Executive Intelligence Review
This article appears in the April 23, 2004 issue of Executive Intelligence Review.

Death of Detroit:
Harbinger of Collapse of
Deindustrialized America

by Richard Freeman

[Note: The graphics referred to in this article are available to subscribers to Electronic Intelligence Weekly.]

Observing the death of Detroit, as it shrinks into oblivion and its citizens are ravaged, one is struck by a fundamental transformation: In the period 1940 through 1963, Detroit was the greatest manufacturing city in the world, unmatched in real physical productivity. But during the period 1964-2004, Detroit became synonymous with blight and decay beyond imagination.

Detroit represents the warring counterposition of two economic trajectories: that of 1933-63; and its opposite, that of 1964-2004. These two trajectories derive from two absolutely irreconcilable economic systems and principles. It is the fight between these two trajectories, and the underlying systems and axioms of thought upon which they are based, that defines the history of Detroit, and of the larger United States. It is that history, of two different transformations—one of development and one of degradation—that every citizen must understand, if he or she is to comprehend what the United States has been, and the dangerous path it is now rushing upon, which will lead to its destruction and potentially take down the world with it.

To measure whether an economic trajectory is developing or degrading, start with the concept of potential relative population density, developed by 2004 Presidential candidate and economist Lyndon LaRouche. Discard Gross Domestic Product (GDP), stock market valuation, and similar meaningless concepts. The source of all economic wealth is the creative capacity of the sovereign human mind to make revolutionary scientific discoveries of fundamental principle, which are transmitted through an educated productive labor force, through advanced machine-tool design and through science. Mankind can make once infertile land, productive; it can divert rivers to irrigate deserts; or it can increase the energy-flux density of a power-generating system. Through these breakthroughs, man increases his mastery over nature. Mankind increases the yield of the land per square kilometer, and also allows it to support a greater potential density of population, per square kilometer, representing a greater quantity of people, each expressing a higher form of development.

The concept of igniting man's creative powers and the upward thrust of the economy is the backbone of the American Intellectual Tradition of Gottfried W. Leibniz and Alexander Hamilton. President Franklin Delano Roosevelt utilized that method, to intentionally produce a trajectory of explosive economic development during 1933-45. During the 1939-44 economic mobilization for World War II, Detroit, already possessed of sizeable industrial capacity, reconverted that capacity with advanced technologies, to produce planes, tanks, etc. Detroit grew into the greatest manufacturing center in the world. Population flooded into the city, living standards rose. After Roosevelt's death, following the conversion of auto production capabilities back to civilian use, the upward trajectory of Roosevelt's development methods continued, even with some problems, up through 1963.

The 1963-64 period constituted an inflection point. The Venetian system, the opposite of the American Intellectual Tradition, is based on free trade looting through usurious loan arrangements, raw materials extraction, etc. Today, this system is known as the Anglo-Dutch oligarchical model. This system is based on the conception of man as a beast, to be herded, looted, and then culled.

Following the late 1963 assassination of President John F. Kennedy, the Wall Street-City of London financier oligarchy moved to impose a post-industrial society policy upon the United States, the policy of the Anglo-Dutch system. This policy deliberately withered manufacturing, agriculture, and infrastructural production, while building a gigantic speculative bubble, which has sucked more of the life blood out of the underlying physical economy, thus imperiling human existence. As a result, the 1964-2004 trajectory transformed America from a producer society, to a consumer society in imitation of the model of Imperial Rome, based on bread and circuses and the looting of foreign nations through slave-labor.

The End Game

A dangerous dynamic characterized the past 40-year period: The more the American productive economy collapsed, the more Detroit's economy followed suit; however, three decades ago, Detroit's accelerating rate of collapse overtook that of the nation; the City is now imploding in a self-feeding cycle, helping pull down the country.

The scope of Detroit's erosion is staggering, though the world ignores it.

  • In 1950, Detroit had a population of 1.850 million; the Department of Commerce projects that its population in March 2004 would be 914,000. Half its population has fled the City.

  • There is an extraordinary deindustrialization. Factory after factory of the City's famed auto, steel, machine tool, and other heavy industrial facilities, have been boarded up, or been sold for scrap. As an example: During World War II, Ford's legendary River Rouge plant complex employed between 90,000 and 100,000 workers. Today, it employs 6,000.

  • Since 1970, a staggering three-quarters of Detroit's manufacturing jobs have been eliminated.

  • Infrastructure from hospitals, to schools to transit has deteriorated, or been eliminated.

The housing picture is perilous, but far different than the average citizen imagines. Detroit has homes that are boarded up and some that are still fire-scarred from the 1967 riots. However, Detroit has "snaggle-tooth" housing: One will travel down a city block that is perhaps 500 feet long by 200 feet wide; there will be two houses on one part of the block, and one house on another part; the rest of the block is empty, one vacant lot after another. The homes have been knocked down, in the largest home demolition process in American history. For block after block, in many sections of the City, there is virtually no sign of life or of the working of civilization. Detroit is going backwards in time.

This regression to empty space is worsened by the city's folding-back upon itself. As factories and jobs disappear, people leave the city. As a result, the city's tax revenue base contracts. This tax loss leads to cutbacks and/or non-repair of basic infrastructure. The reduction of infrastructure leads more factories and people to leave, and so forth in a circle.

