Educate All Students: Larry Miller's Blog

October 22, 2015

The Nation Magazine: We’ll Need an Economic Program to Make #BlackLivesMatter. Here Are Three Ideas.

Filed under: BlackLivesMatter — millerlf @ 12:12 pm

In a country that has always used race to justify inequality, ending police brutality is just the start.
By
Jesse A. Myerson andMychal Denzel Smith January 7, 2015

We are in the midst of a movement to upend white supremacy. Thousands of people across the country, acting in response to the unpunished killings of Trayvon Martin, Jordan Davis, Rekia Boyd, Eric Garner, Renisha McBride, Michael Brown and so many more unarmed black people who have lost their lives to police or vigilante violence, have taken to the streets to proclaim that “black lives matter.” While this is a powerful proclamation all its own, it can now be strengthened by a vision of what it will take to make those lives matter in America.

In 1966, along with A. Philip Randolph, Bayard Rustin, and other organizers and scholars, Martin Luther King Jr. released the now all-but-forgotten Freedom Budget for All Americans, which included full employment, universal healthcare and good housing for all. “The Freedom Budget is essential if the Negro people are to make further progress,” he wrote. “It is essential if we are to maintain social peace. It is a political necessity.” Dr. King came to espouse this view toward the end of his life, acknowledging that civil and voting rights were a critical but merely partial victory in the struggle for complete equality.

King’s vision, needless to say, was never realized. This is why we propose that, in addition to calls for police reform, it is vital for the defeat of the racist system that the #BlackLivesMatter movement advance an economic program. We cannot undo racism in America without confronting our country’s history of economically exploiting black Americans. Demands from Ferguson Action and other groups include full employment, and this foundational item is one that can and should be fleshed out, as we hope to do here.

Before laying out our proposals, we should clarify why, historically, eliminating racism requires an economic program. America’s story is one of economic exploitation driving the creation and maintenance of racism over time. The inception of our country’s economic system condemned black people to an underclass for a practical rather than bigoted reason: the exploitation of African labor. Imported Africans were prevented by customs and language barriers from entering into contracts, and unlike the indigenous population, their lack of familiarity with the terrain prevented them from running away from their slavers. To morally justify an economy dependent on oppression, in a nation newly founded on the rights of men to freedom, it was necessary to socially construct a biological fiction called race, one that deemed some people subhuman, mere property. “During the revolutionary era,” Karen E. and Barbara J. Fields write in their book Racecraft: The Soul of Inequality in American Life, “people who favored slavery and people who opposed it collaborated in identifying the racial incapacity of Afro-Americans as the explanation for enslavement.” White citizens, making their fortunes and proving their social standing through the ownership of African persons, codified the idea of race into law. Those of African origin would come to form the lowest class of American life, while people of Western European origin were free to extract labor and wealth from their bodies. Material inequality, in other words, preceded the racist rationale.

This didn’t change with Emancipation. The convict-leasing system, the lynching of black business owners, and the razing of economically independent black towns by White Citizens’ Councils and the Ku Klux Klan made it impossible for the former slaves to flourish. After Reconstruction, the ideology of race that erected Jim Crow society was crucial for maintaining class divisions among whites. As the Fieldses write, “One group of white people outranked the other precisely because it was in a position to oppress and exploit black people.” Thus, through the daily experience of this dynamic, “the creed of white supremacy” was bolstered, in the words of the historian C. Vann Woodward, “in the bosom of a white man working for a black man’s wages.”

As a result, black Americans continued to experience racist violence, both physical and economic, and no corrective policy prescriptions were forthcoming. In his book The Condemnation of Blackness, Khalil Gibran Muhammad, director of the Schomburg Center for Research in Black Culture, notes that the progressive movements of the late nineteenth and early twentieth centuries advocated increased government resources for poor immigrant groups, while continuing to attribute black poverty to the alleged cultural and moral deficiencies of African-Americans. This legacy haunts us today in every new injunction that ending racism depends on young black people wearing belts. And it lives in the widespread rejection of the obvious fact that drug abuse, violence and educational failure don’t breed poverty; poverty breeds them. The large-scale relegation of black Americans to poverty is the essential “race” problem.

In the postwar boom, as Ta-Nehisi Coates details in “The Case for Reparations,” his article for The Atlantic, black people were largely locked out of homeownership, the largest driver of the wealth gap in modern America, and further housing discrimination meant that black people were also not allowed to attend the schools offering the highest-quality education—another factor in gaining well-paid jobs. The “New Jim Crow” of mass incarceration via the “war on drugs” has replaced vagrancy laws and convict leasing, but with similar results: robbing large numbers of black people of economic opportunities while also denying them access to federal programs aimed at alleviating poverty. A person with a felony record is denied access to food stamps, welfare and public housing. And with no wealth to speak of in a country where political participation is predicated on dollars and cents, black Americans continue to lack political representation; the repercussions include an absence of choice in who is speaking for them in Congress and in which mayor or police chief has jurisdiction over their neighborhood. Inadequate economic security is literally a life-and-death matter for black Americans.

