Black Reparations Parsed

 

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In the midst of today’s heightened racial unrest, the calls for black reparations have become more insistent. In their recent book, From Here to Equality: Reparations for Black Americans in the Twenty-First Century, William A. Darity Jr. and A. Kirsten Mullen write: “Racism and discrimination have perpetually crippled black economic opportunities.” The offenses cited are slavery, legal segregation under Jim Crow, and more contentiously, “ongoing discrimination and stigmatization.” Their book figured centrally in a recent article in the New York Times Magazine by Nikole Hannah-Jones, who launched the highly controversial 1619 Project. In her piece, “What is Owed,” she makes this claim:

Reparations are not about punishing white Americans, and white Americans are not the ones who would pay for them. It does not matter if your ancestors engaged in slavery or if you just immigrated here two weeks ago. Reparations are a societal obligation in a nation where our Constitution sanctioned slavery, Congress passed laws protecting it and our federal government initiated, condoned and practiced legal racial segregation and discrimination against black Americans until half a century ago. And so it is the federal government that pays.

In addition to a vigorous commitment to legal protections against discrimination and targeted investment in segregated communities, Hannah-Jones insists that reparations must include “individual cash payments to descendants of the enslaved in order to close the wealth gap.”

Nothing can justify slavery or Jim Crow. But the case for cash reparations cannot be made by merely pointing to these egregious wrongs. It is also critical to identify a causal connection between past wrongs and the current situation. In other words, it’s crucial to draw a straight line from slavery and Jim Crow to the current disadvantages suffered by black Americans.

When I wrote about this topic in 2004, I argued that the necessary causal connection could not be made under a theory of tortious conduct or unjust enrichment. The former requires that a person who inflicts harm on another provide compensation for the loss. The latter requires that anyone who receives some benefit that was not intended as a gift is required to compensate the transferor to negate his or her undeserved gain. Today, that causal connection continues to be tenuous at best, weakening the case for reparations.

Darity and Mullen claim that slavery, racism, and discrimination have “perpetually” crippled opportunities for black Americans. But a closer look at the historical record reveals a more complicated story. A century and a half has passed since the abolition of slavery and 55 years since the passage of the Civil Rights Act of 1964 and the Voting Rights Act of 1965, both of which transformed American society for the better. Throughout this entire period, the fortunes of African Americans have gone up and down, attributable to events that are much less tied to slavery, but instead linked to politics, legislation, and legal rulings.

One topic of vital importance is how black unemployment rates have varied over the years. It is often overlooked that in 1948, at the height of segregation, the unemployment rate for black teenagers was lower than it was for white teenagers and remained so until the mid-1950s. The key economic driver was that the minimum wage was low enough that it did not act as a barrier to employment for black workers. Black youth unemployment soared once higher minimum wage laws went into effect. Slavery and Jim Crow had little to do with a shift driven by labor regulation. It gets matters backward to condemn the opposition to minimum wage laws as racist, as some do, when increases in minimum wage laws have worked to impose heavier burdens on black workers. And the teenagers so disadvantaged are likely to experience reduced employment prospects even after they reach their maturity.

The same analysis applies to the strong union movement in the United States, where federal legislation often hurt black workers’ opportunities for economic progress. In 1926, Congress passed the Railway Labor Act of 1926, which forced formerly independent black workers in their own unions to become minority members in white-dominated unions. The Supreme Court intervened in 1944 in Steele v. Louisville Railroad by imposing a duty of fair representation on the white union leadership to protect their minority members. But such measures were largely ineffective in neutralizing the ability of white-dominated unions to give plum positions to white workers through explicit racial preferences.

Even though Section 703 of the Civil Rights Act of 1964 ended racial discrimination by unions as well as employers, it did so only by explicitly preserving the seniority obtained by white workers before passage of the Act, which meant that the white beneficiaries of employment discrimination kept their positions. Meanwhile, the pressure to integrate workforces took their maximum toll on younger white workers who had committed no acts of discrimination. These topsy-turvy results were no legacy of slavery or Jim Crow, but the direct consequence of the elaborate political compromises needed to secure passage of the 1964 Act, which in turn was necessitated by the adoption of collective bargaining arrangements in the 1920s and 1930s. Ironically, the explicitly colorblind language of Title VII of the Civil Rights Act served in the short-run as an impediment against the adoption of private affirmative action programs to help disadvantaged minority workers until the late 1970s, when United Steelworkers v. Weber carved out an exception to the colorblind rule to allow for affirmative action programs.