A Picture of America's Future

The method we will use in this article, and the only true way to look at history, is through examining processes of transformation and change, which are governed by policy decisions. These have given rise to, and are expressed by the trajectory of 1933-63, of economic upsurge, and the trajectory of 1964-2004, of economic disintegration.

As shocking as the story of Detroit is, one must realize that its trajectory is the story of every industrial city, and that of the United States itself. At one time America's most productive city, and having been built itself around manufacturing, Detroit necessarily felt the collapse of manufacturing more intensely than any other city; its consequences there have been more extreme.

However, this process that is infolding in Detroit is occurring in the formerly manufacturing, sister cities of Detroit: Buffalo, New York; Chicago, Illinois; St. Louis, Missouri; Cleveland, Ohio; and Philadelphia and Pittsburgh, Pennsylvania. But Detroit and the industrial belt represent the picture of America as a whole in the immediate future. The idea that the United States can escape the fate of Detroit by "diversifying" into services, represents the same post-industrial thinking that created the crisis in the first place.

The entire post-industrial society policy, and the cancerous speculative superstructure, must be overturned. We must address a 40-year sickness.

Lyndon LaRouche uniquely has addressed the root cause of this crisis. LaRouche has first called for putting the world financial system through Chapter 11 bankruptcy reorganization. He would establish a new Bretton Woods monetary system, pivoted around the high-technology development corridors of the Eurasian Land-Bridge, and such continental projects as the Great North American Desert development project. The resulting anti-entropic growth would reconstruct the economy. In its wake, throughout America's industrial belt, it would reopen hundreds of factories, and re-employ millions of productive workers.

But for the moment, Detroit defines in an advanced way, the pathway along which the entire nation hurtles.

I. A Trajectory of Upsurge: 1933-63

The powerful transformation of 1933-63 can be seen in Detroit as a microcosm. The transformation was triggered by President Franklin Roosevelt's American System policies, which dumped the Mellon-Morgan-DuPont monetarist policies that had dominated the Coolidge and Hoover Administrations and produced the 1929-33 Depression.

Detroit had the pre-conditions to be America's greatest industrial city, which one can see in the intelligent organization of the city up through the 1930s, an organization similar to other leading American industrial cities.

Detroit owes its early development, in large measure, to those who exploited a magnificent natural-geographic setting, and improved it rationally by constructing a superb network-grid of ports, railroads, and infrastructure, and settling within and around the grid factories, homes, and community facilities.

The city is strategically located between Lake St. Clair to the north, and Lake Erie to the south (see Map 1). These two lakes form a junction, known as the Detroit River, a fast-moving body of water which carries goods and people to and from the municipality to America's East Coast and Midwest. Further, Detroit participated in the development of railroads during the second half of the 19th Century, and the first half of the 20th, serving as the hub for an astonishing 30 railroad lines, which brought inward a flow of raw materials, and sent outward a flow of finished products.

Inside the 139-square-mile Detroit city limits, a high degree of centralization and rational planning was exercised. There were 534 miles of rail lines inside Detroit. Factories were not placed helter-skelter, but were built along a rail line, and where possible, also along the Detroit River, where they could construct a dock-side port to offload goods. Many homes were built deliberately within the vicinity and walking distance of factories. Today's Baby Boomers would find the close proximity of factories to homes shockingly offensive. Many workers, even when they used transport, travelled no more than fifteen minutes to get to their job. Stores and community facilities were located within the same factory neighborhood.

In his book The Origins of the Urban Crisis, historian Thomas Sugrue captures the flavor of Detroit's organization: "Factories, shops, and neighborhoods blurred together indistinguishably, enmeshed in a relentless grid of streets and a complex web of train lines.... Rail lines formed the threads that tied the city's industries together."

The city's passenger transit system was quite good. The Detroit Urban Railway had a stable of electric trolleys/streetcars and buses in operation. At peak travel during 1941, the streetcars ran up and down Woodward Avenue, the main street that divides Detroit east and west, once every 60 seconds, a better performance than today in any American city from New York to Washington.

President Roosevelt's Transformation

President Franklin Roosevelt's re-institution of American System policies profoundly changed Detroit—and America—by unleashing explosive anti-entropic growth. FDR's New Deal of 1933-37 built important infrastructure in and around Detroit—sewage plants, water systems, transportation—which made long-range improvements. But the most far-reaching change came when Roosevelt's team directed the Hamiltonian economic mobilization for World War II in 1939-44.

Detroit's auto industry's origins traced to the building of the first auto-producing factory in 1900 by Ransom Olds. In 1903, Henry Ford established his Ford Motor Company, and in 1913, introduced the assembly line at his plants. Over the next decades, the production capacity of the auto industry grew, though the industry was hard hit by the Depression during the 1930s.

Roosevelt had known that the United States would become involved in the war to defeat Synarchism and Hitler, and he had started planning in October 1940 to convert America's auto industry's extensive capacity to defense production. A few months after the Japanese attack on Pearl Harbor on Dec. 7, 1941, which led to a declaration of war, conversion began. Roosevelt's War Production Board ordered the cessation of all auto production on Jan. 20, 1942.

