Tuesday, January 21, 2014

The Economics of Reparations

Two compelling arguments that (if anybody cares to be intellectually honest about) proves reparations is merely another form of slavery.


Stephanie said...

Challenge Accepted!

I do agree with you about current generations not paying for past misdeeds to current generations. However, with your argument, the history of the Reconstruction Era is very muddled.

Following the Civil War there were many programs enacted from the Federal Government to put newly freeman on equal economic footing that were undermined my the old guard of the Union and Confederate division.

This is history that is not taught at all. Not in Northern or Southern public schools. Which heightens the misunderstandings of that Era.

History shows there were many attempts to raise freemen to equality through savings, most notably the Freeman's Saving Bank, backed by a federal government charter. The bank was set up for freemen to invest in savings and to get loans for property. The bank charter fell through after the panic of 1873, and investors were never made whole. Up to 62% black depositors never got their money back, despite heavy speculation from investors, which lead to to crash.


Another program that fell through was the Freemen's Bureau, which failed due to the short sightedness of the problem of making former slaves whole. The Bureau was set up to give former slaves education and poverty relief during the Reconstruction. However, the program was only suppose to last a year, when the problem extended to nearly all former slaves being illiterate. Add to the problem was 350,000 was set aside in funds to be borrowed to elevate the former slave population, but due to heavy bureaucracy, only 10% was borrowed (Sound familiar with our current government)


Proper capital needed to rebuild the south was never enacted. Add to the problem, many poor white in the South were angry the programs did not extend to them either. With the argument of poor whites at the time, many had the same problems as freemen. Heavy illiteracy rates and unequal income. Those that profited off of slavery also profited off of poor whites and low wages.

After two decades, failed federal programs, bank panics, the whole issue had been swept under the rug. With heavy support of Jim Crow laws, backed by poor whites and Southern Democrats, most of the programs for freemen were discontinued. Hence, the large debate of reparations and black distrust of federal government related to race issues.

Also, there was a Civil Rights Act passed in 1866 that was also undermined. It took nearly 100 years to reinforce a law. Adding to more frustration and distrust.

The failures of these programs highlight the reparations debate, and to an extent, are why there is still a lot of black poverty. Welfare continues the problems, as it still puts black people on the same poor economic footing, rather than a merit building system. The early attempt of the Freemens Savings Bank was the only program that attempted to raise black people through a merit system.

Faithless Cynic said...

Oh Horse Shit Stephanie! I spent the last year and a half working in Wilmington, Delaware. Wilmington is one giant section 8 ghetto, except for the business district. Blacks have been receiving reparations since Smarmy Lyndon declared war on poverty. The ghetto dwelling blacks receive housing, food, and medical care that working people pay for! Working people are paying a debt to blacks that they do not owe. This shithole cannot burn fast enough.

Stephanie said...

Welfare continues the problems, as it still puts black people on the same poor economic footing, rather than a merit building system

Learn to read. I already stated welfare is not a merit based system. Neither does it address reparation seeing as black people are not the only ones on welfare. More white people and Hispanic are on the dole since 2008 and part time jobs have become the norm.

I did notice you aren't refuting any of my other points, nor my history of the Reconstruction Era. Which is what my comment was about.

Maximo Macaroni said...

How about reparations from the Africans for centuries of violent crime disproportionately committed by Africans against everyone else in America? The costs of crime by feral Africans is never counted. If people are responsible for crimes committed by those with the same skin color, where is the justice for European and Asian victims of feral African criminals?

Anonymous said...

I agree with your conclusion, that reparations is not a great idea, but I think your reasoning is somewhat flawed.

I agree with your point that it is questionable to the extent that slavery benefitted the South. The South and Northern Brazil, where slavery existed, are poorer than parts of the respective countries where slavery did not exist. It could be argued that slavery harmed the South as a whole as opposed to having a system of free labor, albeit benefitting some slave holding families.

The parts of your argument I disagree with:

The modern day advocate of reparations would say that it is irrelevant whether anyone benefitted from slavery or not, he would say that the compensation is due to the harm experienced by black Americans. If I went in your house and robbed you, it does not matter if I benefitted, what matters is that I harmed you.

The modern day advocate of reparations would say that it is irrelevant that you or your ancestors have never owned slaves. They would merely argue that slavery was a state supported institution and the obligations of state do not end when the current politicians leave office or if the citizens alive when the wrong was committed are dead. He (the reparations advocate) would argue that the actions of states are binding on future generations (e.g. reparations for Japanese Americans, Social Security, savings bonds, etc.). He would argue that when Japanese Americans were awarded reparations for internment, many Americans or their ancestors had nothing to do with it nor did their ancestors, for they may not have been in the country, but still had to be taxed for it.

Despite my disagreement with your reasoning, I agree with your conclusion for these reasons:

1. It is difficult to tell the degree that blacks are still affected by slavery. We are all affected by the past obviously, but if very little of the current standing of blacks is due to slavery or Jim Crow, but are due to policies such as the welfare state or blacks own behavior, then what are blacks being compensated for? How can one even know how much the standing of a particular group is due to X factor as opposed to Y factor?

2. Given the track record of government, why would anyone expect reparations to solve the problems facing the black community? Let's say you did not advocate direct cash to blacks but some kind of government policy. What kind of policy would actually solve race inequality that would not actually make things worse?

3. The idea of reparations comes from the idea of "cosmic justice" (to use Thomas Sowell's phrase) of putting people back in the position they would have been if a certain injustice had not occurred. But how is that even possible? Even if reparations were paid, let's say $20,000 per family, the situation of blacks would fundamentally be the same. So basically you are paying billions of dollars to a group when that actually won't help them.

4. Then there's feasibility. You have to contend with the notion that some blacks won't spend the money to actually improve their lives but on frivolous things. But lets say the money was paid to pro-black organizations, then you have to deal with corruption.

5. Then it could result in worse race relations. Whites may feel resentful that they paid for something they had nothing to do with personally, especially when some of these blacks are doing better than themselves. It could cause whites to ignore claims of racism with the attitude of "we already paid you, what else do you want?". Blacks may feel upset too after reparations do not solve problems in their community with some black leaders asking for even more reparations to be paid.

The only way blacks will improve their lives is by starting their own businesses, investing in their communities, studying engineering, science, and medicine and having stable families. This is the way that every other successful minority group became successful. But this solution is not politically popular.