What is the answer to Detroit?

I was watching a show Forgotten Planet and one particular episode caught my attention. It was an episode on Detroit, its heyday and its demise. For a long time Detroit was seen as the industrial mecca in the US, turning out automobiles, steel works, mining operations and one of the country's best school systems. But all of this was to come to an end in the wake of economic policies and disastrous government programs. Detroit now sits in ruin. So what would it take to return this city to the forefront of production and the ability for its citizens to prosper? Is the answer to just get government out of the way?

In an article written in 2013 Patrick Barron makes his case for a "Free Detroit".  His idea is to rid the city of all regulations and all taxation. Barron asks, "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?" adding next, "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."

How can they have it both ways? You cannot allow zero taxation and have a funded government, even miniscule government compared to the current model.

The rest of the article reads pretty much how one can envision any free marketer article going. Cooperative experiences between citizens without the need for bureaucratic red tape, restrictions licenses, regulations and of course the end to the state sponsored welfare state.

All of these things are in line with the thinking of most Laissez Faire proponents, and of course with most who are familiar with the great Henry Hazlitt and Ludwig von Mises.

What Detroit has become is, in large part, due to the enormity of its city government, the State Government and helped along by the Federal Government. Programs that were meant to help the poor or working poor were in fact reducing them down to a life of dependency, and of course when the government finally runs out of other people money to give away, catastrophe ensues. The lesson to be learned from its fall is that there is such a thing as too much government.

But what is the answer to get it going again?

As Mr. Barron states it may lie in doing the complete opposite of the cause.

In response to Barron's writings on Detroit Chief Investment Officer of Universa Investments LP Mark Spitznagle writes, "Detroit can correct its past public-sector ineptitude and abuses by unleashing the private sector’s vast potential, rooted in the metropolitan region’s vibrant entrepreneurial and manufacturing culture, skilled workforce, and a robust technology base nurtured by world-class institutions like the University of Michigan. The city’s position on an important border crossing and access to an enormous fresh-water supply from the Great Lakes, not to mention the business community’s unrelenting support, enhance its prospects further."

Echoing the late Murray Rothbard, such a collapse “is the ‘recovery’ process, and far from being an evil scourge, is the necessary and beneficial return, says Spitznagle.

I think Detroit can be the greatest study of if and how free market and Austrian economic principles and policies can work. Whether it succeeds or fails will be the greatest milestone in the sake of accepted economic means to ends.