Tag: Jim Crow

The Case Against Reparations

The cover story on this month’s Atlantic is a very long piece from Ta-Nehisi Coates making the case for reparations to the black community. A lot of people are responding to Coates’ article without having read it. Conservatives are bashing it for demanding money, even though it doesn’t make any specific suggestions for what reparations would mean. Liberals are praising it for things it doesn’t say.

Although I frequently disagree with Coates, I’ve found him to be an illuminating and gifted writer. He often makes me aware of things I didn’t know about, gives a perspective I haven’t considered and has a keen appreciation of history. I read through the entire article and I found it to be illuminating, thoughtful and, in many parts, enraging. But while I agree with almost all his arguments, I disagree with the ultimate conclusion.

Buckle in. This will take a while.

The case, of course, starts with the original sin of slavery. Although this field has been plowed before, it’s always worth remembering that this was not some small institution confined to a few plantation owners. This was the single most important institution in the country:

The wealth accorded America by slavery was not just in what the slaves pulled from the land but in the slaves themselves. “In 1860, slaves as an asset were worth more than all of America’s manufacturing, all of the railroads, all of the productive capacity of the United States put together,” the Yale historian David W. Blight has noted. “Slaves were the single largest, by far, financial asset of property in the entire American economy.” The sale of these slaves—“in whose bodies that money congealed,” writes Walter Johnson, a Harvard historian—generated even more ancillary wealth. Loans were taken out for purchase, to be repaid with interest. Insurance policies were drafted against the untimely death of a slave and the loss of potential profits. Slave sales were taxed and notarized. The vending of the black body and the sundering of the black family became an economy unto themselves, estimated to have brought in tens of millions of dollars to antebellum America. In 1860 there were more millionaires per capita in the Mississippi Valley than anywhere else in the country.

TNC makes the argument that much of America’s ante-bellum wealth was built on slavery. This isn’t refutable. What is refutable is that much of America’s wealth today is still based on that. The United States paid a tremendous price in fire, treasure and blood to rid itself of slavery. Over $10 billion spent, which be half a trillion today. 600,000 killed, including nearly one in thirty southerners. Entire families were destroyed, entire cities burnt to the ground. The survivors lost all their “wealth” when slavery was abolished and most had to sell their property to northerners just to survive. A huge amount of lingering southern poverty can be traced to the impact of the Civil War. Whatever wealth slavery conferred on America — and it was significant — it was completely annihilated in the war between the states.

TNC then moves on to an era that was only slightly less horrible for black people — the Jim Crow era:

In the 1920s, Jim Crow Mississippi was, in all facets of society, a kleptocracy. The majority of the people in the state were perpetually robbed of the vote—a hijacking engineered through the trickery of the poll tax and the muscle of the lynch mob. Between 1882 and 1968, more black people were lynched in Mississippi than in any other state.

The state’s regime partnered robbery of the franchise with robbery of the purse. Many of Mississippi’s black farmers lived in debt peonage, under the sway of cotton kings who were at once their landlords, their employers, and their primary merchants. Tools and necessities were advanced against the return on the crop, which was determined by the employer. When farmers were deemed to be in debt—and they often were—the negative balance was then carried over to the next season. A man or woman who protested this arrangement did so at the risk of grave injury or death. Refusing to work meant arrest under vagrancy laws and forced labor under the state’s penal system.

Lynchings, terror campaigns, full-scale robbery of law-abiding citizens. The State or a bank could assert that a black person owed them money and they had little recourse. Prices paid by and to blacks were determined not by the market but by whatever was decreed by a white person.

That’s been gone over before, too. But here’s where the article contributes something original and important: what happened in the 1950’s and 1960’s, when blacks moved north and found themselves being systematically looted when they had the temerity to try to buy a home.

… Ross was not really a homeowner. His payments were made to the seller, not the bank. And Ross had not signed a normal mortgage. He’d bought “on contract”: a predatory agreement that combined all the responsibilities of homeownership with all the disadvantages of renting—while offering the benefits of neither. Ross had bought his house for $27,500. The seller, not the previous homeowner but a new kind of middleman, had bought it for only $12,000 six months before selling it to Ross. In a contract sale, the seller kept the deed until the contract was paid in full—and, unlike with a normal mortgage, Ross would acquire no equity in the meantime. If he missed a single payment, he would immediately forfeit his $1,000 down payment, all his monthly payments, and the property itself.