It is vital for the defeat of racism that the #BlackLivesMatter movement shut down the economic engines propelling the continuous reinforcement of white supremacy. Only through the redress of black America’s economic grievances (the pronounced disparities in terms of income, wealth, and community resources like housing, healthcare and education) can we begin building a just society.

1. True Full Employment

Nothing would do more to transform the current political economy than what is at the core of the Freedom Budget and mentioned in the Ferguson Action demands: a policy of full employment.

What we mean by that phrase—an “involuntary unemployment rate” of 0 percent—differs from what mainstream economists mean, even those who nominally support it. By “full employment,” they usually mean nearly full employment. During the most recent period of “full employment” (the also dubiously named “Clinton economic boom”), the unemployment rate never dipped below 3.8 percent. However powerful the boom, millions of people in certain corners of the economy were relegated to a permanent state of bust. The people deepest in those corners, the least employed people in the United States, are teenage black high-school dropouts from poor families, on whom is currently imposed the conscience-rattling unemployment rate of 95 percent.

It is clear that we require more than the conventional policies for boosting job growth if we are to meet the demand for full employment. Luckily, there are two policies up to the task: a federally funded job guarantee and a universal basic income that is unattached to employment. By offering employment as a guaranteed right, the federal government could direct capital to the communities where it is most desperately needed, while employing those communities themselves to do the work needed to improve their own quality of life: cleaning and replacing those oft-decried broken windows, filling potholes, caring for the children of working parents and for the elderly, clearing slum housing and replacing it with decent housing. By paying a basic living wage and normal benefits for a federal employee, the program would effectively set a minimum wage and standard of treatment for private-sector employment. In boom times, when there is danger of inflation, the program and its budget would automatically shrink, and during downturns, when inflation is extremely unlikely, it would grow to fill the gap.

This program could and should be paired with a universal basic income, which Dr. King called “the simplest…and most effective” approach to eliminating poverty, citing three essential virtues of the program. First, poor people, their consumption directly subsidized, will no longer want for basic comforts. Second, the political position of the marginalized would grow stronger: “Negroes,” King wrote, “will have a greater effect on discrimination when they have the additional weapon of cash to use in their struggle.” Finally, King highlighted the “host of positive psychological changes” that universal material security would yield: “The dignity of the individual will flourish when the decisions concerning his life are in his own hands…. Personal conflicts between husband, wife and children will diminish when the unjust measurement of human worth on a scale of dollars is eliminated.” This psychological relaxation is the direct negation of the anxiety and terror that persistently accompany black American life.

A twofold full-employment program would mightily advance the fight against mass incarceration and racist policing. Guaranteeing access to employment and income would also reduce prison recidivism. Employing people to handle “broken windows” would transform the trappings of poverty from an excuse for police harassment to paid community work. And millions of people whose livelihoods are currently dependent on an ever-expanding prison-industrial complex would be able to secure employment and income elsewhere, allowing stronger working-class organizing for a rollback of the prison state. Currently, prison closures have devastating effects on the communities for which these institutions act as economic anchors.

2. A Tax Overhaul

In the current economy, we tax labor and industry, which suppresses employment and offshores profit, and we leave the real-estate sector mostly untaxed, encouraging the accumulation of real-estate fortunes. Real-estate property includes not just buildings but, crucially, the land upon which they’re situated. The buildings themselves—plumbing, woodwork, etc.—deteriorate over time until they require refurbishing, so the speculative commodity in real estate, the investment that stands a chance of appreciating in value over time, is really just land. Speculation in the land market has instituted a great deal of the structural racism that characterizes white supremacy today.

The postwar impetus to maintain segregationist housing policies was the protection of property value. When millions of Southern-born blacks swept into Northern cities, millions of whites fled for new suburban residential developments, taking their capital with them and driving down the land value in black areas. White home buyers (who make up the vast majority of home buyers nationally), with their wealth bound up in real estate, wouldn’t have black people depreciating it with their proximity. Moreover, the Federal Housing Administration, in a policy designed to protect this access to landed wealth, was more likely to guarantee mortgages in communities that adopted racially exclusive charters. This policy “redlined” neighborhoods with low “residential security,” or land value, depriving black neighborhoods of access to financial services for decades.