What followed next was one of the largest and most successful technological undertakings in U.S. history. Auto plant conversion meant not only that the U.S. tore out the old assembly lines from the auto plants, but that it put in their place new machine tools, incorporating the most advanced scientific design. New technological breakthroughs were continuously pumped into machine tools. For example, the production of the Wright Cyclone 14 aircraft required 80,000 machining operations. To build the engine, a new technologically-advanced machine tool was designed to drill, countersink, and spotface 224 identical 3/8 inch holes in an aluminum airplane engine crank case. These operations previously took two hours and 12 minutes. The new machine completed the job in 23 minutes, a 600% increase in productivity.

Technological breakthroughs were made not only in machine-tool design but in aluminum, magnesium, synthetic rubber production, and the harnessing of the atom. Science became the driver of the economy, not just in the airframe sector, but throughout all production. The characteristic of action of the economy was scientific advance.

During the period 1939-44, Detroit's auto plants were opened up to full capacity—some had been on reduced schedule because of the Depression—and approximately 20% new capacity was added, sometimes by ripping up the floors and enlarging the plant. A leading example of what happened is the River Rouge plant (see box).

According to a 1944 report, employment in Detroit, most of it productive employment, grew by 44% during the economic mobilization for World War II. This did not just occur in autos, because 40% of Detroit's manufacturing base was in other heavy industries—steel, chemicals, machine tools, etc.

By 1944-45, Detroit enjoyed an old manufacturing base that had been modernized, as well as a new scientifically-enriched manufacturing base that had been built on top of the old. During the war mobilization, more than 200,000 Detroit workers had received retraining, of either moderate or intense form, to upgrade their skills.

President Roosevelt died in April 1945, but his policy design had been so powerful that its thrust continued for the next immediate period. The economic mobilization for the Korean War of 1951-54 continued the policy that had occurred earlier during the economic mobilization for World War II.

During the 1950s, several smaller Detroit auto companies had shut down or consolidated—Nash, Hudson, Willys, Kaiser-Frazer, Studebaker, Packard, and Murray Auto Body—which caused a loss of jobs. The 1957-58 recession hit very hard in Detroit, and actually continued in the city until early 1960. But the momentum on the whole, with some definable problems, was positive until the early 1960s.

Productive African-American Labor Force

We have seen above the policy thrust and scientific roots of the trajectory of 1933-63. But a proper metric for this transformation must assess singularities, phase changes, which feature the transformation. The powerful transformation of the African-American population is such a singularity, as it built an African-American productive labor force for the first time in history. Prior to 1930, overwhelmingly, African-Americans were confined to work certain jobs: retail store clerks, janitors, and domestics. Some acquired manufacturing jobs, but such jobs were denied to most. Between 1916 and 1929, a considerable number of African-Americans migrated to Detroit, escaping from the South, mostly seeking work. However, many of the newly arrived were consigned to the same lowly jobs.

The positive thrust of Roosevelt's economic mobilization for World War II of 1939-44 changed that. First, this created a labor shortage in Detroit, as many men were under arms at the very time that factory capacity was being expanded. Second, Roosevelt issued an executive order banning racial discrimination in defense production. This created the condition to tear down some racial barriers.

There was an extraordinary change: In 1930, the percentage of working age Detroit African-American males who were employed as factory operatives is unknown, but it is believed to be slightly above 20%. By 1940, about a year after America's economic mobilization for World War II had begun (although still before the reconversion of the auto plants), the percentage of African-American males who were employed as factory operatives rose to 29%. By 1950, taking into account the economic mobilization for World War II and other developments, the percentage of Detroit African-American males who were employed as factory operatives leapt to 45%. This is roughly the same percentage as for White males. At the same time, by 1950, one-fifth of all African-American females were employed as factory operatives.

Detroit African-Americans had gained entry, in a major way, into the "mainstream" of the productive labor force. This had several ramifications. First, manufacturing factory operatives physically alter nature for mankind's improvement. This act of doing something productive that contributes to society, positively shapes the worker's thinking, judgment, and internal sense of him- or herself. Simultaneously, in that time frame, a manufacturing factory operative's annual wage was sufficient to provide the worker's family with a decent living standard and to raise productive and creative children. This was a big step out of the long night of racism and discrimination. There were still other major obstacles, such as racist covenants and red-lining which restricted access to housing. But the breakthrough on the front of productive employment could be used as leverage to defeat the other obstacles, provided that the trajectory launched by Roosevelt in 1933 continued, and was enlarged.

Based on that trend, a second great migration of African-Americans to Detroit occurred. By 1960, 28.9% of Detroit's population was African-American.

But the national policy shift of 1964 would have a major effect.

Detroit as a Standard

Detroit became a standard—though far from perfect—which one could measure other cities and nations against. We can examine all of Detroit's leading features, including its living standard.

What is a living standard? Lyndon LaRouche has developed in his magnificent January 2004 article, "On the Subject of Tariffs and Trade," that "The underlying, fundamental principle of a science of economy, from whose application modern economy is derived, is the notion of 'powers' (ancient Greek: dynamis) which Plato adopted, chiefly, from the work of the Pythagoreans." This "invisible principle of powers" is what governs the transformation from one phase of economic development—or devolution—to the next. A leading expression of this is the cognitive power of the human mind. Situated from that standpoint, one assesses the household living standard, not as some set "quantity of monetary purchasing power." Rather, it is an ordered array of physical goods and cultural qualities, most emphatically including essential public infrastructure, which has a social cost, and which a household consumes in order to achieve higher material and cognitive standards of existence. This enables the household to produce children of a still higher cognitive and productive "power."

