“So goes Detroit, so goes America.”
Detroit faces economic, social and political catastrophe. Detroit’s root problem is a changing economy, with capitalism completing all stages of development, and in transition to a new social system.
History of the City
Modern cities come from somewhere and appear at a certain stage in the development of society. Society is a certain stage of development of our human community. Society is constituted on a mode of production. The mode of production is productive forces and productive relations. These together define the economy, which is basically production and the distribution of that production. Productive forces are the instruments, tools, machines, technology, skills and energy deployed in production. Productive relations are how groups of people organize themselves into classes. Property relations assign property rights distinguishing those who own the means of production and those who don’t, setting the foundation for those who rule and those who are ruled.
The long history of tool development, discovery of fire, creation of means of production and the spread of applied technology in production caused clusters of human beings to become communities (clan communities) and then a society based on the matriarchal pattern. After thousands of years, humans invented the bow and arrow, started to tame animals, discovered primitive agriculture and later, stock breeding. Discovery of metal working, the extension of the discovery of fire and ultimately the discovery of new energy sources other than animal and man would drive the transition from agricultural relations to industrial relations, creating the modern city.
Cities, towns and villages are distinct kinds of community corresponding to different stages of development of society. The original village was a community of people based on the bow and arrow, the wheel, animal husbandry, arising before commodity production. A town is different. Towns arose in antiquity at the dawn of the slave-owning mode of production. At first the towns were not that different from villages, both being primarily agricultural communities. As handicraft, trade and the activity of merchants exchanging commodities became concentrated in villages, the villages lost their original character and became towns.
Over centuries the growth of towns became the basis of a new political status of the individual, who was no longer bonded to a slave owner, Lord or master. The town inhabitants acquired a residential status, ultimately resulting in something new – citizens with “rights” based on property ownership. “Town air makes a man free” was the saying.
The steam engine made possible new machines and new modes of transportation. The new technology, with the gas lamp and later the electric light and electric power grid, created the basis for a new kind of town – the modern city.
American Development and Rise of Detroit
America began as a colony, as a European settler’s State. The villages of the Native American Indians were destroyed in wars of genocide, and new towns and cities were created based on a capitalistic economy, with its signature buying and selling of labor power. Southern slavery dominated the economy, subordinating Northern industry and finance to a Southern-based agricultural economy.
Industry, more productive and profitable than agriculture, caused the North to break its dependence upon the South, with the North now demanding the deciding voice in government and State. The result was the Civil War and the victory of the North over the South. After the Civil War, a new model of the town – capitalist cities with night lights and then electric lights, grew up financed by Northern finance capital.
Detroit, existing as a port city and early home of steel and oven making, grew with the transition of the carriage industry into the auto industry. Henry Ford’s assembly line methods drove the development of gigantic industry and monopoly finance and created the foundation for the industrial city model.
Mechanized agriculture kicked eleven million sharecroppers off the land; six million white, five million Black. These folks migrated from the Southern farms, ultimately ending up North, seeking work in an expanding industrial economy.
After World War II a wave of legislation was passed to guarantee the workforce for this expanding economy. Measures were taken to support, house and keep intact a mass of trained industrial workers with the ups and downs of the capitalist economy. The civil rights movement exploded during a time when the economy needed the labor of Blacks. With the passage of the Civil Rights Act of 1964, the Voting Rights Act in 1965 and the Fair Housing Act of 1968, legal segregation based on skin color was overthrown. Women made strides in fighting to keep the family checkbook out of the pubs, taverns and bars, and for a greater share of the social wealth. A new generation of women entered production, achieving greater economic independence than their previous generation. The first public housing projects, the first freeway, which laid the basis for suburbia and shopping malls, and the very first shopping mall, were created in Detroit.
Finance in the Robotic Economy
An economy is essentially production and distribution. Under capitalism proletarians (laborers) sell their labor ability to the owners of the means of production in exchange for wages. With these wages commodities created by the class of wage laborers are purchased.
