Unleashing speculative urbanism: Speculation and urban transformations

Despite widespread recognition that speculation is integral to capital accumulation, as in other spheres of scientific and everyday life, it received little attention from urban scholars until recently. Yet this has changed rapidly as speculation on land and property has created an affordable housing crisis in cities across the globe. A decade ago Goldman (2011) coined the term speculative urbanism as a mid-range concept for making sense of often dramatic urban land transformations, triggering an explosion of research associating speculation with the urban (Sood, 2017; Newbury 2021; Chu and He, 2022). This reflects the growing significance of speculation within contemporary global capitalism (Bear et al., 2015). As many authors have noted we find ourselves in an era when capitalism has become digitized and financialized, with money capital switching from commodity production to speculation and rentiership (Arrighi, 2007; Stockhammer, 2008; Piketty, 2014; Vishmidt, 2018; Christophers, 2020), with far-reaching negative consequences for ordinary urban residents. Yet those excluded from the wealth thereby created are also resisting and contesting speculation, through both variegated social movements and everyday livelihood practices, making these consequences visible and envisioning alternative urban futures (Leitner et al., 2007).

While it has become common to associate speculation with such economic practices as seeking a return on investment under conditions of radical uncertainty, the term has a long and complex history that exceeds economic framings. Tracing its etymology and shifting meanings through the European Enlightenment Rogers (2021) teases out a remarkable breadth of use, spanning religion, philosophy, and science. In Christianity, speculative thinking was seen as key to being able to imagine a God. John Calvin, believing that true knowledge of the Christian God could only be arrived at through practice, dismissed such speculative thinking as idle. ¹ In eighteenth-century Europe, Newton and others began to draw a distinction between speculative philosophy (that of such thinkers as Hegel) and experimental philosophy (e.g., Bacon), separating German idealism from British empiricism. This binary posed a problem, however, for the emergent seventeenth-century field of science. Robert Boyle, founding member of The Royal Society, proposed a solution to this problem, arguing that scientists’ speculations about phenomena (subsequently relabeled hypotheses) could be assessed by conducting scientific experiments. Speculations were also conceived as socio-political: In 1776, the American General Nathanael Greene described the signing of the US Declaration of Independence as a “bold speculation” (Rogers, 2021: 91).

Rogers (2021: 3) argues that these very different conceptions of speculation share a capacious meaning: “Speculation provides the language and conceptualization by which we produce contingent knowledge, ideas, abstractions, risks, and even money and material gains, all of which radically shape our individual and collective futures. The roots of speculation's force lie not in the parts of the visible world we believe we can know fully, here and now, but in an interaction between the information our eyes process in the present and the scenarios we then envision for the future.” She argues, however, that this was reduced to the far narrower economic meaning as the economy began to dominate European society. More-or-less as Nathanael Greene was writing, Adam Smith (1759, 1776) discussed speculation in The Theory of Moral Sentiments and The Wealth of Nations. Challenging the negative connotations by then attached to the term, he saw speculation as a defining feature of capitalism. He distinguished between productive speculators–capitalists speculating on new products, technologies, and markets (now called entrepreneurs) – and unproductive speculators (“those who never invent or improve anything”), arguing that even the latter “are not altogether useless. They serve at least to … deliver to posterity the inventions and improvements that had been made before” (Smith, quoted by Rogers, 2021: 78). By the mid-nineteenth century, however, with widespread concern that financial speculation manias were sabotaging the (white) American dream, speculation began to reassume the negative meaning predominant today (Rogers, 2021: Chapter 4). Financial speculative manias preceded this era, of course, including the tulip frenzy in seventeenth-century Holland, the early eighteenth-century South Sea and Mississippi Bubbles, and colonial speculation in India (Birla, 2009).

Goldman's 2011 conception of speculative urbanism aligns with its economic meaning. Examining the speculative activities of real estate developers in land and property and their financial backers in Bengaluru, he identified “a shift into new forms of ‘speculative’ government, economy, urbanism and citizenship” (Goldman, 2011: 555). Documenting how these processes dispossess and undermine the livelihood possibilities of Bangalore's urban majority, he asked: “How can city dwellers imagine, and undertake, long-term place-based urban planning when the major financial actors have on their side of the bargaining table the ability to be permanently transient?” (577). Speculative urbanism has been mobilized to examine how speculative markets in land, real estate, finance, infrastructure and digital data shape city-making, urban change and urban futures, as speculators seek to maximize future returns on these various asset classes (Shin, 2016; Leszczynski, 2016; Nam 2017; Goldman & Narayan, 2021; Noterman 2021).

