nomenclature may differ but the intention has been always the same to drive away the poor. Bonaparte built new boulevards to the bourgeoisie class from the newly created space. The same has been repeated in most of the cities making it clear that cities are not meant for poor and other socially under-privileged sections. Capitalism has been always the major reason behind the squandering of public funds on mega projects instead of providing basic needs to all city dwellers. Real Estate speculation is causing the ever increasing prices of land and housing in urban areas, again a capitalistic construct to destroy the justified land use and housing affordability. Due to real estate mechanism and its speculation people from lower middle class and poorer sections are either lost the possibility of having a roof over their head or end up in financial crisis repaying the loans taken. Every single city is facing the same situation in which huge chunk of people are unable to construct their own house due to soaring land and housing prices. Beijing is the epitome of this status quo. The chief economist of the National Bureau of Statistics of China, explains it, the housing prices in Beijing are skyrocketing and ridiculous too. If, a young couple want to buy a new house then they need support from their parents and grandparents from both sides. The savings of three generations are vested to buy a single home (East Asia Forum, 2012). A house in urban area in China cost 8.3 times more than the per capita national income and 28 times more than per capita income of a farmer (Gottdiener, et al 2016).

Empirical Distortions in Urbanism

In Hyderabad there are plenty of examples in which the slums and squatters are evicted and the space was provided to private developers in the name beautification of the city. The squatters around the Hussain Sagar and other areas nearby are evicted in an immediate effect to creation of a new space for recreation and entertainment of the middle and upper middle classes. The space accumulated around Hussain Sagar by dispossession of squatters was given to high-end eateries and IMAX to serve the interests of bourgeoisie class’ and now available at their disposal (Banerjee. Guha, 2010). This is a classic example of what David Harvey explained in his essay on Accumulation by Dispossession. Ironically, in few cases, the above mentioned mechanism which is neo-liberalistic rule of law, looting the poor to serve the rich through ‘democratic means’, was implemented through policy in Hyderabad and many other cities in India. Hi-tech city is the knowledge oriented IT hub of Hyderabad built under the jurisdiction of Cyberabad Development Authority in 2001. It is now positioned in the region where once green agricultural fields were there. Initially land was acquired by implying Urban Land Ceiling Act and the remained was also snatched away from the farmers through the Land Acquisition Act. The compensation paid was nowhere in match to the market price (Ibid). These acts are spatially targeted and executed in the regions where the demand for land was created by the capitalists for the very obvious reason to create new markets and regions to invest in and earn profits. If not for them, the government would hardly even care about the squatters or slums to redevelop or evict, unless there is a possibility of a potential vote bank or identity politics involved. There are certain examples showing the bureaucracy’s negligence towards urban poor and their favoritism towards the rich. Settlers on Musi river’s banks are living in hazardous conditions but the government never cared to redevelop or rehabilitate them until it came up with the plan to create public parks and city beautifying gardens by evicting them. Then people rose against the government by launching the Musi Bachao Andolan which ended in favor of the settlers (Ibid). This is nothing but the market forces dictating who should reside where and how.


The increasing control of the market forces in a city’s functioning and expansion would always result in, eventual, segregation and distorted urbanism. We can’t ignore the incumbent fact that inequality is inherent to capitalistic functioning, considering that if we still allow the market forces to take over the urbanization process it might result in unimaginable divide within the city. A strong political will is always essential to regain the city from greed-driven mechanisms. The initial failure of Navi Mumbai was because of the denial by Political leaders and bureaucracy to shift the assembly and government offices to the upcoming planned city.  Also the participatory urbanism is the core element to create a Just city. As Lefebvre stated, the city dweller should not be alienated from the city building process rather it should be more participatory and community oriented. To eradicate the dichotomy the inequality should be brought down by participatory urbanism involving the Politicians, Bureaucracy, Civil Society, Research and Educational Institutions, Technocrats, Market and finally the most essential of all the ‘people’ themselves.


  • Banerjee, S. Guha. (2010). ‘Accumulation by Dispossession’. Pakalapati, Umesh, Varma. “Hi-tech Hyderabad and the Urban Poor”. SAGE Publication. New Delhi. Pg. no. 125-150.
  • Gottdiener, M. Budd, L. Lehtovuori. (2016). ‘Key Concepts in Urban Studies’. SAGE Publications. New Delhi
  • East Asia Forum. (2012). ‘Green Book’. Shanghai.
  • Harvey, D. (2015). ‘Rebel Cities’. Verso Publication. New York.
  • Sweezy, P. (1950). ‘The Transition from Feudalism to Capitalism’. Aakar Books. New Delhi.