Capitalism is the interplay of group-class interests. Ultimately these groups are divided into economic classes with class interests, and involve other factors including sex, age, color, religion, nation, region, etc. Terms such as finance, speculation, capital, etc., have been created to describe components of a specific kind of class-based system. The common use of these terms over time disguises the system and makes it appears as a law of nature. Just as monarchism and American slavery were rationalized as a natural law of the economy, God sent, the same is true with capitalism today.
Computers and robotics are creating a new economy and a new form of financial capitalism: speculative finance capital. This form of capital in the robotic economy has little to no connection with production of “things”, that is, commodities. It has proletarians, cities, students, and everyone else in a web of debt that can never be paid off.
The solution to the crisis of the city and city finances requires taking sides on this issue. These new banksters are not the old banks of the industrial epoch. Bank of America is the second largest holder of municipal debt in the United States. It is second only to JPMorgan Chase. In fact, neither one of these financial institutions are really banks. That is to say these non-banking financial institutions are allowed to create a credit and debt system based on valueless products without an anchor in production of real commodities. The recent filing for bankruptcy of Detroit is another stage in the inevitable result of this process.
The solution is to dismantle the financial system and nationalize the credit system in the class interest of the new class of proletarians.
Emergency Manager System: Fascism
Just as the industrial revolution had transformed the villages of antiquity and the towns of medievalism, the electronic revolution transformed the industrial city and the bourgeois- democratic regime. The bourgeois revolution created the epoch of the citizen, abolishing the status of serf, slave, lord and master. Electronics eliminates the need for human labor. Under the capitalist system, this throws millions into poverty, makes widespread ownership of property no longer possible and undercuts the foundation for the bourgeois-democratic regime. Today, the ruling class is turning from bourgeois democracy to fascism to maintain its rule.
Since March 25, 2013, Michigan’s largest city – Detroit – has been governed by an Emergency Manager. The Emergency Manager suspended – in practice, fired – the mayor and city council, making Detroit the first major American city since the system of Jim Crow to be ruled based on a fascist form of the State. The mayor’s office and city council have no political or administrative authority, despite the fact they are democratically elected by the people of Detroit.
The fight to impose the Emergency Manager system in the state of Michigan goes back two decades. In 1990, Public Act 72, the Emergency Financial Manager law was enacted. Governors dispatched EFMs to cities or school districts to take over their finances. While it was undemocratic on its face, EFM powers were limited. Claiming a new law was needed to give managers new “tools,” Governor Snyder signed PA4 into law in 2011, giving the EFM breathtaking powers. The Emergency Financial Manager (EFM) became a new and improved Emergency Manager (EM).
The Emergency Manager Act criminalizes debt and makes the inability or perceived inability of a political jurisdiction to pay the interest on debt, punishable by the suspension of representative government. In the case of school districts, local school boards including the Superintendents can be suspended (in reality, fired). The new and improved managers under PA4 can break up and merge cities under their jurisdiction; can void union contracts; sell off public assets (including water rights, public parks and beaches, libraries, hospitals, airport authorities, etc.) and privatize city services. Pay, benefits, pensions and job security are all at risk. The ability of an individual to exercise the powers generally reserved to government, based on a representative democracy, is fascism.
Vision of a New City
Like the clan community, villages, towns, temple-city-states and the industrial city, economic systems have a life cycle. New means of production creates new classes and new ways of organizing human society as the law of life. Just as the steam engine created an industrial working class that replaced the existing manufacturing class, electronics – computers and robotics – is creating a new class of workers. Once we view production and distribution differently we can see our way out of the mess in which electronic capitalism has ensnared the country.
Finance, from municipal bonds to student loans to mortgages to monthly car payments is a monetary form of capital used to realize private profit. In our vision of the new society based on public ownership of the socially necessary means of production, corporate profit is done away with. Deploying labor and resources in an environmentally safe way in order to provide for the well-being of all society will be the purpose of production.
A new system based on public ownership of the socially necessary means of life means that credit and financing becomes the ability to “make things happen” (mobilize and deploy resources and labor to advance the human agenda). We can solve the crisis of cities and create a new kind of city no longer based on the corporation once we leave the system of capitalist production relations behind.
September/October 2013. Vol23.Ed5
This article originated in Rally, Comrades!
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