The American Dream: Detroit’s resuscitation

If one could epitomise the phrase “could have been” in one simple image, it would indubitably be the image of Detroit. The unyielding forces of time have taken a once great city and denigrated it to the status of one of not only one of America’s most economically destitute, but also one of its most dangerous regions. Nowadays, Detroit carries many of the hallmarks of the lesser developed countries of the world, especially with roughly 47% of the population being described as “functionally illiterate” by The National Institute for Literacy, a rate only 13.8% higher than that of Afghanistan. Despite this, Detroit still carries as much, if not more potential as it did in the 20th century, and is simply crying out for some economic solutions to its varied and diverse range of problems. Much of Detroit’s high crime rate can, in truth, be narrowed down to a high unemployment rate, leading to a lack of jobs for people to occupy themselves with, so even this ailment, is, at its core, financial. What this means is that there is still hope for this long-suffering city, as long as the relevant American policymakers act in a fashion that is both effective and sustainable; alas, it is clear to see that this has not happened thus far. Nevertheless, what I endeavour to achieve with this article is to perhaps shed some light on how Detroit can again become the bustling, cosmopolitan hub that it once was, through, primarily, the introduction of a special economic zone.

Special economic zones, which seem like a highly unusual step for a developed country such as the USA, may in fact be a simple and effective solution to revitalise the city of Detroit. The step of making the city a special economic, or more specifically, an industrial zone could potentially be the catalyst for a holistic revitalisation of the Detroit economy. In a nutshell, an industrial zone is a zone specifically made out for industrial development, where tax cuts and tax holidays, among other financial incentives, would incentivise corporations to set up operations in Michigan’s largest city. Detroit’s unemployment rate was a whopping 29% during the worst that we saw of the 2008 recession, meaning that more than 1 in 4 people were unemployed at the time. Despite having reduced somewhat due to, among other causes, a steady outflow of people from the city, unemployment rates are still grossly high, and if Detroit wants to reverse its fall from grace, this is one of its first facets that need changing. The only way to do this, in truth, is by somehow persuading businesses to come to this dilapidated zone of urban decay, and invest in the revitalisation of the area. Now, feasibly, the only way in which this can happen is by supplying them with the aforementioned financial incentives to encourage them to locate in Detroit, supplying jobs for a great proportion of the population. This is the intuitive first step to Detroit’s regeneration.

Functional illiteracy, as alluded to above, is also a major proverbial roadblock to the future success of Detroit. The solution to this is almost as obvious as its problems itself; to invest more in education. Despite politicians’ repeated assertions stating the importance of education, they themselves seem not to believe in what they say, the evidence of which lies in Detroit’s astonishingly abysmal literacy rates. Regardless, education is quite frankly one of the most important facets of any developed region, so for Detroit’s schools to be in the state they are in (as repeatedly shown by the mass media) is frankly shocking. Needless to say, this can only be solved through an increase in education spending in the city, which would give a better education to many residents of the city, thus giving them more transferable skills with which to work and earn money. In addition to this, education has a vital role to play in keeping school-aged adolescents off the streets, thus reducing crime rates, and making the city overall more attractive for people to relocate to. With the low house prices across the whole of Detroit nowadays, it could prove a popular location for many individuals desiring a lower cost of living, if only there was a basic level of security and educational services in the area. By spending more on education, many of Detroit’s fundamental problems could perhaps be ameliorated or even eradicated altogether.

To make sure that Detroit does not fall prey to the same evils which caused its dilapidation decades ago, they need to learn from their various mistakes. The biggest of these was to rely far too much on the car industry, which turned into its Achilles heel when Ford Motors, among other corporations, left the city. Diversification is the key here to financial prosperity, as Detroit needs to ensure that when one industry perhaps fails in the city, there are many others to continue to back up the city financially. This was exactly the problem with the city before; they did not have a backup plan for when demand for automobiles lessened. The conversion of Detroit into an industrial zone and a renewed focus on education will only be sustainable if the city manages to provide wide-ranging sources of income; otherwise, they will simply consign themselves to the same fate as before. In addition, without diversification, a great deal of brain drain would occur, with talented residents leaving the city due to lack of opportunity in their chosen field of expertise. As such, it is crucially important for Detroit to spread its roots far, not deep, if they want to ensure their continued financial prosperity. Of course, in addition to the 3 economic reforms outlined here, much social reform needs to take place in the city before we can truly say that it has been regenerated, but these financial steps provide the building blocks to restore Detroit, again, into a great pillar of the USA.

Shrey Srivastava, 15


By Shrey Srivastava

A finance and economics enthusiast, and someone who wants to share his views with the world.


  1. Shrey, are you an American (U.S. citizen)? Because this post on Detroit reaches deep into the problem that US started back around 2008, and gives it a treatment that can be offered from someone on US soil. Congratulations! You’re at least 20 years ahead of your biological age (not judging you, though).


  2. Hi Shrey, Dretroit does, as you say, have great potential, yet the endemic problems that have settled there are not easily solved. Education of older, even middle aged workers is hard to accomplish in reality, especially if the expectation is for the kind of golden age conditions that existed in Detroit’s heyday when the union could demand and get fantastic deals for the workers.

    Those same deals have, along with the general noncompetative offerings from gm and the economic woes of Chrysler lead to a crisis, and tragically everyone stood their ground and watched the ship sink.

    The jobs have relocated to the southeast, and since each job is supported by suppliers, those jobs move too.

    The idea of a special economic zone is a good one, but the crazy crime rates and poverty have to be under some control or any business tempted will exist like a small armed camp. Honestly, the unattractive truth is that they almost certainly need to raze the untenable excess and now worthless housing stock and let the city grow again from there.

    As you say, this time, choose more that one basket.


