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TWO

Global Goods and the Infrastructure of Desire

CONSUMERS OFTEN ENTER INTO ECONOMIC exchanges without being fully aware of the social and ecological systems required to produce the bevy of things that we consume.¹ In fact, modern commodity chains are often so complex and geographically dispersed that it is difficult for consumers to comprehend the vast spatial and social relationships that make everyday consumption possible. Consumers may also be blinded by ideological and disciplinary frameworks that prevent them from seeing the deeper human connections that bind complex systems together. For example, economic models that try to explain the proliferation of goods in contemporary society often use a consumer choice lens that takes for granted the extensive social relations needed to produce and distribute commodities.² Such rational choice models place too much emphasis on microeconomic market decisions when trying to explain basic social phenomena.³ The result is a rather large gap between the microeconomics of individual choice and the social relations needed to produce robust market systems. A commodity chain approach can help fill some of this gap by connecting individual consumer choice to a theory of political economy that uses logistics to explain how modern retail innovations have reshaped urban space.

It is very easy to get stuck on the physical location of the San Pedro Bay and to see the ports as a collection of terminals, cranes, and intermodal railyards. Nonetheless, the San Pedro Bay ports are part of a larger network that connects Southern California to places like the Central Valley, the Inland Empire, Chicago, China, and beyond. They constitute an extended circuit of capital that requires thinking through the relationships of power necessary to produce them. This more robust reading of logistics reveals how the fulfillment of individual consumer desire is built on an elaborate system of urban infrastructure.

Logistics performs several methodological tasks for this project.⁴ First, it helps unpack the black box of globalization to reveal what John Urry has called “islands of order within a sea of disorder.”⁵ These “islands of order” are important because their production as fixed spaces demonstrates how actors exercise power to manage the complexity of globalization by reordering space and time. In the case of global commodity chains, I argue that logisticians used scientific rationalism and new technologies to create an abstract and ordered vision of space that enabled them to expand the territorial possibilities for capital investment.⁶ In fact, the logistician’s gaze provided a global spatial imaginary for capital investment by producing an abstract vison of the universe that linked places in new ways.

Second, logistics shows how the scientific management of bodies, space, and time produced new labor regimes, which facilitated a more complex and extended system of global production, distribution, and consumption. For example, the ability of logisticians to implement information technologies and efficient just-in-time (JIT) management systems enabled them to stitch together dispersed sets of local nodes into elaborate global production and distribution networks. One result was that logisticians could create efficient spatial systems that linked Chinese factory workers to Southern California warehouse workers and American consumers by ensnaring disparate places into new spatial relationships.

Finally, logistics connects the politics of regional development that shaped Southern California to the much more expansive spatial networks needed by global capital to transform itself in the twenty-first century. The logistics revolution created new opportunities for local actors to contest how they connected to or disconnected from the transportation and information infrastructures that undergird contemporary global commodity chains.⁷ Accordingly, local politics and regional planning became the conduit through which private and public actors extended the infrastructure for global goods.

Logistics is particularly useful as an analytical lens because it reveals how state actors mobilized space for capitalist development and provides a different view of the systems, processes, and spaces that make up globalization.⁸ This reading of logistics as spatial method uses science, capitalism, culture, and political economy to reveal “how spatial restructuring hides consequences from us.”⁹ The deployment of such a method illustrates how transformations in the capitalist mode of production were tied to changes in mass consumption, the welfare state, and organized labor. Logistics enables us to discern some of the powerful forces that were unleashed when major retailers like Walmart and Amazon propelled capitalism into a new age of global expansion after the 1980s. It provides a spatial representation, a type of geographical window that reveals how space, capital, and race were transformed during a key period of global restructuring. The lessons learned from this study apply to many regions across the United States that tried to capitalize on commodity distribution economies by investing heavily in port-related infrastructure. Other metropolitan regions, such as Seattle-Tacoma, Savannah, and Newark, all pursued regional logistics development plans during the same period.¹⁰