This special issue seeks to build on and extend the concepts of speculation and speculative urbanism in four ways: Examining how speculative urban practices emerge from their broader conjunctural context, attending to socio-cultural practices that permeate speculation, identifying a broader range of actors engaging in urban speculation, and expanding the objects that are subject to speculation.

Genesis of the special issue

The geographic focus of this special issue on Jakarta (Indonesia) and Bengaluru (India) reflects its origins in the US National Science Foundation funded research project Speculative Urbanism: Land, Livelihoods and Finance Capital. Conceived as a relational/conjunctural inter- and intra-urban comparison (Leitner and Sheppard, 2020; 2022), this research collaborative has examined the mechanics and dynamics of land transformations driven by spectacular real estate projects. The collaborative pursued three objectives: (1) tracing the networks through which often informally-owned land is acquired, consolidated and brought into the capitalist land market as a commodity in order to build such projects; (2) assessing the impact of these processes on the livelihood possibilities and strategies of the urban majority (Simone, 2014) who had occupied this land, now experiencing displacement, and; (3) examining the role of financial and policy networks facilitating these transformations.

The collaborative consists of an interdisciplinary group of faculty, postdocs and graduate students, from two US institutions (The University of Minnesota and UCLA) and their respective partners in the two cities: The National Institute of Advanced Study in Bengaluru, and Tarumanagara University in Jakarta. ² The teams undertook annual fieldwork between 2017 and 2022 (interrupted by the COVID pandemic), returning multiple times to (re)interview residents, developers, bankers and government officials at select central city and peri-urban field sites in each city. Empirical findings and provisional conceptual frameworks were compared and debated at regular team-wide online workshops. Those studying each city also spent time in the other city, visiting the field sites and seeking broader feedback from local academics, public officials, and activists. Three of the empirical papers in this issue are directly based on this funded research; the other three (by Anguelov, Nowak and Colven) are based on doctoral research inspired by and undertaken alongside the project. It was through workshopping these papers, within the collaborative and more broadly at AAG conference sessions, that the richer and broader vision of speculative urbanism highlighted in this special issue began to emerge. We also invited the external perspective of other scholars working on similar issues, Desiree Fields and Carolyn Prouse, whose commentaries on these papers conclude the special issue.

The conjunctural context

Adopting a relational multi-scalar perspective by embedding local case studies within the broader conjunctural context of contemporary financialized rentier capitalism, we seek a deeper understanding of the mechanisms shaping speculative urbanism on the ground. Detailing this context, Goldman's opening paper (this issue) argues that the neoliberal globalization of finance – greased by its digitization – created fertile conditions for speculative capitalism. The 2008 global economic crisis, rooted in neoliberal financial heartlands, accelerated speculative urbanism: Negative real interest rates made investments in land and infrastructure possible, and “the 2008 global financial crisis did not bring down a system; it helped to create one, with consolidation and monopolization being key features of this speculative urban process” (p. 14). Taking seriously the spatiality of this conjuncture, Goldman challenges the presupposition that it simply diffuses from north to south. Rather, thinking relationally, he teases out how speculative urbanism plays out very differently in different spatio-temporal conjunctural contexts, with speculation leapfrogging across space as fast policy mobility and global capital flows unevenly link cities together. Both Gidwani and Upadhya (this issue) and Leitner et al. (this issue) place their analyses of localized everyday speculation within the broader conjunctural contexts of, respectively, Bengaluru as India's hightech city during the post-1991 liberalization of India's economy, and Jakarta as the national capital in the post-1998 era of democratization (reformasi). Placing his analysis within the broader conjuncture of the privatization of global urban infrastructure finance, emphasized also by Goldman, Anguelov (this issue) argues that Jakarta's conjunctural socio-spatial positionality, at the crossroads of US, Japanese, and Chinese geopolitical influence (Anguelov 2020), has shaped its reliance on state-owned enterprises. Colven (this issue) locates her study within the socio-ecological context of global heating, examining how this shapes speculation around flooding, ecological security and urban resilience. Nowak (this issue) examines how the emergence of platform capitalism, and Jakarta's southern positionality within this context, has shaped the speculation surrounding the ride-sharing industry in Jakarta, where motorbikes are a more effective mode of ride-sharing than automobiles.

