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Urban Studies

DOI: 10.1080/00420989420081001 1994; 31; 1149 Urban Stud

Ludek Sykora Local Urban Restructuring as a Mirror of Globalisation Processes: Prague in the 1990s

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Urban Studies, Vol . 31, No. 7, 1994 1149-1166

Local Urban Restructuring as a Mirror ofGlobalisation Processes : Prague in the 1990s

Ludek Sykora

[Paper first received, September 1993 ; in final form, February 19941

Summary. This paper argues that Prague is rapidly becoming a standard Western city consider-ably shaped by forces of contemporary global capitalism. The impact of global forces on localurban restructuring in Prague is enabled by system transformations, which form the backboneof a government-directed transition to market economy. The system transformations, such aspublic management deregulation, privatisation processes and liberalisation of prices, havealready set `new rules of the game', have reallocated resources and power, and thus have createdthe necessary pre-conditions for the next phase of transition . Secondary transformations in theurban environment, such as the struggle for command over space, local labour market restruc-turing and the emergence of new consumption landscapes, have serious implications for geo-graphically uneven development and the recomposition of urban form. Consequently, thetime-space compression, which links Czechs with the Western world, has had highly differenti-ated impacts on various social groups. In conclusion it is argued that the contemporary transitionshould be viewed as internal transformations within the project of modernity, and the regulationtheory approach is employed to shed light on links between transition in the Czech Republic andcontemporary restructuring in the Western world .

1. Introduction

What is happening in a central European citywhose socio-spatial structure, urban life andculture have been heavily influenced by atotalitarian political regime and a centralisedcommand economy during the Communistperiod? Even a lay person can directly ob-serve a massive restructuring of political,economic, social and cultural spheres, whichgives an impression of a restless urban land-scape in contemporary Prague . What are thedominant factors that influence Prague'surban restructuring?

This paper argues that Prague is rapidlybecoming a standard Western city consider-ably shaped by forces of contemporaryglobal capitalism. It is a rapid transformationof basic axioms of politics and economicswhich makes the Czech Republic, andPrague particularly, compatible with mecha-nisms that operate in the contemporary West-ern world . System transformations havealready set `new rules of the game', havereallocated resources and power, and thushave created the necessary pre-conditions for

Ludk Sykora is at the Department of Social Geography and Regional Development, Faculty of Science, Charles University, Albertov6, 128 43 Praha 2, Czech Republic. The author is indebted to Eric Clark, Jamie Peck, John Paul Jones 11I, Petr Pavlinek and EdelSheridan for their valuable comments on an earlier draft of this paper . Responsibility for the contents, however, remains with theauthor. The financial support of a NATO "Democratic Institutions" Fellowship is greatly acknowledged .

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the next phase of transition.The second phase is characterised by the

utilisation of òld' internal resources in a`new' political, economic and legal environ-ment created by the system transformations .This environment aims to stimulate internalcompetition, and exposes domestic actorsand resources to external forces . The devel-opments within the second phase of tran-sition can be perceived and interpreted as aregular process of urban restructuring, as iswell known from Western cities . However,the speed of transition is far faster than incomparable cities of the Western world, aslocal subjects attempt to match new trends indevelopment on international and globalscales from a relatively backward startingposition, and external/foreign subjects arekeen and enabled to enter the locality withoutany significant restrictions .

Local urban restructuring is important byits geographical multicausality of every par-ticular event . By geographical multicausality,is meant co-determination of local happen-ings by the simultaneous influence of a widespectrum of forces which operate on variousgeographical scales . However, processeswhich link the city as a locality with mecha-nisms that operate on a global scale arerapidly gaining in importance . The influenceof globalisation processes on local restructur-ing is a new phenomenon in the Czech Re-public. Their impact generates a rapidrestructuring of political, economic and cul-tural orientations of various social and econ-omic agents, their values and tastes, and fixesthem in new political structures, productionsystems and consumption patterns .The regulation theory framework is em-

ployed to argue that the previous regime ofaccumulation and its mode of social regu-lation and system of accumulation are beingrestructured towards new standards . Particu-lar attention is paid to the establishment of anew mode of social regulation through sys-tem transformations, which is aimed at re-structuring the system of accumulationtowards contemporary global capitalism pro-duction and consumption patterns . The resultof the operation of these mechanisms is an

intensive time-space compression, that linksa local place (the Czech Republic, Prague)with global spaces . The distance between theCzech and the Western worlds is currentlydeclining with an unimaginable speed .

2. Globalisation and Its Impact on Local-ity

According to Giddens (1990, p . 64)"whoever studies cities today, in any part ofthe world, is aware that what happens in alocal neighbourhood is likely to beinfluenced by factors-such as world moneyand commodity markets-operating at anindefinite distance away from that neighbour-hood itself' . Massey (1991) claims that weneed a global sense of local place . It can onlybe constructed by linking that place to placesbeyond. She argues :

Instead then, of thinking of places as areaswith boundaries around, they can be imag-ined as articulated moments in networks ofsocial relations and understandings, butwhere a large proportion of those relations,experiences and understandings are con-structed on a far larger scale than what wehappen to define for that moment as theplace itself, whether that be a street, or aregion or even a continent . And this in turnallows a sense of place which is extro-verted, which includes a consciousness ofits links with the wider world, which inte-grates in a positive way the global and thelocal (Massey, 1993, p . 66) .

The important message to be taken up is thatthe specificity of the linkage to that òutside'is itself part of what constitutes the local .

What are these linkages? Which actors andtheir actions (in a time-space perspective)constitute processes, that bound happeningson various geographical scales, particularlythe global with the local? Featherstone(1990, p. 1) writes about "processes whichsustain the exchange and flow of goods, peo-ple, information, knowledge and imageswhich . . . gain some autonomy on a globallevel". Giddens (1990, p . 64) defines globali-sation as "the intensification of worldwide



social relations which link distant localitiesin such a way that local happenings areshaped by events occurring many miles awayand vice versa". Castells (1993) coins theconcept of `the informational society','which emerges from à technological infor-mational revolution', that provides the basicinfrastructure for the formation of à globaleconomy' characterised by a new inter-national division of labour. He defines theglobal economy as "an economy wherecapital flows, labour markets, commoditymarkets, information, raw materials, manage-ment, and organization are internationallyfully interdependent throughout the planet"(Castells, 1993, p. 249) .Since the Second World War, national

economies have become increasingly inte-grated within a global system of production,distribution and exchange . Particularlysignificant developments have included theliberalisation of global capital flows, thegrowth in the number and influence oftransnational corporations, the economicprogress of the newly industrialised coun-tries, and the establishment of supra-nationaltrading blocs such as the European Union orNorth American Free Trade Association .However, the most important impetus for theshift to the `global' organisation of pro-duction, and consequent processes of politi-cal and economic restructuring at nationallevel, as well as local and regional levels,appeared in developments of the early 1970s .