SPACES OF CONSUMPTION

Scholars have used commodities as a unit of analysis for a very long time, including such luminaries as Adam Smith.¹¹ Likewise, Karl Marx developed an entire methodological approach by demonstrating how British capitalists erected a social system based on wage labor and profit-yielding objects.¹² He meticulously revealed the complex ways that industrial products were embedded in distinct relationships of power. Focusing on the social relations of an economic process allowed him to explore how different actors could maintain or alter these relationships. Marx pointed out that even if empires and social systems were built on the sometimes obscure rules of accumulation, capitalism’s inner logics, when coupled with the human desire for profit, acted as a powerful material force.¹³ The nexus among individual desire, social competition, and the internal logics of capitalist expansion has proved to be one of the system’s most dynamic drivers. Together, these forces provide the impetus for individuals to introduce the new technological, labor, or managerial innovations that have propelled capitalism forward. Marx’s contributions were critical to the commodity chain approach because his work stressed the importance of power and society in the consumption process. Yet too many of his disciples became stuck in the nineteenth-century widget factory that Marx used as his unit of analysis. The goal here is to find links and to see production, consumption, and distribution as part of the same circuit that makes up contemporary capitalism.

Logistics infrastructure, which includes the roads and railways that deliver goods from factories to the consumer, is the glue that holds global and regional distribution networks together; it is the circulatory system of global capitalism. Thousands of diesel trucks and locomotives use these logistics arteries to deliver goods from foreign production sites to regional and national markets; they are part of an extensive overland distribution system that allows West Coast ports to compete with all-ocean delivery routes to East Coast markets. These conduits enable us to consummate the circulation of capital.¹⁴ This more comprehensive system, which includes the spaces needed to make and deliver the goods that drive global economies and fulfill individual yearnings, is what I call the “infrastructure of desire.”

Urban scholars have mostly ignored logistics and global commodity circuits.¹⁵ While it is true that scholars have written extensively about the revolutionary impact that the shipping container had on commodity distribution, the relationship between logistics and urbanization has been understudied.¹⁶ Economic geographers and transportation scholars, for example, conducted important research on the extensive nature of global production networks.¹⁷ Yet transportation studies tend to leave out the social relations of extended commodity chains. Studies that have examined freight movement mostly focused on ports, gateways, and transportation efficiency, rather than on the broader social relations of metropolitan development.¹⁸ The focus was instead on network efficiencies and on the micro-geographies of place. Likewise, social science scholars have investigated globalization by studying reconfigured labor markets, industry change, and emerging development regions, but these investigations have also left out the role that commodity circulation has played in shaping urban space.¹⁹

Distribution has largely been ignored because scholars believed that new technologies and transportation systems had reduced the significance of space as a factor in the global flow of goods and capital.²⁰ According to this logic, greater mobility had effectively annihilated the limits of space and distribution in modern global commodity chains.²¹ Therefore, scholars of American cities embraced the globalization turn by shifting their attention from modernist industrial manufacturing to the postmodern decline of U.S.-based production, new labor markets, and the rise of the symbolic economy as major factors in post-1970s urban development.²² Studies that examined the intersection of mobility, space, and time tended to focus on the circulation of information, money, and people rather than on the movement of goods.²³ Capital flows, information technologies, and cultural innovations became the defining markers of global cities. London and New York, for example, were studied as financial control centers for an expanding global economic network.²⁴

Logistics was also widely disregarded by scholars who study culture and consumption. Most of the literature that tries to explain the rise of American consumption assumes that consumer desire and individual choice drive the cultural products industry.²⁵ The focus often centers on how consumers make choices about what to buy. One common argument in these accounts is that merchants can use cultural signifiers like taste and status to shape consumer purchasing decisions.²⁶ The underlying assumption is that companies can manipulate desire through advertising and marketing techniques. “Desire” is the right word, because advertisers have often appealed to basic human drives—sex, food, the sense of belonging—to stimulate buying behavior.²⁷ While consumer-centric accounts can provide useful insights into market transactions, they tend to exclude other parts of the commodity chain, such as production and distribution. Consumer models leave out the deep connections among commodity chains, social networks, and products. The following two examples illustrate this point.