Socio-cultural speculation

Following select anthropologists interested in questions of futurity and prediction (Bear 2020, Humphrey 2020, Upadhya 2020), contributions to this special issue broaden dominant conceptions of speculative urbanism to embrace the socio-cultural as well as the economic. As Humphrey notes, speculation is not just about coming to terms with economic/financial uncertainty and instability; it is shot through with emotional and socio- cultural values and mobilizes a future imaginary: “An economic actor cannot make a speculative investment without also having engaged in some kind of scanning or envisioning an uncertain future” (Humphrey, 2020: 120). In this spirit, several papers extend scholarship on speculative urbanism to incorporate non-economic considerations. These papers demonstrate how the diverse actors engaged in speculative urbanism do not simply seek to accumulate wealth; they do so with aspirations in mind for imagined, yet-to-be-realized urban/peri-urban futures. Leitner et al. (this issue) find that developers, financiers, and residents of informal settlements experiencing market-induced displacement, all engage in socio-cultural as well as financial speculation. Their imaginaries of urban/peri-urban futures vary dramatically, however. Developers and financiers imagine a future of enhanced financial returns that will enact the ‘world class’ city (McCann et al., 2013). By contrast, residents of informal settlements aspire to secure a place to live, where they can realize the commoning practices so central to their livelihoods. They see financial speculation as a means to realize such socio-cultural aspirations.

Two other contributions highlight how social and cultural practices permeate acts of financial speculation. Gidwani and Upadhya (this issue) examine how different actors in Bengaluru, involved in land assembly and its assetization, mobilize their social and cultural capital to enable the extraction of capitalist value from urban land. Similarly, in his examination of motor-bike taxi driver communities and networks in Jakarta, Nowak (this issue) shows how constellations of historical cultural arrangements and already existing social relations among drivers infuse acts of speculation. In short, speculative urbanism involves anticipating, envisioning, and experimenting with alternative futures, including those exceeding the norms of neoliberal global urbanism.

The universe of urban speculators

Together the papers in this issue also work to expand the set of actors who engage in speculative urbanism, beyond the usual suspects – the developers and financial institutions at the center of much speculative urbanism scholarship to date. Conceptualizing the land assembly and development process as a value chain – linking local residents occupying land to the developers and global finance (cf. Leitner and Sheppard 2020)–Gidwani and Upadhya (this issue) detail the strategies of particular land brokers and land aggregators in peri-urban Bengaluru, whose actions are essential to converting land from a non-capitalist asset providing economic security into a financial asset and factor of production for the developer. They argue that this “articulation work” connects land buyers and sellers through a speculative economy of anticipation. In peri-urban Jakarta, Leitner et al. (this issue) follow residents experiencing market-induced displacement (Leitner, Sheppard and Colven, 2022) as they relocate and practice everyday speculation. Having agreed to sell their property to a land broker, they not only use the windfall income to rebuild their family compound in a nearby kampung where land prices are still low but also engage in economic speculation by becoming landlords: building rental units for migrant workers and their families. In central Bengaluru, Upadhya and Rao (this issue) examine how a local landowner, armed with a legal ruling granting him sole land title, was able to negotiate the “in situ” displacement of long-established residents holding tenurial rights. Resisting displacement pressure, these residents eventually agreed to relocate to multi-story blocks of small flats to be built on part of the land, releasing the remainder for speculative urban redevelopment. Taken together, by tracing the actions of neglected/ overlooked actors engaging in speculative urbanism – land brokers and aggregators, residents of informal settlements, and local landlords – these articles highlight the mechanisms through which informally occupied land is brought into the capitalist land market.

Nowak (this issue) shows how the 1.5 million ride-share motorbikers hired by southeast Asian ride-share unicorns (GoJek and Grab) in greater Jakarta practice everyday speculation. Speculating on the opportunities and social networks engendered by platformization, “they have auto-constructed networks that now permeate ride-hailing operations …, with sophisticated systems of mutual aid, insurance, emergency response, and social reproduction filling in gaps left by the retreat of platform firms and the state.” Colven (this issue) unpacks how more-than-human agency participates in speculation, showing how Jakarta's hydroscape, itself transformed by the speculative construction of large formal real estate projects, threatens to undermine the profitability of future rounds of speculative investment. Noting how Colven, Nowak and Anguelov attend to more-than-human materialities, Prouse (this issue) argues that these papers “open new possible horizons for thinking of the human and more-than-human forms of speculation.”

