Submitted by Pachamama
Detroit, a black eye for Capitalism
During the middle years of the twentieth century Detroit emerged as a major success for western industrial capitalism. That success imposed American technological dominance over the world and determined the modern transport systems. There was a massive drive to transform the means of transportation from horse drawn coaches to the more ‘efficient’ internal combustion engine. Within this success developed the largest and wealthiest middle classes yet known to man, largely through the efforts of worker’s unions’ engagement in successful collective bargaining. The population swelled to 1.5 million at the height of prosperity thus fuelling industrial expansion in all other industries at an exponential rate. Detroit and its motor companies was indeed the leading edge of American cultural dominance after its shared victory in the Second World War.
The fall of Detroit started to gain momentum around the oil crises of the early 1970’s. Concomitant with transformation in the energy sector there was, starting a few decades prior, effort to de-industrialize the USA in the search for cheaper labour elsewhere. There were management failures to innovate, to reduce fuel consumptions rates, to revolutionize designs, to transform its relationships with workers, to redefine the nature of business. These were strategic failures. These failures led to the rise of competitors from Asia, Europe and elsewhere and opened up the American domestic markets to a level of competition hitherto unknown. Foreign competitors were eating Detroit’s lunch and economic death was not to be too distant. This reminds us of the Barbados tourism industry of today.