First, greater access to finance capital expanded consumption in the post-1980s period. Increased consumption wasn’t simply a consequence of the relentless desire for more stuff. Much of this yearning was underwritten and made possible by ballooning credit card debt and mortgage-backed revolving lines of credit. Access to more credit enabled consumer debt to explode from $5.6 billion in 1980 to more than $1 trillion by the end of 2007 (see figure 5).²⁸ A typical American consumer could use a credit card or a second mortgage to increase their consumption even if wages declined or remained stagnant. Advertising is the second example of how consumer-centered accounts can obfuscate other forces at play. Ad agencies became more important in the consumption process only after producers developed the logistical infrastructure that allowed them to brand and distribute mass-produced goods.²⁹

FIGURE 5. Growth of consumer debt in the United States, 1980–2010. Author analysis of data from the United States Federal Reserve.

Finance capital and advertising both illustrate why it is necessary to break with models that explain consumption through a consumer choice lens. These rational choice models can naturalize major changes in capitalist modes of accumulation while ignoring the social contexts in which individuals operate. To understand how consumption is linked to regional space, we must embed it in a “larger web of social relations.”³⁰ Such an approach helps to reveal the actors and nodes at each stage of the circulation process. A commodity chain framework can strip away any antisocial illusion that places too much emphasis on isolated individual choice. Commodity chains, as Ken Conca, Thomas Princen, and Michael Maniates argue, show how “consumption decisions are heavily influenced, shaped, and constrained by an entire string of linked choices being made, and power being exercised, as commodities are created, distributed, used, and disposed of.”³¹ It is time to move beyond the transactional spaces of consumption—stores and online shopping, for example—to explore how this infrastructure of desire—in particular the logistics of commodity distribution—has shaped metropolitan space. The goal here is to examine how ports and warehouses have expanded the geographical possibilities of contemporary capitalism.

To determine why and how logistics became a prominent part of Southern California’s landscape, we need to place its growth within the wider global economic context of post-Fordist restructuring, especially because regional leaders pushed logistics as an antidote to deindustrialization. North America lost approximately six million manufacturing jobs between 1970 and 2010.³² Riverside, San Bernardino, Orange, and Los Angeles Counties lost more than five hundred thousand jobs between 1990 and 2010, a decline of 46 percent. Flexible production systems like JIT rendered older push-based manufacturing spaces obsolete. Once-mighty factories slowly withered away as capital sought newer facilities and cheaper labor in emerging industrial economies.

China in particular became a major investment target because it offered access to large pools of relatively cheap labor. In addition, heavy state investment in economic infrastructure meant that companies could set up shop and reach tremendous economies of scale in a relatively short period of time. Foreign direct investment into China increased from $57 million in 1980 to $114.7 billion in 2010.³³ The infusion of investment and state-backed capital enabled Chinese producers to quickly overtake both Mexico and Canada as the biggest importer of goods into the United States. By 2008 Chinese goods represented 16.1 percent of all U.S. imports, up from 6.5 percent in 1996 (see figure 6).³⁴

FIGURE 6. Value of commodities imported into the United States, by country, 1996–2010. Author analysis of data from the U.S. Department of Commerce and the U.S. International Trade Commission, tariff and trade data 1996–2010.

China’s incredible rise as a center of production, when combined with U.S. consumption capacity, created new opportunities for Southern California’s ports to establish themselves as vital transpacific gateways. Private investors and regional boosters championed the idea that Chinese imports provided a solution to the region’s sagging job base, especially among blue-collar workers. A report commissioned by the Southern California Association of Governments (SCAG) argued that logistics was the “only route that the region has available to helping those workers achieve growing standards of living while simultaneously correcting the recent deep slide in Southern California’s relative prosperity vis-à-vis other major parts of the country.”³⁵ The SCAG economists and planners believed that the region’s declining manufacturing sector could be replaced by global logistics. Their rationale seemed to make sense. If regions in the United States were losing manufacturing jobs as a result of economic restructuring, some could gain them back on the other end of the commodity chain by building extensive distribution networks that connected imported products with the insatiable appetite of the American heartland.

Of course capital did not completely abandon cities in the United States after the late 1970s. Cities like Los Angeles capitalized on macroeconomic shifts by transforming themselves into transpacific trade gateways. Such a transition was possible because although U.S. production of commodity goods declined after the 1980s, American consumption did not. On the contrary, U.S. consumer demand—combined with the shorter product cycles and readily available credit discussed above—drove imported commodity shipments to record heights at the same time that U.S. production declined. Values of imported commodities jumped from $790 billion in 1996 to $2.1 trillion in 2008.