There were no options open to black borrowers besides these predatory loans. Banks would not lend to them. When the FHA was set up to increase home ownership, it “redlined” black neighborhoods and made black people ineligible for federally-guaranteed loans. When black people went to court, the courts upheld the predatory “lenders”. Covenants were put in place that restricted blacks from certain neighborhoods. When black people bought houses in white neighborhoods without formal covenants, they would find themselves the victims of mobs who would throw stones or set their houses on fire. The ghettos of Chicago didn’t just happen; they were made. This legacy continues today. A black person who has an income similar to a white person has a much higher chance of living in a high-crime neighborhood or a poor neighborhood.

Remember that for most people, a huge percentage of their wealth is tied up in their home. When you force someone to buy a home at above market value on predatory terms then prevent them from leaving if the neighborhood goes bad, you are creating a wealth gap. And the compound effect of all of these crimes over decades is staggering.

Adhering to middle-class norms has never shielded black people from plunder. Adhering to middle-class norms is what made Ethel Weatherspoon a lucrative target for rapacious speculators. Contract sellers did not target the very poor. They targeted black people who had worked hard enough to save a down payment and dreamed of the emblem of American citizenship—homeownership. It was not a tangle of pathology that put a target on Clyde Ross’s back. It was not a culture of poverty that singled out Mattie Lewis for “the thrill of the chase and the kill.”

Discriminatory laws joined the equal burden of citizenship to unequal distribution of its bounty. These laws reached their apex in the mid-20th century, when the federal government—through housing policies—engineered the wealth gap, which remains with us to this day. When we think of white supremacy, we picture Colored Only signs, but we should picture pirate flags.

The thing is, even with all these things I fundamentally disagree with the conclusion: that America’s wealth and prosperity was largely built on things like slavery and discrimination. I would contend that America’s wealth was built despite these things.

What would America be like today had there been no Jim Crow, no racial covenants, no KKK, no redlining, no slavery. Let’s posit, for the moment, that black people would be in far better economic shape and have more wealth. Would that mean white people were poorer? Would it mean America was poorer? No. American would be richer. Anti-poverty spending would be lower, crime would be lower, white flight and the massive expenses of commuting might never have have happened. White businesses would have 10% more customers, 10% more business partners, 10% more distributors. White customers would have 10% more businesses. White workers would have 10% more employers. Slavery didn’t build America. The South may have been rich on paper before the war but conditions in the South were appalling. John Adams described it as so poor it was like visiting a different country. To this day, the South is poorer than the North. Past institutionalized racism and the economic destruction it wrought is a huge reason for that. There are parts of the South were half the population is black. Imagine if that half were prosperous. Redlining and contract mortgage didn’t build Chicago, it nearly destroyed it.

Racism did make black people poor, yes. But it does not follow that it made white people rich. It made specific white people — like slave owners or contract lenders — wealthy. But the overall impact on the country was a huge negative. It’s like the thieves of the recent financial crisis. They got rich. But the country suffered.

Think about what happened when women entered the work force. Our economy surged. Our wealth increased. For men as well as women. If black poverty vanished overnight, black people would obviously be the biggest beneficiaries. But white people would benefit too.

Still … it’s hard to read TNC’s compilation of events and not conclude that black people spent the better part of two centuries being systematically robbed and abused by their government and by their society. It’s hard not to be weighted down by the sense of injustice. So does that justify reparations?

Well … in some cases, yes. I do not object to reparation paid to specifically wronged individuals by the specific people or agencies who did them harm. It’s the same reason I didn’t oppose reparations to Japanese people who were interred during World War II. Those claims were paid out on a case by case basis to people who were wronged, not to same vague group who was wronged by some other vague group. I did not object to reparations being paid to the families of Tuskegee victims or the survivors of the Rosewood riots.

But what about larger reparations? Would that not rectify some of our country’s racial wrongs? Well, that hinges on one of the biggest problems with Coates’ article: it basically ends its argument in the 1970’s. In doing so, it ignores one additional huge atrocity visited upon the black community — the War on Drugs. The War has turned inner cities into war zones. Black drug users are far more likely to be busted and far more likely to go to prison for being busted than white drug users. Black kids are more likely to get arrested for crimes and more likely to get harsh punishment for them.

But more importantly for this specific argument: we’ve been doing reparations for a while now. We haven’t call them “reparations” specifically, but the aim was to ameliorate the damage of two centuries of racism. And the results have ranged from nothing (when black people have been lucky) to disaster (when they haven’t been). Johnson’s War on Poverty was cast in explicitly racial terms. The result, many believe, was a small reduction in poverty at the cost of the death of the African-American family.* Urban renewal and “job creation” efforts have been heavily targeted at inner cities. The result of these policies was the wholesale destruction of inner city economies to the benefit of wealthy outside interests. A few years ago, racial discrimination by the Department of Agriculture was addressed with the Pigford settlements. That “worked” in that the only negative effect was some corruption.