Both Anguelov and Colven (this issue), demonstrating Goldman's discussion of speculative governmentality as a key characteristic of speculative urbanism, draw attention to speculative state actions. Examining Jakarta's recent mass transit infrastructure projects – the MRT and LRT – Anguelov shows how national and local governments facilitate speculative actions by state- and city-owned enterprises in order to realize a ‘world-class’ future for Jakarta. Colven examines how the state, facing the likelihood of ever more pervasive urban flooding due to land subsidence, sea level rise and shifting rainfall regimes associated with global heating, speculatively initiated a large Dubai-style offshore land reclamation and sea wall project.

The objects of speculation

Finally, the articles in this special issue expand the objects of/media through which speculation works, beyond land, property and financial instruments. Colven (this issue) shows how the socio-ecologies of Jakarta – flood risk and groundwater depletion in her study – are simultaneously the object and outcome of different forms of speculation. Environmental speculation on projects designed to mitigate environmental threats, in her case coastal protection (the Garuda Seawall), create new opportunities for private capital accumulation through associated land reclamation projects, even when they are not realized.

Two other contributions to this special issue draw attention to how objects of speculation need not be material entities, but something more ephemeral. Nowak (this issue) examines how different actors speculate on the digital networks created by drivers in the motorbike ride-sharing industry in greater Jakarta. Motor-bike drivers speculate that access to these drivers’ networks can provide social capital and patronage relations; platform firms seek to better manage drivers by accessing their networks; and local officials and political parties speculate that access to the drivers’ networks might help advance their political agenda. Examining the role of local intermediaries in transforming agricultural land into development-ready land in peri-urban Bengaluru, Gidwani and Upadhya (this issue) show that the value chain of land assembly itself becomes the object of speculation and value extraction.

In her commentary, Prouse (this issue) calls attention to yet another object of speculation: the human body. Citing examples of clinical trials with new drugs in the global South, she suggests that the subjects of these trials are often already victims of dispossession and expropriation as a result of speculative developments and investments. At the same time: “Some of the dispossessed engage in a highly speculative, embodied, socioecological, and clinical form of labour, in which the very cells, microbiologies, and bodily capacities are being speculated on by life science firms for drug development. Thus these clinical labourers are, too, forced to speculate - on their life, in order to make a living.” As these different cases show, there exists a complex entanglement between different forms, objects and media through which speculation works.

Concluding thoughts

The articles in this special issue are devoted to understanding how speculation shapes urban transformations and to what effect. But so what? Having posed this question to PhD students for decades, in these concluding thoughts we hold ourselves up to answering it as best we can. What is the relevance of speculation in understanding urban transformations, and urban capitalism more generally? What insights does an extended understanding of speculation and speculative urbanism afford?

First, by working to embed speculative practices within the broader urban, national and global conjunctural context, these articles bring attention to the spatio-temporal conditions under which speculative urbanism becomes a significant shaping force. This helps avoid slipping into a mindset that sees speculation as ubiquitous, as some universal master concept. As Prouse (this issue) notes, taking seriously the geographical specificity of conjunctures contributes to “a methodological framework that allows us to consider how speculative urbanism operates elsewhere”.

Second, we suggest that interrogating speculation provides important insights into questions of urban accumulation and inequality. Many different actors speculate on various objects (land, property, driver networks, real estate chains, the urban ecology), but with unequal power and capacity to accumulate from such speculation. A leitmotif across this special issue is that unequal power relations among those actors engaging in speculation tend to further entrench existing inequalities: Speculation is inequalizing.

Third, investigating the workings of speculation on the ground makes visible alternative imaginaries, of how to live otherwise in cities, bringing urban temporalities to the fore (Fields, this issue). These include imaginaries that exceed the reach of capital (Summers and Fields, 2022), looking forward but also often animating past histories and cultural practices. “[S]peculation is not simply future-oriented but is lived by some in what Whyte (2018) of the Potawatomi Nation calls Spiralling time: drawing together the past, present, and future – and especially the knowledge of ancestral generations - in order to make life under sometimes apocalyptic conditions” (Prouse this issue).