Even today, in an age of union decline, the structural features of the labor market determine the dominant patterns of income and employment among African Americans. Though Democrats may hate Donald Trump, his relatively laissez-faire labor policies resulted in both lower minority unemployment and stronger wage growth before COVID-19 than in the progressive Obama administration.

The case for black reparations flounders on yet another issue. Hannah-Jones asserts that the reparations in question will not be paid by individuals, but by the federal government. This proposition makes no sense. The United States is an abstract entity that is only capable of raising revenues through taxation and borrowing. Revenues spent by the government will eventually be borne by some large fraction of the total population—i.e. by individuals. So is it fair to ask the descendants of the hundreds of thousands of Union soldiers who were killed or wounded in the Civil War to foot the bill? Should recent immigrants from Cuba, Croatia, India, Mexico, Nigeria or Somalia have to pay for the failures of the Reconstruction period? Are the Jewish and Italian immigrants who escaped persecution in their homelands between 1880 and 1914 responsible for the rise of Jim Crow?

In dealing with this problem, Darity and Mullen claim that what is needed to set matters right is not just financial redress, but also acknowledgement, which “involves recognition and admission of the wrong by the perpetrators or beneficiaries of the injustice.” None of the current citizens of the United States were the perpetrators of slavery and few people alive today were responsible for Jim Crow. Nor does the term “perpetrator” remotely describe the millions of individuals who found salvation on these shores as immigrants, whether a hundred years or two weeks ago. The perpetrators of slavery and Jim Crow are dead, and their liabilities died with them.

But what about the supposed living “beneficiaries of the injustice?” This indignant claim assumes that the system of slavery and Jim Crow exploited the labor of black people to create an economy that enriched the white population as a whole. But the economic situation does not provide any support for a theory of unjust enrichment. Slavery was a system that benefitted slaveowners specifically. Their exploitation of slaves did not work for the benefit of the national population at that time or later. The same is true of Jim Crow. In fact, these institutions actually deprived millions of Americans of the benefits of unregulated labor markets with full black participation. Exactly how things would have worked out under freer labor markets is unclear, but it is simply wrong to assume that a set of corrupt institutions that shrunk the productive capacity of the nation somehow benefitted the public at large.

Of course, reparations have been given for national wrongs at other times. But the circumstances and the claims were different. The forced internment of 120,000 individuals of Japanese origin during World War II was shamefully defended in the 1944 case of Korematsu v. United States by Justice Hugo Black—and it was mercifully overruled in 2018 in Trump v. Hawaii. In 1990, reparations of $20,000 were paid to over 82,000 surviving internees—not to their descendants. After World War II, German reparations were paid to individual survivors of the Holocaust and to the state of Israel. In both cases, reparations were paid for the specific actions of a government at a specific time to the specific victims involved. In today’s case, the reparations would be paid for harms resulting from many federal, state, local, and private actions that occurred over a period of several hundred years.

On top of that, it’s not clear who exactly the recipients of such compensation should be. The group of potential recipients includes tens of millions of African Americans with complex lineages due to immigration and intermarriage over the last 155 years. The sensible limitations on both the Japanese and Jewish cases speak to the dangers of extending the logic of reparations to cases in which it is no longer possible to punish the perpetrators, tax the beneficiaries, or even define the class of victims.

Everyone in the United States should be fully cognizant of the evils of racism and their long-lasting legacy. But by the same token, flawed policy choices today could undo much of the racial progress that has been made to date. It is just wrong to think that institutional racism currently pervades every government agency, business organization, or educational institution— most of which have worked notably hard to eradicate racial discrimination and to promote equality.

© 2020 by the Board of Trustees of Leland Stanford Junior University.

Published in Economics, Law
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  1. Dotorimuk Coolidge
    Dotorimuk
    @Dotorimuk

    And it will NEVER be enough to satisfy them.

     

    • #1
  2. RushBabe49 Thatcher
    RushBabe49
    @RushBabe49

    Leftists insist on seeing the “federal government” as a distinct entity unconnected to the People who fund it and give it its powers.  If that supposedly distinct entity were to pay those reparations, there would be NO WAY to ensure that white people were not the source of the funds.  And anyway, how much of the so-called federal government is not white?  

