There is almost nothing about Globalization 3.0 this is not good for capital. Capitalists can sit back, buy up any innovation, and then hire the best, cheapest labor input from anywhere into (sic) the world to research it, develop it, produce it, and distribute it. Dell stock does well, Dell shareholders do well, Dell customers do well, and the Nasdaq does well. All the things related to capital do fine. But only some American workers will benefit, and only some communities. Others will feel the pain that the flattening of the world brings about.
-Thomas Friedman, The World is Flat: A Brief History of the Twenty-First Century
Scenes from the Class Struggle in Detroit[1]
By Nathan Jaco
Frankly, the literature of the global cities model has clear Marxian influences. The focus of the literature is on the way in which the material conditions of cities are changed by the imperatives of capital and the relationships between and among the high-capitalists, the bourgeoisie, and the marginal denizens of the cities and the relationships of each of these classes to the means of production, where production is no longer industrial but service-oriented with large concentrations of capital assets in the financial, innovative, and technological sub-sectors[2]. I am not a Marxist. Marxist theory is historicism, as I believe Karl Popper demonstrated. Marxism is a demonstrably flawed sociological theory; fatally flawed and limited in its predictive capability—thus unimpressive as a science. But, as Chris Hedges says, Marxism provides a vocabulary for talking about the very real problems of society[3].
Breaking away from contemporary academic tradition by not focusing on a pedantic analysis of an arcane issue, I would much rather paint in broad strokes here—detailing the antagonisms between classes and what implications of this class conflict were borne out in the post-industrial history of a blighted Midwestern metropolis. This is radical sociology and owes a nod to Marxian thought, but unlike Marx I am not self-consciously in possession of a general framework whereby I am able to classify all instantial phenomena and predict the nature and direction of the relations between constituents (though I believe I am armed with what Noam Chomsky might call “Cartesian common sense”[4]). However, I would like to impose a principle into the analysis to serve as a north star. This guiding light will hopefully assist me in arriving at a coherent conclusion at the end of some wandering (which is precisely what a good academic adventure is: a bit of wandering). That principle is the concept of the spectrality of modern capitalism. I encountered this idea in Slavoj Zizek’s Violence, where Zizek talked about the objective violence of modern capitalism and the way in which the material circumstances of literally “real” people are ignored for another reality—one with real consequences nonetheless. However, Zizek meant spectrality properly in the Lacanian sense[5]. I mean spectrality in a less abstruse and obtuse sense. I mean spectrality in the sense that modern financial capitalism is actually growing into a non-materialist enterprise. This critique is only partially derivative of other works, because I am using a term with implications contemplated by its original use, but I am using it in a different sense. But I hope to demonstrate how the non-materiality of neoliberal capitalism has deleterious human consequences.
A word of caution is needed regarding the present research. Given the onerous time constraints, I have been unable to give the literature more than a cursory review. This review was sufficient for understanding the major points of the authors, but was not thorough enough to determine the probative value of the totality of evidence the authors bring to bear in demonstration of the cogence of their arguments. Therefore, there is a very real risk here that I have reached premature conclusions. I was surprised by how neatly this research congealed. However, the tidiness of the coalescence may be merely coincidental, and I may be misled by false impressions due to this. I urge the reader to exercise their own judgment in drawing conclusions.
LITERATURE REVIEW
Detroit Divided focuses on explaining why the marginal population suffered and attributed these effects to the following causes: technological change, manufacturing degradation, and globalized capital[6]. It seeks to explain the polarization of Detroit, which is realized in the inequality between wealthy whites in the suburbs and poor blacks in the central. Detroit’s focal manufacturing product was durable goods, and its economic fate hinged on the robustness of the market for durable goods, while its laborers fate was dually contingent upon both the same and the structure and processes of manufacturing durable goods (particularly the labor intensity and the composition of skill levels demanded). Furthermore, Detroit is heavily dependent upon automotive manufacturing, with no substitute source of employment at a large scale. The marginal population of Detroit—black Americans—was marginalized by both capital flight from their confined living zone and by the racism of white workers and employers. This process of suburban/urban polarization typified the 1970s and 1980s, but has actually worsened since that time. While the processes of technological change and capital re-centering has benefited some workers, black Americans have been unable to assimilate the way that generations of European immigrants and southern transplants have, and are therefore, sometimes literally, left out in the cold.
In The Origins of the Urban Crisis, Sugrue offers a widely accepted explanation that the interacting phenomena of central city isolation, unemployment and resulting impoverishment have their origins in complex but persistent patterns of inequality which have existed since the post-war era and have since solidified[7]. Sugrue sees Detroit as merely an exemplitor of larger scale changes which have occurred throughout the Rust Belt. According to Sugrue, the “crisis” state of urban areas was not an inevitable, organic outcome of the forces of nature but rather the consequent of economic and policy decisions—particularly “industrial location policy” which was not motivated solely by “technological imperatives” but also by desire for corporate dominance including tax avoidance and union-busting. Federal and local policies, activism by private sector actors, and indifference by white workers in the process of assimilation in the segregated steady state of the economy left black Americans under assault from all sides.
