I was recently in Detroit, and I have a few thoughts about what I saw. One way to learn the economic history of a community is to see who gave money to its art museum, when, and for what. The labels on paintings tell you something about the work, but they also offer a who’s who of major donors. The Detroit Institute of Art was founded in 1885, when Henry Ford was still working on his family farm, and it managed to amass some lovely European paintings before the Model T hit the road. It’s a reminder that Detroit had wealth and culture even before the auto industry arrived.
Before Detroit had automobiles, it had people who donated funds for art after making money in publishing (Mrs. James E. Scripps), agriculture (Charles Willis Ward and Queene Ferry Coonley), and energy (James L. Edison). As visible as Mabel Dodge Luhan and assorted Fords are among the museum’s donors, they have plenty of company from other wealthy art lovers, many of whom preceded them. The new auto philanthropists were joined by people who made money in soft goods rather than hard ones, such as members of the Kresge and Taubman families.
And what a legacy they have left!
The collection is impressive, and the installations are really well done. They enlighten but don’t pander. With the emphasis on older European works, the visitor gets to see another layer of wealth, of the people who had money long before the Industrial Revolution. The portraits of various Medicis and minor European royals remind us that once upon a time, wealth came from land, not ideas. That’s not the case in our current post-bubble economy. Real estate in Detroit is cheap. You could buy acres and not be wealthy. In an era where people can work anywhere, it’s not terribly important that they aren’t making any more land.
The next generation of wealth will make their money from ideas.
Just as we don’t know what those ideas are, we also don’t know what types of amazing video installations and avant-garde works will be dreamed up in time when it’s time for the next entrepreneurs to donate them to the DIA.
Even during the auto industry’s heyday, Detroit had some significant non-auto sectors. Take music, as in Motown Records. The label decamped for LA in 1972 and is now part of Universal, but the original headquarters still stands as the Motown Museum. Visitors can see the two-flat where Berry Gordy Jr. launched the record company that made Detroit singers famous before Eminem was even born. The museum tour is a lot of fun, and the guide I had was beyond enthusiastic. He made us sing in the studio, and we all sounded great even without Auto-Tune.
But here’s what struck me, financial type that I am: Gordy structured his business to make a lot of money for himself. One stroke of genius was creating as many record labels as needed to represent any genre. Motown even had a country label, Melody Records. As if often the case with intellectual property businesses, his performers and songwriters probably didn’t so well. So many artists signed with him when they were very young and without independent advice. Maybe that’s why I didn’t notice any of their names among the donors at the DIA.
No One’s Emerald City
When in Detroit, I was struck by how many of the people I talked to seemed to have learned the lines of the Chrysler-Eminem Super Bowl commercial by heart. It is definitely a city with wide-open spaces, thanks to all of the vacant lots. But there people who live there love it and want it to come back. They want to show it off. They want Detroit to matter. And they aren’t waiting for gas to go back to $1.00 per gallon, either.
If that passion is put into new businesses, then the city will recover, somehow. But when? Timing is tough to call. While you wait, marvel at the scenes from the Diego Rivera mural in the Detroit Institute of Art, among other city landmarks.
And Marshall Mathers, I’m waiting to see your wing in the DIA.
Until next time,
Ann C. Logue
Guest columnist Ann C. Logue is a lecturer in finance at the University of Illinois at Chicago and the author of Socially Responsible Investing for Dummies (Wiley 2009).