This household living standard can be assessed from three parameters: a market basket of consumption goods; demographic changes; and composition of the labor force.

  • As reported above, in 1950, 45% of all African-American male workers, and a similar percent of White workers, were employed as factory operatives. Adding in the workers who were engaged in the productive activity of construction, transportation, power generation, and mining, well over half of all Detroit male workers were then engaged in productive labor. Today, the percentage of workers for the United States as a whole who are factory operatives, is only approximately one-third the level that existed in Detroit in 1950.

  • For the United states as a whole in 1950, 60% of households were headed by a single wage-earner; and based on patterns, it is likely that at least 65% of Detroit's households were headed by single wage-earners.

  • Housing: One historian describes the housing of Detroit: "spreading out for miles and miles on the horizon in every direction was a sea of frame and brick houses." The homes in Detroit might have 1,000-1,300 square feet, less square footage than a new home built today. But many of the older Detroit homes were well-built; a significant percentage of them were built out of brick. Compare that to the new homes built today, which have less brick, made of inferior material, and are shoddy. Detroit had a very high rate of home ownership (although many African-Americans were engaged in battles to obtain housing). Two-thirds of Detroit dwellings were single-family homes.

  • Hospitals: Under the impetus of the Hill-Burton Act, hospitals and health infrastructure were being constructed at a rapid pace.

Under the thrust of the Roosevelt policies that launched the trajectory of 1933-63, Detroit, as a microcosm of America, was America's greatest manufacturer. It functioned as a city that integrated industry and dwelling places. Its infrastructure performed on a level of good to superior. Detroit functioned well, and could serve as a standard to America's cities.

II. Trajectory of Decimation: 1964-2004

In the stark days after President John F. Kennedy was assassinated in November 1963, President Roosevelt's persisting policy principles were replaced by an entirely different ordering principle: that of the policy of post-industrial society. This launched and governed the 1964-2004 trajectory of decimation of what is now euphemistically labelled "the Rust Belt."

Detroit went from the most manufacturing-dense city in the world, to a former city on the path to extinction. In this, as a microcosm of the United States, it accurately shows the pathway that America is travelling. It offers a warning: Unless these policies are stopped, there will be no United States, just as there will soon be no Detroit.

We look at the critical demographic, composition of the labor force, and household market basket consumption parameters, that allow us to trace Detroit's development, for the worse, over the past 40 years.

Post-Industrial Society Policy

The years 1963-64 marked a crucial turning point, as the Wall Street-City of London financier oligarchy imposed the post-industrial society policy upon the United States.

Three key features are cited:

  • On Aug. 15, 1971, President Richard Nixon ended the Bretton Woods system and took the U.S. dollar off the gold reserve standard, on advice from London-Wall Street oligarchical forces, which instituted the floating-exchange-rate system. This severed U.S. financial flows from physical goods flows. The dollar could be moved anywhere around the globe without any connection to financing hard-commodity goods trade or industrial processes. This led to a big increase in speculative investments.

  • During the week of Oct. 6-12, 1979, President Jimmy Carter's Federal Reserve Board Chairman Paul Volcker unleashed a policy that he called "controlled disintegration," as an extreme variant of the post-industrial society policy. Volcker sent interest rates into the stratosphere, so that by December 1980, the prime lending rate charged by commercial banks shot up to 21.5%. Volcker kept interest rates at double-digit levels for nearly a decade. This razed to the ground production facilities, many of which never reopened again.

  • In 1981, the Congress passed the Kemp-Roth Tax Act, which contained provisions encouraging real estate and stock market speculation; in 1982, it passed the Garn-St Germain Act, which disastrously deregulated the banking system.

These and other steps produced a profound transformation, a phase-change, which reduced the productive potential of the United States below the break-even level.

Shut-Down

The way to conceptualize the process of Detroit's destruction is as an ongoing implosion. Detroit, like every well-designed city, depends upon and operates through interconnected functions. But when two or three leading functions are destroyed, they pull down the rest, in a series. Ultimately, the integrated whole which is the city, collapses, unable to function properly or to produce its population's survival.

The first trigger to Detroit's shutdown was the collapse of the automobile industry as well as its other heavy industry. The Big Three auto companies, General Motors, Ford, and Chrysler, which are under considerable banker influence, helped to accelerate this process by outsourcing production to low-wage centers, first in the American South, and then in the developing world. By the early 1980s, Chrysler procured fully 70% of the value of its final product from outside suppliers, with an increasing share of that produced overseas. Allegedly to "stay competitive with Chrysler," Ford and GM stepped up outsourcing.

Table 1 shows several significant auto production facilities that operated in Detroit and its immediate environs in 1960, including mainstays like General Motors' Cadillac, Chrysler's Dodge Main, and Ford's River Rouge. Most citizens of Detroit knew every plant by name and the community within the city in which it was located. The Table shows that in 1960, there were 35 significant auto plants, employing 97,051 workers. By 2003, half of these plants had been boarded up or blown up, and the machinery sold for scrap. Dodge Main went from 7,500 workers to zero. In this time frame, six new plants have been opened, but of modest employment levels. Overall, by 2003, the remaining auto plants employed 36,523 workers, a reduction of 61% since 1960.[1]

The auto plants' closure forced the closure of feeder manufacturing sectors, such as machine tools, steel, glass, rubber, etc. The post-industrial society policy also forced the closure of many non-auto-related machine tool, steel, etc. factories. Combined, this triggered the collapse of Detroit's manufacturing base on an unprecedented scale.

