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A Building Problem

I’ve been interested in construction ever since I did a single day working as a labourer. I was doing the cement for a small project. That meant standing in the sun for hour after hour mixing and barrowing more than 1.7 tonnes of cement. It was brutal work. When I got home at the end of the day the lime had eaten through my skin. I got paid £50 – which wasn’t much, even nine years ago. I didn’t go back.

In preparation for an episode of Workers’ Inquiry, the podcast hosted by Notes From Below, I went down the rabbit hole on the Labour promise to build 1.5 million homes by 2029. I’ve collected some of the most useful results here, in the hope that they provide a starting point for someone else. If you work in construction and want to make something exploring the industry from your perspective, please do get in touch with NFB.

I’ve been interested in construction ever since I did a single day working as a labourer. I was doing the cement for a small project. That meant standing in the sun for hour after hour mixing and barrowing more than 1.7 tonnes of cement. It was brutal work. When I got home at the end of the day the lime had eaten through my skin. As far as I remember, I got paid £50 cash – which wasn’t much, even nine years ago. I didn’t go back.

Labour like this is the unseen prerequisite for Starmer’s promise to get the private sector to build 1.5 million new houses. It’s funny how we talk about companies ‘building’ houses – companies don’t barrow cement or lay bricks. But semantics aside, Labour wants to unleash the animal spirits of construction by removing planning restrictions. The hope seems to be that this acts as a kind of crypto-Keynesian generator of effective demand. 300,000 homes a year means lots of people working on sites, lots of materials and commodities being produced in the supply chain, and (they hope) falling housing costs. Falling housing costs seems to be a critical part of what the government is looking for out of this process, because a) they think it will create a new layer of young homeowners loyal to the ‘pro-growth’ vision of social democracy (a kind of pathetic echo of Thatcher’s strategy with right-to-buy) and b) because lower rents act to effective increase real wages. Lower rents feed through into higher elastic consumption budgets for the working class, thereby stimulating industries like hospitality. You can see why a Labour government incapable of any kind of meaningful transformation of the balance of class forces in Britain might grasp at this particular straw.

 The housing crisis continues to hit the working class in the pocket. In 69% of local authorities a healthcare assistant would have to spend more than 30% of their income to rent a one bed property. Housing costs are a significant reason for the constant upwards pressure on the minimum wage that is squeezing margins across the service sector. Average rents are no longer surging at 10%+ per year, but they remain above 4%.

The Corn Laws are a much-quoted example of how cutting subsistence costs for the working class by using the state against the landlord class can produce an alliance between the bourgeoise engaged in labour-intensive production and the working class. There’s an obvious analogy here: Labour could form an alliance with elements of capital (construction firms, major employers) to raise living standards for much of their electoral base by increasing housing supply and papering over some of the cracks revealed by the housing crisis. But the engine of the construction industry is sputtering.

Take a look at the monthly releases of the S&P Global UK Construction Purchasing Managers’ index, and you won’t find an industry roaring into life. The index is constructed by asking construction managers what’s going on at their firms. In February the index reported housebuilding activity was falling at the fastest rate since earl 2009, in the early days of the financial crisis. The trend continued in March. By April the index was reporting: “a reduction in staffing numbers for the third consecutive month. The rate of job shedding was the steepest since October 2020. Subcontractor usage also decreased at a solid pace in March, while construction companies reported further cutbacks to their input buying in response to lower workloads.” May extended that record to make it four consecutive months of job shedding.

Rather than speeding up, the construction industry is pumping the brakes. Citing weak ‘consumer confidence’ and rising input costs (read: the return of inflation in the supply chain), they are mothballing projects. Housebuilding in particular is highly cyclical – no company wants to be left with a lot of stock on their hands when a recession hits. The whole thing is a game of musical chairs, with firms trying to match their supply pipeline with what demand will look like when those projects reach completion.

The rate of construction Labour wants to see was last hit in the late 60s, early 70s. Only, the market never achieved anything like those numbers. Even in an economy characterised by higher rates of economic growth, the state was still building 40%+ of those homes, or over 140,000 a year in absolute terms.