Since the break up of the Bretton Woodsagreement in 1971 and the subsequent oilcrisis, the world economy is going through asubstantial recession . Processes of funda-mental restructuring in private as well aspublic spheres appeared as a response to aworld-wide economic crisis . The restructur-ing can be conceptualised within the regu-lation theory framework (for summary andcritique see Lipietz, 1986; Dunford, 1990 ;Brenner and Glick, 1991 ; Hirst and Zeitlin,1991 ; Tickell and Peck, 1992), which pro-vides a useful framework for understandingcomplex processes of change in the organ-isation of capitalism . First, there is the re-structuring of the accumulation system .

RESTRUCTURING IN PRAGUE

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Unfortunately, most of attention has beenpaid to changes in production patterns, whichare often interpreted as the transition fromFordism to flexible specialisation, whileother spheres such as consumption, distri-bution and exchange have been omitted. Sec-ondly, there is the restructuring of theregulation system, the conceptualisation ofwhich is highly underdeveloped within theregulation approach (Tickell and Peck,1992). Nevertheless, it can be referred to thetransition from a welfare state to a 'post-wel-fare' paradigm in politics (Bennett, 1990) .The key factor for the conceptualisation ofcontemporary developments within a regu-lation theory framework is an attempt tointegrate developments on various geograph-ical scales .

There has been virtually no control over,no barrier to and no regulation of capitalmovements on an international scale sincethe breakdown of the US-dominated globalorder at the beginning of 1970s. Conse-quently, the potential for private capital ac-tors to èscape' from the 'Fordist/Keynesian'regulation system integrated within nation-states to a higher geographical scale, wherethe control of capital flows was more re-laxed, could be realised with higher speedand intensity than in the 1950s and 1960s .The jump of geographical scales was alsoenabled through the achievements of thetechnological informational revolution, as themobility of capital and information and, im-portantly, the centralised control of decen-tralised production (Sassen, 1991) becameless restricted by physical attributes of globalspace. Consequently, there has been an im-portant `global shift' (Dicken, 1992), ortransformation from an international to a glo-bal economy .

This development initiated a systematicretreat of national state governments fromthe regulation of financial, commodity andlabour markets . It influenced a deregulationof regulatory mechanisms and practices atnational level and a hegemony of the nation-state as the core or key geographical scale forthe system of regulation. Consequently, thereappeared the "globalisation" (Swyngedouw,



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1992) of regulatory practices, characterisedby a devolution of regulatory practices tolocal governments at regional and urbanlevels on one hand and a transfer to supra-national institutions, such as the EU orNAFTA, on the other .

However, the most important developmentwas caused by changes in the role of public-sector institutions, characterised by deregula-tion from public to private allocation ofresources (privatisation, weakening publicand planning regulations, short-term policiesover long-term planning goals), and by thestrategy supporting the development oftransnational corporations and prioritising in-ternational trade and investments . These pro-cesses have nearly exclusively been directedby central government actions, particularly incountries with strongly based neo-conserva-tive politics of economic liberalism . Neolib-eral economic strategies in either conser-vative, centrist or social-democratic formsreplaced the strategies of Keynesian welfarestates in almost all countries. This develop-ment can be perceived as an attempt for atransition to a new 'neo-competitive' modeof social regulation at the national level,which proved to have serious limitations toprovide a basis for long-term sustainable de-velopment (Peck and Tickell, 1992) . How-ever, it significantly contributed to theestablishment of a competitive mode of so-cial regulation at an international or globalscale .

While in the 1950s and 1960s the balancebetween private and public bodies was heldwithin a framework of national states, duringthe 1970s and 1980s a

command over economic space ceased tocoincide with the borders of nation states. . . and came to be situated at the globalscale of production and circulation of capi-tal . At the same time, however, the regu-lation of the production/reproductionnexus remained firmly associated with thescale of the national state . The tensionsthat arose finally led to the disintegrationof the national Fordist contract and the defacto demise of many (although by no

means all) national-territorial regulatoryforms. The faltering of the Fordist mode ofdevelopment set the stage for the practicesand conditions that are now commonlyassociated with flexible accumulation . Theconditions of relative stability of the 1960sthus gave way to the volatile, uncertain-in fact, flexible-age of the 1980s and1990s (Swyngedouw, 1992, pp. 51-52) .

Globalisation is understood and interpretedhere as a process of change from a nationalto a global scale of integration of the accu-mulation regime. The word 'globalisation'symbolises the destination of the move,while the real integration is being achievedrather at an international level or within afew sub-global systems . Globalisation has aprofound impact on the restructuring of thelocalities involved in the process . The per-formance of cities and regions is increasinglyaffected as well as constituted by processesand forces external to their geographical ar-eas, and even to boundaries of their nationalstates. The global impact of new trends alsoimplies parallels in many new urban devel-opments. Soja (1991) writes about ànemerging new mode of urbanisation',Castells (1993) defines `the informationalcity', Hall (1993) describes `forces shapingcontemporary urban Europe' .

Contemporary urban restructuring is char-acterised by :

increasing internationalisation of metro-politan regions in terms of both capitaland labour (Soja, 1991), the formation ofthe world city (Castells, 1993) or theglobal city (Sassen, 1991) ;

(2) changing power relations between thepublic and private sector, which at thelocal and regional levels of government ismirrored by the deregulation of planningcontrol and reducing other governmentalregulations, favouring entrepreneurialism(Harvey, 1989b) and attracting foreigninvestments ;

(3) industrial restructuring and consequentshifts in production patterns and labourstructures, characterised by deindustriali-sation and by the growth of command

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and control functions in central parts of afew global cities (Sassen, 1991) ;

(4) increasing social and economic polaris-ation is becoming apparent, symbolisedby the emergence of the dual city (Mol-lenkopf and Castells, 1991) marked bysimultaneous concentration of an execu-tive-professional-managerial technocracyand an urban underclass in the sameplaces (Soja, 1991); Marcuse (1993)coins a modified concept of the 'quar-tered city' ;emergence of post-modern urban land-scapes (Zukin, 1992), characterised bynew modes of urban culture and con-sumption, underlined by an aestheticform of post-modern urban architecture,as a part of post-modern production fo-cused on `the selling of place' (Harvey,1993) as the crucial strategy of currentcapital accumulation in the context ofgrowing competition at international oreven global scales .

