Read an Excerpt
CHAPTER 1
The Marketplace
In English usage, the word market has long embodied two very different meanings: one having to do with an older, socially embedded place and the other referencing an abstract space of generalized exchange relations. This conceptual dichotomy — and, in particular, the emphasis on the relative autonomy and immateriality of the market space — is entirely modern, entangled within the same histories of commercial transformation that gave birth to new, more visible forms of property market organization. In medieval and early modern Europe, markets were fixed places, often marked by a cross in the center of towns and governed through dense social and cultural networks of ritual and custom. From the fifteenth century onward, however, the abstract market emerged, less as a place than a principle — a generalized encounter determined not by physical markers or local custom but, as Adam Smith would elaborate, by the opposition of competing self-interests. The very concept of modernity is often narrated through this historical parting of the ways between marketplaces and the growing dominance of market space across all fields of society.
In the nineteenth century, the distinction between the marketplace and market society lodged itself further in the differing epistemologies of modern social science. Economists like Antoine-Augustin Cournot developed mathematical expressions for supply and demand curves. Scholars of jurisprudence and comparative anthropology like Henry S. Maine examined the histories of marketplace institutions in village communities, and, as it happened, resituated them to the periphery of the modern world. Distinction also bred disdain: for Enlightenment thinkers like Smith, Jacques Turgot, and Nicolas de Condorcet, the marketplace was inherently vexatious, characterized by the corrupting interference of local corporations and government, a sclerotic burden on what might otherwise be a more rational form of economic calculation.
Even the most sympathetic treatments of the marketplace, such as those written on the "moral economy" of local market practices, have only reinforced a persistent binary logic between a socially embedded marketplace and an abstract market space defined purely in terms of a disinterested cash nexus. However, the effort to rid the market of its localism has never been completely successful, and critics of the market idea continue to point to the importance of social and spatial practices in situating the reification of market ideologies. The cultural meanings of market exchange may be more mobile and diffuse today than they were in the more strictly delimited practices of the medieval village marketplace, but they are no less dependent on or constitutive of these situated geographies of exchange. Thus, in considering the relationship between place and space in the configuration of the property market, this chapter begins with a set of seemingly straightforward questions about the geographical organization of property exchange in eighteenth- and nineteenth-century Britain, and particularly London: Where was property traded, how did the geographical organization of property exchange evolve over the course of the period, and what did such changes mean for understanding the property market?
My initial answer to these questions is that, while a significant portion of property transactions continued to be carried out in private — behind the hedgerows and office doors of estate owners and their solicitors — the public sale of property was transformed in ways that gave the property market greater coherence, meaning, and visibility. From the prevailing practice of private treaty sales and public auctions held in inns, taverns, and coffeehouses, metropolitan auctioneers and estate agents designed and constructed purpose-built spaces for property exchange, the most important being the London Auction Mart, first erected in 1808 and subsequently relocated to a new building in 1867. The auction mart provided a place in which to imagine a coherent and abstract market space; but this process was invariably a negotiated one, filled with the tensions and ambiguities associated with making marketable something as socially, politically, and culturally important as real estate. The auction mart created a spectacle of exchange comprising many different actors and observers, and its principles of bringing the market into the view of the public were eclipsed only at the turn of the nineteenth century, when the geography of property exchange proliferated into a kaleidoscope of suburban and provincial offices and salesrooms.
The Development of Property Auctions
Though it was built in the nineteenth century, the London Auction Mart had eighteenth-century origins. Its significance must be understood in the context of a broader transformation in British social and economic life that set the conditions for new commercial cultures and practices like public auctions, for new categories of marketable urban and suburban property and property buyers, and for new kinds of commercial and institutional spaces in London and elsewhere. This period was marked less by the overall growth in the quantity of goods consumed than by changes in taste, quality, and consumer demand; a nation of consumers became accustomed both to new goods and to new methods for marketing them. Commerce likewise depended on the greater movement of goods and people and the extension of social networks between individuals living and working across greater distances — be it within cities, or between city and country, London and provincial towns, or the metropole and its expanding imperial network. These changes also generated forms of economic abstraction that reconfigured how people thought about the economy and their own economic lives. In terms of real estate, urban development and the demand by new classes of investors further encouraged the use of commercial practices that could communicate information to a broader public. Commerce, finance, and empire all found institutional expression in the development of London, and, in particular, the City. London thrived as a central place of commercial and imperial power, and its institutional fabric reflected this in the design of new spaces like the Bank of England (opened in 1734, but greatly expanded under the design of Sir John Soane after 1788), the corn exchange (1749), the coal exchange (1770), the stock exchange (1801), and the auction mart.