    • #2
  3. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

    It is clear that there is no remedy possible for the blqck white division.  We elected a black president and it was not enough. 

     

    • #3
  4. Dotorimuk Coolidge
    Dotorimuk
    @Dotorimuk

    Scott Adams’s view is that to calculate reparations, you have to compare African-Americans’ prosperity to that of Africans. 

    • #4
  5. Paul Stinchfield Member
    Paul Stinchfield
    @PaulStinchfield

    Dotorimuk (View Comment):

    And it will NEVER be enough to satisfy them.

    There is no cure for resentment and paranoia except from inside the mind of the sufferer.

    • #5
  6. GrannyDude Member
    GrannyDude
    @GrannyDude

    I recommend getting your DNA checked. You never know. 

    While I am uninterestingly Northern European through and through, it turns out that both my [“white”]children and my [“white”] stepchildren are descended from African slaves. Just imagine how wealthy and powerful they’d be, if only their great-great-grandmothers had been born in Africa instead of in Virginia and Surinam respectively? How blissfully happy, too, had they married African men in the old world rather than white men in the new?

     

    • #6
  7. James Gawron Inactive
    James Gawron
    @JamesGawron

    Of course, reparations have been given for national wrongs at other times. But the circumstances and the claims were different. The forced internment of 120,000 individuals of Japanese origin during World War II was shamefully defended in the 1944 case of Korematsu v. United States by Justice Hugo Black—and it was mercifully overruled in 2018 in Trump v. Hawaii. In 1990, reparations of $20,000 were paid to over 82,000 surviving internees—not to their descendants. After World War II, German reparations were paid to individual survivors of the Holocaust and to the state of Israel. In both cases, reparations were paid for the specific actions of a government at a specific time to the specific victims involved. In today’s case, the reparations would be paid for harms resulting from many federal, state, local, and private actions that occurred over a period of several hundred years.

    Richard,

    First we must deal with the call for reparations as nothing but a propaganda ploy by Marxist groups like BLM. On the assumption of the sincere desire for this, I would point out the most counterproductive paradox. It is, of course, who would be the beneficiaries?

    Race is largely a pseudo-scientific 19th-century genetic theory that has been almost entirely discredited by 20th-century science. If one limited the reparations to those who could legitimately trace their ancestry to slavery then at least this limitation would solve part of the problem. However, what of those whose ancestry is part slave and part not? The wider problem is that given the tenor of the demands at the moment for “people of color”, bizarrely enough, attempts at defining the beneficiaries would entail a return to 19th-century racial ideas and identifications. In short, to determine the beneficiaries would require applying the most virulent racism to the classification system. Should very dark-skinned people with what would have been called in the 19th-century classic “negroid” features be automatic beneficiaries. As grotesque as this result would be it would be inevitable as the race “narrative” is played out.

    Interestingly, quota-based racial preferences involve the same backward logic. How does one define the beneficiary? Elizabeth Warren has high cheekbones, a 19th-century racial characteristic, but by modern genetic standards is immensely unlikely to be the Indian she claims to be. Barack Obama, who benefited massively from the quota-based preferences he took full advantage of at university and law school, had one “white” parent and another parent, although dark-skinned, had absolutely no ancestry in American slavery.

    The difficulties and paradoxes abound in these so-called preference solutions. One can see the wisdom of the “neutral” solution of the 1964 Civil Rights Act. Rather than trying to play Gd and right all past wrongs, the 1964 Civil Rights Act erected a standard of behavior that should be followed by all in the present and into the future. For a brief time between 1964 and 1973, this was the “law of the land”. I remember it well and fondly. I also remember the kind of bizarre race hustling manipulation that started as soon as the first quota-based ruling came down in 1973. One could feel the corruption of the race-neutral ideal as soon as this happened. The amoral simply “played the system” like Barack Obama and Elizabeth Warren. While this happened academic standards were massively lowered as these standards were incompatible with the quota. What if there was a fellow by the name of Stein, just as Christian as he could be but on the playground growing up they called him a dirty Jew. Should he get reparations from Germany because of the Holocaust? Don’t answer too quickly.

    Once you’ve really wrecked everything with the wrong policy for the last 47 years is it possible to realize the error and turn it around?