In The End of Detroit, Maynard takes a far more business-centric view[8]. Maynard states the overarching goal of the Big Three automakers was strategic growth and not custom-centric product. The leaders of these companies focused on the use of financial capital to build enterprises. They focused on the value of the enterprises and not on the value of the products being made. When this led to alienation from the domestic consumer, they responded with financial enticements and with shifting their operations toward their financial business. This financialization of the Big Three auto producers ultimately led to their failure as manufacturing enterprises.
For a perspective on Detroit from another angle, the biographical account Walter Reuther: The Most Dangerous Man in Detroit, by the delightful Nelson Lichtenstein[9]. Walter Reuther was the son of a West Virginia brewer who was a socialist organizer. Reuther became a prodigious socialist organizer himself, but lived long enough to strike one-too-many Faustian bargains. Walter rose to the executive board at UAW in 1936 at a time when trade unionism was being buttressed by New Deal programs and progressivism. However parochial influences, particularly the realities of work-life and the managerial control of the industrial bureaucracy, on the marginal classes, namely black Americans, Appalachian transplants, and eastern Euro immigrants, managed to stultify emancipatory self-assertion. By the end of the Great Depression period, almost half of American workers were blue-collar workers and the income of the bottom two quintiles of American laborers was rising considerably, while Michigan was a national center for war production attracting workers from all over—notably the South. Unionization was associated with significantly improved material conditions of life for the labor classes. Reuther had to walk a thin line in the war ear because he had to adopt anti-Communist rhetoric and shop policies in a period of patriotic militancy but also not allow the imperatives of war production to stultify the union movement. Due to the imperatives of war production the government intervened with the National Defense Mediation Board (NDMB) which served as a conflict resolution mechanism between labor and capital based on the need for social stability. The government tended to favor equalization of wages and benefits between primary and marginal classes of laborers. However, in the process the now socialized union movement ceded “much freedom and legitimacy to the warfare state”. Reuther distanced himself from his more ideologically coherent socialist past and embraced the idealism of American capitalism citing the unparalleled productivity which he was competent to comment on because of his front row seat. Reuther maintained a faith in collective bargaining and Keynesian government intervention to raise living standards and maintain employment, but failed to contend with the new theories of industrial relations and forces of industrial automation, seeing this as an inevitable natural process. His failings exemplify the failings of the union movement, which left laborers further weakened and the marginal classes at the mercy of corporatism.
In order to determine if the etiology of Detroit’s pathology could truly be attributed to neoliberal capitalism, as earlier asserted, I consulted an account of neoliberalism capitalism causing uneven development on a global scale, namely Harvey’s A Brief History of Neoliberalism, to search for parallels[10]. Harvey’s account, with some analysis, leads to the following conclusions: Neoliberal programs collapse foreign economies that open up capital markets to speculative pressures from interest rate fluctuations, the U.S. and Euro companies can then come by falling-priced assets at fire-sale prices. Countries with high rates of return on foreign direct investment and foreign portfolio investment from the U.S. and substantial periods of economic growth suddenly fall into crises caused by currency speculation—particularly in the financial sector which leads to liquidity drying up for less ethereal enterprises—which tends to lead to strategic sectors (including the banks of course) being bailed out or nationalized and other industries or companies not supported by state interventions left to the wolves of Wall Street. For the Big Three the problem worked in reverse. Neoliberal programs induce countries to focus on building up exporters, leading to an export-dependent economy reliant to a significant degree on U.S. consumers. This makes them vulnerable to currency fluctuations, which can be created in a volatile speculative environment with the interest rate fluctuations by U.S. and Euro central banks being amplified by speculators and devastating countries with easy capital flows and export-dependent industries. For the Big Three in Detroit, their growing export focus left them not sufficiently attentive to domestic markets, while their dependence on financial schemes to recover left them vulnerable to the financial markets, without mention of their growing reliance on financial operations for turnover. The eventual crisis left the Big Three, and much of Detroit’s economy with it, in dire straits.
CONCLUDING REMARKS
But the suffering for modestly skilled marginal workers in Detroit was not primarily an effect of the crisis. It was part of long-term process which pre-dated the current crisis. The problem for laborers in general is that capital was becoming a substitute for labor thanks to labor-saving technological and technical innovation. In the era of globalization, capital became a further substitute for labor as companies led by finance men focused on their strategic use of financial capital to drive international growth of the companies rather than focusing on using real-world resources like labor, plant, and equipment to improve revenues as one might expect from truly “productive” enterprises.
