The Revolution in International Capital Markets: Urban Growth and Australian Cities

Australia has suffered in line with other nations from the recession of the 1970s. Behind the downturn lay a major structural change in the economies of Western Nations; a change which resulted from the movement from a system of monopoly capitalism to one of global capitalism. Much attention has been paid to the rise of multinational manufacturing corporations in this process; relatively little to the fundamental revision of the world's capital markets. The process of change began with the shortcomings of the Bretton Woods system and the rise of the Eurocurrencies. A vast and undisciplined international capital market was created, the hallmarks of which were highly volatile exchange rates and a greatly expanded pool of capital which was very mobile. The power of individual governments to control the system was reduced, and the new system was organized through a group of key global cities which operated the market throughout the world on a twenty-four-hour basis. A fourfold hierarchy of centres evolved. In Australia there was an historic transition from the dominance of Melbourne to that of Sydney as a result of the changing world scene. The growth of the international markets has produced a revolution in the distribution of wealth and activities throughout the world. The problems resulting from this have called for a regulatory body to control the new system. The prospects for creating such a body are clouded by the scale of the problem and by the lack of understanding of its causes. The result is an indecisive and probably wrongly directed approach to the question of regional development.