Slave labor helped build the American economy, creating massive wealth that excluded African-Americans through legalized discrimination. The racist strategy created a cumulative effect of systemic inequality that persists to this day.
Several Democratic hopefuls in the 2020 presidential election support reparations including Senators Cory Booker of New Jersey, Kamala Harris of California, Elizabeth Warren of Massachusetts and former Housing and Urban Development Secretary Julián Castro.
About 4 million people were slaves in the U.S. when the Civil War started, and reparations have been promised and discussed since then. But the question of reparations goes far beyond the original slaves, Ta-Nehisi Coates wrote in The Atlantic in 2014.
In the most recent census, 47 million Americans identified as Black or African-American. The majority descended from slaves, while some immigrated more recently. So who qualifies for reparations, and why?
“A recurring theme has been to return to that first official action promising 40 acres and a mule,” wrote Patricia Cohen, national economy writer for New York Times.
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Black families have 10 cents for every dollar held by white families. Supporters say this cumulative effect justifies paying reparations to the descendants of slaves.
Duke University economist William A. “Sandy” Darity Jr., is an expert on reparations and wealth inequality. One of the leading economists in the U.S., he ranks No. 35 on a list of top economic influencers.
Darity proposes a 10-year rule that he said would help screen out anyone trying to cash in on a windfall, Cohen reported. He suggests two qualifying conditions:
Darity estimates about 30 million Americans would be eligible. President Barack Obama, the son of a white American mother and a Kenyan father, would not qualify. Oprah Winfrey, whose genealogy has been traced to slaves from West Africa in the early 19th century, would.
What’s a fair amount for reparations? Economists have tried for years to quantify this. In 1983, David H. Swinton, an economist and former president of Benedict College, put that number at $500 billion.
Towards the end of the Civil War in 1865, Gen. William T. Sherman promised to redistribute land along the Atlantic coast to freed slaves. President Abraham Lincoln and Congress approved, and 40,000 freed slaves in the South started to plant and build.
Within months of Lincoln’s assassination, President Andrew Johnson rescinded the order and returned the land to its former owners. Congress tried again, but Johnson vetoed it.
Darity puts the present-day value of Sherman’s promise at $2.6 trillion, Cohen reported.
In 1988, people of Japanese descent who were forced into internment camps during World War II received $20,000 and a formal apology. Germany has paid $70 billion-plus in reparations to Jewish victims of the Nazis, and is still doing so to the tune of hundreds of millions of dollars a year.
Darity advocates a universal proposal — the Baby Bonds Proposal. It’s not really a bond. It’s a trust fund or endowment endowed to every newborn infant. The endowment would be graduated on the basis of the wealth of the child’s family.
Darity explained baby bonds during a 2016 YouTube interview conducted by economist Glenn Loury on “The Glenn Show” on Bloggingheads.tv at Brown University.
“If we were to give an endowment to a newborn child of Oprah Winfrey or Bill Gates we would give the child $50. But for kids born in the lower end of the wealth distribution, we’d give them an endowment of $50,000-to-$60,000 and we’d guarantee them a 1 percent real rate of interest on the account,” Darity said. “The kids could access it when they turn 18.”
The biggest economic objection to reparations is that they would be unaffordable, Cohen wrote. Others “argue that reparations would be a boon over the long run — lifting people out of poverty, and improving their earning potential and buying power.”