Detroit – Motor city

“You can see here, as it is impossible to do in a more varied and complex city, the whole structure of an industrial society.” So wrote essayist Edmund Wilson, reporting on a visit to the Motor City in the 1930s. As the capital of America’s most important industry—automobile manufacturing—Detroit became a global symbol of modernity and of the power of American capitalism and the labor that built it.
Detroit had all of the ingredients for industrial growth: it was close to the nation’s major centers of coal, iron, and copper mining; it was easily accessible by water and by land; and it was near the nation’s leading, well-established production centers. Still, it was not a great metropolis. When Henry Ford founded the Ford Motor Company in 1903, Detroit was only the nation’s thirteenth largest city.

By the mid-twentieth century, one in every six working Americans was employed directly or indirectly by the automobile industry, and Detroit was its epicenter. The “Big Three” auto firms—General Motors, Ford, and Chrysler—were all based in metropolitan Detroit. The auto industry consumed vast amounts of steel, glass, copper, and (later) plastic, fueling the rise of a host of auto-related industries in and around the city. Detroit was, in the words of one historian, a “total industrial landscape,” a place where hundreds of thousands of blue-collar workers found work on the assembly lines, in stamping and tool-and-die plants, in foundries, and in a myriad of small factories that made all sorts of parts, from spark plugs to hood ornaments. The reach of the auto industry extended far into Detroit’s suburbs and into the small towns of the upper Midwest, where manufacturers made everything from auto glass to engine mounts. The dependence of towns like Toledo, Ohio, and Flint, Michigan, on the auto industry led to a common adage: “When Detroit gets a cold, the whole Midwest gets pneumonia.”


Photos of Detroit

  1. Creative destruction

2. The Market for Lemons

3. Tragedy of the Commons

4. Principal-agent theory


Form groups 1,2,3,4. Focus on one of the concepts each. Explain your concept to the others.

Explain in plain terms two of the concepts discussed. Post as a comment.

3 reaktioner till “Detroit – Motor city”

  1. The tragedy of the commons occurs when individuals neglect the well-being of society in the pursuit of personal gain. Most individuals are happy as long as they themselves have it well, without caring about the rest.

    The principal–agent problem occurs when a person (the agent) is able to make decisions on behalf of, or that impact, another person (the principal). The principal doesn’t hires someone but forgets the specifics. Like a color of a car, or the flavor of an ice-cream. The agent will finish the job on his own, with his own decisions. Either in self-interest or for the better of both.


  2. Creative destruction is a concept in economics which since the 1950:s has become most identified with the Austrian American economist Joseph Schumpeter who derived it from the work of Karl Marx and popularized it as a theory of economic innovation and the business cycle.

    ”Creative destruction” describes the ”process of industrial mutation that incessantly revolutionizes the economic from within, incessantly destroying the old one, incessantly creating a new one”. This sort of term could compare to Cinema and websites. Nowadays we search movies at the websites and watch them there instead of cinema because it’s free.


  3. Tragedy of the commons

    The tragedy of the commons is a theory of a situation where things shared among a community, or everyone, is used in a way that only benefits them and leads to the overuse of said shared thing.

    Creative Destruction

    The destruction of a market to allow for another market to rise.



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