What is the American Dream? Well, a central part of that idyll is the assumption that everyone has an equal opportunity to obtain the sort of wealth that brings real meaning to the words “life, liberty, and the pursuit of happiness”.
Underlying the American Dream is the notion that everyone can own a home, start their own business, and build inter-generational wealth as long as they put the hard work in.
This long-held belief has been repeatedly defied by the US government decrees that denies black Americans the same wealth-building opportunities.
In 2020, the average black family has 10 times less wealth than the average white family. White college graduates are 7 times wealthier than black graduates.
When Will We Get Reparations?
So, to ensure the American Dream is not just a pipe dream but an equitable reality calls for the same government that denied blacks the opportunity to build wealth to make reparations in the form of individual cash payments to close the racial wealth divide.
Also, there should be further reparations by the way of wealth-building opportunities addressing the racial discrepancies in housing, business ownership, and education.
The physical bodies of enslaved black Americans were valued at over $3 billion in 1860. This amounts to more than the total investment in railroads and factories combined. The value produced on cotton produced by slaves in 1861 was $250 million.
Slavery, then, enriched the white slave owners and their descendants while suppressing opportunities for blacks to build wealth. As yet, black Americans have yet to receive any government compensation for their labor. Beyond this, the federal government has not yet made redress for the equity lost through transportation and business policies along with anti-black housing policies.
So, thanks to slavery, anti-black practices such as redlining, and Jim Crow segregation – not to mention a range of discriminatory policies throughout the education and criminal justice systems – black Americans have been robbed of the chance to build inter-generational wealth.
The Racial Wealth Gap
Now, this racial wealth divide will not be erased through bootstrapping. Blacks changing their personal responsibility and individual behavior will do little to close this wealth gap, nor will upping their financial literacy. Indeed, it’s often the case that whites who dropped out of high school are wealthier than their black college counterparts.
This racial wealth gap did not come about through a lack of labor either, but rather stems from a paucity of financial capital.
This disparity between racial wealth has a greater impact than calling the American Dream into question. Wealth is associated with improved health along with superior education and economic outcomes. With assets from the property, stocks and bonds, and retirement nest eggs, whites have a stronger financial safety net to help them cope with the inevitable shocks that happen to the economy and to personal finances over a lifetime.
Recessions affect everyone, but there’s an uneven distribution of wealth in the US that makes things much harder for some. Disasters like the housing crisis of 2008 and 2005’s Hurricane Katrina showed up the inadequacies of the government safety net.
In the wake of an economic downturn, those able to draw on the equity in their homes and savings will be better placed to bounce back than those without wealth to draw on. The ongoing COVID-19 crisis brings disparities in health care access and economic policies into sharp focus. Overall, black people are rendered more vulnerable to negative consequences than white people.
How have reparations panned out historically, then?
History of US Reparations
Reparations are a form of redress for egregious injustices, and the idea is not foreign to the US.
Native Americans have already received land along with billions of dollars in benefits and programs as a result of their forcible exile from their native lands. $1.5 billion was outlaid to Japanese Americans interned during WWII. The US also helped Jews receive reparations from the Holocaust through the Marshall Plan. Back in 1952, Holocaust survivors received 3.45 billion Deutsche Marks from West Germany.
The only group yet to receive reparations for such state-endorsed racial discrimination are black Americans. At the same time, slavery furnished some white families with the chance to accrue enormous wealth. Slavery was also brutal with 15% of all enslaved dying on their way from Western Africa to the US. Those who made it were frequently beaten or lynched for minor infractions. With one in three marriages broken and one in five black children separated from their parents, the family unit was also disrupted.
The case for reparations, then, can be made on social, moral, and economic grounds.
Despite repeated opportunities to atone for slavery, there has still been no meaningful attempt to transform the American Dream into a reality.
Missed Opportunities for Atonement with Reparations
The first squandered opportunity for reparations came after the Civil War. On the orders of union leaders like General William Sherman, black families were each due to receive 40 acres of land. Field Order 15 was duly signed and 400,000 acres of confiscated land earmarked for reallocation. Some families were also due to receive leftover mules.
When President Abraham Lincoln was assassinated, though, the order was reversed by President Andrew Johnson, and the land returned to its former slave owners.
So, rather than giving Blacks the opportunity to support themselves, the federal government instead empowered former slave masters.
In Washington DC, for example, slave owners received reparations for lost property in the form of their former slaves. The same practice occurred in states nearby. In many cases, black Americans returned to works for the same slave owners as sharecroppers. Not only did these slave owners make money through enslaving black Americans, but they also profited repeatedly from the land where the previously enslaved had no option but to work.