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Tuesday, July 30, 2013

Detroit - A Glorious Experimental Opportunity

   This was by Patrick Barron is on the Mises libertarian site and seems to me to be something worth trying in bankrupt Detroit. What Detroit has going for it is that there is no real downside it doesn't work. Indeed from my answer posted below you will see that I think it would work faster and perhaps better than the author does: 

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

My comment:

   "This is essentially a less extreme version of what happened with Hong Kong. Less extreme because HK started as one of the poorest places in the world, far worse than Detroit; that in 1948 their troubles were made worse by 2 million refugees without property, fleeing Mao; that Detroit's trading hinterland would be the USA & Canada; and that I assume anybody who wanted to leave Detroit (ie anybody simply unable to survive without welfare) would do so.

That latter might make the rebuilding, through the establishment of new, probably gated, communities of tax exiles rather fast.

If it included no external trade restrictions, if only by water, I can see it as a good place to establish a factory for mass producing nuclear plants.

Thanks to the benevolent non-rule of people like the Scot, Sir John Cowperthwaite, Hong Kong is now the wealthiest, non-oil, community in the world and the example to China (though not unfortunately to its former colonial master."                                                                                                                                                        

    I am thinking that it would quickly mean the suburbs spreading back into the centre in the form of a gated community of people not wanting to pay Michigan taxes.

   There is nowhere in Britain remotely as bad as Detroit. Nonetheless we have had a very successful Enterprize Zone in London Docklands, now possibly the most moneyed square mile in the world and if that is not justification for cutting a lot of regulation and some taxes in chosen depressed areas I don't know what would be.

   And I have previously suggested such entreprize zones on Scotland's more remote places or islands.

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