In 1932, Edsel Ford wrote a check and Diego Rivera picked up a brush. The result, twenty-seven frescoes covering the walls of the Detroit Institute of Arts’ Garden Court, is the greatest monument ever painted to American industry. Rivera spent months sketching the River Rouge plant and rendered its assembly lines, blast furnaces, and stamping presses as something close to sacred. He saw, even as a committed communist, what everyone saw when they looked at Detroit in 1932: the future.
Eighty-one years later the city filed the largest municipal bankruptcy in American history, and creditors’ lawyers began asking how much the paintings were worth.
How did that happen? And why did it happen in Detroit and not in Pittsburgh, a city with every reason to expect the same fate?
Those are the questions I put to Dave Hebert, Director of Economics & Economic Freedom and Senior Research Fellow at the American Institute for Economic Research, on this week’s episode of Acton Line. Hebert has written a paper on the divergent fortunes of the two cities, and the story he tells should unsettle anyone, left or right, who believes the answer to industrial decline is to build a wall around industry.
The parallels in 1950 were striking. Detroit built roughly half the world’s automobiles. Pittsburgh’s mills poured more steel than all of Great Britain. Each was a one-industry town at the height of that industry’s power, and each would falter as global manufacturing shifted in the decades that followed. Yet Detroit collapsed, hemorrhaging population and tax base, while Pittsburgh merely bent without breaking.
Hebert’s explanation begins with what each city had planted alongside its dominant crop. Pittsburgh, even in the age of steel, had cultivated other things: research universities like Carnegie Mellon, a robust healthcare sector, institutions with no connection to a blast furnace. When the mills closed, workers and capital had somewhere to go. Detroit had the automobile and the trades that fed it: machining, parts, tooling. When the auto sector faltered, the supporting industries fell with it, and a laid-off line worker looking for other work in the city found every other employer laying off too.
Monoculture is only part of the story. The larger part is what Detroit did to protect itself, and how each protection became a trap.
The 1950 “Treaty of Detroit,” the landmark agreement between the UAW and General Motors, guaranteed high wages, annual raises, and generous pensions. It was celebrated as labor peace, and for a generation it delivered. It also insulated Detroit’s workforce from any pressure to adapt. By the late 1970s, Japanese manufacturers were building cars with labor costs roughly half of Detroit’s. The treaty had not protected the workers so much as fixed the price at which they would become uncompetitive.
Government then stepped in to protect the protection. In 1980 Michigan rewrote its eminent domain law so the city could seize the Poletown neighborhood, spending some $200 million to clear it before selling the land to GM for around $8 million. Washington negotiated “voluntary” restraints on Japanese imports. Each intervention bought time, but none bought change. Shielded from competition, the automakers had less reason, not more, to fix the practices that were failing them. Protectionism, as Hebert puts it, offers short-term comfort at the price of long-term fragility.
The protectionist measures eventually failed to protect Detroit's way of life. The middle class left. The tax base eroded. Schools and services deteriorated, giving those who remained more reason to go. By 2013 the city Rivera painted could not pay its creditors.
What I found most compelling in our conversation was Hebert’s insistence that this is not merely a story about efficiency. It is a story about dignity. The Catholic social tradition has always taught that work is bound up with the dignity of the person. Hebert’s argument is that this dignity is not served by making workers permanent dependents of a declining industry propped up by subsidy and tariff. It is served by making it easier for them to move, to learn, and to find new work worthy of their gifts. Pittsburgh’s workers had that option. Detroit’s, for a long time, did not.
There is good news at the end. Since roughly 2010, investment in technology, mortgage lending, and financial services has begun to give Detroit the diversity it lacked. The city is recovering, slowly, by becoming less of a company town.
The Rivera murals, for their part, are still on the walls. A coalition of foundations, the state of Michigan, and the museum’s own donors raised more than $800 million to keep the collection out of the bankruptcy. It is fitting. Rivera painted men at work as an image of human dignity. The lesson of Detroit and Pittsburgh is that dignity cannot be walled in.