What if Google bought Detroit?
brandonhtomlin.blogspot.comAm I misreading this article, or is the author confusing buying all of Detroit's $20bn of outstanding debt (an unbelievably terrible idea) with buying the actual city? To "buy the city", you'd need to buy all its residential, commercial, and industrial real estate. There are $1 houses in Detroit, but there are also million dollar houses there, along with 8-figure office towers.
I think this analysis is a little silly.
> What would be appealing to Google would be the ability to produce city wide legislature that allowed them to use the entire city of Detroit as real life testing ground for all of their technologies without having to comply to city laws and regulations.
...and turn it into a dictatorship, too, apparently.
Someone's a bit confused.
Isn't this just unincorporated land? There are big patches of unincorporated land in every state; they aren't lawless wastelands, but are instead managed and services by their parent counties and states.
No, they used this Improvement District to gain even more power over the land then even an incorporated city would have,
>There are big patches of unincorporated land in every state; they aren't lawless wastelands, but are instead managed and services by their parent counties and states.
Tangentially, this isn't true. NJ has no unincorporated land. Most states in the north eastern quadrant of the country have their unincorporated land organized as townships, which have elected boards of trustees or similar.
Huh. Neat. Didn't realize that about NJ and the NE. Thanks!
No problem :)
He seems to be suggesting Google could garner significant local influence by 'bailing out' the city of its unfunded liabilities. Not, strictly speaking, as insane as intimating that you could own the City of Detroit for $20bn. But it's still pretty 'out there'.
It would cost considerably less than a billion dollars for Google to gain a commanding influence over Detroit! One billion is probably orders of magnitude more than what was spent on every election race there.
Luckily for Google, the city's operating under the Emergency Management law. So they would have to buy significantly fewer politicians than one might expect.
Unluckily for Google, the cash-strapped state of the city is not indicative of any lack of monied influences who rather prefer things the way they are.
We in Michigan are already a bit disillusioned with Google.
We gave Google a huge ($38 million) tax break when they opened an office here in Ann Arbor with promises to hire 1,000 workers at the Ann Arbor office.
Instead staffing has been around 300 people at that office.
The state actually filed a tax lien against Google due to this violation of the agreement.
So I doubt you'll see the state getting into bed with Google again soon.
According to this, the tax lien is not related to the tax break for the Ann Arbor office:
http://www.annarbor.com/business-review/googles-31-million-m...
Initial reporting indicated otherwise:
http://www.annarbor.com/business-review/31-million-tax-lien-...
Basically stating that the office in charge of auditing companies who got the MEGA grants and making sure they qualified for them wasn't doing its job and on review it turned out Google didn't qualify and owed back taxes based on that.
But regardless, if the tax lien is unrelated (which seems weird to me, especially since the figures involved fit perfectly with the MEGA credit), Google still hasn't held up its end of the agreement.
Imagine this blog post but with Google replaced with Exxon Mobil (which has an even higher market cap), and Google-friendly public policy replaced with Exxon Mobil-friendly public policy.
There's a damn good reason we don't want corporations to be able to "buy" cities.
Yeah we tried company towns. Didn't work so well.
I have heard of one company town that worked: Rochester, New York and the Eastman Kodak company. http://www.nytimes.com/2012/01/17/nyregion/despite-long-slid... But it's the only one I've ever heard of.
In China, it seems to work well to the financial benefit of the company. There are companies owning entire "cities" with houses for the employees, farms to produce eggs, schools for the kids, etc.
Or China is censoring all the news. After all, Big Brother has increased the chocolate ratio to 20 grammes per week!
Among them that doing so would tend to "bankrupt" the corporation.
This is nonsensical. Bailing out Detroit wouldn't give Google (or anyone else) any incremental sway over the auto makers. Nor would it give them some kind of carte blanche to act as a benevolent dictator and make changes to legislation without normal democratic process.
That's the part that's particularly laughable. The auto industry operates largely, if not almost entirely, outside the city limits these days.
Further, why would Google even need their help, let alone pay $20bn to attempt to strong-arm them into some partnership?
Google, should they want to develop their own vehicles, wouldn't need more than one or two plants for years. And there's plenty to go around in SE Michigan. There's no need for legislative sway and they can be had for significantly less than billions of dollars.
Not to mention if they just wanted influence GM in some way it would be far cheaper for Google to just write a check directly to them.
The poster is confusing the amount of insolvency with the value of Detroit. The value of the city far exceeds the valuation of Google.
The poster's confused, but I'm not sure it's necessarily true that the city of Detroit should have a value that's greater than zero. If the current cost of paying pensions and the cost of maintaining (underused) infrastructure is much larger than the expected tax base, than the value of the city (not including private property) could well be negative.