It would be wildly optimistic to expect capital to double its production volumes even in a boom period, let alone a conjuncture characterised by the seemingly secular slowdown in growth rates and frequent bouts of economic turbulence.

But even if 300,000 new homes a year a built the OBR predicts it would only lower house prices by 0.8%. The effects on the rental market are even more diffuse. So, it seems both unlikely that these 300,000 houses a year could be produced, and then even more unlikely that they would have the intended effect of ameliorating the housing crisis. Take just one example of what’s happening to many of these new single family homes: private equity is buying up more than £2 billion annually with an eye to taking a dominant position in the rental market. Rather than forming a cross-class alliance corn law style with the intention of mitigating the housing crisis, these elements of financial capital are piling into landlordism to make a profit from it.

One of the key limitations to any prospective boom is labour availability. The sector is short approximately 200,000 construction workers, and the people doing the work at the moment are ageing rapidly. The Department For Education is bricking it (pun intended) and looking for workers to fill this gap in the wake of EU migration. You can read their latest report here – it’s a bit thin. There is no real plan to ameliorate this shortage given the anti-migration stance of all the major parties. Bourgeois politics is increasingly tied up in contradictions on the question of migration and labour supply.

If there aren’t enough workers in the industry and they’re getting older, one obvious solution for capital would be to raise productivity per worker. More houses produced by fewer people means a smaller workforce isn’t such an issue. But the trend is heading in the opposite direction. Multi factor productivity for construction has actually been falling over time:

The solution? A reorganisation of production. Now we can see a new wave of potential deskilling on the horizon. The use of modular timber building techniques (with brick-style wallpaper – and no that is not a joke) and automated construction techniques looms over this workforce shortage.  Technology isn’t a neutral player in the class struggle.  

“The 2D method was on display at the Derby factory of Oregon Timber Frame, which supplied the Cotgrave development. Timbers are cut and nailed together in panels up to 10 metres long down three production lines, according to detailed instructions given on computer screens. Computer-guided metal stops and rollers ensure the frames are square and correctly positioned, while a menacing-looking automatic nailing machine assists with the more intensive steps, such as attaching the boards to the outside of the frame. At full capacity, about 200 workers can produce the timber structure for 32 houses every day, which are flat-packed on to lorries like sophisticated Ikea kits — complete with a labelled box of bolts and fittings. Once delivered to the development site, a timber frame house usually takes between 12 and 14 weeks to finish, compared with 20 for traditional masonry construction.”

Some construction firms claim to be aiming for 30% timber construction by 2030. Who knows if they will actually end up pouring fixed capital into the supply chains required to produce prefab housing on this scale given the threat of recessions leaving much of this capital sitting idle – but the possibility is there. If building is to accelerate (and it’s a big if) then changes like this would be needed to get anywhere near that 300,000 target - and that could shift the balance of forces between classes.

A call for inquiry

In all of this discussion I worry the labour of building has become a bit obscure again. With a few more abstract analyses we could be back to thinking about capital as the agent producing houses.

I haven’t done the work required to present anything more than notes on struggle in the industry here. But I do want to share a few resources that help us understand how workers have fought in construction historically, and what the experience of work looks like in parts of the industry today. Building the bridges between the initial diagnosis presented above and the balance of class forces in the workplace is clearly the fundamental task. If you want to do that work, get in touch.  

(If you need help finding a PDF of any of these, drop me an email)

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Platform Capital Sclerosis

As of today, Tuesday 6th May, Deliveroo has been acquired by Doordash in a deal worth £2.9 billion. Having written about Deliveroo and the struggles of platform workers for almost a decade now, I thought it might be useful to offer some brief contextual thoughts on what the deal represents, and more importantly, what it might mean for the people dragging burgers across London and New York for poverty wages.

As of today, Tuesday 6th May, Deliveroo has been acquired by Doordash in a deal worth £2.9 billion. Having written about Deliveroo and the struggles of platform workers for almost a decade now, I thought it might be useful to offer some brief contextual thoughts on what the deal represents, and more importantly, what it might mean for the people dragging burgers across London and New York for poverty wages.

