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By Brian Doucet
October 30, 2013
One hundred years ago, Detroit was the Silicon Valley of its day.
Entrepreneurs flocked to the city because it was at the cutting edge of
industrial innovation. Henry Ford perfected the assembly line,
unleashing a whole new mode of production. Mass migration followed and
made Detroit one of the fastest growing cities in the world. In the
post-war years, Detroiters enjoyed some of America’s best public schools
and had the nation’s highest rates of home ownership. Their city was
the flagship of America’s industrial power. By 1960, the population
reached almost two million.
So what happened to the one-time fourth largest city in the US, now bankrupt and home to under 700,000 people? Many accounts blame the recent economic and foreclosure crises and political mismanagement. It is very easy (and popular) to blame local Detroit politicians for what has happened to their city. But these accounts miss two important factors which the City of Detroit is little able to influence: wider structural trends of deindustrialisation and globalisation and extreme regional fragmentation which encourages sprawl and ensures that the wealth which does exist in Greater Detroit remains in the suburbs, rather than in the city.
Deindustrialisation has hit the Motor City harder than any other place on earth. It has been a long process; in his book The Origins of the Urban Crisis, historian Thomas Sugrue pointed out that tens of thousands of well-paying jobs were leaving the city as far back as the 1950s. One of the best accounts of the city’s fortunes is George Galster’s book Driving Detroit. In it, he states that between 1950 and 2005, the city lost 29% of its homes, 52% of its people, 55% of its jobs and 60% of its tax revenue. Since 2005, these numbers have all increased considerably. Most of this has simply been transferred to the suburbs. Given these dramatic statistics, how is a city supposed to function?
To illustrate the dramatic decline that has befallen Detroit, think of a city you know well. Then imagine that within a few decades, 65% of the population of that city has left. Of those who remain, close to half cannot read (which, since you are reading this, probably means you have left too) and 36% live below the poverty line. Within sixty years, the main economic activity has lost over 90% of its jobs. What would that mean for shops and amenities, public transport, municipal services, quality of live in neighbourhoods, crime and other key factors which are important to cities? If you can picture this in your favourite city, you get a pretty good indication of what happened to the ‘Paris of the Midwest.’ You can also imagine the virtually impossible task of trying to run such a city without incurring huge debts and debilitating cuts to services.
Many people in the rest of America and in Europe look at the Motor
City and say ‘that can’t happen to us.’ They point to Detroit’s long
history of troubled race relations, which stands out even among American
cities. And compared to their European counterparts, American cities
rely far more on their own tax bases, without pooling or redistributing
resources. This means that a sharp loss of jobs or people can have far
more catastrophic consequences for the provision of services and the
fiscal health of a city than in other countries. This is exacerbated by
the extreme fragmentation of American metropolitan regions, which are
comprised of dozens, or even hundreds of separate municipalities who
fund their own schools, libraries and police departments. While Detroit
is bankrupt, there is a lot of wealth in Greater Detroit; the suburb of
Bloomfield Hills is among the wealthiest communities in America. But
virtually none of this wealth is shared with the City of Detroit. The
suburbs keep growing; they rely on growth and sprawl to fund their
services. Yet the entire region has remained stagnant for over four
decades, with a total population of around 4.2 million. Growth on the
urban fringes of a region which is not growing results in abandonment in
its core; between 1970 and 2000, 160,000 homes were abandoned in the
City of Detroit. This is not a uniquely Detroit issue: in America, each
jurisdiction is forced to fend for itself and the result is city pitted
against suburb and as sprawl continues unchecked we increasingly see
older, inner-suburbs pitted against newer ones.
While European cities and regions have different governance models
which pool resources, plan at a regional level and ensure that at least
some wealth is redistributed, this does not exempt them from feeling the
effects of wider structural trends in the economy. Deindustialisation
has hit many European, particularly British cities, hard. In Europe, the
stronger role of the state in providing welfare and redistributing
wealth from rich to poor regions mean that the overall impact of these
structural economic changes have been less extreme than in American
cities. But even in many European countries, the state is withdrawing
from these functions leaving people and cities to fend for themselves
more and more. In countries such as the UK and the Netherlands, policies
now focus more on strengthening core regions such as London and
Amsterdam, rather than aiming to redistribute wealth across the country.
In this regard, the differences between Europe and America are
decreasing.
Detroit’s key lesson should not be focused on political
mismanagement, its combative labour relations or even regional
fragmentation. These factors have made Detroit’s situation direr, but
they are not the root cause of its bankruptcy. Detroit offers the world a
cautionary tale as to what happens when a place loses its economic
reason for existing and what happens when the economic activity which
created so much wealth disappears within a few decades. Detroit was
built on the mass production of cars. That mass production now requires
far fewer workers and is no longer geographically concentrated in
Detroit. These structural changes, far more than anything else, lie at
the root of the city’s current predicament.
While most visible today in old industrial cities such as Liverpool
or Newcastle, Detroit’s lessons have resonance with all cities. Think
of how important the financial services industry is to today’s
wealthiest cities. New York, London, and Frankfurt are all global
leaders of the post-industrial era in the same way that Detroit,
Manchester and Germany’s Ruhr valley were in the industrial era. What
would happen to these cities if globalisation caused the centre of the
financial industry to shift towards China or the Gulf States? Stating
that could never happen is similar to a 1960s Detroiter proclaiming that
cars would never be made Japan, Korea or the American South.
Any place that puts all of its economic eggs in one basket runs the
risk of losing its wealth if the forces which brought about that
prosperity change and they are unable to adapt to meet that change. That
holds true as much for today’s economy as it did in the industrial era.
Detroit excelled at one thing – making cars – much the way Silicon
Valley today leads the world in developing computer technology. Any
real, long-term solutions to Detroit’s woes will require two key
factors. First, a structural readjustment of the city’s economic base
which provides good jobs to large numbers of people. The creative
businesses which people such as Richard Florida have been celebrating in
Downtown and Midtown Detroit are a small start; but they have very
little impact on the bulk of the city which hasn’t seen the arrival of
the ‘creative class.’ Real solutions will need to address these areas,
too. Second, some sort of regional planning and coordination to
redistribute wealth across the region. This will also need to curb the
sprawl at the region’s edges which are responsible for the abandonment
at its core. This is unlikely to happen anytime soon as many
suburbanites are reluctant to ‘bail out,’ as they see it, the city they
fled years ago.
While Detroit offers us an extreme example of deindustrialisation
and regional fragmentation, it is by no means unique. The paths that
Detroit takes over the coming years will influence other cities around
the world as they struggle with these issues themselves. Finally, for
those who say that such a decline could never happen to us, Detroit’s
lesson should not be to look at how poor and bankrupt it now is: it
should be to look at how cutting-edge, innovative and prosperous it was
only a short time ago.
Figure 1. The Packard Plant represents
Detroit’s structural economic changes. It, and hundreds of other
factories like it lie vacant as the forces of globalisation and
deindustrialisation hit Detroit harder than any other city on earth.
Figure 2. Much of Detroit looks like this; one third of the city is vacant. Any real solutions for Detroit’s problems will need to find ways of using this space, too. Dubois and Wilkins on the east side.
Figure 3. Sprawl at the edges of Greater Detroit, a region which
has not grown in over forty years. Growth at the fringes of the region
leads to abandonment of its core.