Values and Capitalism readers are already familiar with the city of Detroit’s woes: high unemployment, crumbling infrastructure, violent crime and a city government in receivership. One of the root causes of Detroit’s decline is a city government and civic culture that appears unconcerned with its level of self-interest. The Washington Post recently described how corrupt governance and special-interest groups have created countless problems for the city’s people. A new 134-page report issued by Detroit’s state-appointed emergency manager, Kevyn Orr, shows the current state of affairs in Detroit:
…the [report] nevertheless tells a harrowing story of institutional rot and social collapse, brought on by decades of government of, by and for special-interest groups. Prominent among them are public-employee unions — 47 in all, from organized crossing guards to the Association of Professional Construction Inspectors. Contracts permitted employees to “bump” from job to job based solely on seniority, “without regard to merit, relevant qualifications or experience,” the report says. Generous pension and retiree health benefits gobbled up tax dollars — more than 38 percent of the city’s revenue in fiscal 2012 alone — that would otherwise have paid for public services.This is but a peek into how Detroit functions these days—a political class unaware, or unconcerned with, the stewardship of its dwindling resources. Of course, things might actually appear on the upswing, if the corrupt mayoralty of Kwame Kilpatrick was the nadir of Detroit’s trajectory. And external factors like a manufacturing exodus, the 1967 race riots, and the progressive dissolution of the American family since the 1960s have not helped matters. But it’s obvious that there’s been a failure of leadership, as well. The city’s governing class has showed little appetite for sacrifice in hard times. When times got tough, city managers got more. A stirring contrast to this selfishness is the attitude that Detroit’s business leadership showed during World War II. As America mobilized for the war, Detroit automakers retooled their entire operation to serve the nation. Last year, writer Arthur Herman published “Freedom’s Forge,” a very lively and informative book on how American industry transformed itself into “the Arsenal of Democracy.” One particularly striking section highlights how willing General Motors executive Bill Knudsen was to disrupt his comfortable family life and participate in the war effort:
When Bill Knudsen told his wife and children he was going to be leaving General Motors to help the president with the defense effort, they were stunned. Why? they protested. America wasn’t in any war; why would he give up his life at home in order to move to Washington? Besides, they pointed out Roosevelt was a Democrat and Knudsen a lifelong Republican. His twenty-year old daughter, Martha, a coed at the University of Michigan, asked the final question. “Why are you leaving to work for this man now?” Knudsen’s answer was simple and direct. “Because this country’s been good to me, and I want to pay it back.”Knudsen later threw down the gauntlet to the other automaker heads at a dinner for the Automobile Manufacturers Association in 1940:
“We must build big bombers,” he blurted out. “The British cannot win the war with fighters.” It was not just Britain who would suffer, he said, but America’s own defense preparations. “We need more bombers than we can hope to get,” he said. “We need them sooner than we dare to get them under present circumstances. You’ve got to help!” The response from automotive executives was enthusiastic: Tell us where to go and what to do. You’re the boss, Bill.Of course, America’s industrial output was a major factor in winning the war. By supplying America with the industrial might it needed for victory, even at personal and professional expense, Detroit’s leaders showed sacrificial character in doing what the public good required. The city’s political leaders have a chance to do the same today. Will they?