    Beats me.

    Regards,

    Jim

    • #7
  8. Fastflyer Member
    Fastflyer
    @Fastflyer

    Dotorimuk (View Comment):

    Scott Adams’s view is that to calculate reparations, you have to compare African-Americans’ prosperity to that of Africans.

    In which case, the reparations would be a negative number.

    • #8
  9. TBA Coolidge
    TBA
    @RobtGilsdorf

    In defense of the ‘white Americans won’t pay, it’ll be the Federal government’ claim, I would point out that we just spent a trillion dollars in Covid maintenance. 

    I realize it will never be enough, and that everyone’s children would end up paying for it, but we have kind of established that the feds can ‘afford’ it. 

    • #9
  10. The Elephant in the Room Member
    The Elephant in the Room
    @ElephasAmericanus

    Coming soon: Reparations to Latinx-Americans for the land stolen from their ancestors by the gringos during the Texas Revolution and Mexican-American War…

    • #10
  11. Kozak Member
    Kozak
    @Kozak

    Oh the Federal Government  pays.

    Put it on the tab.

    • #11
  12. Kephalithos Member
    Kephalithos
    @Kephalithos

    If reparations are nothing more than transfer payments and social programs, then we’ve been paying reparations for nearly half a century. How well has it worked? What, exactly, has it repaired?

    • #12
  13. Stad Coolidge
    Stad
    @Stad

    If by some bout of insanity reparations do get passed (likely in the House), will someone stand up and offer an amendment deducting the cost of riots, lootings, arsons, and murders committed by black “protesters” over the years?  My guess is blacks would end up paying reparations to the government . . .

    • #13
  14. Richard Fulmer Inactive
    Richard Fulmer
    @RichardFulmer

    I agree with Dr. Epstein’s argument that minimum wage laws and Great Society programs did far more than the Jim Crow laws to hurt black Americans.  However, that argument actually strengthens the case for reparations.  Jim Crow was confined to Southern states, minimum wage laws and the Great Society are nationwide, and, while Jim Crow was ended 55 years ago, the federal laws and programs that are hurting black (and white) Americans are still on the books.

    Like @christopherriley (#12), I believe that the real argument against reparations is that they are little more than extensions to the federal programs that have done so much harm.  If we really care about making black lives better, we need to dismantle the government programs that create and sustain poverty.

    • #14
  15. TBA Coolidge
    TBA
    @RobtGilsdorf

    When black people were freed, they said, “we can do just as well as anyone else” and proceeded to demonstrate it through individual efforts.  

    They didn’t say, “we’re going to achieve statistical parity in all things”. Such an idea would have been bizarre then, and, despite it being widely held as a goal now, it remains bizarre. 

    • #15
  16. Buckpasser Member
    Buckpasser
    @Buckpasser

    The “one drop rule”?.  We are returning to the good ‘ole days.  Oh joy.

    • #16
  17. JamesSalerno Inactive
    JamesSalerno
    @JamesSalerno

    Kephalithos (View Comment):

    If reparations are nothing more than transfer payments and social programs, then we’ve been paying reparations for nearly half a century. How well has it worked? What, exactly, has it repaired?

    Let’s not forget non-profit agencies that receive public funds. Southern Poverty Law Center, NAACP and whatever Al Sharpton’s cause of the week is.

    • #17
  18. Dotorimuk Coolidge
    Dotorimuk
    @Dotorimuk

    JamesSalerno (View Comment):

    Kephalithos (View Comment):

    If reparations are nothing more than transfer payments and social programs, then we’ve been paying reparations for nearly half a century. How well has it worked? What, exactly, has it repaired?

    Let’s not forget non-profit agencies that receive public funds. Southern Poverty Law Center, NAACP and whatever Al Sharpton’s cause of the week is.

    *cause of the weak😉

    • #18
  19. I Walton Member
    I Walton
    @IWalton

    Well, I’m not sure.  After all Democrats after having been the pro slavery party, and subsequently the segregation party also stopped black progress which was moving very fast after the war.   They instituted a set of successful policies to destroy black families, create black dependency, foster black unemployment and abort black babies while at the same time consolidated black political support.    Evil, on purpose, but brilliant and they still claim, mostly successfully, to support blacks.

    • #19
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