PS16 Architectures of Finance: Commodities, Securities, and Urban Space

In the last hundred years the architecture of finance has taken on a distinctive form: the banking network.  Shaped by advances in communication technology, financial space has shifted from a series of fixed, local points to a network that transcends time and space. It is physically anchored by buildings and linked by webs of wires.  The network is both rooted and dynamic, simultaneously material and virtual.  In this paper, I argue for analysis of the architecture of finance, not through individual structures or even districts, but as larger designed networks. My focus is on the origins of the central banking systems in the United States.

In the late-nineteenth and early-twentieth centuries the economic geography of the United States underwent fundamental transformation through westward expansion and urbanization. The flow of capital across great distances was essential to commerce, manufacturing, agriculture, and extraction. In response bankers in large cities established clearing-houses and correspondent relationships to stitch local bankers and businessmen into the larger, central systems of exchange and credit. By 1914 these private arrangements were replaced by the Federal Reserve System, which distributed linked branches across the nation to centralize and rationalize capital flows.

This centralization was possible because of the new transportation and communication infrastructure: railroads and telegraphic wire services. My presentation will analyze the material and virtual elements that linked banking centers to each other and to thousands of points in between. This includes the special cars and equipment of the Railway Mail service, the architecture and design of the telegraphic system, plans of clearing-houses, and the integration of new technologies into bank buildings. Such back-office infrastructure was a fundamental component of the networked architecture of finance then, as it is now.

Scholars have identified a process of financialization in the global economy that is defined either by scale (sector, firm, household), or by transitions to finance-centered strategies in firms, or by an increase in rhetoric around shareholder value. Financialization, in these analyses, is best understood by putting finance at the center of a political economy lens. Real estate was drawn into the financialization of the economy in large part through a device known as a Real Estate Investment Trust (REIT), created in 1960 in part to make investing in real estate more like investing in the stock market. Beyond the simple financialization of the economy that real estate participated in, the REIT also allowed for securitization (a concept best known through mortgage-backed securities). Risk is divided over a group of properties, to a group of investors. Syndicates, trusts, and REITs represent a phase of financing for construction and buildings that scholars have yet to unpack. This paper looks to position these devices in both the context of the history of finance and of architecture and urban space to understand the relationship between architecture and finance. Did the REIT produce a new kind of client? A new kind of city?

During the years of U.S. federal urban renewal that followed World War II, life insurance companies invested in new construction projects in American downtowns. In studying this, scholars have looked at the urban and architectural results of changes in financing. The REIT, as a new financing device, opens up an accompanying set of questions. What impact did REITs have on buildings and urban space? What special interests did REIT managers bring to a building or neighborhood? What did the REIT do to the cultural economy of real estate investing in the 1970s and 1980s?

In 1975, a new headquarters was established in Ipswich, England for the preeminent British insurance brokerage Willis, Faber & Dumas, which underwrote global ventures related to construction, energy, and aerospace technologies, and also traded in more convoluted processes of mutualized risk management. Quite consciously situated outside the country’s teeming financial center in the City of London, the new low-profile glass-skinned headquarters building also turned inwards against its immediate surrounds in the Suffolk market town. Designed by Foster Associates, the building’s deep-plan, fully air-conditioned interior presented a paradigm of productive space that combined principles of spatial flexibility in landscape office planning, techniques of environmental management, and the insertion of amenities intended to gratify the workforce.

There was a paradox between the cool world of financial services and the building’s pleasurable interior; cut off from the city at large, this space was intended to enhance communication, social relations, and worker comfort in the service of company operations. At the same time, the tranquil air of this self-contained social sphere counterposed the externalities of widespread social and political instability in the United Kingdom during the period. Inflation, unemployment, labor strikes and energy shortages—which led to the declaration of a national state of emergency during the headquarters’ construction—precipitated a general climate of discontent. The building employed various globalized techniques of production, assembly, and management to generate a form of enclosure that through its pristine material composition and its highly regulated interior environment precisely repelled the disarray in domestic circumstances beyond its sleek, reflective glass walls. Turning its back on the city to create a clean, bright, alternative domain, the headquarters was a local instantiation of the increasingly prevalent severance of the space of financial interest from the public realm in sites worldwide.

It is well known that cities played an active role in absorbing and managing surplus in the long 19^th century—a period of capitalist expansion underwritten by imperialism. Less well understood is the salience of the city in elaborating theories of the death of capitalism during the interwar period. Focusing on the Cité Mondiale proposed by the Belgian pacifist Paul Otlet in partnership with Le Corbusier between 1927 and 1933, this paper argues that the creation of new forms of negotiable debt to privately finance the development of garden suburbs after 1919 had the ironic effect of conjuring an alternative to capitalism. In place of capitalism, which was prone to overproduction as a result of the capitalist’s perpetual search for profits, Otlet imagined that production and consumption could be regulated by the agency of finance capital. He saw private borrowing, particularly from foreign creditors, as having a disciplining effect on producers and consumers, ridding them of the baser appetites and irrational drives that fuelled capitalism, thus allowing for a new mode of production to take hold. Spatially, this was to be achieved by laying out a garden suburb on the periphery of the Cité Mondiale, creating a source of municipal revenue to back bonds sold to national governments and private investors. Examining the configuration of the Cité Mondiale as a promissory note, this paper exposes how Otlet anchored the financialization of the globe in the fiscalization of land, and provides a new genealogy for the hegemony of global finance.