The Bureau of Labor Statistics counts manufacturing employment in Detroit using two different methods, the household survey method, and the establishment survey method. Figure 1 uses the household survey method, whereby the BLS counts the number of Detroit city residents who list manufacturing as their primary occupation, regardless of whether that manufacturing job is located in the city of Detroit or not. On this basis, the number of Detroit manufacturing workers plunged from 228,806 in 1960 to 64,586 in 2000, a fall of 71.8%.

Figure 2 uses the establishment survey method, under which the BLS counts the number of manufacturing jobs that exist at plants inside Detroit, regardless of whether the person who works at that job resides in Detroit or not. On this basis, the level of manufacturing employment at manufacturing plants inside Detroit, plunged from 259,495 workers in 1960, to 46,925 in 2000, a staggering 81.9% collapse.

Whichever method is used, the process of transformation is painfully clear. During World War II, Detroit had been the world's biggest manufacturing city, known as "the Hub of the Arsenal of Democracy." Now, under a different principle, its manufacturing factories and workforce had been obliterated.

Once manufacturing was gone, the floodgates opened up. Figure 3 (using the establishment survey method) depicts that the total employment inside Detroit fell from 810,923 workers in 1960 to 345,424 workers in 2000. Nearly half-a-millon jobs, or three-fifths of the 1960 total, had been eliminated.

A 50% Population Reduction

As a result, the population imploded. Figure 4 portrays Detroit city's population since 1930. Under the impetus of Roosevelt's policies, people flocked to Detroit for the manufacturing employment, its living standard, and the city's competent functioning. Detroit's population reached a peak of 1.85 million people in 1950. Over the next ten years, it declined, but largely as workers moved to areas just outside Detroit's borders to live, while still working in the city.

However, starting in 1960, many residents left the city and did not come back to work, because the jobs had disappeared. This swelled the population living in suburbia, shown in Figure 4. Detroit city's population started careening downward at an accelerating rate. By 2000, it had dropped to 951,270 people, a level that was an incredible 43% below the level of 1960, and 48% below that of 1950. The depopulation has continued: The U.S. Department of Commerce projected last year that by March 2004, Detroit's population would have further declined to 914,000 people. Detroit's population has been reduced by 50%. For a city that started out with a population of 1 million or more, such a halving had never happened in the history of the United States.

To understand Detroit's depopulation, one must comprehend a second process which turned out to have a grim consequence. From 1930-60, many African-Americans escaped from the Deep South, leaving behind feudalistic conditions of lack of jobs, crushing poverty, and prevalent racism, to move to Detroit. For all its notable imperfections, Detroit was a place where one could hold a well-paying factory job, vote in elections, and raise a family. Table 2 shows how in a cruel twist of fate, African-Americans continued to migrate to Detroit in great numbers during the 1960s—Detroit's African-American population grew by 190,000 during this decade—expecting what previous generations had gained, even as the manufacturing jobs, under the impress of the post-industrial society policy, were disappearing. The same process, of a migration of African-Americans to Detroit continued during the 1970s, though at a lower rate, even while the urban economic conditions continued to get worse.

Then the migration came to a halt. During the 1980s decade, Detroit's African-American population grew by 23,000, but that growth of 2,300 people per year can be accounted for entirely by childbirth. During the decade of the 1990s, the African-American population declined in absolute numbers. There started a reverse migration, as desperate people headed back to the South. In 2000, Detroit's African-American population constituted 81.6% of the city's total population. Many Whites had moved to the suburbs.

But now those living in Detroit, whether African-American or White, faced a daunting reality. Detroit had changed entirely from the land of opportunity and progress; the citizens were trapped in a city that could not support even 1 million people, and was dying.

As the population declined, and opportunities for decent real employment disappeared, there was an accompanying breakup of the family structure. This was abetted by the growing prevalence of the sex-rock-drug counterculture. Figure 5 shows the types of family in Detroit. The family headed by a married couple is, when operating well, best suited for nurturing children. This is not true as "an article of faith," but because two loving parents can develop the child, and will have the time to spend with the child, and can transmit an agapic sense which will give the child emotional depth and a more developed sense of identity. Hopefully, the child will not have to spend time trying to secure his daily bread, because his or her single parent is struggling to survive. Figure 5 shows that in 1970, about 77% of Detroit's families that had children of their own were headed by a married couple. This still represented the stability of African-American and White working class households. However, by 2000, the family arrangements had significantly deteriorated. There had been a reversal: Now nearly two-thirds of Detroit's families that had children of their own were headed by single parents. In most cases, when the child came home from school, the parent was working. These became latch-key children.

Further, whereas nationwide, in 1950, 60% of families had a single wage-earner, because income levels were sufficient, in 2000, only 10% of families had a single wage-earner. In Detroit, this tendency would be even worse.

