Some Reflections on Reparations for Slavery

In any liberal-libertarian conception of justice, there is no doubt that a liberated slave had a moral right to compensation from his master. From an economic viewpoint (what is possible and at what cost), the problem is more complex, especially across generations. In response to an article in The Economist, I would propose two arguments against reparation payments to today’s descendants of the slaves of several generations ago. These arguments suggest a new approach for effective and moral reparation.

The first argument is an economic argument: measuring the compensation due to the slaves’ descendants is impossible. Academic estimates of the harm done to American slaves range from 0.7% to 37% of today’s GDP (that is, of what American residents produce and earn in one year). But the problem is more serious than this range suggests.

Assuming we know for sure that a certain individual is a descendant of an American slave, we still face radical uncertainty as to whether or not the descendant himself was actually harmed. What is the counterfactual? His first slave ancestor brought to America would likely not have come here otherwise. There is a good chance that today’s slave descendant would have been born in Africa if he had been born at all. As late as 1950, life expectancy at birth in Africa was 37 years, compared to 68 (at that time) in the United States. We don’t know and have no way to know if today’s slave descendant would be alive and better off if his first ancestor had not been kidnapped and brought to America as a slave.

I sidestep the difficult philosophical question of whether an individual counterfactually born elsewhere—or even conceived in slightly different circumstances in the same bed—can be said to be the same individual. From a purely naturalistic viewpoint, it would seem that the answer is negative, which would refute my counterfactual argument. But we would still don’t know how to calculate meaningful figures for the reparations—nor, by the way, whether they should be paid in some sort of affirmative-action services or in cash.

The second argument is a moral argument, which is not surprising as welfare economics has shown that any government policy must ultimately rely on a value judgment about distribution. The argument is that there is no moral justification for forcing an individual living today to pay for his ancestors’ crimes. Collective guilt is indefensible. A cogent moral argument could be made for reparations from an identifiable individual of today only if it could be proven that he owes part of his wealth to an identifiable ancestor who exploited an identifiable slave whose current descendant will be the recipient of the reparation payment. Such a calculation is impossible.

The moral case would of course have been different when slaves were liberated in 1865 as their masters could be immediately identified. As time passes, the claims become unprovable and moot.

This being said, one may argue that some of the slaves’ descendants are currently being exploited by some of the descendants of slave owners (and perhaps by some slave descendants too). From a moral viewpoint, this current injustice by current perpetrators should of course be corrected. This leads to an indirect reparation path very different and more practical than what is currently being proposed.

It is possible that the slavery heritage of black Americans has helped keep them in (relative) poverty, if only because of the legal discrimination they have suffered until just a few generations ago. It is quite clear that the individuals responsible for maintaining laws that continue restraining economic opportunities for Blacks should cease doing so. There are at least four regulatory areas where the poor, including descendants of former slaves, are being continuously exploited by currently living Americans.

1) Zoning regulations.—Zoning regulation started in NYC in 1916 to prevent Blacks and immigrants from moving into white neighborhoods as the free market allowed them to do with their dollars and the beneficial greed of property owners. In his recent book A Republic of Equals (Princeton University Press, 2019, p. 196), Jonathan Rothwell illustrates “the tension between market forces and racism” with a quote from a New York real estate agent, found in the New York Times of August 4, 1898:

I assure you there is no sentiment about the property owners bringing colored people here. It is purely a matter of dollars and cents and self-interest. The negroes pay their rent regularly, and many of the white people do not.

Although zoning regulations are not explicitly racist anymore, they have a similar effect by artificially increasing house prices and apartment rents. (See my Regulation review of Rothwell’s book.) Terminating zoning bylaws would substitute partly for impossible and unethical reparation payments.

2) Licensure laws.—Occupational licensure now forces one-fourth of Americans to obtain a costly (in time or money) licenses before they can offer their services. They curb the ability of the poorest individuals to compete on the market—not to mention the increased prices they have to pay for the services of licensed professionals. Terminating licensure laws would indirectly provide compensation to individuals, including descendants of former slaves, who are victims of a kind of government discrimination on the entrepreneurial market.

3) Minimum wage laws.—Minimum wage laws prevent the employment of those whose productivity is lower than the fixed minimum. These people pushed out of employment include the poorest and, no doubt within them, many slave descendants. (The unemployment rate of Blacks is typically above that of Whites, Asians, and Hispanic.)

4) Drug prohibitions for adults and other victimless crimes.—Laws that create victimless crimes—such as those banning some drugs—have two effects for our purposes: first, they create underground markets that are tempting for the poorest workers; second, they give police more opportunities to discriminate against some minorities.

Since most of these discriminatory laws exist at the local or state level, the reforms would be difficult, slow, and perhaps always incomplete. But instead of confiscating money from current taxpayers as a punishment for something they never did themselves, the federal government could play a useful role in promoting these economically and morally justifiable policies.

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