The Free Market is Saving Detroit

by

Thursday, May 31, 2018


Detroit is known as the Motor City. Detroit was home to 1.86 million in 1950. That same year, the city had 10 streetcar lines and 67 bus routes that serviced a population of over 2 million people. Strolling down the bustling streets and crowded storefronts of Woodward Avenue was like a walk down Broadway in modern day New York.

Republican John C. Lodge served three stints as Mayor of Detroit in the 1920s. The Detroit Free Press credits him with overseeing the transformation of Detroit “from a Podunk little town to an industrial powerhouse.” An incredibly honest politician, Lodge served publicly as a city councilman, Michigan House legislator, and as Mayor. In addition to espousing conservative social values, like his “Go to Church on Sunday” campaign, Lodge practiced conservative economic values.

In the 1927 mayoral election, Lodge beat incumbent Mayor John W. Smith by supporting the construction of the privately-owned Ambassador Bridge, which is the busiest U.S.- Canada border crossing today. Conservatives like Lodge saw the virtue of privatization and knew that the bridge would be a major economic breakthrough for the burgeoning city. Privatization worked because the current owner, Matty Moroun, had an incentive to make it a well-run, efficient border crossing. If the bridge fell into disrepair, fewer people would use it and he would lose money.

Detroit flourished economically throughout the 1920s up until the Race Riots of 1967, which occurred under Democrat Mayor Jerome Cavanagh. Instead of championing free enterprise as Lodge did, Cavanagh sought Federal money to construct skyscrapers downtown. Detroit abandoning a free market approach to development marked the beginning of the end for the once-bustling industrial powerhouse.

Detroit has not elected a Republican mayor since 1957. Democrats have had a free hand in the city for over a half a century.

What have they done for the people? Ruined them.

A mass exodus from the Detroit began in the ‘60s. For the past 60 years, people have fled to the suburbs as soon as they have the means.

The failures of liberalism culminated in 2013, when Detroit became the largest municipality ever to file for bankruptcy. Reckless Government spending, like Cavanagh’s constant borrowing, was responsible for the bankruptcy.

These awful trends are beginning to reverse. In 2015, nearly 40 percent of Detroit’s residents lived below the poverty line. A year later, in 2016, this number fell to 35.7 percent, following a year of massive capitalist investment. That same year, the median household income increased from $26,000 to $28,000. Even Democrat Mayor Mike Duggan agrees that “bringing business back” is responsible for this economic improvement.

Capitalism is saving Detroit and the numbers show it. The mass exodus has slowed since the billionaire founder of Quicken Loans, Dan Gilbert, began investing heavily in 2010. Today, Gilbert owns or operates 78 properties downtown. Gilbert’s employees are moving into the city and closer to their jobs. Major construction projects, such as the new Shinola Hotel and dozens of new shops along Woodward, are the result of capitalistic investment.

The Detroit Free Press reports that 1,000 new apartments will be added downtown in the coming months. Dozens of new residential developments in the downtown, Midtown, and Corktown neighborhoods are also scheduled and underway.

The Hudson’s Site, in the heart of downtown, will become the tallest skyscraper in Michigan and is forecasted to add 24,000 temporary and permanent jobs to the city. Such capitalistic investment brings opportunities that a half century of unfettered liberalism could not offer. For the first time since the 1950s, Detroit is cool again. Young people are flocking to Midtown.

As the Brookings Institute’s Alan Berube points out, “The single most important thing to drive down poverty is to drive up employment.” This is exactly what capitalist investment, such as Dan Gilbert’s Bedrock investments, have done.

The largest source of funding for the QLine, Detroit’s new light rail system and catalyst for $7 billion worth of new investment, was the private Kresge Foundation which nearly doubled the Department of Transportation’s TIGER I grant. A new study found that private investors, like Gilbert, steered the QLine.

Capitalism is saving Detroit in the face of a half century of unfettered liberalism. Private investors who want to make a return on their investment are incentivized to make their projects work. The private sector, not government bailouts, are the answer to economic woes. New development, such as the streetcar and dozens of shops and hotels, have the private sector to thank.

John Hale a sophomore from Detroit studying political science at the University of Notre Dame. He currently serves as Secretary for Notre Dame College Republicans and is the Political Commissioner for Notre Dame Right to Life.

The views expressed in this article are the opinion of the author and do not necessarily reflect those of Lone Conservative staff.


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About John Hale

University of Notre Dame

John Hale a sophomore from Detroit studying political science at the University of Notre Dame. He currently serves as Secretary for Notre Dame College Republicans and is the Political Commissioner for Notre Dame Right to Life.

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