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In the late 20th century, an unusually large and fecund group of loosely affiliated, Marxist-inspired urban and economic geographers began to form in Southern California, particularly at the University of California at Los Angeles (UCLA) and the University of Southern California. This group, including notables such as Michael Dear, Edward Soja, Allen Scott, Michael Storper, and Mike Davis, played a key role in shaping urban political economy and injecting space into debates about the changing structure of capitalism. In particular, it was instrumental in theorizing the urban division of labor under post-Fordism or flexible production and, more broadly, in injecting space into the heart of all social analysis, helping dethrone historicism.

The so-called Los Angeles School upheld the greater conurbation of the region as the prototype of postindustrial, polycentric urbanization under advanced, globalized capitalism. This view was in contrast to the Chicago School of the early 20th century, which was located within, and concentrated on, the epitome of industrialized, unicentric urbanization embedded within a largely national market. In many ways, the school arose as an attempt to make sense of the bewildering changes unfolding across the region as Los Angeles was repeatedly reconfigured by massive social, technological, and spatial changes, which were generating a new urban regime of accumulation. Rather than an exception to long-held norms of urban analysis, Los Angeles became the new template for understanding other cities. Thus, for Soja, in a line used often in his works, “it all comes together in L.A.”; that is, Los Angeles is the exemplar of contemporary capitalism in all its gory complexity. As the ideas of the Los Angeles School became increasingly important in the discipline, other urban areas began to be dissected in similar terms. While it does not constitute a homogeneous whole—some doubt even the existence of such a school—certain commonalities run throughout.

Central to this line of thought was the primacy of production systems as the core of urban analysis, in contrast to the privileged status of individual decision making and residential space in both social ecology and neoclassical economic analyses. Scott's work laid the ground conceptually for the idea of an urban division of labor organized around the input-output transactions of firms, which range from densely clustered, vertically integrated networks in the inner city to more dispersed, capital-intensive firms on the periphery. The historic shift into flexible production—a phenomenon identified rather early by some in the Los Angeles School—marked a significant transformation of firm organization and associated labor markets, ushering in broad-based changes in residential space, such as gentrification, and mounting social and spatial inequality, including homelessness. Intimately intertwined with this perspective was an account of the state, via various urban planning practices, as it accommodated the shifting imperatives of capital and sought to reign in the anarchy of the market. In this way, the Los Angeles School's view became an important stepping stone in the incorporation of regulation and regime theory, with close ties to subsequent work on world cities.

Moreover, this view noted, urban areas had become increasingly globalized—that is, situated within a worldwide division of labor or, more specifically, as a part of a global “necklace” of city-regions that propelled the international economy forward. Subsequent work elaborated on the role of interpersonal contact, face-to-face communications, and tacit knowledge in the creation of dense pools of firms locked into tightly bound networks. Firms and neighborhoods throughout Los Angeles, from the dream factories of Hollywood to the aerospace complex of Orange County to the immigrant clusters of Koreatown, were thus all simultaneously local and global, positioned between and across two scales that were more complementary than mutually exclusive.

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