(5)

All the above-outlined processes have animportant impact on the geographical recom-position of urban form (for instance, the con-stitution of economic development areas inthe form of Urban Development Corpora-tions or Enterprise Zones, the social andeconomic revitalisation of central cities, orthe gentrification of inner-city neighbour-hoods). A question we now have to ask ishow these processes influence the contem-porary urban restructuring in Prague, andwhat their impact is on changes in the land-use pattern and socio-spatial structure of ur-ban areas?

Globalisation on the one hand contributesto a certain kind of homogenisation at aglobal scale, but on the other hand it does notalways have uniform effects on all countries,regions and localities . It can be understood asanother source of geographically uneven de-velopment (Massey, 1991) . Globalisation ischaracterised by an uneven integration ofdifferent regions and localities into the globalsystem. "Thus, the global economy embracesthe whole planet, but not all its regions andall its population. In fact, only a minority of


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the people are truly integrated into the globaleconomy . . ." says Castells (1993, p . 249) .Furthermore, "the particular character of in-dividual countries, of regions and even local-ities interacts with the larger-scale generalprocesses of change to produce quite specificoutcomes" (Dicken, 1992, p. 2). This raisesquestions such as how Prague (or parts of it)is related to the global system, what is theimpact of external forces, what role is playedby local actors, and what are the outcomes ofthis global/local interplay?

Another question, formerly asked on moregeneral level by Wallerstein (1990, p . 36),can be taken up and reformulated for a con-crete local context . Should the transforma-tions, which are occurring in Prague, theCzech Republic or even in central and east-ern Europe as whole, be conceived of as avoluntary change from a local and traditionalculture to a world-wide modern culture, or isthe population in these geographical entitiesrather simply under pressure to give up theirculture and adopt that of the Western world?

There are many questions to be answered,but only a little space to discuss them, andtoo little research has been done yet, to givemore comprehensive answers. Nevertheless,the identification of the right questions is afirst step for further analysis . In the followingparagraphs, an attempt to uncover the mecha-nisms which shape contemporary urban re-structuring in Prague will be sketched .

3. Transition : The Role of System Trans-formations

The contemporary period of development incentral and east European countries is gener-ally labelled a transition . It is the transitionfrom totalitarian to democratic politicalregimes, and from centrally planned to mar-ket (or mixed) economies. In the Czech Re-public, the first stage of transition has beendeliberately directed by central governmentactions, whose basic pillars have been systemtransformations in politics and economics .

There has been an institutionalisation ofthe democratic model in politics, which isexplicitly linked with the constitution of a



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relative balance between the powers of pub-lic and private sectors, between both collec-tive and individual interests and needs . Atthe urban level, the model of centralisedtotalitarian political power is being replacedby a new system of urban governance basedon struggles and negotiations between centralgovernment, various levels of local govern-ment bodies, private-capital actors and dif-ferent political, social and environmentalmovements and pressure groups .

The institutionalisation of a politicallydemocratic model at the beginning of 1990,confirmed by parliamentary elections in 1992(Jehlicka et al., 1993), created a necessaryprecondition for a government-directed tran-sition to a market economy . The scenario of(rapid) economic reform was approved byparliament already in September 1990, and awide-ranging, consistent reform programmewas put into effect on 1 January 1991 . Sincethat time a succession of partial reforms hastransformed fundamental features of theCzech economy and has influenced the re-structuring of society as whole, and urbanareas in particular .

The institutionalisation of the marketeconomy has been perceived as a necessaryprecondition for economic growth, develop-ment and prosperity. The decisive factor ofgovernmental effort has been the shift fromthe publicly planned allocation of resourcesto the market allocation of resources . It canbe conceptualised as a set of three maintransformations . First, there is deregulationof the public management of resource alloca-tion to actors in the market place . This istightly bound to the reduction of indirectpublic influence through the dominance ofstate ownership and the regulation of ex-change processes, and is reflected in the se-cond and third transformations, which areintended to create an environment in whichmarket forces become a main allocator. In asecond transformation, privatisation pro-cesses break down the dominance of stateownership into a more fragmented structure,creating a broad and complex set of individ-ual subjects which can undertake exchange .The third transformation, the liberalisation of

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prices, installs a market environment in itsnarrowest sense by deregulating public in-volvement in exchange measures (prices,rent), thus permitting relatively the free ac-tion of individual agents in market exchange .

Consequently, direct involvement of pub-lic bodies in the allocation of resources hasbeen reduced, a broad and complex set ofindividual subjects who can take an action ofmarket exchange has been created, and theliberalisation of prices has opened a space forthe relatively free action of individuals inmarket exchange . Furthermore, a legalframework for freedom of economic activi-ties based on de jure equality between thepublic and private sectors was established(the latter now even enjoys substantial legaland economic preferences in many areas),and liberalisation of foreign trade has ex-posed domestic producers and consumers tointernational markets .

The transformations outlined above havealready created basic changes in the systemenvironment. They have defined `the newrules of the game' with two main goals . First,they have been aimed at creating an internalcompetitive environment, which will stimu-late economic progress and development .Secondly, the attempt has been made tomake Czechs compatible with the prosperousWest as fast as possible .

The character of system transformationshas been strongly influenced by the econ-omic liberalism of neoconservatism, whichhas dominated post-Communist politics inthe Czech Republic . The liberalisation policyhas extensively drawn on examples of dereg-ulation to market allocation coined by Rea-ganism and Thatcherism. This developmentwas influenced by exogenous sources,mainly by the timing of the 1989 `Velvetrevolution' at the peak of Thatcherist politi-cal influence in Europe, as well as by indige-nous preconditions formed by a strongantagonism against any public regulation, af-ter 40 years of central planning, and utilisedby an elite group of liberal economists, whoplayed a crucial role in designing politicaland economic reforms . The relative wealth ofCzech citizens also played a vital role in the



acceptance of a rapid transition to a marketeconomy. Consequently, the establishment ofa competitive market environment has beenbased on a highly uneven redistribution ofresources and power between private firms,public agencies and individual households .The deliberate production of inequalities,aimed at stimulating and speeding-up econ-omic restructuring, thus creating conditionsfor future growth, has not however beenaccompanied by adequate social, housing,regional or urban policies . This strategy islikely to produce social disparities which canhave some undesirable effects if they are notregulated by consistency in public policy .Potential social tensions can emerge andchallenge the legitimacy of the contemporarygovernment and its policies .

The transition is a period when the newideology is in conflict with inherited struc-tures `materialised' in the form of institu-tions, norms and laws by the old ideologywhich lost the power battle in society . Thepolitics of transition attempts to transformthe `materialised' structures as fast as poss-ible and thus to legitimise its own ideologyand political power. The current systemtransformations in the Czech Republic can beconceptualised as changes in a mode of so-cial regulation, which attempt to create con-ditions for a new system of accumulation,which will be more competitive in the con-text of the contemporary global economy .Nevertheless, the dominant change in thecontemporary world is the transition from anation-state to a global level of integration ofthe accumulation regime. The national regu-latory framework in the Czech Republic isbeing restructured in conformity with thisgeneral trend . However, internal changes inthe Czech case are subordinated to develop-ments at an international or global scale .