The appreciation of land value was at the heart of Wall Street’s recent mortgage bubble and its racist predatory lending, by which 53 percent of all black wealth was destroyed. “Mortgage investors,” meaning land-market speculators, would buy up houses and sell them once the land value had increased, making off with the gain. To keep prices rising, the real-estate/financial complex offloaded garbage loans on unsuspecting black families, who have suffered a massive wave of foreclosures in the years since the crash.

Education is also linked to land value. Pegging school resources to property taxes undermines equality from two directions: well-to-do people are driven to move into ever more expensive neighborhoods for fear that their kids will be conscripted into inferior schools (thereby further concentrating education funding), while schools in poor areas degrade as wealth flees, driving down land value in the already underserved area.

Keeping land untaxed also gives landowners an incentive not to develop properties in poor areas, since it’s thereby free to hang onto an undeveloped plot until white people decide that the neighborhood is “up-and-coming” and bid up the land value. In the short term, this leads to abandoned buildings and vacant lots—that is, to slums plagued with “broken windows.” In the long term, it has a catastrophic effect on communities: while these plots of land remain undeveloped, our tax system holds down the housing supply at a time when a severe urban housing shortage has city land prices skyrocketing. And this, in turn, fuels a community-bulldozing wave of gentrification whose primary beneficiaries are the land-speculating interests.

To stop those interests, we must shift from taxing labor and toward taxing monopoly and land rents. The American political economist Henry George, whom King cited in his economic advocacy, famously proposed a 100 percent land-value tax as the only tax capable of ensuring equality amid economic development. As the board game Monopoly (invented by George devotees) makes clear, even when everyone starts with equal money, private rent extraction inevitably directs all funds into a few hands. George saw taxing the full rental value of land as the only way to develop an economy equitably—that is to say, without producing poverty constantly. And several local jurisdictions in George’s native Pennsylvania tax land, albeit not at 100 percent. No human created the land, and so no one—not an absentee slumlord, not Goldman Sachs—should be extracting its value from the people who live on it.

3. Baby Bonds

In the end, black people in poor areas will always be vulnerable to disastrous community disruption as long as white people control the vast majority of wealth. It is wealth (the stock of overall resources someone controls), rather than income (the inflow someone receives over a year), that ensures true economic security—waiving the income a job provides is less intimidating to a person with independent wealth. As bad as income inequality is in the United States, wealth inequality is even worse, as those born rich get richer and those born poor stay that way. As long as white people can take advantage of lopsided bargaining positions to outbid black people for land use, the land remains whites’ to claim and distribute. The only true and permanent way to alleviate the many ills detailed here is to close the racial wealth gap.

The political challenges to implementing a reparations program—which we support—were daunting from the outset and are now possibly prohibitive. To address this dilemma, Duke University’s William A. Darity Jr. and the New School’s Darrick Hamilton have proposed another innovative program that they estimate would close the wealth gap within a few generations. Even those who cannot concede our premise—that black people have been condemned to poverty by public policy, not by their own lack of ambition and discipline—will surely agree that no newborn child is to blame for his or her impoverished condition, and that each one deserves a fair chance at leading a fulfilling and comfortable life. Darity and Hamilton have thus suggested a “Baby Bond” program aimed at these newborns. Everyone born into a “wealth-poor” family (any family below the median net-wealth position) would be granted a trust fund at birth that would mature when the person reaches 18, whereupon the grantee would obtain access to the fund. The further below median the family is, the larger the fund the infant would receive, such that the lowest quartile would receive a $50,000 or $60,000 bond. Note that although this program is not limited to the descendants of black slaves, its effect is quite similar to the one desired from a reparations program: eliminating the wealth advantage that white Americans command over their black countrymen.

Karen E. and Barbara J. Fields highlight law professor Derrick Bell’s 1990 essay “After We’re Gone: Prudent Speculations on America in a Post-Racial Epoch,” in which the writer imagines space aliens purchasing all the black people from the United States, whereupon “post-racial America” must truly confront, “straightforwardly, for the first time…the problem of who gets what part of the nation’s wealth, and why.” With white supremacy gone as an organizing principle for social relations, it becomes clear that resource distribution was the question all along. Implementing a program of guaranteed employment and income, a taxation policy targeting monopoly and land rents, and a system of wealth-equalizing baby bonds would eliminate material insecurity for all people—blacks, whites and others—thereby eliminating white supremacy’s reason for existence.

These policies may seem like a long shot in the current political environment. But if the #BlackLivesMatter movement continues to increase its political power, it can channel support from Americans who already favor more equitable wealth distribution into a truly transformative program. It seems to us that the thrilling movement shutting down transit and commerce operations has the power not just to get more civil-rights reforms, but to transform the foundation of our society. It has the power to make black lives be treated as though they finally, truly matter.

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