Compounding the problem of families with children headed by a single parent, is that in Detroit, officially, nearly 40% of families headed by a single female parent, live below the poverty line. Figure 6 demonstrates that poverty is deeply ensconced in Detroit. In 1969, the poverty rate in the United States was 12.1%, while that in Detroit was 14.9%. In 1999, the poverty rate in the United States fell slightly to 11.9%, while Detroit's poverty rate jumped to 26.1%. One out of every four people in Detroit lives in grinding poverty.

Figure 7 shows poverty for children in Detroit. In 2000, 34.8% of the children under 18 years old in Detroit were poor. But there is an additional classification, called "working poor." This constitutes households that earn an annual income that is between 101% and 150% of the official poverty level. The official poverty level is so artificially and criminally low, that 150% of the poverty level is still very poor. EIR has long regarded 150% of the poverty level as the true poverty threshhold. What Figure 7 expresses is that one out of two children in Detroit suffers poverty, a truly stunning development.

The reader should conceptualize that poverty means that a child lives in a run-down apartment or home, with inadequate or sometimes non-existent heat in the Winter; that the family often goes without one meal per day, and towards the end of the month, may miss two or all three meals a day; that according to national statistics, children born in poverty have a much greater chance of being born with low birth weight, and that according to medical specialists, low birth weight appears to account for one-third of all children who are born with cerebral palsy and gives an increased significant chance for other childhood afflictions, including mental retardation. As will be seen, Detroit's widespread poverty, combined with the take-down of its health and hospital system, has bequeathed to the city a sky-high infant mortality rate.

This is how the lower quarter of Detroit's population, by income class, lives.

Living Standard Destruction

There was a downward thrust in household existence.

First, we take a first-approximation look at household income. We know that median household income is completely inaccurate as a real measure to be used, but the series can be used for comparison, giving a crude sense of direction. Figure 8 highlights that in 1969, the annual median income for a household in Detroit was $7,904, which was 6.5% below the nationwide U.S.A. median household income of $8,496. In fact, the year 1969 was part of the severe 1967-69 recession, which shut down several auto plants. Had it been possible to chose 1965 or 1966, it is likely that the Detroit annual median household income would have equalled or slightly exceeded the national median household income. However, one can see the trend: By 1999, the Detroit median household income had fallen a whopping 30.2% below the national median household income. This shows that however inadequate median annual income is as a metric, Detroit could not keep up with the nation, and was one-third behind.

We shift focus onto the household market basket of consumption, which is the real metric of the standard of living. A household consumes such goods and infrastructure, including education, to raise its own productive power and that of its children, and to transmit this productive power as improvements to the economy as a whole. This household market basket has been falling.

Look at three critical elements of real household consumption which highlight this fall: housing; transportation; and health and hospital services.

Housing: We examine three features of the housing crisis.

First, Figure 9 shows that in 2000, the vacancy rate of Detroit housing reached 10.3%. Much of the unoccupied housing is grossly inferior, unfit for human habitation.

Second, the poor are imperiled by their housing situation. The U.S. Department of Housing and Urban Development (HUD) calls a housing problem a "Critical Housing Need" (CHN) and says that a household experiences a CHN when either: a) it pays 50% or more of its income for housing; and/or b) lives in a dwelling that is substandard (according to certain standards). HUD reports further, that of the 142,000 households in Detroit's Very Low Income (VLI) households, half have fallen into the status of having CHN. These households may be shunted into a defective apartment, but still have to pay an indecent 40%, 50% or more of their income for their dwelling. Many of these households depend on the whim of the landlord or their next paycheck, as to whether they have a roof over their head. The 71,000 VLI households who live in this dangerous condition of having Critical Housing Needs constitute one-fifth of the entire Detroit population.

Third, and most serious of all, in terms of quality and availability, the condition of Detroit housing today is one-third below what existed in the 1940-60 period. This matter is of such importance that we treat it in depth below.

Transit: In the 1933-63 period, Detroit had a very good transit system, and at its height, Detroit's rail system had 30 different rail lines running in and out of the city, traversing 534 miles of track within its boundaries alone. Much of this network was for freight.

The Detroit Urban Railway system was the main transit system for people transport inside the city, featuring electric trolleys/streetcars, and buses as well. As reported, in 1941, during the economic mobilization for World War II, at peak travel on the city's main street Woodward Ave., a streetcar ran every 60 seconds. But the building of highways inside Detroit, and other efforts led by the banks, led to the insane act of shutting down the efficient streetcar system in 1956. In 1960, about 22% of Detroit's population used the public transport system, but that fell to 9% in 2000. Now the city is wholly dependent on cars; but 22% of Detroit's population has little or no access to cars, so it must walk.

The bus system is deteriorated, routes have been eliminated, and in some areas, it necessitates waits of 20-30 minutes. And with the shutdown of factories, there is not much of an option to walk to work. This is a pale reflection of the 1933-63 transit system.

Health and Hospitals: The hospital and medical system keeps people productive, and is crucial for longevity and increased potential relative population density.

From 1933-63, there was considerable hospital building in Detroit. EIR was restricted by lack of accurate information on the number of hospitals and closings over time in Detroit city, supplied by the American Hospital Association (AHA). But AHA information does show the trend for Michigan as a whole, which trend has been accelerated in Detroit.

In 1985, Michigan had 193 hospitals; 48 had been closed by 2002. In 1985, Michigan had 37,546 hospital beds; 11,416 had been stripped away by 2002.

