Declare Detroit a Free City, Give Free Markets a Chance

By: MISES

Patrick Barron writes: We who advocate the free market as the sure path to peace and prosperity often hear that the US economy has to get much, much worse before any real reforms will be allowed. Why must we continue to wait before taking serious action to throttle back parasitic government? A common response is that we need to wait until things are so bad that no one will be able to deny that government is the problem and not the answer. Then even died-in-the-wool socialists will give the free market a chance.

Well, what if we hit the brink and people want more government and not less? The result would be fascism in the US. Given a choice, I for one prefer not to wait for such an eventuality. I would rather have an American test case to illustrate that radically less government leads to peace and prosperity.

Detroit as a test case for economic freedom

The decades’ growing tragedy of a now bankrupt Detroit provides a unique opportunity to test our fundamental principles. What if Detroit became a free city in which government provided for public safety, honest courts, protection of property rights, and little else? Might not unabated free enterprise take hold as it always has in America?

Detroit is bankrupt, and its problems appear to be unsolvable. Its population peaked in 1950 at 1,850,000 only to fall to 706,000 in 2011, surely representative of people voting with their feet. As British politician Daniel Hannan has written, the Detroit disease may be well advanced in the rest of American cities and perhaps in all of America as well. Before the disease can kill the rest of America we have the opportunity to give free market reforms a chance in a fairly controlled setting — the bankrupt and dysfunctional city of Detroit.

All that Detroit really needs is economic freedom and secure property rights. Give Detroit its freedom from all manner of government, including the federal government. Declare Detroit a free city. (You can rest assured, Detroit, that America will come to your rescue if those bloodthirsty Canadians attack!) In other words, no one would pay any federal taxes whatsoever or be subject to any federal regulations whatsoever. Wouldn’t it be nice not to pay federal taxes, not even Social Security and Medicare taxes? Do the same with Michigan taxes. No taxes BUT also no federal or state aid either.

A Free Detroit would have absolutely no labor and workplace regulations, including minimum wages, mandatory insurance, equal opportunity rules, occupational safety rules, etc. People would be allowed to work together cooperatively for whatever terms their marginal productivity of labor will secure.

End all red tape that thwarts business startups and hobbles its expansion, such as licensing, public health regulations and inspections, zoning restrictions, etc. Do not be concerned that people may be employed in low wage, dangerous jobs against their will. The reality is that business owners must recruit workers and not dragoon them and chain them to their workplaces. Nor are business owners interested in harming either their workers or their customers. If they do, normal civil and commercial law will suffice.

Privatize all government services, such as garbage pickup, water and sewage services, and allow for unbridled competition in these and other areas, even fire protection. Sell off city property (who needs offices that are empty of government bureaucrats anyway?) and deed public housing to its current occupants, making them responsible for their own abodes. You may be surprised how responsible people can be with their own property. End public education and all its costs. Allow the people to get the kind of education that they desire, whatever that may be. Since half the current population of Detroit is functionally illiterate, what’s the risk?

Do you want a safe society? Then let people arm themselves without any licensing requirements. Since it takes Detroit police approximately an hour to answer a typical 911 call, this is simply a practical solution to the basic human right of self-defense. Above all end welfare. The destructive cycle of dependency is driving American cities to the financial and cultural wall.

Do not expect overnight success, but who knows? A free market always surprises us with new innovations. At first one can expect lots of mom and pop startups, sidewalk vendors, unlicensed and untaxed services such as simple property repair, home schools, private taxis, etc. But if Nike and other American businesses are enticed by lower costs and fewer regulatory burdens to outsource their manufacturing operations overseas, why would they not take a good look at a Free Detroit? Expect to be amazed.

Allow Detroit to become a safe, cooperative city that represents the best that America can be. Economic freedom will ensure the rebirth of Detroit. This city can become the beacon of true prosperity to the rest of America and to the world.

Patrick Barron is a private consultant in the banking industry. He teaches in the Graduate School of Banking at the University of Wisconsin, Madison, and teaches Austrian economics at the University of Iowa, in Iowa City, where he lives with his wife of 40 years. Read his blog. Send him mail. See Patrick Barron's article archives.

This article is an address delivered by Patrick Barron at the European Parliament in Brussels on March 16, 2011.

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