That said, it's unlikely that's true, because there's still a lot of option value available if someone's willing to make hard decisions and/or shed some costs through bankruptcy. (But it's going to be really unpopular, like not paying pensions or simply shutting down city services to certain neighborhoods.)
America doesn't really have a model for shrinking city infrastructure. Detroit is the first test of what happens when a major modern city stops growing and starts shrinking in a long-term way. It's hard to scale down government and infrastructure in a smooth way.
Isn't this the plot to RoboCop?
Detroit might be bankrupt, but the statue of Robocop is going to be awesome: http://www.avclub.com/articles/detroits-robocop-statue-is-al...
Yes, but perhaps for some other RoboCop loving city or individual. Pool your cash now to buy it at auction and help Detroit dig out of that $20/bn in debt.
Bankruptcy seems to have worked for Mexico and other states, why not Detroit?
RoboCop, but more explicitly in RoboCop 2.
> What would be appealing to Google would be the ability to produce city wide legislature that allowed them to use the entire city of Detroit as real life testing ground for all of their technologies without having to comply to city laws and regulations.
Ah yes, democracy, ever holding back technology and progress.
How many science fiction novels take place in a corporate-owned metropolis, where everything you do is monitored and logged to your profile? How long until we become Deus Ex?
I am keenly reminded of Shadowrun's megacorps, where corporations are the government, for all practical purposes.
Do. Not. Want.
Do you have any evidence that isn't based on a video game plot?
Obviously not, since a corporation has never actually bought a city like the proposed Google buyout of Detroit. I was making a glib remark about possible downsides to a Google city.
So in that spirit: Yes, in TV shows like Deadwood and Eureka.
Do you learn only from books? Use your eyes.
Yes. Robocop.
We're already Deus Ex.
This quote intrigued me to share this article for further discussion because I want to see this happen sooner than later:
"What would be appealing to Google would be the ability to produce city wide legislature that allowed them to use the entire city of Detroit as real life testing ground for all of their technologies without having to comply to city laws and regulations. This would allow them to test cutting edge technologies in everyday scenarios. It would also present the authority needed to re-imagine how a city operates on an information level, and not only to test their driver-less cars, but test products such as mobile commerce, free public internet and free public transportation as well."
Yes, it is definitely hard to imagine anything going wrong in a scenario where the entire population of a city is turned over to a corporation to use as guinea pigs.
Most recent edition of Top Gear showed 'ghost towns' in Spain. These are complete towns, but empty of people. It'd be much cheaper for Google to buy one of those.
The issue with an article like this is that you can't really buy a city.
The article talks about how Detroit has $20B in debts and Google could afford to spend $20B. But that wouldn't be the cost of Detroit which would also include all of the assets that the city owns. Even then, what have they bought? Things like the roads and sewer system? But they wouldn't really control those things since the residents of Detroit would elect their government.
But let's say that Google could own a city and rule it as a dictatorship within America. "Google could convince the existing car manufacturers to start producing Google Cars and a premium rate. [sic]" Self-driving cars are still a while away. Ignoring that for a moment (and ignoring the fact that Ford and Chrysler moved out of Detroit), I understand the thought: "how great would it be for the Detroit automakers to have a higher-margin draw to their products?" That would be great in a certain sense, but wouldn't really work. If it were easy and cheap to do, others could easily follow. If it's hard and expensive, Google isn't going to just donate those profits to the GM/Ford/Chrysler shareholders and workers - they're going to want those profits for Google shareholders and Google workers. However, the whole thing ignores the fact that Google owning Detroit and such a partnership have nothing to do with each other.
"What would be appealing to Google would be the ability to produce city wide legislature. . . [sic]" Again, this goes back to the issue that Detroit would still be democratically governed. Sure, Google could use power and influence to shape legislation, but isn't that what, say, Comcast tries to do? The idea that Google wouldn't have to comply with laws and regulations is laughable (and would be terrifying if it weren't so ridiculous).
It's always interesting to think, "how would someone/some organization I respect run a government." However, there just isn't logic in this article. Democratic governance negates most of it, equal protection guarantees mean that Google couldn't be placed above the law, and any partnerships with other companies could be made regardless of "owning" Detroit.
Buying Detroit's $20Bn debt would get Google a stack of papers, but not the sewer system or the roads. I think that's what you meant to say, but it wasn't clear to me.
Wouldn't that essentially be the beginnings of Fascism with a completely corporation owned city? Next Google could presumably install its "manager", lets call it the "Director/Dictator", that has no worries about democratic niceties and can therefore pass any legislation Google wishes (goodbye social justice, hello minimum work standards, corporate friendly legal environment).
big nit: facism is an absurdly fuzzy concept; the popular definition winds up being "people more authoritarian than I like". If you dig up Mussolini's comments, it's something more akin to making the civil religion the major ideology of the people.