Los Angeles and Long Beach adopted the global logistics development strategy and pushed ahead of other ports by implementing regional policies that expanded their capacity to absorb a larger portion of Asian imports. Local policy makers, led by the port authorities of Long Beach and Los Angeles, leveraged tremendous amounts of public resources to invest in infrastructure that allowed them to expand their throughput capacity. Billions of dollars were spent on infrastructure to modernize the ports for the global distribution market.³⁶ For example, net investment in both ports topped $493,732,400 in 2006.³⁷ Port authorities budgeted more than $2.5 billion in capital investments for the 2010 fiscal year. This did not include private and public spending on rail and transportation infrastructure both near and away from the ports.

Local officials had reason to be happy with the results. Global economic restructuring and local infrastructure spending enabled the region’s share of imported goods to reach record levels. Export and import container volume grew from 9.5 million twenty-foot equivalent units (TEUs) in 1999 to 13.1 million by 2004,³⁸ an increase of 38.2 percent.³⁹ Imported container volume reached its peak at 8.1 million TEUs in 2006 and 2007 (see figure 7). While many pointed to 2008 as a year of major port decline, container volume remained relatively high. Port activity grew at such record rates during the 2000s that even a decline of 9 percent between 2007 and 2008 did not wipe out historically high volumes. By 2010 imports were on their way back up and reached 7.1 million TEUs.

FIGURE 7. Port growth by container volume. Author’s analysis of data from Port of Los Angeles and Port of Long Beach.

JUST-IN-TIME URBANIZATION

The proliferation of consumer goods was induced by one of the most dramatic changes in modern production and distribution that occurred during the 1980s, when Japanese automobile manufacturers introduced JIT production systems. Toyota was a leader of JIT managerial techniques and provides an example of how JIT increased production efficiencies by focusing on market demand. The JIT approach allowed small work teams to produce cars and parts as they were needed in the marketplace. This market-driven process was supposed to reduce costs associated with holding excessive inventories in both supplies and finished goods.⁴⁰ For example, parts were only produced after production teams received an order from Toyota’s assembly crews. Toyota’s JIT system was successful because it used emerging information technologies to build closer links between consumer demand and dispersed production networks. Of course this type of pull system—in which products are made in response to market demand—had existed long before JIT was invented as a concept.⁴¹ Yet what made Toyota’s JIT system so powerful was that it led to widespread adoption of market-driven manufacturing.

Companies adopted JIT’s market-driven principles by integrating consumer desire into commodity design and procurement. Old top-down models, in which firms designed new products and pushed them out to market, gave way to more data-savvy manufacturing techniques, in which consumer demand shaped production and distribution.⁴² Dell Computers is a quintessential example of how this worked. The company mixed JIT part sourcing with direct market demand and revolutionized business-to-consumer relations. Under Dell’s system, consumers logged on to the company’s website, configured their desired computers, and placed their orders.⁴³ That simple act of clicking a button put an entire social and economic system in motion. The company famously claimed that it used JIT part sourcing to reduce stock from thirty-five days in 1995 to six days by 1999.⁴⁴ Other companies used JIT to incorporate market information into product design. An example is the Sony Walkman. Sony engineers developed a design process that incorporated consumer behavior and desire into possible iterations of the audio device. The intention was to make products that were more responsive to market dynamics by producing exactly what consumers wanted.⁴⁵ Sony’s demand-driven approach was reflective of a “cultural circuit” in which the “products both reflect and transform consumers’ behavior.”⁴⁶ Cultural circuits enable consumer demand to influence what is made, how it is designed, and when it is delivered.

Market-driven production provided new opportunities for retailers to increase their leverage as intermediaries between consumers and manufacturers. Companies such as Walmart and Target developed new business strategies that gave them greater power in the JIT corporate world because they built their business models around real-time market information. Walmart revolutionized retail by creating a vast information system that made it the world’s largest purchaser of commodities.⁴⁷ Access to market data gave retailers tremendous purchasing power, which they used to influence what was made and by whom. The most successful retailers used their new influence to transform shopping behavior by merging more efficient supply chains with cutting-edge sales strategies.⁴⁸ They increased sales by monitoring and cultivating market demand, a practice that also transformed modern logistics. One way they increased sales was by blending style and status with low-cost goods to make discretionary shopping available to a larger audience.

