Two Sides of the Same Coin

Yulina Goto, December 15, 2022

INTRODUCTION

The purpose of this website is to use the language of economics to understand the present and future state of structural racism. The two economic terms, "value" and "fortuity," reveal that structural racism will persist. The terms, "fee" and "reparations," describe possible solutions to mitigate this persisting oppression.

The present state of structural racism in the U.S. is that it will persist. Lawyer Michelle Alexander argues that since racism is inherent to America, forms of social control reappear dressed in new rhetoric to oppress Black people. An economic perspective yields the same conclusion. Structural racism will continue because it is deeply embedded in U.S. institutions. The terms "value" and "fortuity" reveal that structural racism is part of the U.S. labor and policy-making systems. Formerly incarcerated Black people are valued mainly for their labor. Policy-making puts white interests above Black rights.

If racism will continue to exist, what solutions may allies and advocates imagine? The language of economics also provides possible solutions to structural racism. The terms "fees" and "reparations" present two different monetary solutions. We could levy fees on companies that discriminate against Black people. We could also pay reparations to Black families who were denied equal chances to build wealth.

A guide can be helpful when taking a new perspective on a topic. Similarly, we will benefit from a guiding light when taking an economic perspective on structural racism. This guiding light will be the truth theories. The philosophers Aristotle, Rene Descartes, Michael Sandel, and John Locke provide us with powerful ideas about reaching the truth. Aristotle calls for deduction to reach the truth. Descartes advocates returning to reason to understand bodily sensations. Sandel defines the truth in relation to justice. Locke lays out inalienable rights to define truth. These truth theories show that structural racism will continue to exist. They also help us evaluate whether proposed solutions serve the Black cause, illuminating the "truth" of proposed solutions.

ECONOMICS IN THE PRESENT

The language of economics provides us insight into the persistent nature of social control in the U.S. Structural racism will continue because it is deeply embedded in U.S. institutions.

The term "value" shows that structural racism exists in the labor market. Formerly incarcerated Black people are valued mainly for their labor.

The term "fortuity" shows that structural racism exists in policy-making. Laws that advance Black rights often have white interests at heart.

Value: monetary worth

“Value” in a general sense means importance or worth. “Value” in an economic sense points to the material or monetary worth of something (“value”). Society values incarcerated Black people only from the value they produce for white people. In Halfway Home, sociologist Reuben Miller shows the valuation of Black people based on labor by contrasting the shift in the accessibility of re-entry programs before and after 2008.

Lorenzo’s experience speaks to the difficulty of a formerly incarcerated person in joining a re-entry program in 2001. During Zo’s time in prison, he had his eye on a re-entry program that would give him better job opportunities following his release from prison. Zo was determined to join Emmaus Road, a prisoner-reentry program in North Lawndale, Chicago, that helped people get jobs by offering six months of free housing and a chance to earn a high-school diploma (Miller, n.p.). However, Zo quickly learned that re-entry programs in 2001 were not accessible as expected. Zo was rejected from the program. He was devastated. “I didn’t know what to do,” Zo recounted. “I cried,” he said. “I cried, man. Right there” (Miller, n.p.). He recounted that the hopelessness was so great that he had planned to rob two boys on a busy street immediately after hearing the news.

In juxtaposition to Zo’s experience is the sudden expansion of re-entry programs in 2008. In April of 2008, George W. Bush passed the Second Chance Act. A 165 million-dollar legislation, the act was the largest federal appropriation for community-based services for formerly incarcerated people in history (Miller, n.p.). President Bush described the law as a compassionate gesture: the US needed the “healing touch” of organizations (Miller, n.p.). All of a sudden, re-entry programs became accessible.

The political philosopher Aristotle guides us in understanding that Black people are valued for their labor. Aristotle states that reasoning leads one to the truth (Aristotle). Reasoning is the process of taking empirical evidence and piecing it together to lead to deductive truth (Aristotle). Contrasting the two pieces of empirical evidence—Zo’s struggle to join a re-entry program in 2001 and the sudden expansion of programs in 2008—we can deduce that the Second Act attempted to mitigate the effects of the economic recession by moving formerly incarcerated Black people into the labor force. The timing in which the law was passed was when the US desperately needed more workers to boost the economy. Policymakers knew that people with criminal records had a terrible time in the job market. Thus, the Second Act was a policy the U.S. needed to desperately raise the employment rate in order to boost the economy. After release from prison, Black people are viewed as secondary citizens who only hold value as labor.

Fortuity: a chance occurence

“Fortuity” in a general sense means luck. “Fortuity” in an economic sense points to a chance occurrence; the lack of correlation between two events. Advancements in Black rights are but chance occurrences. Lawyer Derrick Bell states that the benefits to Black people are not "direct to him but an incidental benefit arising from the contract," much like a third party in a contract (Bell 41). The motive behind the Brown v. Board of Education decision reveals the role of fortuity in policy-making.

