Tuesday, March 24, 2009

The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit

The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit by Thomas J. Sugrue. Princeton University Press, New Jersey (c. 2005).

World War II gave American race relations an opportunity to choose a new path.  During the war, Detroit powered the American army, and stood atop the nation as the symbol of industrial ability.  Land, labor, capital, and entrepreneurship primed the pump that fueled Detroit.  Every player in the economic boom pursued his maximization of utility.  Status quo of the city provided this maximization of utility at the expense of African Americans.  Thomas Sugrue, in The Origins of the Urban Crisis, highlighted the city’s massive expansion, thirst for resources, and policies that fed its fall.  Detroit’s maintenance of the malfunctioning standard, instead of pursuing sustained innovation, led to the collapse of the city.

During the creation of Detroit’s industries and, more acutely, during World War II production, labor shortages brought higher wages for the city’s manufacturing jobs.  Well paid workers, in order to control wages, created an artificial labor shortage with discrimination and segregation.  Managers provided excuses for the segregation, saying they “feared that white workers would strike or lose morale if the color line were breached” (93).  Union leaders stated support for integration, but acted oppositely. At union shops, “disproportionately few blacks held union posts” (101), while “on the national level, the UAW was on the cutting edge of civil rights” (100).  In 1955, Michigan passed the Fair Employment Practices Law.  Employers exchanged explicit discrimination for disparate impact: “prospective workers found their way to the union through references from friends and relatives.  Here, housing segregation reinforced hiring discrimination” (107).  White control over wages was founded on control of labor supply. Once employees asserted groups of individuals were inferior, the labor supply was halved and wages forced upwards.  The system rewarded every white person with greater opportunities than half the population. Marginalizing African American maximized these rewards for white workers, and “patterns of discrimination fluctuated depending on the relative supply of black and white labor” (122).  As workers maintained artificially high wages, Detroit’s industrial costs soared and “employers left industrial centers with high labor costs for regions where they could exploit cheap, nonunion labor” (138).

Discrimination of African Americans in the workplace diffused into society.  Even segregating neighborhoods created shortages for white and black living spaces. Vultures of society maintained status quo because segregation provided a benefit.  For real estate agents, threat of integration created artificial turnover:

"Blockbusting" real estate brokers, as they came to be called, offered real opportunities for blacks, while sowing panic among whites.  Working both sides of the embattled racial frontier made a lot of real estate brokers rich. (195)

Real estate agents received higher compensation from protectionist neighborhoods assaulted by rumors of integration.  Shrewd landlords extorted black tenants living in dilapidated neighborhoods with excessive rent and destitute conditions.  Individuals maintained the dual systems because they maximized utility.  Two artificial markets, employment and housing, allowed deficient individuals to assert superiority over half the population with an easily distinguishable feature: skin color.  Using segregation, individuals scrambled for larger pieces of the flagging industrial complex, and, doing so, thwarted an innovative, entrepreneurial future.

Sugrue argues that Detroit’s economic foundation of and federal funding of segregation premised a collapse.  Companies received greater gain when they deserted the artificial markets of Detroit. The tone of Origins of the Urban Crisis exposed the author’s passion for examining urban blight.  Comprehensive sources included community council memorandums, FDR speeches, US social-political dissertations, newspapers, and time period surveys.  Surgue constructed the sources into a profound statement: Detroit’s fall was evitable.  Government, society, businesses, unions, and education failed to provide positive direction to establish the city as a reigning industrial powerhouse.  Each player acted as if the outcome was a zero-sum game.

After writing my review, I read about the Nash Equilibrium.  Asymmetrical information and violent defense of the status quo in the public sector created a stalemate for Detroit.  No group gave ground for the fear of being trampled.  These groups eventually made it inhospitable for business in the city.  In the end, the entire city was trampled.

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