Detroit Should be Left to Its Own Vices

ImagePoor Detroit! It has made news again—and not for good things.

Governor Rick Snyder has appointed Kevin Orr, an emergency manager, to save the city from itself.

It’s possible that the Governor could have found someone more remote, but he also would have had to find someone from the outside. Is no one in the state beyond reproach or suspicion?

The fact that the implementation of an emergency manager is not racially motivated does not mean that it’s not color blind. The best thing that can be said of Orr’s appointment is that it’s cynical.

But the appointment doesn’t smack of illegitimacy as much as it smacks of paternalism. Detroit doesn’t need any big ideas. And it certainly doesn’t need any new ideas. Detroit doesn’t need an emergency manager; it probably doesn’t even need a mayor. What it needs is less government—and more civil society. The appointment runs afoul of democratic procedures, to be sure. But it’s also bad economics.

No one in the state knows more about what Detroit needs than the people who live there. But rather than support the good works that the existing institutions and organizations are doing, officeholders are seeking to supplant them. And, somewhat counterintuitively, outside investment and federal aid can even make the problem worse. In short, Detroit is in serious need of some bottom-up growth. It might be slower and not as dynamic; it might not even be pretty. But its genuineness could give it staying power. It must grow on its own terms.

In the parlance of economic development, Detroit has slipped into the Second World or what some call the semi-periphery. Detroit’s greatest asset is also now its greatest liability: geography. It is in the United States. It is, in the language of political economist Robert Gilpin, “weak in a world of the strong.”

Were it elsewhere, its institutions might have the autonomy to take root and develop and the people who live there might have an opportunity to establish an common identity and a sense of community, which might come at the exclusion of others and cannot be forced onto a people, however dire their circumstances. You cannot force a people to be free any more you can force a people to like each other.

Adding an additional layer of bureaucracy and politicized accountability onto flawed but existing institutions will do nothing to bring the city into the 20th century, to say nothing about the 21st.

Small businesses and community groups are the solution–and the only solution. You can’t create the markets necessary for development, but there is no need to do so—they either come on their own or not at all.

The automobile was the best and worst thing that ever happened to Detroit. Schumpeter described capitalism as “creative destruction.” And Detroit, once a shining beacon of the former, has borne the brunt of the later.

To his credit, Orr is a business leader. But government is not business. No one should want a government that is run like a company. Orr is either a fool for thinking he can make a difference, or he’s blameworthy for taking the easy money.

The best argument for an emergency manager is that Lansing is too removed from the problems to make a difference. If Orr does nothing, he will have earned his $275,000 salary.

If the road to hell is paved with good intentions, then that road is starting to look a lot like I-96.