The contemporary transformation is an at-tempt at fast installation of all basic featuresof capitalism, which will make Czechs com-patible with the dominant forces shaping thecontemporary world . The current transition isan enormously intricate process importantbecause of its rapid pace, which reduces therelative spatial and temporal distance of


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place (the Czech Republic) from forces oper-ating at global scale. If this project is suc-cessful, Czechs will continue to experience,how enormously intensive time-space com-pression (Harvey, 1989a) interlinks theirplace with global spaces. (This question isreturned to in a later section of this article .)

The formulation of new ideologies, theirimplementation into new societal rules, andtheir influence on the restructuring of òld'societal fabric are strongly determined by thegeographical structuration of reality . Theoutcome of mutual interactions between so-cial structuration and geographical structura-tion is often interpreted as uneven geo-graphical development. The restructuring ofsociety in some geographical areas is mostprofound and progressive. In the CzechRepublic this is so in the capital city ofPrague, where contemporary urban restruc-turing can be seen as the leading edge ofrestructuring in Czech society .

4. The Impact of System Transformationson Local Urban Restructuring

At the urban level, the system transforma-tions have been realised by many mecha-nisms which have aimed at installing a localmarket environment. In the sphere of publicmanagement deregulation, attention has beendirected at the reduction of local governmentpower to influence the allocation of re-sources, for example by releasing non-resi-dential premises for particular users andfunctions . Another case has been the replace-ment of Housing Service Corporations, mu-nicipal agencies responsible for the manage-ment of public housing stock, by a number ofprivate real estate agencies . The mostinfluential factor on the local level of urbangovernance is a general antagonism directedtowards public activities and planning regu-lations in particular. Inconsistent and oftencontradictory short-term political goals havegot priority over long-term planning strate-gies (Sykora, 1994) .

Ownership structures are transformed byseveral mechanisms . At the urban level, themost important are restitution, small privati-



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sation and large privatisation (for details seeGrime and Duke, 1993) . While the first twoprocesses have been active in transformingPrague's urban environment, the large-scaleprivatisation impact is still in its early stages .The first of these mechanisms, restitution, isa process whereby previous owners, or theirheirs, have been given back properties thatwere confiscated by the Communist regime .Restitution was driven not as much by econ-omic reasons as by the desire to give moralcompensation to those who lost their owner-ship rights after the Communist coup inFebruary 1948 . However, restitution was notonly a matter of justice but a fundamentaleconomic tool aimed at taking the state outof decision-making concerning existing capi-tal assets as soon as possible .

Restitution (or reprivatisation) has hadsignificant implications for a massive econ-omic and social restructuring in particularcity areas . Changes in ownership structurecreated by this reform have significantlyinfluenced real estate in the inner city ofPrague. For example, in the central city dis-trict Prague 1, about 70 per cent of the totalhousing stock was restituted, and in Prague2, an inner-city high-status neighbourhood,an even higher share (75 per cent) of houseswere returned in 1991-92 . In many otherinner-city neighbourhoods, restitution has af-fected about 35-65 per cent of the existingresidential housing stock (Sykora and~imonI kova, 1993 ; Eskinasi, 1994) .

There are still many houses in municipalownership which were not claimed in resti-tution. In the case of Prague, the central-citygovernment entrusts Prague's local govern-ment authorities with the privatisation of thisproperty, represented exclusively by tene-ment houses. In this process, high priority isgiven to selling houses to their tenants ; for-eign investors and real estate agencies arekept out as long as possible (in contrast torestitution) ; only less profitable and run-down houses are sold in inner-city neigh-bourhoods ; there are financial incentives forthe stimulation of housing renewal to becarried out by new owners (Eskinasi, 1994) .

Small-scale privatisation commenced in

Prague in January 1991 and most propertieswere auctioned before the end of 1992 . Theprimary aim of small privatisation was to sellsmall state-owned businesses by means ofpublic auctions into private hands thus offer-ing the facilities necessary for the rapid de-velopment of a small private entrepreneurs'sector. Nearly 2500 shops, restaurants andsmaller enterprises found new owners or ten-ants in the small privatisation auctions during1991-92. Sale prices under the small privati-sation scheme represented the first compre-hensive indicator of the market value oflocation within the Prague urban context .The prices showed general trends in price orrent surface, indicating buyers' expectationof the future profit differential acrossPrague's urban space . The price gradientwhich emerged resembles the neoclassicalrent curve, with a peak in the centre anddecreasing values towards the edge of thecity (Sftora, 1993) .

This spatial trend is also confirmed by landprices and rents in the emerging real estatemarket. In 1992 the market price for 1 sq mof urban land ranged from 700 Czechcrowns2 at the city outskirts to 70 000 Czechcrowns in the CBD (Sftora and ~imon-ickova, 1994), while in 1980s there was oneadministratively set price for the urban landwithin Prague's territory which amounted toonly 20 Czech crowns per sq m . The rent foroffice and commercial space available incentral locations increased rapidly in the im-mediate aftermath of the November 1989revolution, especially when a new system ofrent regulation/deregulation was introduced .Nevertheless, with a growing supply of resti-tuted and privatised properties, prices de-creased, and since 1992 the fluctuation ofprices and rents has more or less stablised .During 1992, the rent for 1 sq m of office andretail space in the CBD ranged from 900 to1300 Czech crowns and from 1500 to 2500Czech crowns respectively . In other parts ofthe central city, rents stablised at around700-900 Czech crowns per sq m, with valuesdecreasing towards the suburbs, where therent per sq m amounted to 200-250 Czechcrowns (Sykora and JimonI&ov , 1994) .



5. Secondary Transformations in the Ur-ban Environment

The system transformations create an im-petus for a much broader process of urbanrestructuring . Secondary transformations ap-pear and form a character of the next phaseof transition . Despite the fact that trajectoriesof contemporary urban change in Prague areinfluenced by both internal sources and ex-ternal influence, the most significant featureof restructuring is the reflection of generaltrends which currently shape transition in aWestern society. Particular attention will bedevoted to changes in control over space, tolocal labour market restructuring, to theemergence of new urban consumptionlandscapes, and to the implications of thesetransformations for uneven geographicaldevelopment. Common features with thecontemporary restructuring of Western citieswill be underlined .

