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New Money, Nice Town: How Capital Works in the New Urban Economy

Author: Leonard Nevarez
Publisher: New York: Routledge, 2003
Review Published: June 2003

 REVIEW 1: Dianna Dilworth
 AUTHOR RESPONSE: Leonard Nevarez

In the article, "City of Riverside, CA: Be a part of it!" appearing in the March 2003 issue of America West Magazine, the city of Riverside is advertised as a growing and ideal new community. The place is being sold as an idea, community to follow. Though this process of advertising a concept of a place in order to create a new community (and not vice versa) is nothing new, within American history, the West has always seemed to hold the spotlight for opportunity and new developments.

Leonard Nevarez's book, New Money, Nice Town, investigates these new communities in an in-depth study of business and cultural trends within the major industries in Southern California: software, tourism, and entertainment. His analysis of how capital works in the new, post-Ford, urban economy diagrams how the traditional business model functions. Further, he compares and contrasts this with the model of various quality of life corporations. While he addresses these trends in general, which can be applied to any location that this trend is present (even outside of California), he focuses mainly on the California communities of Santa Barbara, Santa Monica, and San Luis Obispo.

Nevarez addresses how the new business model functions by breaking down the differences in corporate power structure, centers of industrial space, lifestyle space, sites in the new urban economy, doing global business in a local industry, corporate interventions into local government, philanthropy, and the idea of rootlessness.

The corporate power structure in the new economy is typically horizontal, rather than hierarchical. Nevarez adopts Castells' theory of network society which describes the structuring as "an economy that is informational in its productivity, global in its scale, and networked in its form" (15). This power structure organizes production in a new way by moving it "out of the individual corporation and into the business project, whereby an ad hoc group of firms, contractors, labor, and finance creates a specific good or service at a specific time, only to dissolve once the product is finished" (15). While businesses often used to work with their local chambers of commerce, new industry networking has made this less common, except in the tourism industry where companies take advantage of the free perks and advertising that these resources can allow them. Asserting this basic organizational structure, he works through each sector and location for their specific tendencies throughout the book.

From such a perspective, space becomes an important issue in this new urban environment, both within the constructs of the centers of industrial space and sites, as well as lifestyle spaces. While the traditional business model bases its site needs on labor production, the new economy has introduced a global exchange in this production, outsourcing the need for mechanized workers. From this movement the number of onsite workers is downsized and dominated by either elite workers with special skills or de-skilled service workers (i.e. human resources, receptionists, etc).

For this reason, the new urban centers have moved. Many small corporations have turned away from the overcrowding and gridlock of larger industrial cities, and moved into smaller, more manageable, and often times more beautiful communities, such as Santa Barbara and San Luis Obispo, for their offices. Others, especially within Silicon Valley, have developed office malls, in which all of the symbiotic companies are on-site and are located in close proximity to reasonable cost housing. Small tourism firms are based in less developed and therefore often more desirable beach locations, such as San Luis Obispo. The quality of life workspaces of this kind of tourism are small offices, hotels, and shops in cozy beachside towns. The entertainment industry also sets up its own centers outside downtown Los Angeles in studio towns, where not only studios are located, but small production companies are near-by as well for consulting (Chapter 4).

This movement is also indicative in personal space. People in these industries tend to populate the smaller towns in which they work, living in proximity to their workplaces, and making a small community of their industry. Since many of these people live away from industrial work environments, developers spend money on designing homes in either trendy hip urban lofts or in exclusive beachfront homes.

The political involvement in these businesses is very industry-need specific. Executives in the software industry tend to remain apolitical or pragmatic, staying away from the political realm, viewing it as a dirty business. Due to the fleeting nature and minimal size of the companies, real estate, and zoning concerns, typically politically important issues tend not to be of concern. The entertainment industry is politically active in an interesting way. Globally, Hollywood is very liberal, a fact seen in its residents contributing one sixth of former President Bill Clinton's campaign. Executives often participate in political committees, including such execs as David Geffen and Lew Wasserman working to bring the 2000 Democratic National Convention to Los Angeles (133). However, they tend to act to the contrary when dealing in local politics, preferring the conservative wing in city council and mayoralships because they tend to make it easier for acquiring permits and dealing with logistics. The tourism industry has the biggest interest in local politics; as Nevarez notes, a hotelier in San Luis Obispo and a restaurateur in Santa Monica hold positions in their respective city councils. Tourism is affected directly in Southern California by local politics, as slow growth measures by locals tend to conflict with large resort developments. The private tourism sector also tends to benefit from government subsidies and the ability to exist outside of the zoning restrictions. Therefore, many of these local tourism companies are very active in their community governments and chambers of commerce.

Philanthropy in the new economy is mirrored in the political involvement. Since most software companies tend to be new and often fleeting entities with young executives, they tend to give the least. They are less involved in the community and have less experience in the need to create harmony within the whole community. In the entertainment industry, charitable giving is part of the territory. This includes many stars who contribute to charities in order to keep up public appearances as well as to give back for having achieved so much success themselves. The tourism industry tends to support philanthropic activity as well. They are especially known for their interest in environmentalism, as keeping nature intact adds to the desirability to visit a small beach town.

Overall, Neverez's research is accurate, clear, and succinct, and documents a very specific and important new trend in business and culture. His conclusions are well founded, raising sociological questions about the nature of these new industries and how culture and life are affected by these developments, in both positive and negative ways from these industries. The book is not didactic, but merely leaves the facts documented to the reader to ascertain the complexity of the new economy.

The author's description of the political involvement of the entertainment industry in Southern California is ever apt, especially considering the speech given by Michael Moore at the Academy Awards, a very mainstream event. His research into the software industry is incredibly accurate, especially his documentation of the fleeting aspect of community and culture. The sections on tourism are illustrative and complete. Southern California's tourism industry is an especially interesting study as it caters to an exclusive group and has more of a tendency to support small business and be more conservative about growth.

While his findings on the software and tourism industries were specifically poignant, the work could have been more enriched had a closer research of the entertainment sector been more minutely examined. Both Joan Didion (1978; 1992) and Mike Davis (1990) have done impacting research on the functioning of the city of Los Angeles, particularly in how things really function politically in Hollywood and how city planners work with the city council members and tourism boards to allow tax breaks and zoning allowances. The work would have been more compelling had it addressed some of these already documented occurrences. Despite comparisons with other work, Leonard Nevarez's New Money, Nice Town is a valuable documentary of a very interesting turning point in business and culture.

Davis, Mike. City of Quartz: Excavating the Future in Los Angeles. London: Verso, 1990.

Didion, Joan. The White Album. New York: Simon & Shuster, 1978.

_____. After Henry. New York: Simon & Shuster, 1992.

Dianna Dilworth:
Dianna Dilworth has a BA in English from San Francisco State University, and is working on an MFA in Media Communications at the European Graduate School in Switzerland. She is based in Brooklyn, NY, where she works as a freelance journalist and photographer.  <dianna_dilworth@hotmail.com>

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