From the late seventeenth century, auction sales developed as a popular institution of British commercial culture, though not one that was initially used for many real estate transactions. As Brian Cowan has noted, auctions were integral to the forms of genteel sociability that shaped British metropolitan consumer culture, but he also demonstrates that the overwhelming majority of public auction sales at this time — 88 percent, according to a survey of printed advertisements from the 1660s through the 1690s — concerned works of art and rare books. These were the sales "by candle" that took place in London's proliferating coffeehouse culture and that so fascinated contemporaries like Samuel Pepys, John Evelyn, and Robert Hooke. Auctions similarly linked and facilitated the movement between the expanding networks of British imperial trade and commerce; many of the great trading routes that fueled British expansion relied on auctions as the primary method of sale. This was true for slaves in the West Indies and the American colonies, for bulk imported goods carried back to London docks, and for the diverse and exotic luxuries made available in the metropolis through colonial trade.
Following the growing popularity of auctions for personal property, public sales of real property became more common from the mid-eighteenth century. Based on a survey of printed advertisements, Peter Ash established that the first auction of land or house property likely took place in the 1730s and was probably the work of the most prominent auctioneer of the day, Christopher Cock. Cock hosted auctions in his Covent Garden office, and, though he was initially known as a bookseller, one advertisement in the spring of 1739 included the sale of two houses among the other property being sold from a bankrupt tradesman. By the 1740s the same office routinely posted advertisements for the public sale of land and houses, along with continued sales of personal property. In 1766, when James Christie opened his great room in Pall Mall, he likewise featured auctions of landed estates and other real property. By the late eighteenth century, auctions — for real and personal property — had spread throughout the country and were so associated with the consumption of luxury goods as to become subject to state regulation. Under the Auction Duty Act of 1777 (17 Geo. 3, c. 50), taxes and license fees specifically distinguished between sales of real and personal property. Regulation played an important role in defining auctioneering as a distinct occupation, but so too did a process of specialization that resulted in auctioneers developing expertise in particular branches of trade. Thus, an article written for the Penny Magazine in 1844 observed that the "connoisseur in pictures and prints, goes his rounds regularly through one series of rooms. ... The book-collector has his special haunts. ... Furniture occupies the principal attention of a third class of auctioneers, carriages and horses of a fourth." Finally, there were "the mighty ones of the calling" — those who traded in estates.
Modern social theory argues that auction mechanisms flourish in social contexts where more heterogeneous populations no longer view traditional networks of privately exchanged information to be effective or reliable. As a general principle, this would suggest that the development of real estate auctions in late eighteenth-century Britain reflected a reconfiguration of exchange mechanisms, perhaps in response to uncertainty in the value of new forms of property or as a means of connecting more socially or geographically distant sellers and buyers. Neither of these was universally true, however, since private treaty remained the more common means of exchanging property. Indeed, there are many examples of large-estate owners trusting in private mechanisms to find buyers and negotiate market values, turning to public sales only as a last resort. When the London solicitor James Coulthard organized the sale of the third Duke of Chandos's Radnorshire estates in the early 1770s, for example, he combined the use of private networks of professional contacts with public printed advertisements, employing a competitive bidding mechanism and the threat of a public auction sale if the property (or portions of it) failed to attract interest. Sales of estates were also often driven by debt, and many families on both sides of an exchange preferred the less exposed and more trustworthy route of private negotiation. Suspicion over the public exposure of an auction sale persisted into the nineteenth century. When the solicitor in charge of selling the Rushall estate in Wiltshire wrote to the Duke of Wellington in 1837, he confided that the owner, Sir Edward Poole, feared an unsuccessful auction might depreciate the value of the estate. Asking about the advisability of an auction sale, the agent wrote, "I have no right to ask your opinion, but I should like to have it." Wellington declined to purchase the property, but it was ultimately advertised for sale at the auction mart the following year, suggesting that Poole and his lawyer overcame their initial hestitation.