(*Liberals like to jump up and down because poverty fell from 20% to 12% after the Great Society and black poverty fell from 40% to 25%. This ignores two things: the biggest reductions were at the beginning and right after Bill Clinton’s much-hated welfare reform, and; poverty rates fell faster in the years before the Great Society. Pre-1960 data is difficult to pin down because the government only began officially measuring poverty in 1959, which allows liberals to claim the Great Society cut poverty while ignoring everything that happened before then. The best numbers I can find indicate that poverty fell from 30 to 20% between the post-war era and the Great Society and black poverty went from 70-80% down to 40%. Whatever the exact numbers, it is clear that poverty was already plunging when the Great Society was foisted on us.)

Moreover, TNC hinges his argument on housing policy. But the last forty years saw a huge push to revise our housing policy and make credit easier for the poor and minorities to obtain. The result was a financial crisis that made things far worse for poor people and minorities, that destroyed what little wealth they had … again. TNC notes that subprime mortgages were heavily targeted at minority communities — even for those who had good enough credit to get prime loans. That’s true, but subprime was a small section of a massive swindle, aided and abetted by our own government’s “ownership society” policies. And Wells Fargo, for one, did pay reparations for that. And should have.

Take a look at this article, which uses hilarious Length of the Mississippi arguments to figure out what slaves were owed. It then suggests several possibilities for reparations including the idea that money be made available for investments in businesses. But we’ve tried that. You can look the desolate economies of our inner cities to see the result.

And that brings me to my conclusion: my main problem with reparations is that I don’t think it will solve anything. Giving black people a bunch of money may provide a temporary infusion of cash. But it will not solve the problems that truly plague the black community — poor education, few job opportunities, mass incarceration, broken families. When affirmative action first sprang up in college admissions, I predicted it would fail because it did not address the real problems that were lowering black admissions to college — broken families, poor public schools, high crime. It attempted a fix at the back end, like curing lung cancer by giving someone cough medicine. Affirmative action has faded but what has sprung up is almost worse: a massively leveraged financial system which encourages more and more people to go to college but leaves many of them worse off financially (and, as usual, blacks are getting the worst end of the deal.)

Let’s look at other instances of reparations. Presidents Reagan and Bush eventually paid out reparations to Japanese Americans interred during World War II. TNC cites the precedent of Israelis who demanded reparations from Germany and got them. That may sounds like a precedent for reparations for blacks. But … does anyone think that the prosperity of the Japanese-Americans or Israelis was created by reparations? Does anyone think they would currently be poor without them? Israel grew before reparations and grew after them and still has a strong economy 50 years later. Even with most generous assessment, reparations contributed only 15% to their economic growth over the decade of reparations and that at a time when Israel had minimal infrastructure to build wealth with. That is not nearly equal to the chasm that exists in our inner cities.

In both cases, the reparations were a moral judgement, not a way to ameliorate poverty. Paying reparations might make some feel better. It might assuage some lingering white guilt. But in the end, the impact of it on the black community will diminish and disappear. Just like when we sink billions of dollars into public schools. Or when we sink billions into “big projects” and “job creation” in our inner cities. We’ve tried this. Unless you are talking about the most extreme reparations (such as the suggestion by one wag that the government simply give money to black people every year to make up the difference in income between them and white people), this will be a temporary infusion that will go away very quickly.

The solutions to black poverty — to poverty in general — are far more complex. Black poverty may throw its roots in racism. But it has been compounded over the years by government malfeasance and cultural decay. That can not be fixed with money. We’re already spending hundreds of billions trying to. It can only be fixed by giving people the means to make money — through education and opportunity — or by stopping doing the things that hobble them — crony capitalism, the War on Drugs and mass incarceration. That will take time, possibly generations. It will involve changing the way we do things in many ways. But that would be real reparations, not another liberal silver bullet.

In any case, you should read Coates’ article. Not because of the conclusions he reaches but because of the relentless documenting of the African American experience. It is long and depressing but a must-read. The racial history of this country does not define us. Nor does it justify whatever policy some Lefty think tank comes up with. But it should not be forgotten.

(TL;DR version: there is no question that economic destruction has been visited upon the black community by institutionalized racism from the early days of this country up to the present day. However, as is often the case with liberals, TNC correctly identifies the problem but identifies the wrong solution. Reparations, even if you accept the idea of collective guilt, aren’t working and will not solve the problems that ail black America.It will only put them off. Again.)