Buenos Aires, Detroit, and the Price of Prosperity
A section of Diego Rivera’s mural “Man and Machinery” displayed at the Detroit Institute of Arts. Photo courtesy of ashleystreet.
“America’s Great Comeback City” is plastered on the wall of Detroit’s international airport, the first sign that greets travelers before they make their way to the baggage claim. “Comeback” implies a process, describing a city that is a shell of its former self, striving to regain what it once was. In Detroit, you can observe remnants of this “great” past in nearly every corner of the city. As a child, I spent hours in the Detroit Institute of Arts, a museum with collections that put most others to shame. Among the Rembrandts and Van Goghs, Diego Rivera’s mural lies at the very heart of the museum, illustrating the history of the city’s industrialization, fueled by the labor of many and the ideals of one great visionary. This mural depicts the Detroit of the early to mid-20th century, shaped by Henry Ford’s automobile, Albert Kahn’s Art Deco masterpieces, and Berry Gordy’s Motown Records. Once one of the wealthiest cities in the world and a thriving cultural hub, Detroit was the American Dream. Today, however, to outsiders, Detroit is a city filled with thousands of empty homes, the skeletons of once-bustling factories, and marked by bankruptcy and crime.
When I recently visited Buenos Aires, I observed something similar. Once defined as the “Paris of the Americas,” the city continues to breathe life, but now in a labored manner. Although the city streets are lined with breathtaking monuments and structures, 31.6% of the population lives in poverty. In addition, 82% of Argentinians have expressed dissatisfaction with the state of the country, and only 20% believe that the government is working in the best interest of the general public. In the past, Argentina was known as “the breadbasket of the world.” Immigrants flocked to its shores to experience “wealth as an Argentinian,” seeking opportunity and sanctuary. However, just like Detroit, the very factors that made Argentina wealthy contributed to its decline.
The source of the issues we observe in both Detroit and Argentina is not simply the result of a single moment, but rather the fault of systems that fail to address domestic issues and thus collapse under slight internal and external pressures.
Despite its promising nature, Argentine success was based on a fragile structure. Argentina underwent a demographic transformation during the late 19th and early 20th centuries, leading to an era of prosperity known as the “Belle Epoque”. Hundreds of thousands of immigrants flocked to Argentinian shores, mainly arriving from Italy, Spain, and other European nations. This influx not only brought new modes of agriculture and industry to Argentina but also helped foster close bilateral ties with the very countries that people fled. Families that were separated by oceans became trading partners, and Argentina’s agricultural export-based economy boomed as the nation supplied vast quantities of agricultural exports to Europe and the rest of the world. By the 1880s, Argentina had become the most prosperous country in Latin America and one of the world's ten wealthiest nations. However, the very export-based economy that had ushered in this initial boom was insufficient to sustain it when other nations’ industrialization increased competition. By the end of the First World War, Argentina was facing an economic crisis. This set off a domino effect of social and political consequences, leading to a 20th-century plagued by coups d'états, brutal authoritarian regimes, and deteriorating economic stability. To this day, Argentina has been unable to recover from this painful time, illustrating just how difficult it is to escape a destructive spiral once it has commenced.
Both Detroit and Argentina are victims of unsustainable economic systems that rely on maintaining an absolute competitive advantage to thrive. In the face of growing global competition, these systems often falter. Detroit experienced its first major blow in the 1970s, when an oil crisis led many Americans to turn to cheaper, more fuel-efficient Japanese vehicles. What followed was the near collapse of Detroit’s central industry and “twenty years of federal bailouts, record industry losses, and worker strikes halting North American production for weeks at a time.” Aldo Isuani, a public policy professor, describes this phenomenon as a system that relies on “exceptional moments,” or miracles, which generate satisfaction and prosperity for a significant portion of the population. However, as soon as “holes” appear in the system and conditions begin to deteriorate, people who have become accustomed to high living standards grow increasingly dissatisfied. In response, they turn towards populist movements that promise radical, extreme solutions quickly. This creates a destructive spiral. One that, once entered, is difficult to escape from.
Isuani’s principles manifest directly in Argentina; this “populist tradition” has led to “bad economic policies” and the emergence of harsher social divisions that continue to plague the nation today. In response to the economic instability that followed the conclusion of World War I, the government adopted interventionist policies to increase workers’ wages and stimulate the domestic economy. Despite initial promise, these policies failed to save Argentina from a collapsing economy. Compared to its North American counterparts — the United States and Canada —Argentina did not have strong institutional development bound by the rule of law. As a result, by the 1930s, Argentina's economic stagnation had far eclipsed that of the United States during the Great Depression.