5.1 The Struggle for Command over Spaceand its Implications for Geographically Un-even Development

The system transformations redistribute re-sources and power between a great variety ofactors with a highly differentiated level ofinfluence . The system transformations haveimportant implications for the constitution ofnew ùniversal' principles of command overspace, which are now being embodied in themore or less universal principles of capitalaccumulation. Nevertheless, this universalityis contrasted with another outcome of thetransformations which is characterised by ahighly scattered rule of many individual ac-tors over a great variety of particular places .

Since the collapse of centralised decision-making, a struggle for command over par-ticular territories has emerged. It is a strugglebetween various actors within both the publicand the private sphere as well as betweenthose sectors. The general trend is a shift ofpower from public institutions to private-sec-tor actors. This trend is further strengthenedby the impact of national developments inmany developed Western countries, charac-


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tensed by a transition to the post-welfareparadigm in politics (Bennett, 1990) . Fur-thermore, tensions which have appearedwithin the public sector concerning futureforms of territorial administration and divi-sions of power between state administrationand local self-government, have brought adecline in the credit and influence of publicauthorities .

The example of the split of Czechoslo-vakia is well'known. However, this case isnot an isolated one . The notion of municipalself-government as a fundamental vehicle fordemocratisation brought the breakdown ofthe old territorial administration at variousgeographical levels . Regions were abolishedimmediately after the `Velvet' revolution .This development was also intended to re-form 75 districts. However, they have re-tained their political power. At the presenttime there are hot disputes about whetherinternal division should be into 3-4 lands(provinces) or 10-14 regions. The number ofmunicipalities has increased from 4158 inJanuary 1989 to 6237 in January 1992 (Karaand Blazek, 1993) .

The territorial disintegration also touchedthe internal territorial administration withinthe city of Prague. Prague was divided into10 districts in 1989 . At the present, there are57 boroughs as basic units of self-govern-ment, and 13 districts, which represent thebasic level of state administration within thecity. Importantly, the differences in terms ofpopulation and economic power among the57 boroughs are extremely large ; the 13largest boroughs have from 35 000 to145 000 inhabitants; 32 boroughs have apopulation of less than 5000 ; while the foursmallest boroughs contain fewer than 300people. The division of responsibilities be-tween the central city administration and itsrespective boroughs is set out in the Charterof the Capital City of Prague, a documentwhich has been rewritten several times and isconstantly on the agenda of political debates.Of course, the smallest boroughs are too weakto form subjects in any negotiation . Politicalattempts to reduce or to enlarge Prague's terri-tory have also been considered recently .



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Regardless of political struggles within thepublic sector, the power to control space iscontinually being channelled to actors in theprivate sector. Command over space hasbeen rapidly transmitted from the authorityof central political and planning institutionsto a wide spectrum of actors operating withina market system. These actors are on the onehand ruled by uniform principles of capitalaccumulation, but on the other hand theirparticular actions express high individuality .Their interest is based on the same abstractprinciples but is unevenly distributed withina concrete framework of social and geo-graphical reality .

The possibility of highly individualisedcommand over particular places has broughta chance to extract a high profit from invest-ments in properties in attractive locations orforms of functional use . In contrast, low-de-mand locations and functions are neglected .The redistribution of power between marketactors has brought high selectivity of devel-opment processes, as actors seek the bestpossibilities for comparative advantage overothers. This potential for uneven develop-ment is further reinforced by a growing dif-ferentiation of consumer demand and by ageneral antagonism directed towards publicactivities and planning regulations in particu-lar. Therefore individual interests are gainingover a holistic vision of urban managementor a collective consciousness of more bal-anced development .

The contemporary city government lacksthe appropriate locally based regulatory mech-anisms needed for the maintenance of localurban development . While the local adminis-tration has recently served as a vehicle forpromoting general liberalisation strategiespursued by the central government, localdevelopment strategies have not been on thepolitical agenda . However, planners from theChief Architect's Office have succeeded inputting forward proposals for a new MasterPlan (Sykora, 1994), and in September 1993,the City Council approved the Territorial andEconomic Guidelines for the preparation ofthe new Master Plan . This document is animportant attempt to consolidate the control of

the city's territorial development . Unfortu-nately, it is being prepared in an old-fash-ioned spirit of physical planning and isomitting economic tools for encouraging orcontrolling various urban developmentprojects or influencing the contemporary realestate market's performance . Planners havealso attemp-ted to discuss planning and pres-ervation regulations for Prague's historicallegacy which would reflect changing econ-omic conditions. However, their effort hasnot been reflected in the decision-making oflocal politicians .

The contemporary reorganisation of urbanspace can, according to Harvey (1989a, p .255), be understood as a reorganisation ofthe framework through which social power isexpressed. The new forms of geographicaldifferentiation mirror a new structuration ofcontrol over space. In the case of the CzechRepublic and Prague particularly, the centralfeature of changes in command over space isthe shift of power from public institutions toprivate actors . Furthermore, local/national re-sources are no longer under the exclusivecontrol of local/national public administra-tion and not even under the decisive controlof local private-sector actors, as their actionsare increasingly influenced by processes op-erating at an international or global level .

5.2 Local Labour Market Restructuring, andits Implications for Income and Social Polar-isation

The system transformations established acompetitive market environment which isbased on a highly uneven redistribution ofresources and power between private firms,public agencies and individual households .The internal system of the Czech Republic isbecoming more or less compatible with theinternal structures of contemporary capitalistsocieties. Another system transformation, theliberalisation of foreign trade, brought in thedirect influence of the Western model and theactors who operate within it . Consequently,the restructuring of production and employ-ment structures follows trends in the division



of labour which are generated in inter-national and global areas .

In the case of Prague, many jobs haveemerged in the highly paid sector of businessservices, namely in banking, insurance andother financial institutions, real estate agen-cies, professional consultancies, media andadvertisement services . These have come atthe same time as many trade businesses fo-cused on expanding their operationalinfluence towards formerly centrally plannedeconomies in central and eastern Europe . Themarketing of information-handling equip-ment, in particular, has grown with expand-ing demand. The boom in the retail sectorgenerated a high demand for retail space incentral-city locations, where the highest dy-namics of the restructuring process concen-trated .

The rapidly growing demand for officeand commercial space and the liberalisationof the real estate market established possibil-ities for extracting money through specu-lation and the real estate market . Real estateagencies mushroomed in their hundreds,bringing new jobs as well as fuelling demandfor commercial space . An important role inthe local labour market is played by varioustourist-oriented services, which are often animportant source of new job opportunitieswith comparatively higher incomes . Cur-rently, the demand for labour is higher thanlabour supply, and the rate of unemploymentis far below 1 per cent in Prague .

