March 4, 1999
Vol. 18 No. 11

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    [saskia sassen], by perry paegelow  Saskia Sassen, who came to the University at the beginning of the Fall Quarter, is an expert on globalization.

    Sociology Professor Sassen shares her global perspective

    By William Harms
    News Office

    Although Chicago’s futures markets have experienced an erosion of their worldwide market share in the past 10 years, they remain dominant forces in a fast-changing globalized economy, says Saskia Sassen, Professor in Sociology and an expert on global markets.

    “The total share of the futures market handled by two big futures markets in Chicago fell from 60 percent in 1987 to 30 percent in 1997, but at the same time, the volume of contracts handled by the two markets increased by 45 percent,” said Sassen, who wrote about changes in markets in an article, “Global Financial Centers,” published in a recent issue of Foreign Affairs.

    The futures markets are flourishing because of the globalization of the market and the invention of new instruments. Strategic alliances also are forming among financial markets around the world. Liberalization of the market place and a standardization of trading rules have meant that a key group of about 25 cities, including Chicago, have come to dominate the world of finance, Sassen maintained. Those cities flourish because they are connected with a system of digital networks and are served by an experienced group of financial traders and other experts, she pointed out.

    “The Chicago Mercantile Exchange has hooked up with the Paris futures exchange, the Matif,” she wrote in Foreign Affairs.

    “The emergence of electronic trading will mean that the jobs people have on the floor may eventually go, but employment in finance and its sister industries will remain an important element in Chicago’s future because human intelligence and talent will still be needed,” Sassen said.

    The emergence of the euro as currency and the collapse of Asian economies have sent the financial world into new levels of consolidation, she said.

    “Location still matters,” she wrote. “Even as digitalization, decentralization and denationalization radically change the way business is done, one still needs a central base, not just an address, to run financial operations.”

    Because some of the most complex and strategic information is what individuals know and not necessarily what is available through electronic sources, said Sassen, it has become critical for people in the financial sector to have access to multiple types of expertise and experience. A financial center such as New York or Chicago provides these concentrations of professionals.

    Smaller, regional centers of trade are losing share as capital and corporate power shifts to a few cities, with New York and London leading the list. The 25 major financial cities in the world controlled an impressive 83 percent of the world’s equities under institutional management by the end of 1997.

    Among those cities, London, New York and Tokyo hold a third of the world’s equities under institutional management.

    As wealth becomes more globalized, a new class of citizens, the financial elite, develops, said Sassen. People in this elite class have more in common with their colleagues doing similar work around the world than they have with many fellow citizens in their own cities, she said.

    However, not everyone shares in the wealth of globalization. In countries such as Thailand, where the value of the local currency has fallen, foreign investors have purchased property at drastically reduced prices. Citizens in the service sectors often work at low salaries.

    In her forthcoming book, Sassen will examine how accountability to broader public agendas can be brought into this new type of economic system.

    Governance and Accountability in the Global Economy will be published in the year 2000.

    Much of Sassen’s research has dealt with these major world issues, and she is at the forefront of studying such topics as the digitalization of markets. She joined the University faculty in 1998 after many years at Columbia University as a professor of urban planning.

    Sassen is the author of several books, including Losing Control? Sovereignty in an Age of Globalization (1996), The Global City: New York, London, Tokyo (1991) and The Mobility of Labor and Capital: A Study of International Investment and Labor Flow (1988). A collection of selected essays by Sassen, titled Globalization and Its Discontents, was published in 1998.

    Sassen received two years of undergraduate education at the Universidad Nacional de Buenos Aires in Argentina and the Universita degli Studi di Roma in Italy respectively. She then moved immediately to graduate school, receiving a Ph.D. in economics and sociology from Notre Dame in 1974.

    Sassen will deliver a lecture as part of the Social Science Inaugural Lecture Series at 4 p.m. Wednesday, April 28, in the Social Science Research Building, Room 122, 1126 E. 59th St.