To measure health, it is necessary to measure it on a per-capita or per-household basis. Figure 10 shows that between 1985 and 2002, the number of hospitals available per 1 million people, dropped from 21.2 to 14.4, a fall of 32%. One-third of Michigan's hospitals are boarded up or destroyed. Between 1985 and 2002, the number of hospital beds per person had fallen from 4.12 to 2.60, a collapse of 37%. According to the standards of the Hill-Burton Act, there should be between 4.5 and 5.5 hospital beds per 1,000 persons. Michigan has only about half the number of hospital beds mandated by Hill-Burton.

The process of close-down of hospitals, and insufficient beds to treat people, has been exacerbated in Detroit. LaMar Lemmons, a former Michigan state representative representing Detroit's east side, told EIR on March 12, that during the last three years, Samaritan Hospital, Holy Cross Hospital, and Saratoga Hospital, all located on Detroit's East Side, have closed down, leaving only one major hospital still open in Lemmons' district. He recounted, "I went to one [Detroit] hospital that looked like a MASH unit. People were out in the halls. They didn't have enough rooms.... The patients flooded in. They had to go somewhere."

In addition to hospitals, beds, and doctors, health is a total process, that involves sufficient levels of sanitation, plentiful clean water, and individuals having adequate diet. Detroit has insufficient levels of all of these. This is made manifest in the death rate. It is highlighted by comparing Detroit' infant mortality rate to that of the United States as a whole (infant mortality is the number of child deaths per 1,000 live births). Figure 11 demonstrates that in 1980, the United States' infant mortality rate was 12.6 compared to Detroit's rate of 21.0. By 2002, the United States' infant mortality rate had fallen to 6.9, but the rate in Detroit remained extraordinarily high at 16.7, which is two and one-half times greater than the national average.

Back to Empty Spaces

As Detroit was depopulated, the city was literally demolished, as entire sections which were once viable, were ripped up and carted away.

Part of this had actually begun in the 1950s, with the introduction of the highway system into Detroit. In 1956, the Federal-Aid Highway Act was passed, which authorized the construction nationwide of 41,000 miles of interstate highways. This led to a series of freeways and bypasses which cut through many cities, most emphatically Detroit. It started with the beginning of construction inside Detroit, in 1959, of the I-94 Freeway, and continued through 1989 with the construction of the Walter Reuther Freeway. These freeways caused thousands of residences and hundreds of businesses to be ripped up, especially African-American sections such as Paradise Valley. This led to massive traffic congestion, and a devolution of Detroit transit.

But a second, more powerful, over-arching process was set into motion. As jobs and population disappeared, so did the city's factories and housing stock. One notable feature of deindustrialized cities is the amount of housing that is burned out and/or boarded up. Detroit certainly has that, but it also has something that exists far more in Detroit than any other city, and is completely shocking: mile after mile of city streets where housing has been demolished, and nothing stands in its place.

Figure 12 shows that between 1970 and 2003, there were permits granted for the construction of 21,827 new housing units. It is not clear that for all these permits, actual housing units were constructed; but let us assume that they were. During the 1970-2003 period, 166,992 housing units were demolished. Over 33 years, Detroit tore down one-third of its occupied housing stock. This dimension of housing destruction had never happened in a major city in America's history. To put the enormity of this destruction into perspective, according to Dr. Allen C. Goodman of Wayne State University, a housing expert, the total quantity of housing units that Detroit tore down since 1970, almost equals the total number of housing units that exist and are occupied in the city of Cleveland today. An entire city of half a million people could live in the housing stock that Detroit destroyed.

Figure 13 depicts the housing balance for the 1970s, the 1980s, and the 1990s, where the net change is equal to the number of new units minus the number of housing units demolished.

The tearing down of homes in Detroit for the past 40 years, is a governing characteristic.

On Aug. 24, 1990, the City Planning Commission of Detroit issued a critical report with the dry title, "Survey and recommendations regarding vacant land in the city." The survey divided the city into 30 area districts, and subsumed each district into one of five categories: 0-10% vacant; 11-30% vacant; 31-50% vacant; 51-70% vacant; and 71-100% vacant. The report contained map studies of some of the 30 area districts. Map 2 shows the area in the northwest portion of Detroit. According to the report, in this cited district, "over 70% of the parcels in the area are vacant, [and] over 20% of the existing buildings are also vacant." The blacked out areas on the map represent vacant land. Once this district area functioned as part of the city; but now it has been left to rot.

The City Planning Commission report had an ominous warning of what to do about district areas that are 51% or more vacant. It recommended "relocating the remaining residents to provide them with increased security and services." That is, the city would take the population out of these areas. To understand the full import of what stands behind this recommendation, one must consider the proposals of the financier oligarchy, as presented by what they were doing in New York City, under the "Big MAC"—Municipal Assistance Corporation—of Felix Rohatyn and Roger Starr.

The Rohatyn Model

By the early 1970s, the Wall Street-City of London financier oligarchs had decided to de-urbanize the United States, as the one of the most direct ways to enforce a post-industrial society upon the United States.

In 1975, the bankers precipitated a financial crisis in New York City, which already had deep financial problems. They rammed through the New York State legislature, legislation which invoked "emergency police powers," and in June 1975, created the Municipal Assistance Corporation; then, in September 1975, the Emergency Financial Control Board. Using these powers, the bankers overrode the powers of New York's elected City Council and Mayor. Synarchist banker Felix Rohatyn of Lazard Frères investment bank, the head of MAC, took over as the unelected Führer of New York for the next several years. Rohatyn announced, "The pain is just beginning." During the six years after 1975, he cut New York's workforce by 22% and shut down vast portions of the city's vital infrastructure.