    1. Thank you very much for the comment 🙂 I completely agree with everything stated in your comment; I hope the education policy outlined in the article will do something to reduce the crime rates that you highlighted in your comment.


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  4. Excellent post….my problem is that Detroit will go the way of Harlem…it will lose its cultural heritage all in the name of progress. I do not want Detroit to fail just try to protect its cultural background at all cost….chuq


  5. Shrey, Thanks for replying to my blog post, and I very much enjoyed reading your views on resurrecting Detroit. Of course, like others, I had to keep reminding myself of your age, as most of us are less concerned with macro-economic policy at 15 than the call from raging hormones. In any case, you may be assured that you have gathered another regular reader out here in sunny San Diego, California. All the best, and continued success in your studies and writing. TR


  6. Shrey, I’ve posted a reply to your comments on my own blog (which is only marginally about economics and finance, so it probably wouldn’t interest most readers of this one).

    But I just want to say, having read this post on Detroit, that (like so many others who’ve replied here) I’m amazed at your age and – quite regardless of that – your depth of argument and lucidity of style. If you can think and write like this at the age of 15, the sky’s surely the limit. I couldn’t approach that level, and I’m nearly 65.

    Good luck in whatever you do, and keep up the good work!


  7. This was a particularly interesting article to me because it touches on something that I experience every day as a special education teacher. I work with students from a variety of socioeconomic backgrounds. I’ve noticed that many students have difficulty believing in themselves when their environment makes them believe anything but. Often, the parent does not know how to assist their child with homework or have enough cultural capital to know what their resources are. Many parents are unavailable to support their children due to mandatory prison sentencing for drug offenses. As such, these students will take on challenging behaviors and fall behind academically.

    How would you go about spending public funds on education in a way that reflects the massive gaps in outcomes? In which sector of education would you focus the investment? Staff? Materials? There is a high school in suburban Detroit that is primarily poor and African-American. The school switched to a flipped classroom model wherein the students would do independent practice at school and watch a lecture at home. This way the parents would be able to tell their children to watch their lecture and not have to worry about whether they can help students with their homework. Additionally, it gives the teacher more time to help students when they are actually working on math problems, for example. As a result of this initiative, the graduation rate rose from 20% to 80%. This investment may be as simple as providing students smart devices that have access to video content.

    There was also the example of the Tangelo Park millionaire who used his wealth to give younger children access to free day care and graduation high school students free college. The graduation rate rose tremendously, crime fell in half, and property values went up. That’s something you should definitely look into. He conducted the program when crime rates were already falling in the 1990s. I think you should do some research as to how much of Tangelo Park’s success was a result of rising graduation rates and how much of it was part of a bigger trend. Maybe there is data on a demographically similar community in the area that had different outcomes.


  8. Wow, impressed with this blog. I do agree that creating incentives for employers to locate themselves there in order to offer employment is the first major step to creating revitalization. Amazing work young man. Keep it up!


  9. I think you need to do a little more research. Spending per pupil in Detroit is $15,570 per pupil per year. the problem with Detroit is corruption, as always happens when you have a small group of people having control over most of the resources, You could spend $100,000 per pupil and get the same result.

    Likewise, if you tried to start a business in Detroit, the parasites that ripped apart some of the most successful American factories would come out of the crevices and pull it apart. The city and state governments would latch on and suck every tax out they could. The labor unions who forced the car makers to pay people for sitting in a room and reading the paper because people could not be fired even when there was n work would appear demanding high wages and absurd rules.

    You need to chase all of the parasites out of Detroit and have people who believe in personal responsibility move in. Otherwise it will stay a smoldering reminder of why Socialism doesn’t work.


    1. Ah yes, the good old talking point “socialism doesn’t work” because of one example that can only loosely be attributed to socialism (let’s ignore that trickle down economics has failed the entire country, as opposed to one city who has a few socialist policies in place…) As the article pointed out, Detroit’s problems arose from the crash of the auto industry and had nothing to do with socialism. In fact, it could easily be argued that the problems arose because of lack of regulation on the auto industry and the bailout that occurred following the crash. But let’s just blame it all on socialism boogieman. It’s much easier that way, isn’t it?


      1. But the auto industry is alive and well in the South. The industry didn’t fail – there were just too many burdens to allow it to continue to be profitable in Detroit. That’s a decision that isn’t made easily since it is really expensive and difficult to move a factory.

        I always love how it is pointed out that various socialist policies will cause bad things to happen like the loss of jobs, factories closing, or increases in healthcare costs, Liberals say it is silly to think that way and those things won’t happen, then when they do happen Liberals find something else to blame. Other examples of Socialism failing: Venezuela, China, USSR, Cuba, Chicago, British healthcare. Can you name examples of Socialism succeeding?


    1. “Note they’ve also had a Democrat as a mayor for fifty years.”

      And? I can easily find far more prime examples of corrupt Republicans than you can Democrats. Where there is power and money, there can always be found examples of corruption, whether it be in politics or business. The fact that these guys were Democrats has nothing to do with their corruption. They’re corrupt, period.


  10. Wonderful post, Shrey. I like your focus on diversification, lack of it seems to be a key factor in the decline of the city.


  11. What an awesome write up. It’s truly hard to believe that you’re only 15 years old, as you write and reason like someone well beyond that age. I’ll admit I knew of Detroit’s circumstances, but I haven’t given much thought into how to fix the problems since I live so far away. This post was very enlightening.


  12. This is the most important problem that we my have as a nation right now: Nowadays, Detroit carries many of the hallmarks of the lesser developed countries of the world, especially with roughly 47% of the population being described as “functionally illiterate” by The National Institute for Literacy, a rate only 13.8% higher than that of Afghanistan.


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