Behind these developments, which oc-curred mainly in private sector, there is stilla high proportion of jobs in the publicsphere, such as education, health and socialservices, and local administration, wheresalaries in relative terms has fallen below theaverage standard. Many people also find newjob opportunities as street vendors marketingvarious kinds of goods . Such activities,which are on the margin of local economy,are often oriented toward tourists and con-centrated in tourist areas . It was recentlyestimated that over 5 per cent of the labourforce in the Czech Republic is employed inthe `shadow economy' sector (Kux, 1993, p .311). It can be expected that the percentage

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in Prague will be even higher . Despite lowunemployment in Prague, there is emerging astratum of people excluded from the standarddaily life of the majority . The presence ofhomeless persons in areas of growing wealthsymbolises the rapid and deep social conse-quences of the installed version of capital-ism. New developments towards the liberali-sation of civic life brought an increase incrime and a relatively new phenomenon,prostitution . It is in the central city of Praguewhere social marginality makes itself pre-sent. The concept of the dual city can bepartially relevant to such developments .

5.3 The Emergence of New ConsumptionLandscapes : Globalisation of Taste versusFragmentation of Local Consumption Pat-terns

The transition brought an uncritical import ofWestern culture . This is particularly visiblein the sphere of changing consumption pat-terns. The ùnited fashions' of global cultureare shaping the development of newlyemerging consumption landscapes in con-temporary Prague. The same movies, thesame music, the same fashion, the sameCoca-Cola, Fanta and Sprite as well as vari-ous kinds of sweets or washing powders andtoothpastes are displayed in retail and cater-ing establishments and advertised on TVchannels and radio broadcasts in the CzechRepublic as in Western Europe . Largeposters with an exemplary map show whereto find 'McDonald's 4 times in Prague' ;pizza is available on nearly every corner ; andwith a little effort it is possible to have a beerin an Irish pub . One of the large departmentstores already belongs to the US K-martchain and the United Colours of Bennettonare displayed in the most up-market shop-ping areas. The comfort of thousands of for-eign tourists and businessmen is secured bythe supply of goods in places they are fam-iliar with from every corner of the Westernworld.New developments on the Czech con-

sumption scene are characterised by a rapid



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acceptance of Western patterns of consumerbehaviour. They were influenced by indige-nous as well as exogenous factors . Czechconsumers have been desperately seeking forWestern goods of any standard, after manydecades of grey and monotonous socialistconsumption . This trend was further accentu-ated by the aggressive approach of advertise-ment businesses flooding the Czech massmedia with thousands of commercials forgoods offered by companies expanding theirmarkets towards central and east Europeancountries .

Changes in consumption landscapes arefurthermore emphasised by the developmentof new shopping facilities . Four US-styleshopping malls are scheduled to open in thegreater Prague area within 1994-95(Damsell, 1994). The projects include threeshopping complexes in Prague's inner city(4000, 5000 and 10 000 sq m of retail space)and a 26 000 sq m shopping centre locatedwest of Prague on the highway that linksPrague with Pilsen and (West) Germany . Thefirst project, the US Pavilon, a four-and-a-half-level mall is scheduled to open in Au-gust 1994. The project is based on the idea ofan entertainment shopping centre with a mar-ketplace concept and is being created in theornate 19th-century Vinohradska market-place. However, shopping as an entertain-ment, as well as shopping in supermarketssituated outside the city centre and accessibleonly by car, cannot be afforded by mostCzech citizens .

At the present time, many shops andrestaurants in central Prague belong to anetwork of internationalised places ratherthan to a locality . Their customers are almostexclusively foreigners and their products areimported rather than locally manufactured . Inaddition, the luxury facilities are ac-companied by a mass of street vendors andother kinds of informal economic activity . Inthe same places, it is also possible to see ahomeless person looking through a garbagecontainer in front of a shop selling luxurycars. Westernisation shows not only thebright but also the dark side of capitalism .On the one hand, there is the unification of

consumption patterns with Western stan-dards, unification or integration on a largergeographical scale, while on the other handthere is a growing differentiation in con-sumption patterns between various socialgroups, which is particularly apparent on thegeographical microscale .

The agents of commercial capital are verysensitive to the differentiation betweenaffluent and poor, between foreign visitorsand native people. They are also sensitive tothe differentiation in taste . A large number offoreigners seeking the spirit of Kafka'sPrague, have given impetus to quite a few'Kafka black theatres' . Harvey (1989a, p.303) writes that "through the presentation ofa partially illusory past it becomes possibleto signify something of local identity andperhaps to do it profitably" . Unfortunately,such commercialised cultural heritage hasnothing to do with a real local culture whichis rapidly being replaced by new culturesconstructed to meet the expectations of rela-tively rich outsiders .

6. Time-Space Compression and its So-cially Differentiated Experience

The concept of time-space compression(Harvey, 1989a), which "refers to movementand communication across space, to the geo-graphical stretching-out of social relations,and to our experience of all this" (Massey,1991, p. 24), is particularly relevant and use-ful for the conceptualisation of the conse-quences of contemporary urban restructuringin Prague . Restructuring is important bothbecause of the enormous speed at whichthese changes are occurring, and also be-cause of the effects these changes are havingon the local society . The role of acceleratingturnover time, plus the accelerating pace oflife in general, is gaining importance in shap-ing the everyday life of contemporary West-ern society . Nevertheless, the CzechRepublic and some other central and eastEuropean countries are moving at evenhigher speeds as they attempt to match West-



ern standards from a relatively backwardposition. This development on the one handreduces the relative distance between Czechsand the West and thus contributes to inte-gration and homogenisation on a generallevel and at larger geographical scales, whileon the other hand it contributes to growingdisparities within local societies and localplaces, which are caused by the highly socio-spatially differentiated impact of the time-space compression .

The time-space compression has not hap-pened in the same way for everyone and itdoes not evenly influence all spheres of so-cial activity. Massey (1993, p . 61) calls thisthe power-geometry of time-space com-pression, for "different social groups, anddifferent individuals, are placed in very dis-tinct ways in relation to these flows andinterconnections". The influence as well asthe experience of time-space compression ishighly differentiated at the level of the indi-vidual . While in many cases social relationsare increasingly stretched out over space,there is still a majority who are only partiallyactively constitutive of this process, or whoare not involved in it at all .

There is an experience of personal pres-ence in globalisation by top businessmenmanagers or politicians whose work is on theone hand conditioned by and on the otherhand constitutive of globalisation processes .However, there is also an experience ofglobalisation mediated for example throughthe mass media, while the person/recipient (apensioner or a lower-rank service worker) ismostly absent from the processes which con-tribute to globalisation. Whilst the everydaylife of such people is considerably shapedby globalisation processes, they themselveshave little influence on the processes .