Anyway. I don't know what would happen, but a corp-owned city is a classic dystopia scenario. I've lived enough of my life working for corporations; I don't really want their tentacles creeping into my entire life and making my body's entire existence about maximizing their profit, or being research subjects, etc.
Let's bring back the company town!¹ Where you shop at the company store using company scrip. If profits are down, your hours get cut but the rent at your company-owned house doesn't. And if you get fired, you have to move out with little notice.
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I'm not sure you can buy the right to legislate as you want, even if you own all the property in a given city.
FYI - This is the plot behind Showtime's Continuum (http://www.showcase.ca/continuum), where private corporations buyout the existing national government.
They don't portray human-rights well in this new world.
This is on the SyFy channel in the US.
I think for $20 billion Google could just buy the manufacturing companies in Detroit, get the cars built, still help with jobs in the city, and save a ton of money. They should not have to pay for other people's bad decisions that have put the city in the mess it is in.
Umm. I'm surprised no one has mentioned OCP yet. All we are missing is the cyborg.
The biggest risk would be Google shutting down Detroit in a few years, like many of their other products. I'm sure they'd allow the users to migrate their houses out to another city provider with plenty of notice!
I think the biggest problem is the question: would they be buying the assets? Or, the assets and liabilities? Future pension payments is a huge challenge for the current owners and future owners.
Fascism in America. I mean, who cares what 700,000 people think. All that democracy stuff is just in the way of google giving us awesome toys. What a bunch of tripe.
Detroit lost its democracy when the state appointed an Emergency Manager: http://tv.msnbc.com/2013/03/11/michigans-emergency-manager-l...
From a legal standpoint, how would such a thing even work?
Where's Google's leverage meant to be coming from in all this? What do they need you for after you've paid?
They'd do better if they bought a corn field and built it up from scratch as a city.
We used to think of powerful megacorporations ruling cities as a dystopia. But if I take a look at what our actual governments and authorities are doing (PRISM, Stand your ground laws, voting rights act, recent news of censorship in Britain etc. pp.) it seems it couldn't be much worse "under Google's rule". sigh.
Of course, the blog post is a bit naive, but it probably was just meant as a discussion starter. I've been thinking about a very similar plan.
This is what I'd do if I were filthy rich and ruthless: - Buy a large part of the city. I mean properties, buildings, infrastructure. - Arrange special terms with city and state. Make Googletown into a separate entity, with its own city government etc.. If you wait for another major crash, the US might be so desperate that you can arrange for extraterritorial status. - Maybe one could arrange that unused interesting property can be expropriated or forcefully sold. - Make Googletown into a Special Economic Zone. - You don't only get the property, but also everybody who lives on it. Not as your servants :-) but as citizens of Googletown.
Why? The idea is that you'll have a lot of very cheap workers, who will be extremely loyal to you for saving their city, if you pull it off correctly. You can produce all kinds of (cheap) goods at competitive prices, and sell them on the north American market. And you can run experiments - sure, Google Cars, but I'm more interested in social experiments (see below).
Why would Detroit/Michigan/the US agree to my plan? - It would provide immediate relief. As someone in this thread noticed, the debt is much less than the total value of the city. Paying the debt is peanuts in comparison. - They'd get rid of many bad = cheap parts of the city. - You'd take care of the people for them - providing healthcare, social security, police, etc..
How would I rule Googletown? I'd let it organize democratically, but I'd take care that I'd control the general direction of development. On one hand, I'd try to make it a liberal model town / experiment. Gay marrage, strict gun control, universal healthcare... a republican's nightmare :-).
On the other hand, I'm trying to run a very troubled town. People are poor, not well educated, there's a lot of crime. People are accustomed to doing stuff their way, and won't likely adapt well to a googletopian society. So it's not just carrot, but unfortunately also stick. (Wow, that sounded really Machiavellian. Honestly, I hope no one ever tries to pull this off.). One necessary thing would be to crack down on organized crime and gangs. Increase police presence, expell all gang members from the city bounds. Ban all weapons. Regard organized crime as treason against the people, and have draconian punishments for it. Robocops.
Again, I find it sad and scary that we've come to the point where I'm actually considering a benevolent corporate dictatorship to be a worthwhile alternative to our current system.
Would they rename it Delta City?
Naah, that would only happen if Delta Airlines bought it.
I think you are missing the reference to Robocop
Ooops my apologies! Been almost 20 years since I saw that flick!
geeks and politics, just like water and oil.