David Bieri: Gradual and Cataclysmic Money Revisited: How Detroit's Turbulent Financial History Matters for Urban Theory

Photo illustration showing economic change in Detroit and a quote by Henry Ford

"The Great Housing Credit Boom and Bust in Detroit (Spatial Distribution of Mortgage Originations)," from Bieri's Moonlights, Sunspots and Frontier Finance: The Historical Nexus between Money, Credit and Urban Form. photo / David Bieri

David Bieri is an associate professor of urban affairs and affiliate associate professor of economics at Virginia Tech (VT), with a joint appointment in the Global Forum on Urban and Regional Resilience. He also holds an endowed appointment as faculty fellow in the VT Program in Real Estate. Bieri's current research project, Money and the Metropolis, studies how the urbanization of credit has transformed American capitalism over the past two centuries. His other research examines regulatory aspects of international finance, global monetary governance, and their role in the process of financialization. He also writes about the history of economic thought. Before joining the faculty at VT, Bieri was a faculty member at Taubman College at the University of Michigan in Ann Arbor. Prior to his academic appointments, he held various senior positions in central banking and investment banking, including at the Bank for International Settlements in Basel, Switzerland, and at Bankers Trust and UBS in London. Bieri received his Ph.D. in public policy from VT. He holds a master's in corporate and international finance from the University of Durham (U.K.) and a B.Sc. (with honors) in economics from the London School of Economics.

Abstract:

Jane Jacobs' observation of a perpetual tension between "cataclysmic" and "gradual" capital flows across the urban hierarchy has gained new currency in the wake of the Great Financial Crisis. This talk reengages with these half-century-old claims by examining the evolution of the monetary-financial system and urban development as a joint historical process. Specifically, Bieri will develop the case of Detroit as an urban center of "frontier finance" that plays a unique role in modern U.S. financial history — a tale that includes a major default on railroad bonds (1835), two national banking crises with Detroit at their origin (1837 and 1931), near-bankruptcy (1958), and actual bankruptcy (2013). As such, Detroit's variegated monetary-financial history typifies the urbanization of credit as a turbulent process that involves the clash of monopolists, corporate fraud, financial Ponzi schemes, enduring corruption, organized crime, and federal insurance abuse and bailouts that range from the great Free Banking experiment of the 1830s to the Obama administration's emergency rescue of Detroit's auto industry. Finally, this talk also offers a tale of one of Detroit's great success stories: The lasting iron grip on the city's economic fate by its financial robber barons — a two-century-old struggle over ownership and control that arcs across several regimes of accumulation from Charles Trowbridge, Detroit's first privateer-financier, to his present-day pendant, Dan Gilbert.

Sponsored by the Glenn H. Beyer Memorial Lectureship