culture

Is racism the cause of black-white economic disparities?

Authentic Ventures
Independent Scholar
Genesis
Response
Penultimate
Finale

Jesse Clain

Authentic Ventures

March 21st, 2021
In the US, the average black family has about 60% of the income and 1/10 of the wealth of the average white family.
My claim is that racism is a significant contributor to current black/white economic disparities – first through institutional race-based slavery of black people until 1865, then through legal exclusion of black Americans from public and private places until 1964.
Let’s assume for the sake of argument that once the Civil Rights Act passed in 1964, all personal racism and systematic discrimination stopped. Immediately. No more discrimination in housing, bank loans, schooling, or the criminal justice system. Everybody became colorblind and the country became perfectly meritocratic.
What happens next in a meritocracy?
Jobs to go to the most qualified, most experienced people.
Which people had the best qualifications and the best experience?
In 1964, black Americans were half as likely as white Americans to have a high school or college degree.
Black Americans were even less likely to have advanced degrees or experience starting or managing companies. There’s almost zero chance that they inherited significant wealth from their parents.
Even though racism (in this universe) had been eliminated in 1964, the past wasn’t wiped out. Black people were less educated, less wealthy, and more likely to be incarcerated because of previous racism. Therefore, for perfectly meritocratic reasons, black people had worse economic outcomes. Even in the absence of racism, the accumulation of racially disparate outcomes over 8 generations produced racially disparate outcomes in the present.
The cycle continued. Parents’ wealth, education, and connections to useful networks improve the economic outcomes of their children. Wealthier parents can help their kids buff up their credentials, get interviews with family connections, or make high-risk, high-reward career moves with the comfort of a safety net. So white kids, whose parents were on average significantly wealthier than the parents of black kids, had better outcomes.
Now let’s return to our universe to see how wealth can pass through generations.
Here, in 2021, there are white families like the Du Ponts and Vanderbilts who live off fortunes their ancestors amassed in the 1800s, at a time when black people couldn’t build wealth because wealth was measured by how many black people you owned.
There are 7 black billionaires in the US in 2021. None of them inherited their wealth.
Meanwhile, there are 7 white billionaires in the US named Walton. Each of them is richer than the richest black American. They all inherited their money from an ancestor who bought up retail stores in Arkansas at a time when stores put up signs in their windows saying black people weren’t allowed in.
To demonstrate that racism plays no causal role in black/white economic disparities, you’d have to show that at some point, the accumulated disadvantages of the past – in wealth, education, criminal justice, access to useful networks, etc. – were eliminated or stopped having an effect on the economic outcomes of black Americans.
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