The city of Detroit continues to be a haunting case study of municipal implosion, economic upheaval, and urban renewal.
An "emergency manager," Kevyn Orr, has been appointed to oversee the restructuring of the city's finances. Part of that process has been for the city to declare bankruptcy. That unprecedented strategy received confirmation on Wednesday when U.S. Bankruptcy Judge Steve Rhodes issued a decision permitting the city to pursue protections that will allow a restructuring of Detroit's debts. As with most bankruptcy negotiations, this means the possibility of creditors receiving pennies on the dollar of what's owed.
But there are real people attached to those debts. In particular, Judge Rhodes ruled that pensioners are one of many creditors and all creditors should be treated fairly. In other words, pensions receive no special protection. Unions for city workers (legitimately) hear this as a broken promise.
Which brings us to another piece of news from Detroit this week. The auction house, Christie's, assessed the value of the Detroit Institute of Arts collection between $452 million and $866 million.
What's the connection between these two news items? You guessed it: many creditors, including unions and their pensioners, are looking at the DIA collection as something to be monetized to help settle the city’s debts. And Kevyn Orr agreed that DIA art "remains on the table."
There are ways to monetize the art without simply selling off the collection. Some have suggested using the collection as a collateral for a loan—which sounds like a proposal to get out of debt by taking on new debt.
Others have suggested finding foundations and donors willing to secure the collection by creating a foundation that would effectively buy the collection but preserve it for public enjoyment. But given that the art is already in the collection largely from the largesse of prior donors and patrons, you can understand why donors might wonder: Isn’t this double-patronage, in a sense? Our patronage secured the art originally; now our giving is just securing it ... again? It’s a fair question.
There are no good solutions here. Without question, protecting the DIA collection will mean even fewer cents on the dollar for retirees and pensioners—people who devoted a life of work to civil service.
(We could, no doubt, have a conversation about the viability of compensation packages promised to city workers over the years. But then we also need to talk about those corporations who embody "Detroit" fled the city for the suburbs, evacuating the city of tax revenue. There's plenty of blame to go around.)
One can understand why pensioners and other creditors look on the DIA art collection as a "luxury"—perhaps not unlike those disciples who thought Mary Magdalene was wanton in her "waste" of the spikenard on Jesus’ feet (Luke 26:6-13). Retirees have mouths to feed; looking at Matisse is a luxury for the upper classes.
But what sounds like straightforward economic logic might betray a very narrow vision of flourishing. And what looks like a "luxury" might be more of a necessity than we realize.
The question we need to ask ourselves is this: What does a flourishing city look like? What does a healthy Detroit look like?
"Detroit" is more than its finances (or lack thereof) because cities are more than economic entities. Cities are multifaceted organizations of human social life. There is an economic aspect to any city, to be sure; but a city is not only economic. There are many sorts of “capital” that make a city flourish. Indeed, this is at the heart of Cardus' Social Cities initiative, which we summarize this way:
Thriving cities require that all of the resources within and around them interact as effectively as possible. This includes social and institutional resources that range from the very local, where we spend most of our lives, to the regional, national, and global contexts we are part of.
The complex network of relationships between people, institutions, and culture represents what we at Cardus call social architecture. We explore the existing social architecture and propose ways in which it might change to better serve the common good.
It would be a tragedy if the "restructuring" of Detroit were reduced to restructuring debt—as if all problems could be "monetized." No, we also need to attend to culture and fostering social capital if the city is going to flourish. The value of the DIA cannot be reduced to its monetization. While a bankruptcy court may not be able to honour such cultural complexity, one hopes the city of Detroit and her creditors can recognize the difference.