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Wednesday, June 30, 2010

What’s Wrong with Reparations for Slavery

Should Americans of African descent receive financial damages?

There has been much debate recently about reparations for slavery. According to its proponents, the federal government should award Americans of African descent financial damages solely because slavery, as an institution, existed in the United States from the founding until almost a century later.

Three principal arguments are offered: (1) The legacy of slavery has hindered the economic progress of blacks in America; (2) reparations would serve as a damage award that would rectify a historical wrong committed by the United States; and (3) reparations would give poor blacks more disposable income, which would increase their living standards and lift entire black communities.

On the surface, these arguments seem to have a modicum of legitimacy. However, because of the potential divisiveness that the issue is sure to have, it is important to closely examine the premise on which these arguments are based. To do that effectively, we must first look at the institution of slavery itself from a historical perspective.

Slavery as an institution existed on every inhabited continent of the earth for at least 4,000 years of recorded history.

Slavery was a truly global phenomenon: Europeans enslaved other Europeans; Asians enslaved other Asians; Africans enslaved other Africans; and Native Americans enslaved other Native Americans. In fact, the origin of the word slavery itself comes from Slav, as in the Slavic people of eastern Europe and the Balkans. During the middle ages and throughout the early stages of the Ottoman Empire, Slavic villages in what is modern-day Yugoslavia (Serbia) and Croatia were regularly raided by Barbary pirates, Arab slave traders, and Ottoman conquerors in search of men, women, and children to enslave. During the eighteenth century it wasn’t uncommon for up to half the slaves for sale on the island of Zanzibar, an Arab colony off the east coast of Africa, to be Caucasian. In short, people of all races, not just blacks, have been enslaved, and virtually every culture in the world has a grievance.

The only thing unique about slavery in the West is that it was abolished here. One of the earliest anti-slavery documents was Pope Pius II’s 1462 condemnation of slavery as a “great crime.” British abolitionists, who for the most part were evangelical Christians, championed the legislative revolution that brought about manumission in Britain and her colonies.

In the West, once the abolitionist momentum was underway, there was no turning back. This was especially the case in the United States, where the ideological underpinnings of a constitutional republic made it increasingly difficult rationally to deny slaves their rights. The abolition of slavery in the United States marked a historically significant moral high point, not only for this country, but also for the entire world. By the end of the nineteenth century, slavery as an institution was non-existent in the West and only existed in small pockets of Africa, Asia, and the Middle East.

Has Slavery Hindered the Economic Progress of Blacks?

Economist Thomas Sowell, in his seminal work Civil Rights: Rhetoric or Reality, concluded after exhaustive statistical research that the vast majority of whites and blacks believe there are a higher percentage of blacks in poverty than there actually are. Indeed, when surveyed, most whites and blacks believe three-quarters of black Americans live below the official poverty line, when in reality only one in four do, according to the 2001 Census.

Why is there so much confusion? Part of the problem is the perception that “black” and “poor” are synonymous. In the 1960s it was politically expedient to associate the state of being poor, uneducated, and oppressed with being black. The civil rights establishment found this association rhetorically necessary to focus public attention on the plight of southern blacks and to engage the emotions of the white majority against overt southern racism.

However, this political strategy had an unexpected impact on the emerging black middle class. According to the black-equals poor logic, when the black middle class achieved more opportunity and became more educated and affluent, it essentially became less “black.” This perhaps explains the black establishment’s attitude toward Supreme Court Justice Clarence Thomas and national security adviser Condoleezza Rice. Essentially, black identity was hijacked and frozen during the 1960s.

Unfortunately, the image of poverty stricken blacks in need of government handouts to get by is still perpetuated by race demagogues like Jesse Jackson and Al Sharpton, who stand to gain politically by fostering that stereotype. It is a truism of politics that charlatans in search of political power will always benefit from having a constituency with a chip on its shoulder.

Is there a legacy from slavery that has hindered the economic progress of blacks today? Let’s consider the numbers. Major marketers have long constructed a black “gross national product” (GNP) from government statistics to gauge the financial power of black Americans. This is actually a misnomer since it tries to measure the total products and services consumed, not produced, by the black community. This statistic is often cited by black political leaders to persuade corporate America to produce more goods suited to the preferences of blacks. It turns out that if black Americans constituted their own country, they would have the 11th largest economy in the world.

In addition to being a wealthy demographic group (richer than 90 percent of the people in the world), blacks in America have a longer life expectancy than African and Caribbean blacks, as well as whites in many parts of Eastern Europe and Latin America. Black Americans have higher rates of literacy and achieve more postsecondary degrees as a percentage of the population than blacks in Africa. Black Americans’ upward mobility from Reconstruction to the present is a testament to their creativity and ability to adapt. Reparations are not only unnecessary as a financial corrective, but they would also be an insult to the multitudes of successful black Americans who lifted themselves out of poverty before and after the civil rights movement.

Who Gets What?

If the proponents of reparations take to the courts, it will be interesting to see their principle for determining who is entitled to what. For many reasons that will be a Herculean task.

Because of centuries of migration, conquests, and intermixing, racial purity is more of a social construct than a biological fact. Intermarriage between whites and blacks in America over the past two centuries has produced a large population of individuals who defy the stark dichotomy.

Racially mixed populations in other parts of the world, such as in Latin America, have created classifications to describe themselves based on racial portions as small as an eighth. However, the practice of racial classification has evolved differently in the United States.