On Nov. 14, 1976, Roger Starr, a member of the New York Times editorial board, wrote a 4,000-word feature in the Sunday Times magazine section, advocating planned shrinkage. Starr declared, "Planned shrinkage is the recognition that the golden door to full participation in American life and the American economy is no longer to be found in New York." At that time, New York City had a population of 7.5 million. Starr decreed that, "New York City would continue to be a world city even with fewer than 5 million people." This led to only one conclusion: forcibly expelling, or killing off, one-third of the city's population.

This became the policy for U.S. cities, emphatically for Detroit. In the 1980s, a plan was put forth to close down sections of the city, and place a fence around those sections. This apparently originated with some banks and think-tanks. On April 26, 1993, at a press conference, the city of Detroit Ombudsman, Marie Farrell-Donaldson, an accountant who specialized in cost-accounting, put forth a plan, that echoed planned shrinkage.

The Ombudsman's office has the responsibility to act as a watchdog over the delivery of city services. Instead, Farrell-Donaldson sought ways to cut services. She declared, "Right now, we have streets with one person living on them, yet you still have to provide streetlights for that street. You still have to provide police protection. You still have to provide fire protection. We should move those people out" (Detroit Free Press, April 27, 1993). She continued that entire areas that were dilapidated should be cleared of the remaining homes, businesses, and people. Fences should be erected around the areas, to keep people out. These areas should then be sent "back to nature." Farrell-Donaldson mobilized for her plan by citing GM's policy of layoffs. "I know it sounds crazy. But when General Motors has excess capacity, what do they do?"

The Economist magazine, the mouthpiece for ghoulish City of London bankers, and which was then half-owned by the same Lazard Frères investment bank, covered Farrell-Donaldson's proposal in an article, provocatively entitled, "Day of the bulldozer: inner cities." The Economist contended that "as long as [the] incremental approach [to Detroit's problems] remains half-hearted, wholesale abandonment of the city begins to make grim sense."

Farrell-Donaldson (since deceased) claimed the proposal she made was her own; EIR is seeking who the more likely authors were.

In an essay published this year, "Shrinking City Detroit," author Kyong Park, the director for the International Center for Urban Ecology, argues for further shrinkage. "Is perpetual growth the only economic model for cities, or are there also benefits from the de-urbanization of cities, such as the affordability of spaces and the increase of open land, as in the case of Detroit... Is the concept of smallness, as opposed to bigness, the more effective scale for urban ecology? Is a new or better economic model possible through the conscious and positive reduction in size of a city, which might involve, for instance, re-designing the city of Detroit to accommodate a population of 500,000 or less?"

If Hyong's recommendation is implemented, Detroit would be reduced to less than one-third its 1960 size.

The problem is that the dynamic of economic collapse is pushing Detroit in this direction. This is a process coming from the national level. As this larger process overwhelms Detroit, in a world of reduced tax revenues, and falling population and manufacturing, Detroit's elected officials, unless they challenge and reverse the underlying axiomatic assumptions of policy-making that have led to that collapse, will be applying planned shrinkage, whether they like it or not.

Detroit has been ripped up more than any other major city in America. As a result of the demolitions, Detroit is now pock-marked by 40,000 vacant lots, four times more than the American city with the next highest number. The disparity becomes even greater when compared to Detroit's population, which in 2000, was 951,000. We look at the next three cities with the highest volume of vacant lots, with that city's population in parenthesis: New York, 9,800 vacant lots (8.0 million); Philadelphia, 8,500 vacant lots (2.3 million); and Chicago, 4-5,000 vacant lots (3.5 million). (The vacant lot data is published by the Detroit Almanac of the Detroit Free Press).

What the reader must conceptualize, keeping a metric of societal growth or devolution in mind, is that Detroit has regressed to the level of 1920. There are wide open patches of dozens of blocks, attached back to back, where there is no sign of human civilization, but only unkempt grass. This is what the developers of Detroit saw in the 1920s, when they saw grass and overgrowth, and cleared it to build factories, schools, hospitals, and homes. Now, it has regressed back to that state of nature, returning Detroit to a state as if it had never grown at all.

Pathetically, Michigan Governor Janet Granholm has announced a "cool cities" project, where Detroit will portray itself as "hip and cool" and attract young people and Baby Boomers. This is a fantasy trip that hysterically refuses to deal with the relentlessly unfolding process that is destroying the city.

The U.S. must reclaim and redevelop Detroit and its other industrial cities, to get them to exceed their past accomplishments. Failing that, Detroit's death is the unfolding of America's future.


[1] Actually, in auto plants in Detroit in 1960, there were more than the 97,051 auto workers reported in Table 1; there were 114,587 workers. The reason is that if, between 1960 and 2003, a Big Three-owned auto facility was sold to a non-Big Three company, EIR did not count that sold plant's 1960 employment level in the cumulative total for 1960, nor the sold plant's 2003 employment level in the cumulative total for 2003. EIR did not know the employment totals of several plants under their new owners in 2003, and did not want to throw off the comparison.

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