The vicissitudes and inclemency of the market and the callous movements of capital and intra-labor class conflict along racial lines are responsible for volatile patterns of employment for the marginal class. It is true that there exists real opportunities for some members of marginal groups, as the overall trend of society is toward more social civility. However, the problem of inequality is a problem of persistent and complex patterns of discrimination which are hard to circumscribe narrowly enough to place indubitable blame upon because of their fluidity.
As supported by, if not all, virtually all the literature here reviewed, since the early 20th Century Detroit’s economy has been heavily dependent upon manufactured durables, especially autos, and the auto industry itself was both central to the economy and highly dominated by three massive producers. The giants of industry were built by innovators and their early success was contingent upon technological prowess. These giant carmakers were led by a relatively small group of financiers who developed a focus on building big companies within the financial realm (that is making them big in terms of quantifiable financial metrics), not making great products in the real world. So it is my belief—which is itself now better informed than when I began this research--that the spectrality of modern (since this process began before proper globalism took hold in the 1970s and 1980s) and contemporary (the era of globalization) capitalism led to loss of employment both when it was successful and because of its failures. The latter is an unanticipated result (at least unanticipated by your humble author).
Allow me to be candid: with this research I did not find what I sought to find. I sought to find a narrative of the structural oppression of the people on the margins in Detroit that could place blame squarely on the shoulders on the insidious machinations of wicked corporate executives. That is not what I found. This is not to say that the suffering of many thousands of disadvantaged denizens of Detroit’s ghettos was not caused by conscious economic and policy decisions made by rational and accountable beings. But the decisions were not based on viciousness, but rather on the imperatives of an ideological system which places finance first and human consequences later.
I have become more sympathetic to the Lacanian sense of spectrality, as interpreted by Zizek. I have also become more sympathetic to Peter Marcuse’s thesis that the “character of contemporary cities” is not merely a part of the phenomena of global cities, but a part of the “phenomena of the Capitalist City” which predates the globalism of the 1970s[11].
It is my hope that the abbreviated analysis provided above was somewhat useful to the reader for the purposes of understanding the pathological state of Detroit and the disease process of Anglo-American capitalism, which has now metastasized through globalization. The corporatists who overcame the distributive welfare states of the New Deal era America and the social democracy of the advanced European states made the Luciferian decision that it was better to reign in Hell than serve in an imperfect Heaven. All hail to his Satanic Majesty, the modern Corporation.
[1] The inspiration for this title comes from an episode of The Simpsons titled “Scenes from the Class Struggle in Springfield” in which Marge tries to join a prestigious country club.
[2] Sassen, S. (2006). Cities in a World Economy Third Ed. Thousand Oaks, CA: Pine Forge Press.
[3] Hedges, C. (2010). Death of the Liberal Class. New York, NY: Nation Books.
[4] For a valorization of common sense and derogation of social scientific “theory”: http://www.youtube.com/...
[5] So I am not accused of taking anything out of context, here is the full quote in reference:
Here we encounter the Lacanian difference between reality and the Real: “reality” is the social reality of the actual people involved in interaction and in the productive processes, while the Real is the inexorable “abstract,” spectral logic of capital that determines what goes on in social reality. One can experience this gap in a palpable way when one visits a country where life is obviously in shambles. We see a lot of ecological decay and human misery. However, the economist’s report that one reads afterwards informs us that the country’s economic situation is “financially sound”—reality doesn’t matter, what matters is the situation of capital… Is this not truer than ever today? Do phenomena usually designated as those of virtual capitalism (the futures trade and similar abstract financial speculations) not point towards the reign of the “real abstraction” at its purest, far more radical than in Marx’s time? In short, the highest form of ideology does not reside in getting caught in ideological spectrality, forgetting about its foundation in real people and their relations, but precisely in overlooking this Real of spectrality and in pretending directly to address “real people with their real worries.” Visitors to the London Stock Exchange get a free leaflet which explains that the stock market is not about mysterious fluctuations, but about real people and their products. This is really ideology at its purest.
Zizek, S. (2008) Violence: Six Sideways Reflections. New York, NY: Picador.
[6] Farley, R. (2000). Detroit Divided. New York, NY: Russell Sage Foundation.
[7] Sugrue, T. (1996). The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit. Princeton, NJ: Princeton University Press.
[8] Maynard, M. (2003). The End of Detroit: How the Big Three Lost Their Grip on the American Car Market. New York, NY: Doubleday.
[9] Lichtenstein, N. (1995). Walter Reuther The Most Dangerous Man in Detroit. Chicago: University of Illinois Press/HarperCollins.
[10] Harvey, D. (2005). A Brief History of Neoliberalism. New York, NY: Oxford University Press.
[11] Marcuse, P. (2006). Space in the Globalizing City. In N. Brenner, The Global Cities Reader (pp. 361-9). New York, NY/Canada: Routledge.