From The Guardian UK: http://www.guardian.co.uk/commentisfree/2013/jul/23/detroit-decline-distinctively-capitalist-failure
The auto industry Big Three were loyal only to shareholders, not the people of Detroit. The city was gutted by that social choice
Richard Wolff
guardian.co.uk, Tuesday 23 July 2013
Capitalism as a system ought to be judged by its failures as well as its successes.
The automobile-driven economic growth of the 1950s and 1960s made Detroit a globally recognized symbol of successful capitalist renewal after the great depression and the war (1929-1945). High-wage auto industry jobs with real security and exemplary benefits were said to prove capitalism’s ability to generate and sustain a large “middle class”, one that could include African Americans, too. Auto-industry jobs became inspirations and models for what workers across America might seek and acquire – those middle-class components of a modern “American Dream”.
True, quality jobs in Detroit were forced from the automobile capitalists by long and hard union struggles, especially across the 1930s. Once defeated in those struggles, auto capitalists quickly arranged to rewrite the history so that good wages and working conditions became something they “gave” to their workers. In any case, Detroit became a vibrant, world-class city in the 1950s and 1960s; its distinctive culture and sound shaped the world’s music much as its cars shaped the world’s industries.
Over the past 40 years, capitalism turned that success into the abject failure culminating now in the largest municipal bankruptcy in US history.
The key decision-makers – major shareholders in General Motors, Ford, Chrysler, etc, and the boards of directors they selected – made many disastrous decisions. They failed in competition with European and Japanese automobile capitalists and so lost market share to them. They responded too slowly and inadequately to the need to develop new fuel-saving technologies. And, perhaps most tellingly, they responded to their own failures by deciding to move production out of Detroit so they could pay other workers lower wages.
The automobile companies’ competitive failures, and then their moves, had two key economic consequences. First, they effectively undermined the economic foundation of Detroit’s economy. Second, they thereby dealt a major blow to any chances for an enduring US middle class. The past 40 years have displayed those consequences and the capitalist system’s inability or unwillingness to stop, let alone reverse, them.
Continue reading at: http://www.guardian.co.uk/commentisfree/2013/jul/23/detroit-decline-distinctively-capitalist-failure
