After the war the city built back bigger, bringing unexpected gains
hard to see why bombings are bad for business: as well as inflicting a tragic human cost, prolonged air raids tend to displace workers and destroy infrastructure, bringing even a buzzing economy to its knees. But according to a duo of economists, what happens in the decades after is worth a closer look.
When Gerard Dericks of Oxford Brookes University and Hans Koster of Vrije Universiteit Amsterdam studied the economic effect of Nazi Germany’s prolonged bombing campaign on London during the second world war, they discovered something counterintuitive. After much of the city was razed, London built back bigger. That supercharged the city’s economy in the long run.
London has never been built according to an ordered plan, like Haussmann’s Paris or Le Corbusier’s Chandigarh. After the great fire of 1666 Christopher Wren proposed a new European-style layout built around grand intersecting avenues. Londoners thumbed their noses at his continental vision: they built back pretty much as things were before. Similarly, the Blitz did not transform the map of the city.
The clusters that were energised by this—finance in the City, law in Holborn and Clerkenwell and private equity in the West End, to name a few—saw huge financial returns. High office rents reflect firms’ hunger for being in a hub. Those benefits are so concentrated that the economists estimate that just a three-minute walk outside a cluster the agglomeration effect nearly vanishes.
Were it not for the buildings and businesses that shot up in the decades after the bombings, London’s gross domestic product would be 10% smaller, equivalent to a loss of £64bn per year in today’s money.
Belgique Dernières Nouvelles, Belgique Actualités
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