[MUSIC] Hello again, and welcome back. In the previous lectures, we portrayed a world of global economic governance. Now, not withstanding some considerable doubts at the time of their creation. Its main institutions have not only survived, but have recorded some very real results, although in limited fields. The financial system has adapted to crisis management, but is still pretty hopeless at crisis avoidance. The trade system has lowered world protection, but still seems to satisfy neither the rich, nor the poor. And although we didn't examine them in the lecture. We could also have pointed at the security system that has managed to prevent a global conflagration. But has to stand by and survey almost continuous conflict or warfare, somewhere in the world. And we could have pointed at development agencies. That even now have failed to unlock the secret, that by billions of the worlds populations could be lifted out of poverty. Now if, by international action, states are incapable of controlling the global forces responsible for, and yet at the same time, threatening their security and prosperity. What chance, then, for nation-states working on their own? Nation-states, if hyper-globalist rhetoric is to be believed, are ready to be swept aside by the remorseless march of globalization. So in this series of videos, we're going to leave the level of the nation-state and international organizations behind us. And we're going to configure the world in four different dimensions, in no particular order. We will start now with the sub-state actors, and look at the cities. Then in other videos, we'll look at non-state actors, such as big business and advocacy groups. As well as supra-state actors, and we'll focus there on the European Union. Now I have to confess some difficulty in making a choice of unit for this lecture. Many states offer statistics at the sub-state level, regions, provinces, and municipalities. But these are all arbitrarily defined, and the data's often suspect. And then last year, I was lucky enough to attend the lecture by Benjamin Barber, of Jihad vs McWorld Fame. Where he was discussing his new book, If Mayors Ruled the World. In this book, he argues that cities are the motors for change. That they are closer to their citizens, that they don't have hang ups about borders and sovereignty. And that therefore, the world would be better off if it were ruled by city mayors. So I've settled for cities. Now cities have a good record, in economic history. Centers of learning and innovation tend to be in places where different streams of science and logic meet and merge. And where the dead hand of social control is the lightest. Merchant cities were particularly valued in this respect. And the decision by China in the 15th century, to restrict access to foreign trade. Has been seen by some historians as a major factor, in the origins of the great divergence between China and the West. The city-states of Renaissance Italy, the merchant towns of the low countries. And the industrial cities of United Kingdom, Europe and United States, drove forward the innovations that have made today's world. But not all cities has been successful in the past. The ruins of the great ancient city-kingdoms of the Middle East and of Asia bear testimony to a flowering of art and culture. But all were bled dry, as the institutions of the ruling elite sucked out the available capital and resources, for the purposes of luxury and adornment. Today, half of the world's population live in towns and cities. The top 600 cities account for 22% of the world's population, and yet generates 60% of the world's GDP. At the moment, the most productive of these are in the developed world. 380 city regions located there contribute 50% to the world's GDP. But the balance is shifting, as large urban accomodations emerge in China, India, and Latin America. Cities are big, but that doesn't explain the dynamic of what makes them important. In his classic book The Competitive Advantage of Nations, Michael Porter emphasized the importance of agglomerations, or clusters of skills and activities. In providing firms and businesses with what he calls externalities, such as shared pools of skilled labour. And of reduced transaction costs, if you remember, the costs of obtaining information in concluding transaction. Now this idea of a creative soup that makes up the major cities is captured by the works of Peter Taylor. Who's interested in documenting and quantifying the interconnectivity of cities. His work focuses not only on economic size of cities. And their physical connections with the outside world, such as ports and airports. But also their position as hosts to cultural, social, and political institutions. So cities, big cities are the real spaces where all the transactions in this whirling, globalized, internationalized world eventually come to rest. And these transactions extend into the social and cultural spheres. Cities, basically, are places where things happen. They're also becoming more democratic, with local elections, local councils, and local mayors. And unlike the sleepy, small town image of local government, and I speak here from a British perspective. City authorities have to act, if only to prevent the entire accommodation from seizing up. And the leaders of big cities are beginning to become well-known and popular, attracting public support and legitimacy. In Alesina's book, The Size of Nations, he describes the tension between the scale of governments, on the one hand, and its legitimacy. Big nations can do things more efficiently, goesof logic, but local identities identify less with it. So are cities now the optimal size of nations in a globalized world? Well, Benjamin Barber will certainly try to convince you. Cities are beginning to establish the beginnings of a foreign policy, they collaborate and they compete. A good example of this is the collaboration of the C40 Cities Initiative for Climate Change, with a current membership of 63 cities. Whose aim is to share experiences in lowering greenhouse gas emissions. And Barber lists over 30 other trans-border collaborative networks, all with permanent secretariats and headquarters. But, and there is always a but, are cities any more capable of controlling world events? Do they, any more than the governments that they are supposed to supercede, have the financial resources to withstand the waves of speculation from edgy financial markets? Do they have the capacities to control international movements of illegal goods and criminal activities? Are they any more immune from corruption and cronyism, than the states where they're located? And is the world of city-states more immune from protectionist tendencies and petty squabbles, than their counterparts in the 15th and the 16th centuries? Well, let's sum up. We've seen how cities were the main motors for technological change and scientific advance. And how, still today, they contribute disproportionately to the growth and prosperity of the world economy. We saw how they were satisfying their citizens' aspirations, even moreso than nation-states to which they belong. And we saw that there are proposals to pull them more fully into world governance, a proposition which I questioned. But let's end on a positive note, for once. Barber writes, if mayors ruled the world, the more than three and a half billion people, over half of the world's population, were urban dwellers. And the many more in the exurban neighborhoods and beyond, could participate locally, and collaborate globally at the same time. A miracle of civic glo-cality, promising pragmatism instead of politics, innovation, rather than ideology, and solutions in place of sovereignty.