With the collapse of investment banker Lehman Brothers last month, the fearful imaginings of the media pundits peaked. BBC Radio 4 imagined another Wall Street Crash, focused on US and Asian finance markets.
Of course, this 21st century financial turmoil is not going to result in anything resembling the Great Depression of the 1930s. Yet even if the economy does falter, the experience of 80 years ago suggests there could be an upside for those with the funds to commission the British construction industry.
Take the story of the Empire State Building. On 23 October 1929, frantic selling began at the New York Stock Exchange. President Herbert Hoover offered reassurances on the “fundamentals” of the American economy, but the next day the stock market crashed. Ruination of manufacturing and unemployment threatened.
Construction activity in New York was down 50% in a year, with construction workers having half the chance of finding a job, on reducing rates. The architectural and engineering staff fared no better, and the 1931 lyrics of Yip Harburg allowed Bing Crosby to express the frustration of the workforce:
Once I built a tower, up to the sun, brick, and rivet, and lime; Once I built a tower, now it's done. Brother, can you spare a dime?
A lack of work on completion faced those constructing the Empire State Building, but that never slowed them down. John Tauranac’s The Empire State Building – The Making of a Landmark reveals how important it was at a time of political and economic crisis to build with ambition.
That took leadership and shared purpose. The developers were led by John Raskob, who had popularised the selling of cars on affordable financial credit through General Motors. They were the kind of developers who wanted an architectural and engineering triumph to operate as an asset, not another skyscraper to sell to landlords. They illustrate Kenneth Frampton’s point in Modern Architecture – A Critical History. Informed, committed clients are essential to the advance of architectural culture.
The owner-developers and their capable consultants needed an excellent builder. Starrett Bros & Eken had a reputation for getting things done well. They organised their subcontractors into a commercial club to co-ordinate everything down to details. All work was designed and sequenced to a programme before getting to site. After the Wall Street Crash, prices got a lot keener, but the team’s ambition was strengthened, not weakened.
Work on site started four months after the crash, and the Empire State Building opened on 1 May 1931. The landmark they built was a bargain, but far-sighted commercial leaders like Raskob were exceptions. Then, as now, most commercial developers planning speculative projects chose to sit on their funds. They let the competitive momentum that often drives productivity increases in other industries go to waste.
In the US of the 1930s it was Hoover who built public infrastructure, hoping to soften the depression. The make-work schemes were inadequate then. Now, credit crunch Britain cannot afford a publicly funded construction industry. Alistair Darling has not got a Treasury dime to spare to fund construction, even if he thought it worthwhile. These days, even the Building Schools for the Future programme and private finance initiative hospitals are dependent on funds from the City, underwritten by the Treasury.
Neither is the government likely to pump extra money into public sector housebuilding to make construction work. To do so would further destabilise the private housing market, and risk the £1.2 trillion of existing mortgage lending from the City that is still secured against inflated house prices.
If only there were decisive developers like Raskob around today. Obviously no developer ever has a dime to spare for the construction operatives they need. Yet developers have the freedom to decide when to use the funds they have accumulated, or can gain access to. Today, British developers could be building great architecture at bargain prices.
And like Raskob, those with funding to spare today could take the risk of consolidating the construction industry in ways that improve co-ordination in production. If the benefits of tight co-ordination between contractors, consultants and suppliers were obvious in 1929, they should be blindingly clear in 2008. Developers should be ashamed when now they fail to spare a dime to advance the construction industry, on and off site.
Ian Abley is an architect and runs www.audacity.org