In the case of the Rushall estate and for many others, public sales offered a valuable mechanism for attracting a diverse community of spectators and bidders. This was certainly true for the kind of large sales that drew national attention, such as one in 1824 that put Richard Arkwright into possession of Sutton Hall for £482,432 or one that enabled the Duke of Devonshire to sell his estate at Wetherby for £168,561. There is no historiographical consensus on the degree to which new wealth aspired to settle in estates, but it is clear that there were enough new purchasers from the ranks of urban business and professions to justify new marketing techniques. John Habakkuk has suggested a list of possible purchasers that includes returning nabobs, politicians, clergy, merchants, bankers, lawyers, West Indian planters, seamen, and industrialists. Moreover, the market for smaller properties was not necessarily less diverse, as B. A. Holderness has shown was the case in Lincolnshire, where a steady volume of smaller sales fed the demand of local farmers, regional merchants, and professionals, and even distant metropolitan investors. Auction sales contributed an important marketing mechanism to this process.
Auctions were also used for many different types of property, from very large estates to much smaller parcels generated through the breakup of estates and urban development. At the aforementioned auction of the market town of Wetherby, the Duke of Devonshire disposed of his nearly 1,500-acre estate in 170 lots of farm, residence, and commercial property; this kind of subdivision appears to have happened with greater frequency throughout the nineteenth century. "Experience goes to prove," stated one guide to estate management from 1868, "that, in disposing of any extensive estate to secure the largest price ... sell it in lots." The author gave the example of a small estate outside London, initially purchased for £1,600 but then broken up and sold in lots for a total of £21,980. Such subdivision often preceded more intensive urban expansion and development, though this process started well before the nineteenth century. For the counties surrounding London, land began to be subdivided into mini-estates for retiring professionals early in the eighteenth century. At this time, Daniel Defoe remarked on the many "handsome large houses" on the border of Essex. The growth of London thereafter generated new residential properties on planned estates in west London by the likes of Grosvenor, Portland, and Bedford, as well as speculative house building there and elsewhere across the city. Later in the nineteenth century, building societies and freehold land societies would also use auctions as a means of disposing of improved building lots.
The forces of estate improvement and urban development produced exactly the kind of property that was typically advertised for sale by auction in London around the time of the auction mart's construction. In a single issue of the Times from 1805, for example, the firm of Winstanley & Son advertised a wide range of upcoming real estate auctions, including the following: the 1,073-acre estate and manor of Warkworth in Northamptonshire, a mini-estate "in the Vicinity of Clapham" with a "New erected Villa" and fourteen acres of land, and a sale in multiple lots for a mix of freehold commercial property (shops and public houses) and dwelling houses situated on Bull Inn Court and Maiden Lane, the Strand. A week later, the father-and-son firm previewed another auction for a leasehold residence on 58 Gower Street, held by the Duke of Bedford on an eighty-two-year term. Elsewhere in the paper, a great many advertisements gestured to London's outward expansion, such as in the ad published for Allport & Son for a three-acre leasehold farm in Hackney, "eligible for carrying on the gardening business or [that] at any easy expence [sic] might be converted into a desirable residence for a genteel family," or another ad by Smith for a leasehold timber house and yard in nearby Hoxton, "well calculated for building a manufactory and dwelling-houses in a populous improving neighbourhood." Across the city — from residential villas to public houses and riverbank manufactories — auctions sales mobilized the commoditization of property by alerting prospective buyers to sales and convening them to negotiate values and prices.
Finally, though auction sales were used throughout Britain during this period and were regulated by similar laws, differences in practice were seen by some commentators to stifle the more widespread use of public sales outside England. In Scotland, for example, where auctions were commonly referred to as roups (and auctioneers known as roupers), the English practice of reserving a final bid for the seller was instead addressed through the use of upset prices, which often meant that properties started bidding at higher prices, thereby suppressing further competition. Bids for real property were also taken to be contractual in Scotland, even before the fall of the auctioneer's hammer, whereas in England they could be withdrawn in the course of the sale. The "English mode" further required an immediate deposit of 10 percent, which gave vendors insurance against phony bids as well as a means of paying any auction duties. Finally, the close of a public roup in Scotland offered little protection to anyone who may have offered an earlier bid, since, in the case of the highest bidder failing to complete the sale, the seller reserved the right to force a sale on the next highest offer. This last custom, complained one Scots commentator, was "a barbarous condition ... which would not be tolerated in England for one moment." As the same writer noted, none of these conditions were likely to have a noticeable impact on sales of larger estates; houses and other smaller properties were another matter.
(Continues…)
Excerpted from "Marketable Values"
by .
Copyright © 2018 The University of Chicago.
Excerpted by permission of The University of Chicago Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
