I grew up in Detroit. Well, six blocks outside in a middle-class town you’ve never heard of. But Detroit was where my younger years were spent and my college years too. Every time I visit family, I spend time in the city, driving around to see if old haunts still exist or if anything has changed.
In some areas, things have changed for the better. Downtown is in much better shape than when I hung out there. Outside of that area, however, where most of the inner-city residents live, Detroit is still a very depressing and depressed place. But it doesn’t have to be.
Like most economically devastated cities, the collapse can be traced back to policy decisions made by elected officials. In Detroit’s case, after the race riots in 1967, everyone who could afford to leave left. They called it “white flight,” but the people leaving were of every color.
That left behind those who either wouldn’t leave (because they loved the city so much) and those who couldn’t afford to. Both groups kept electing liberals, with new politicians more liberal than the last. An economic death spiral started, and the political leadership became convinced the end of their failure was just one more government policy away. Each made it worse. And you ended up with a city that, to this day, is a shell of what it once was.
The population is down from nearly 1.9 million in 1950 to 670,000 as of 2021. But that doesn’t mean there’s no hope. There’s always hope. As someone who still loves that city, I’ll never lose hope in it. But the people have to be willing to take some chances — especially when it comes to its political leadership.
Maybe it is time to try something new — something that has worked in Hong Kong (before the China takeover), Singapore, and with the domestic enterprise zone experiment in the United States.
On a small island off the coast of Honduras, Roatan, for example, created a “Zone for Employment and Economic Development,” or ZEDE, to do just that. Think of these zones as a more comprehensive version of “empowerment zones,” where government power is focused on protecting human rights, free enterprise can flourish under the rule of law, reasonable taxes are collected, and moderate regulations are the norm. In these zones, protections are in place to protect property rights (including sufficient police protection) and reduce regulations that inhibit growth, which often results in an explosion of local jobs and lower taxes.
They have been successful in their short lives, which is to say they are hated by authoritarians who insist government control is the only “fair” way to reach prosperity. The new leftist Honduran government has repealed the ZEDE law, and they want to apply the repeal retroactively to squash existing zones and U.S. investments in them. In the name of equity, everyone must suffer equally.
Prospera argues that investments in existing ZEDEs are legally protected because the “repeal of the ZEDE legal framework does not affect the constitutionally protected acquired rights of ZEDE investors, which are premised on the legal personhood as well as the legal, economic, administrative, and political autonomy of ZEDEs.” That makes sense. I’m not a lawyer and don’t know how this will play out legally, but U.S. investments are protected by the Central American Free Trade Agreement. That means this conflict will be litigated, and if Honduras loses, it could end up on the hook for, according to the Center for Strategic and International Studies, “hundreds of millions and perhaps billions of dollars of liability.” No bueno.
It’s generally a good thing when authoritarians are terrified by the idea of people obtaining liberties. Detroit would be the perfect testing ground for such an idea. There are young, industrious residents of the city — hipsters who move there because houses are cheap. And while hipsters aren’t known for their open embrace of the free market, they do so without hesitation when given the opportunity. Those stores they own don’t open themselves.
Detroit is in need of something dramatic, and bringing big business downtown isn’t going to cut it. I still love the city. I still believe in it. A ZEDE might just be what it needs. Get unnecessary government out of the way and let people freely pursue prosperity. What the hell do they have to lose? The answer for Detroit and other depressed American cities is literally nothing.
Derek Hunter is a nationally syndicated radio host, podcaster, and author of Outrage, INC: How the Liberal Mob Ruined Science, Journalism and Hollywood. Follow him on Twitter @derekahunter.