In an effort to deny inheritance rights to illegitimate progeny born by slave women, racist plantation owners in the antebellum South created the dreaded “one-drop rule” to discourage the courts from calling their miscegenational offspring anything but Negro. The nomenclature of this racist practice has survived to this day and is embraced by both blacks and whites, who for the most part are unaware of its discriminatory beginnings. Consider how Vanessa Williams and Colin Powell are labeled black despite their interracial heritage.

With so much racial intermixture, will those who dole out the potential reparations demand certificates of racial purity? The thought is preposterous. Another quagmire in paying reparations is that a small percentage of blacks were free before slavery ended, having bought their freedom or having had it bequeathed to them by sympathetic slave owners. Are their descendants eligible for reparations?

In antebellum New Orleans it wasn’t uncommon for freemen of color to own slaves. That blacks owned slaves has been a hotly debated point. It is true that a vast majority of blacks who bought slaves did so to emancipate relatives and friends. However, there are several well-documented cases of black slave owners in Louisiana who kept their slaves in servitude for life.

Black slave ownership poses a serious conundrum in the equitable distribution of reparations. Few Americans, white or black, are familiar enough with their genealogies to know, with any certainty, significant details about what their ancestors were doing almost two centuries ago.

Then there is the case of African and Caribbean émigrés from the post-Civil War era. It is estimated that this subgroup of the black community comprises between 3 to 5 percent of the total black population in the United States. Will they pay or receive reparations?

More Reparations?

In some respects one could argue that reparations for slavery have already been paid. These implicit reparations, the argument goes, have taken the form of direct monetary transfers such as welfare payments or nonmonetary benefits such as hiring and admission quotas. Indeed, policies based on racial preferences such as affirmative action have allowed hundreds of thousands of blacks to enter universities and obtain employment based on criteria different from those applied to other groups of people.

It should not be overlooked that the greatest irony of American slavery is that the descendants of those brought across the Atlantic from Africa are demonstrably better off than the descendants of those who remained. Sub-Saharan Africa is home to some of the poorest countries with some of the most appalling living conditions in the world. Disease, war, and famine are commonplace, and corrupt governments led by military dictators and kleptocrats ensure that economic growth and development for the masses is a low priority. In his book Out of America: A Black Man Confronts Africa, American reporter Keith Richburg concludes that black Americans should consider themselves lucky to have escaped the squalor of what is contemporary Africa.

Not only blacks, but all Americans should feel lucky to be born in the society with the most opportunities for advancement. The American dream is not a myth but a reality — so attractive that tens of thousands of people from across the world try to make it to our shores every year. The benefits of living in the United States weaken, if not destroy, the foundation of the argument in favor of paying blacks group compensation for what happened to their ancestors.

In a system where politicians steal from Peter to pay Paul, the politicians, as George Bernard Shaw once pointed out, can always count on the support of Paul. But does this redistribution of wealth leave anyone better off? Yes. The people who receive the hard-earned money confiscated from the taxpayers will undoubtedly be materially better off. However, to judge whether such a policy is sound, one must look beyond the immediate effect and try to discern the impact on other groups.

In that respect, reparations would not be an economic stimulus because wealth would merely be shifted from its producer to someone else—no new wealth would be created. Applying the wisdom of Frédéric Bastiat in looking for what is unseen in public policy, we could say that the economic benefits of reparations are countered by the taxpayers’ invisible opportunities compulsorily forgone. Put in this context, how could one argue that the expenditure of reparations by blacks would be an economic stimulus?

An economist as such cannot make normative judgments about a policy and remain true to his discipline. He cannot tell us how to correct the historical crime of slavery (assuming it can be corrected at this late date). What economics can teach us is that if policymakers appropriate the wealth of one group to pay reparations to a second group because a third (dead) group did nasty things to a fourth (dead) group 150 years ago, it would create a plethora of problems. Chief among them would be racial animosity and the festering of a truly debilitating mentality of “victimization” among black youths.

Are Current Taxpayers Culpable?

Of the three primary arguments for reparations, the argument for damages is the most irrational. Though slavery was widespread in the southern United States, slave ownership was not. It is estimated that less than 10 percent of whites owned slaves. The vast majority did not; they had neither financial nor agricultural resources to warrant slave labor. Slave ownership was restricted to a highly concentrated group of wealthy southern elites—the landed aristocracy.

Today we live in a country with a population of 285 million people. Because of immigration, it is safe to argue that the majority of white people in this country are descended from post-Civil War immigrants who had nothing to do with slavery.

Many ethnic groups that arrived on American shores in the early twentieth century, including the Irish, European Jews, and Chinese, were subject to severe discrimination. However, with every passing generation, ethnic groups developed the occupational skills, knowledge, and cultural norms necessary to fully assimilate and rise to higher socioeconomic levels within the mainstream American culture.

Why, then, should the descendants of these groups, let alone first-generation Americans, be financially liable to blacks as a group? In the American legal system, damages hinge on the principle of cause and effect — one pays for the damage one causes. In the case of slavery, there is no culpable person alive to pay for the crime.

Perhaps the most important error made by those who argue for reparations is not economic at all but philosophical. The idea of achieving justice by taking money from one group to pay another for an act that was neither committed nor suffered by the parties is a collectivist affront to the American ideal of individualism. People are not interchangeable pawns but individuals responsible for their own actions. Slaves and slave owners are dead, and we cannot bring them back.

Our Constitution provided the framework for legal equality for all individuals, and later legislation eliminated remaining race-based government barriers to freedom, assuring that blacks, like whites, can be beneficiaries of this great system. Thus the only solution to the race problem in America is a commitment to individualism.