Doordash is the largest US food delivery platform. It has a capitalisation of $87 billion and controls more than two thirds of the US market.

 Its origin story is so Silicon Valley that it verges on parody. In 2013, three Stanford students set up PaloAltoDelivery.com, and before long they had seed backing from infamous venture capital fund Y Combinator. (For more on the Silicon Valley ecosystem, see Malcom Harris’ magisterial Palo Alto, for more on the structural power and history of venture capital see here and here). By 2019 the platform was the biggest in the US, and in 2020 the company went public with a $3.37 billion IPO. The platform made its first annual profit in 2024. Its list of shareholders reflects the role of US based asset managers in pooling the common stock of the capitalist class. Major institutional shareholders include Vanguard at 9.98%, BlackRock at 6.10%, and Morgan Stanley at 4.80% and the Singapore state wealth fund at 4.86%.

So far, so generic. The model was the same as every other food delivery platform: get venture funding, absorb massive losses to grow market share, gradually drive down delivery worker wages, weather their strikes and protests, extract rents from restaurants, speculate about the automation of food production as a pathway to profitability – whilst actually becoming profitable through hyper exploitation of precarious migrant workers. This is all relatively familiar to anyone who has spent time thinking and reading about the dynamics of platform capitalism.

The new element of the story that Doodash begins to tell is how the monopolistic tendency of platform capitalism plays out on a global scale. Like many platforms, it has attempted to internationalise through direct market entry. But it has also used acquisitions to enter markets without the need to fight existing local platforms for dominance. In 2022, Doordash bought Wolt, a Finnish platform operating in 25 countries (primarily across Scandinavia and Eastern Europe.)  

Deliveroo has become the next target for acquisition shortly after posting its own first annual profit. But as the FT’s Lex put it, the platform’s lack of deep-rooted domination in any one market made it ripe for a takeover: “This is a market for deep-pocketed duopolies, not for those ranked third or fourth. Growth is thus about empire building: collecting top slots in as many jurisdictions as possible.”

In any one national market, platforms act as desperate wannabe monopolies. The whole industry lives and dies by Peter Thiel’s rule that “competition is for losers.” They are willing to burn $20 billion plus to take control of a market. Dirty tricks are part of the game. In a 2024 case, Uber claimed Doordash had “coerced restaurants into working exclusively with them by threatening to issue penalties or demote restaurants in the DoorDash app.”

But increasingly the apps are becoming profitable. As market share becomes consolidated, capital valorisation is no longer a distant future prospect. It is interesting to compare how the platform founders used to say they would become profitable with the reality. Early investors were seduced with dreams of automated food production and delivery – but actual profits have only been reached when hyper exploited migrant labourers have had their wages forced down to below subsistence levels. This is not high-tech production, it’s algorithmically-enabled sweated labour.

Platform workers have repeatedly shown that they are very able to contest this exploitation. Massive mobilisations have been achieved over and over again - the challenge they continue to face is creating a form of collective organisation that can endure from once cycle of struggle to the next. There are no simple answers to that challenge.

It strikes me that food delivery platforms represent a mode of operation somewhat analogous to the emerging Trumpian political economy. US-based firms are using their resources to stake out territory in a global marketplace defined by the constant looming threat of economic contraction and declining ‘consumer confidence’. They are engaged in a zero sum fight to the death, grappling with each other to find whatever advantage they can. Jamie Merchant’s excellent Endgame, which diagnosed the economic nationalist turn well in advance of events, offers us a way to think about how this competition might play out.

Needless to say, platform capital is not a dynamic global force that could lead to a revival of capital’s fortunes. These platforms extract rent from existing industries and hyper exploit urban surplus populations by using technology to accelerate the informalisation of labour. The colossal valuations of firms like these represents something like the nihilism of the contemporary ruling class. They know this system is rotten, and yet they continue to pump it for all its worth. As Adorno put it, “the bourgeoise live on, like spectres threatening doom.”

The only way to escape that doom is through struggle. Start climbing. One way out!  

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