Towards a human-centric capitalism in cities

26 May 2023
Capitalism needs reforming to ensure market is freed from corporate abuse, says smart cities adviser and DHB Holding CEO Omar Delawar


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Capitalism is an economic and political system that values private ownership and wealth accumulation through market competition. It has been the dominant economic system in the world for the past few centuries and is often touted as the engine of innovation and growth. 

In an article titled Rulers of the World: Read Karl Marx, The Economist magazine (2018) argues that many of the expectations and urgent warnings outlined by Karl Marx in his critiques of capitalism are now valid and even prescient. 

Capitalism impacts city designs by creating social and economic inequalities. Marx’s theory argues that capitalism exploits workers and concentrates wealth and power in the hands of a small group of capitalists.

In cities, this gives economic power and influence to developers, corporations and other actors who prioritise profit over the needs and wellbeing of the community. 

Marx critiques the commodification of space and the transformation of cities into sites of capital accumulation. He argues that under capitalism, space and land are commodities to be bought, sold and developed for profit rather than resources managed for the public good.

This has led to the displacement of communities, the destruction of natural environments and the prioritisation of private interests.

Cons of capitalism

Under industrial capitalism, the rise of manufacturing and industry led to the growth of cities and development of new forms of infrastructure, such as factories, railroads and tenement housing. The design of cities under industrial capitalism was often driven by the need to accommodate large numbers of workers and to facilitate the movement of goods and raw materials.

Financial capitalism has led to the rise of global financial centres, with the needs and desires of the financial elite shaping urban landscapes. Financial centres such as New York and London are characterised by their towering skyscrapers, luxury housing and other forms of infrastructure that cater to the wealthy.

Architects and urban planners can work alongside economists for a better urban future by achieving a public-private balance in cities

The effects of capitalism on cities can be conveyed as follows.

> Urban sprawl 

The pursuit of profit and competition has led to low-density, single-use zoning in suburban areas, which offer developers cheaper land and lower taxes than city centres. This has resulted in the spread of suburban development further away from the city centre. 

The impact of this sprawl on cities has been significant. The cost of providing infrastructure and public services, such as roads, schools and public transport, to low-density suburban areas has strained municipal budgets. Furthermore, the suburban sprawl has led to increased traffic congestion, air pollution and longer commute times, contributing to a lower quality of life for residents.

Segregation by income 

Developers and city planners often prioritise projects that will generate the most profit, such as high-end luxury apartments or commercial properties, over projects that would benefit the community as a whole, such as public parks or affordable housing. As a result, cities become segregated by income, with the wealthy living in luxury high-rises and the working class struggling to find affordable housing.

Car-centric urban designs 

Affordable car prices and available bank loans have incentivised people to buy cars. This trend has resulted in air pollution, traffic congestion and a deficiency in public transport.

Studies have shown that up to 50 per cent of the urban landscape is dedicated to roads, highways and parking lots in some cities.

These outcomes have detrimental effects on the environment, create a physical divide between individuals and their surroundings, and diminish the quality of public spaces. Pedestrians must navigate busy streets instead of enjoying a walkable city.


Under modern capitalist principles, pursuing profit has encouraged the privatisation of public services including transportation, water supply and waste management. Privatisation often leads to higher consumer costs and decreased access to services, particularly for marginalised communities.

Additionally, capitalism has encouraged the privatisation of public spaces such as parks, plazas and other open spaces, leading to a loss of access for the public.

Privatisation can also erode democratic decision-making processes. Public services and spaces that are privatised are often governed by corporate interests, with little public input or accountability.


Gentrification is when wealthy individuals and businesses move into low-income areas, driving up property values and displacing long-time residents. Capitalist principles drive gentrification as developers and investors capitalise on undervalued neighbourhoods. Gentrification can lead to the loss of cultural heritage and displacement of working-class and minority communities.

Financial centres

When a city attracts millionaires, it can increase demand for luxury properties, inflating prices. The presence of millionaires can also lead to the financialisation of the real estate market, where properties are treated as financial assets rather than as homes for people. This can result in the commodification of housing and the prioritisation of profit over the needs of residents. 

Positive impact of capitalism on the development of smart cities

Despite the adverse effects of capitalism on cities, it would be imprudent to overlook its favourable impacts

Capitalism plays a pivotal role in fostering innovation and investment, which has resulted in new technologies and solutions that have significantly improved the quality of life for city residents. 

Additionally, capitalism can drive economic growth, which can lead to the availability of more resources for investment in smart city initiatives.

Furthermore, capitalism is often associated with efficiency, which can help smart cities to optimise resource utilisation and enhance service delivery to their inhabitants.

As professionals in architecture and urban planning, we are responsible for advocating for a more equitable and sustainable model of urban development that prioritises the needs of all residents and the environment over the interests of the wealthy few.

While urban planners and architects may not be able to solve this issue alone, they can work alongside economists for a better urban future by achieving a public-private balance in cities. 

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