The first military coup of 1930 contributed to Argentina's institutional instability and the rise of ineffective political leaders who failed to stabilize the nation and its economy. Following yet another military coup in 1943, populist leader Juan Perón gained popularity. Upon winning the 1946 election, President Perón stressed self-sufficiency as a remedy to the stagnating Argentine economy, regarding once-close trade partners with newfound suspicion and closing the nation off to trade. What began as a means to facilitate internal innovation quickly devolved into steep price hikes and declining quality. Perón’s policies initially came with calls for inclusion and support for the lower and working classes of Argentina, showcased by Perón stating, “The nation is not the patrimony of the learned, much less of the wealthy, but it is constituted by everyone, by the rich and by the poor, by the educated and by the ignorant.” Furthermore, Peron’s once-unifying rhetoric also promptly shifted. He went on to stress the urgency in “defeat[ing] our external and internal enemies… annihilating them if necessary.” Within Argentina, significant ethnic, racial, class, and rural-urban divides already existed. What began as an effort to bring the nation's people together quickly devolved into classic populist “us and them” rhetoric. Perón was known for using words like “evil, unscrupulous, and vermin” to describe his opposition, and Argentinian society became further divided between Peronist and anti-Peronist lines.
Presently, in the United States, we observe sentiment that mirrors that in Argentina. Today, nearly 40% of Americans believe that our golden age has passed, 59% believe that substantial change is needed, and 60% feel that our economy is “very poor or somewhat poor.” This pattern holds true across various political ideologies, ethnic categorizations, and socioeconomic statuses. Americans are growing increasingly skeptical and disillusioned with the state of their government, economy, and even overall quality of life. Barely 10% of Americans believe that their government accurately represents them. Despite this general sense of dissatisfaction, there is little to no consensus on how to tackle America’s issues exactly. Each side of the political spectrum presents leaders who promise solutions that involve undoing what their predecessors implemented, but they fail to make any promising, long-lasting changes. Within Detroit itself, many of its citizens have lost faith in the system completely. Only 48% of Detroiters responded to the 2020 census, citing government neglect and unfulfilled commitments as reasons that fueled their reluctance to do so.
These leaders are quick to divide and scapegoat; they are eager to blame one demographic or moment for a poor situation, yet fail or refuse to address the weak foundations that are directly responsible for the problems. Detroit’s downfall is often associated with the oil crisis of the 1970s. Still, the city has also had a deep history of racial discrimination, reliance on a single industry, a lack of worker protections, and corruption. For Detroit, the United States Government responded with what is referred to as defensive industrial policy, or actions taken by the government to preserve industries under threat from foreign competition. Whether it is in the form of tariffs on imports, subsidies, or bailouts, as put by Political Economist Lester Thurow in the 1990s, these policies would become dominant throughout the 21st century. From KKK-backed Bowles of the ‘30s, Cobo’s redlining disguised as suburbanization, or Fitzpatrick’s highly skillful investments and fraud-marred term, Detroit’s politicians have further pushed the city off the brink. Federally, the United States took action, utilizing defensive industrial policies to protect Detroit’s automotive industry. These same industrial policies, once used to preserve Detroit’s automotive industry, have spiralled into policies that have become indistinguishable from corporate interests. Like Perón and other Argentine figures, American politicians since the turn of the century have begun to increasingly rely on what journalist Veronica Smink calls a “succession of economically illiterate populists” at both the local and national levels.
Whether it is Javier Milei in Buenos Aires or Donald Trump in Washington, politicians often call for a return to what they believe to be a much better era. Yet, the romanticized ideals emulated by Norman Rockwell’s Four Freedoms and the “picket-fenced” American Dream were not the reality for all. This America no longer exists, and even when it did, it was marred by a legacy of inequality, violence, and war. Economic instability is not the fault of a moment or a population; rather, it represents just how well a system can respond to obstacles. Disillusioned people turn to populism for answers to what appears to be years of stagnation. However, Americans must realize that there are no easy, short-term fixes to problems that have been simmering for decades. We must recognize that we live in an imperfect system, and it cannot be patched with simple, band-aid-like solutions; sometimes, it requires a complete reconstruction.
Hana Arnautovic (CC ‘27) is a staff writer from Detroit, Michigan. She studies economics and political science and is interested in democratic backsliding, international courts and tribunals, IGOs, and Western Balkan and E.U. politics. She can be reached at ha2705@columbia.edu.