How new retail strategies affected logistics workers is described later in the book. Here I want to conclude by examining how companies used cultural circuits and retail strategies to increase the flow of consumer goods. For example, retail companies increased sales by shortening the time that products spent between design and delivery dates, thus increasing overall inventory turnover. Retailers also increased turnover rates by developing business models that focused on goods with shorter product cycles. All of this was made possible by JIT supply chain techniques and by logistics innovations that enabled smaller time-to-market distribution windows. As a consequence, consumers were lured into buying the latest thing by companies that constantly updated their product lines. Old ideas of seasonal buying were discarded because the constant flow of new merchandise made shopping a year-round experience. These new tactics propelled the circulation of capital by flooding the market with a constant stream of desirable products.

Low-cost goods took on new cultural meaning by enabling customers to reposition themselves within a community of style that retailers transformed by changing the shopping experience. Retailers have routinely used space and style to change the practices and meanings of shopping. Major department stores, for example, were created as spaces in which shoppers could experience the wonders of modern commodities inside a fabricated and controlled environment. The mall, according to Michelle Lowe and Neil Wrigley, was designed as an “essential site for communication and interaction, a place for ‘hanging out’, for ‘tribalism’, where adolescent subcultures are formed and where key lifetime experiences take place.”⁴⁹ Shopping places set the spatial context for transactions that linked cultural and economic spheres.⁵⁰ They gave shape and meaning to otherwise mundane economic transactions by imbuing the act of shopping with particular lifestyle experiences. Culture and aesthetics have been key retail strategies precisely because they can establish lifestyle practices that effectively link individual identity to particular commodity types and social status. For example, certain products are marked as aspirational purchases: the value of buying the thing extends beyond function and need. Such commodities function as cultural symbols that convey status.⁵¹

We must consider the connection between individual desire and social status more deeply, especially because it is such an important part of understanding the rhythms of contemporary commodity flows. Even if capital structures what people can and cannot buy, high-velocity retailing has provided merchants with the ability to embed style and class status into mass consumption practices. H&M’s multinational brand of fast fashion, for example, which encouraged up-to-date style at low prices, required customers to buy more and to shop more often to maintain their social status. Cultural motifs—the latest fabric or scarf—created an alternative style economy that let individuals escape the limits of economic capital by converting less expensive items into status-rendering goods. Low-cost goods that mimicked upper-middle-class commodity economies created new ways for people to participate in, even if they could not achieve, similar economic status. This disjuncture brings us back to debt and finance capital, which when combined with a greater array of cheap goods, enabled more shopping. As producers adopted market-driven business models—in which goods were produced and shipped whenever and wherever people wanted them—they also developed more efficient distribution systems and flexible labor supplies. The same technologies that sped up the circulation of capital and commodities also introduced new time and space demands into the labor process. Globalization, in the words of Andrew Herod, meant “greater pressure from employers and governments for workers to become more ‘flexible’, both in terms of skills and, more importantly, in terms of work organization, so that corporations may respond quickly to the vagaries of the market.”⁵² Such acceleration in the circulation of capital was a clear example of how globalization transformed the temporal experience of the economy for retailers, consumers, and workers. As retailers made more goods available to the masses, they also increased the amount of space needed to produce, distribute, and sell their goods.

I return to this theme elsewhere, but before moving on to logistics in more detail, I want to review my argument so far. I began this chapter by discussing the role that desire has played in expanding consumption. I then illustrated how consumer desire became a powerful material force in the post-1980s period, when individuals were able to leverage credit to purchase larger quantities of goods. However, as much as consumer desire is an important actor in this story, it was producers and retailers who created the material spaces and physical infrastructure that allowed commodity consumption to play such a prominent role in contemporary economies. Finally, while retailers developed new sales strategies and business relationships to assume greater control in the commodities game, it was their distribution systems that had a profound effect on metropolitan regions. The next chapter examines how high-velocity retailing and global commodity chains reconfigured logistics space.