Several layers of a `new' social division ofspace can be conceptualised . There is thespace of managers, whose presence con-tributes to time-space compression-Pragueas a network of top business and governmentinstitutions, hotels, conference centres, whichthrough telephones, telefax machines and E-mail, taxi services and an airport are connec-ted to networks of similar places in other


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large settlement centres . There is also thespace of an average citizen, characterised byreduced personal involvement in the pro-duction of time-space compression-Pragueas a meeting-place between citizens of theWest and the East, seen through a personalexperience of holidays in Italy or a shoppingtrip to Austria or Germany, the experiencethat stimulates an imagination of coherentlandscapes within the unifying Europe . Astep further in the hierarchy of the power-ge-ometry of time-space compression is thespace of low-waged, poorly educated andelderly citizens, who due to low spatial andsocial mobility are mostly absent from theprocesses of globalisation-Prague experi-enced through a geographically limited areaof daily routine, that is dynamically changingits face as an outcome of unimaginable anduncontrollable powers . Furthermore, recentdevelopment favours the establishment of aspace of those who are excluded from thedaily life of society altogether .

Several notions of place can be derivedfrom various social experiences of presenceor absence in globalisation processes . Forthose who are in charge of the time-spacecompression, their experience of place can bedefined globally or more accurately as a spa-tially distinct network of particular placessuch as hotels, offices, meeting rooms, air-ports and family villas. For those whosedaily action is more spatially restricted andoften is not part of the globalisation pro-cesses and does not contribute to the time-space compression, the place is given by adaily routine realised at a much smaller geo-graphical scale .

Is the meaning of local community brokendown or is the local just lifting to a moreextended geographical scale? The global isbecoming local for many of us . However, notfor everyone. There are many who must relyon local resources, the management of whichis increasingly mediated through powerswhich are out of local control. The crucialquestion is : how does the different involve-ment in and experience of the time-spacecompression contribute to new forms ofsocial space exploitation?



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7. Globalisation-Localisation, and the Re-composition of Urban Form

Featherstone (1993) refers to the localisationof globality . In his opinion, globalisationdoes not produce homogeneity but famil-iarises us with greater diversity . Conse-quently, "one of the effects of the process ofglobalization has been to make us aware thatthe world itself is a locality, a singular place"(Featherstone, 1993, p . 175) . What is the roleof local places in this context? Can we notalso indicate globalisation of localities? Thecrucial feature of globalisation-localisationis the growing interpenetration of processesoperating at different geographical scaleswithin particular local places. What is new, isthe accelerating role of globally rootedmechanisms in determining local happen-ings .

Material structures as well as the culturalspirit of local places involved in the processof globalisation-localisation, can be seen as amixture of interest of people with differentscales of spatial mobility and experience ofplace. Furthermore, the contemporary pro-cess of local restructuring is increasinglyinfluenced by projections of interests of thoseindividuals and groups who are more andmore involved in the relations of globalisa-tion and who contribute intensively to andexperience the time-space compression, andwho therefore have decisive control overspace, to the reshaping of local materialforms, legal conditions and social relations .Giddens (1990, p. 19) states that "locales arethoroughly penetrated and shaped in terms ofsocial influences quite distant from them" .

In the context of the general unificationand integration of the capitalist system ofproduction within international or globalspheres, individual actors are searching forcomparative advantages by exploring localdifferences and exploiting those which cansignificantly contribute to their competitive-ness within the global market. In this devel-opment, Harvey (1989a, pp . 295-296) sees

the central paradox : the less important thespatial barriers, the greater the sensitivity

of capital to the variations of place withinspace, and the greater the incentive forplaces to be differentiated in ways attract-ive to capital. The result has been theproduction of fragmentation, insecurity,and ephemeral uneven development withina highly unified global space economy ofcapital flows.

In contemporary Prague, there is growingincome and social polarisation as well asdifferentiation of lifestyles, social and cul-tural values. This development brings ahighly differentiated demand from variousactors, which is perceived by private capitalagents and reflected in a highly differentiatedsupply of goods, services or properties. Itcreates preconditions for a new socio-spatialdivision of urban space. Consequently, thecontemporary economic and social restruc-turing has a very selective impact withinPrague's urban space . The most dynamicrestructuring is concentrated in the centralcity. Nevertheless, new developments arerather scattered across the whole city terri-tory. New revolutionary changes in thephysical shape of internal urban structurecannot be expected, but the social and func-tional content can undergo massive restruc-turing . The importance of contemporarychanges lies in the transformation of socialand functional attributes within the òld' fab-ric of Prague's built environment, which isbeing utilised to meet demands growing outof societal restructuring .

With the background of experience fromrecent studies (Sftora, 1993, 1994 ; Sykoraand SimonI kova, 1994 ; Musil, 1993), it ispossible to speculate about future trends ofurban restructuring in Prague . In the centralcity, which can be perceived as a laboratoryof contemporary urban restructuring, trans-formation has a considerable impact on thedecline of the residential function. Manyrestituted houses and individual flats weretransferred from residential space to non-res-idential premises. This change is relativelyeasy, as currently no legislative norms existwhich would prevent the reduction of resi-dential space . Consequently, a rapid decline



may be anticipated. However, many unusedor underutilised non-residential premiseshave been converted to `the higher and bestuse' . These processes rapidly change the faceof the central city, where revitalisation, com-mercialisation and capitalisation make them-selves especially apparent. On the aggregatelevel, residential areas show a rather lowlevel of social restructuring . However, a mi-cro-geographical view reveals cases oftremendous change at the level of individualhouses, blocks of houses or small neighbour-hoods. Despite a certain demand for luxuri-ous apartments in central city locations andsome inner-city prestige neighbourhoods,gentrification or social upgrading cannot beexpected over the whole central city. Thespatial selectivity of various developmentprocesses and socio-spatial segregation into amosaic of small areas with their specificsocial structures, cultural spirits and func-tional uses are more probable outcomes .

