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Capitalism in Detroit – Now You See It, Now You Don’t

July 22, 2013

The city of Detroit is trying to file for bankruptcy (the judge won’t let it), having collapsed owing $20 billion to about 100,000 creditors and of course all the public sector jobs that the city supports will either be gone or be re-negotiated on much worse terms. See this report on zerohedge.com for a few facts: http://www.zerohedge.com/news/2013-07-21/25-facts-about-fall-detroit-will-leave-you-shaking-your-head

Detroit has been a by-word for decades for inner city decay (RoboCop was made in 1987) when it was already beyond redemption. Socialists, e.g. The Guardian and The Independent, blame the city’s collapse on “white flight” because white workers refused to meet an ever-growing welfare state, and the loss of high paying manufacturing jobs in the 70s, when the Motor City became the poster child for offshoring manufacturing. The Motown sound and the giant sucking sound were both heard first in Detroit, a couple of decades apart.

Capitalists, e.g. The Telegraph, promote the idea that Detroit suffers from too much state and not enough capitalism. It is just a matter of cutting back public services and letting ten thousand private sector businesses bloom in order for prosperity to be restored.

Of course, as always both capitalists and socialists are wrong. Detroit had its capitalist phase when it produced cars for America and then armaments for WWII, when sharecroppers were “bussed-in” from Alabama and Mississippi. Compelling people of very different cultures and morality to live together has never and will never lead to a melting pot – it always becomes a crucible.

Capitalism offered two generations of labour a decent standard of living, until the capitalists realised it was practical (thanks to Asian mercantilism) to increase their profits by using a cheaper labour source. To avoid protests (at least on a large scale) high paying manufacturing jobs had to be substituted with seemingly high paying service jobs, and thus the financialization of the West began. In the decades since the offshoring revolution, capitalists’ knowledge of the science of offshoring has increased to the point where even low-end clerical work can be and is being offshored. When the service must be delivered locally, e.g. health care or hospitality and catering services, the cheap labour is brought onshore. Immigration is where the interests of capitalists overlap with the interests of socialists – the former want a cheap, compliant workforce and the latter need large numbers of immigrants to justify razing the West’s Christian (really it’s Catholic) culture to the ground.

As the capitalists were extracting maximum value from Detroit, the reaction came from organised labour, inspired by the satanist Saul Alinsky. Predictably, the reactionaries did not fight capitalism head-on, but used its malign effects as a justification to plunder exactly the same people whose labour was being expropriated. Needless to say, those who could go, left a long time ago and those who stayed had to adapt themselves to the new immorality, of whom Eminem is an exemplar.

Detroit is another, bigger canary in the coalmine of the West’s collapse. Western labour is being pulverized between the millstones of capitalism’s low wages and socialism’s high taxes. And cut adrift from Catholic social teaching, even very few Catholics can see the injustices being perpetrated on us and our posterity. Because capitalism seems to offer choice it can survive longer than socialism, but only the trajectory is different. The terminus is the same. With the debauching of currencies continuing apace and leverage levels still unsupportable, the economy is going to take another lurch down, causing a commensurate drop in living standards, that will not be recovered. We are all living in Detroit because we don’t know how else to live.

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From → Chapter 1

One Comment
  1. alan permalink

    Here is another post from ZeroHedge which could bring on an interesting discussion:

    http://www.zerohedge.com/news/2013-08-16/why-isnt-there-demonstrably-correct-economic-theory

    However, in the comment section, there is an amazing lack of the term “Usury.”

    I don’t think you can have a ‘correct’ economic system if usury is allowed.

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