8 . Conclusions : Changing Social Regu-lation and Transition to RadicalisedModernity

"Rather than entering a period of post-modernity, we are moving into one in whichthe consequences of modernity are becomingmore radicalised and universalised than everbefore", declares Giddens (1990, p. 3) . "It ismore modern than modernism . Postmod-ernism hyperbolically accentuates the pro-cesses of increased turnover time, speed ofcirculation and the disposability of subjectsand objects", confirm Lash and Urry (1994,p. 3). Similarly Soja (1989, p . 5) continues"to see the present period primarily as an-other deep and broad restructuring ofmodernity rather than as a complete breakand replacement of all progressive, post-En-lightenment thought, as some who call them-selves postmodemists (but are probablybetter described as antimodernists) pro-claim". Zukin (1988, p . 442) concludes heressay on the post-modern debate over urbanform with a statement that "there is bothsimilarity and continuity with the modernismthat represents (and opposes) the `high' capi-


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talism of an advancing industrial age" .Analysing the condition of post-modernity,Harvey (1989a, p . 121) assures us that "thebasic rules of a capitalist mode of productioncontinue to operate as invariant shapingforces in historical-geographical develop-ment". Finally, Thrift (1989) warns us aboutdangers inherent in transition models, for"new times and spaces are not quite as `new'as all that" .This short summary of a few selected

thoughts on the `novelty' of 'post-modernis-ation' is presented to introduce the final partof the discussion of contemporary changes inthe Czech Republic, and Prague in particular .The first question to be approached is : doestransition constitute a capitalist modernity, oris it a trajectory to post-modernity? I haveattempted to show that the contemporarytransition in the Czech Republic is an instal-lation of all the basic features of contempor-ary capitalism . If the change from modernityto post-modernity in Western society isdoubted, and as was highlighted above it is,then it can be argued that transition reconsti-tutes modernity in its capitalist fashion . Bau-man (1990) sees the development ofsocialism as a radicalised version of modern-ist thought and practices . Consequently, thepresent turbulence in the Czech Republic andPrague should be conceptualised as internaltransformations within the project ofmodernity, an operation based in institutionsand rules embodied in the democratic politi-cal system and the market economy .

According to Harvey (1989a) we shouldview recent changes in the organisation ofcapitalism as a transition in the regime ofaccumulation and its associated mode of so-cial regulation and system of accumulation .The regulation theory approach is also rel-evant and useful for the conceptualisation oftransition in former centrally planned econ-omies in central and eastern Europe, which"are going through similar restructuring asother industrial countries" (Pavlfnek, 1993) .Pavlfnek sees these structural changes as partof global restructuring . However, the formercentrally planned economies differ becauseof their much higher speed of change .



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In the Czech Republic, the transformationof the system of social regulation precedesrestructuring towards a corresponding systemof accumulation. The restructuring of thesystem of social regulation is deliberatelyused as a tool for the promotion of a `new'accumulation regime which will be compat-ible with, as well as competitive within, theglobal capitalist economy. This is in accordwith an observation made by Peck and Tick-ell (1992, p. 354) on changes in nationalregulation in the UK. They interpret Thatch-erism as "a conscious attempt to restructurethe accumulation system through the estab-lishment of a new regulation system" . How-ever, most researchers working within theregulation theory framework would arguethat changes in the system of accumulationhave primary importance for transformationsin the regime of accumulation .

To explain this discrepancy, it is necessaryto look closely at ways in which verticalgeographies of accumulation and regulationinteract with one another . By `vertical' ge-ographies is meant linkages between hori-zontal geographies at various geographicalscales (global, international, national, re-gional, local) . The primary importance ofcontemporary developments is heralded byglobalisation of production, circulation andconsumption-i.e. by globalisation of thesystem of accumulation . Globalisation hascreated an external environment whose im-pact has become crucial for the performanceof national and regional production systems .As some industrial sectors and regions areseverely hit by the operation of volatilemechanisms of global competition, variousnational social regulation systems attemptto react in different ways, but often based onliberal economic strategies, and means topower which are no longer under their control .

It is precisely at the national and lowerlevels where the restructuring of social regu-lation is aimed at promoting changes in theaccumulation system. The `new' social regu-lation is primarily aimed at the restructuringof those segments of national, regional andlocal production, distribution and consump-tion which are seen as fundamental pillars for

LUDEKSYKORA

stabilising and promoting the national econ-omy in the wake of the growing turbulencegenerated by changes at the internationalscale, which are not under the control ofnational regulations . Secondary strategiesaimed at supporting selected spheres of in-dustrial production which do not match pro-gressive developments at the internationaland global scales usually accompany the pri-mary focus on incentives to internationalfinancial services and attracting investmentsfrom transnational companies to particularlocalities . The character of this developmentin the last decade has been shaped by similarideologies based on economic liberalism, re-gardless of the conservative, liberal or social-democratic orientation of governments inmost developed countries. Now, this ideol-ogy and its policies are being applied in theCzech Republic in a more radicalised waythan in the countries of origin . Consequently,the aims and directions of social regulationrestructuring within the nation-state frame-work are the same in both the Czech Repub-lic and in developed Western countries, butthe formerly centrally planned economy hasto go through a more lengthy process .

The competitive character of integration ata global scale has important implications foruneven geographical development at variousgeographical scales . Recent deregulationstrategies placed the market allocation ofresources in a privileged position . Thesestrategies can be successful in promotingeconomic growth in particular sectors or geo-graphical areas which have a privileged placein national accumulation strategies, but gen-erally allow sectoral, regional and social in-equalities to widen . The neoconservativeideology of economic liberalism imple-mented in the Czech economic reformshaped the new mode of national social regu-lation in one direction only . The rapid liber-alisation has helped to establish the Czecheconomy as a part of the world economicsystem; however, it has not developed anyappropriate mechanisms of social regulationto tackle the uneven impact of this inte-gration on particular segments of Czechsociety . Regulation is particularly under



developed in the spheres of housing policy,industrial policy and regional policy as wellas in the case of appropriate regulatory insti-tutions at the regional and urban levels .

During the last four years, the laws ofcapitalist society have been imposed on theCzech environment in their radicalised form .The Czech Republic has served as a play-ground for liberal economic strategies imple-mented through the neoconservative policyof a strong central state. The implementationof these strategies has been sustained by anew ideological orthodoxy which has beensuccessful in the maintenance of relativelyhigh public support for central governmentpolicies. This success has been conditionedby specificities of local social and politicalconditions, given by a natural counter-reac-tion to any kind of public regulation . How-ever, the consequences of the new ideologyare likely to place the government on theknife-edge of a legitimation crisis if social,housing, regional and industrial policies donot become a part of reform strategies. Un-fortunately, the new orthodoxy hassignificantly reshaped the views of citizenson what a developed (the use of the wordcapitalist is practically forbidden) society isand should be . This `cultural' transformationis expressed in the words of Kayal (1993)borrowed here for the conclusion of thisessay: "the values of the `Velvet' revolutionare dead, supplanted by a national obsessionwith material wealth and admittance into theworld economic community" .

Notes

1 . With the concept of the informational societyCastells (1993, pp . 248-249) describes "thesocial structure of a society whose sources ofeconomic productivity, cultural hegemony,and political-military power depend, funda-mentally, on the capacity to retrieve, store,process, and generate information andknowledge ."

2 . 1 US$ = 30 Czech crowns, £1 sterling = 44Czech crowns, 1 DM = 17 Czech crowns .

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Urban Studies - Fakultasykora/pdf/Sykora_1994... · Urban Studies DOI: 10.1080/00420989420081001 Urban Stud 1994; 31; 1149 ... urban restructuring in Prague is enabled by system transformations,