In 1954, the Brown decision ruled racial segregation in public schools unconstitutional. Many Americans cheered this landmark decision. However, Black people had documented school segregation and its harm to Black children for one hundred years (Bell 36). All of a sudden, the government stopped segregation in schools.

The philosopher René Descartes guides us in understanding that advancing Black rights is rarely the primary motive of policymaking. Descartes acknowledges that the body recognizes and prefers pleasurable sensations to painful ones (Descartes). However, he uses reasoning before jumping to any conclusions about the pain or pleasure experienced by the body (Descartes). It is pleasing to believe that the Brown decision is a sign of America's moral advancement. However, reasoning shows that Black rights were never the main reason for passing laws. The Emancipation Proclamation claimed to abolish slavery, but Lincoln was aware that he could better ensure a Union victory by enlisting freed slaves from the South (Bell 41). Similarly, post-Civil War amendments granted citizenship to former slaves, yet, policymakers did so with the understanding that Republicans would be in control of the government for years to come (Bell 41). Commitments to Black rights come about when policymakers see that the country would derive benefits that were at least as important as those Black people would receive.

ECONOMICS IN GOING FORWARD

If racism will continue to exist, what solutions might allies and advocates imagine? Appealing to morals does not work. Tackling a systemic issue requires taking into account material realities, not betting on virtuous behavior. Economics is apt because it disregards morals when tackling problems. The amoral nature of economics carries benefits and drawbacks. The drawback is that economics does not always promote the right attitudes toward what is being exchanged with money. The benefit, on the other hand, is that economics provides hard evidence of monetary exchanges between two parties.

The language of economics provides possible solutions to structural racism. The terms "fees" and "reparations" present two different monetary solutions.

We could levy fees on companies that discriminate against Black people. But fees promote a harmful attitude toward Black people since they commodify the right to discriminate.

We could also pay reparations to Black families. Economics support reparations because evidence exists that Black homeowners were locked out of wealth accumulation.

Fee: a price without moral judgment

A “fee” in a general sense means a payment in exchange for a good or service. A “fee” in an economic sense is a price that implies no moral judgment. In contrast, a "fine" implies moral disapproval (Sandel, n.p.). Fees promote degrading attitudes toward Black people and should not be a solution.

In the 1960s, Black lawyer Geneva Crenshaw proposed a racial discrimination fee. Observing the problem of employment discrimination, Crenshaw believed that a fee would create an incentive for companies to hire equally. All employers could obtain a license authorizing racial discrimination (Bell 46). License holders would pay a 3% fee during each quarter (Bell 46). Money collected from license fees would then be placed in an "equality fund" for the Black community. The funds would insure black businesses, offer no-interest mortgage loans for black home buyers, and provide scholarships for black students (Bell 47). The purpose of the fee was to guarantee that Black people would benefit either directly, from equal access, or indirectly, from the money raised from the license fees by companies who excluded Black people (Bell 47). Crenshaw argued that the fee brought "hard-headed realism" to solve employment discrimination (Bell 47). The fee was an effort to derive some benefit from a system that only created losses for Black people.

The 21st-century political scientist Michael Sandel argues that fees promote a corrupt attitude toward Black people. According to Sandel, anything considered justice must promote virtue (Sandel). A just solution is one which “cultivat[es] the attitudes and dispositions, the qualities of character, on which a good society depends" (Sandel). A license authorizing racial discrimination does not promote the virtue of its citizens, rather, it erodes respect for the dignity of Black people. We must be careful about how we use money. Money not only acts as a medium for the exchange of goods, but promotes certain attitudes about the goods being exchanged (Sandel, n.p.). A racial discrimination fee is not just money; it promotes the attitude that is it appropriate to treat the right to discriminate as a commodity (Sandel, n.p.). A fee would weaken the moral stigma attached to racially excluding Black people from employment. Thus, a fee is ultimately harmful to the Black cause.

Reparations: payment for what is owed

“Reparations” in a general sense are payments to make up for a wrong. “Reparations” in an economic sense are payments for what is owed or forcefully taken away. Reparations pay Black people for their losses from housing discrimination and should be a solution.

The U.S. government denied Black people the chance for wealth accumulation. In the 1930s, discriminatory practices barred Black families from getting mortgages and benefiting from rising home prices. In 1934, Congress established the Federal Housing Administration (FHA) to help low-income families buy homes. The FHA adopted policies that insured private mortgages, dropped interest rates, and decreased the down payment required to buy a house (Coates 11). However, the policies only applied to white families. Through the process of redlining, the FHA denied Black families the same chance to obtain mortgages. The FHA adopted a system of maps that rated neighborhoods according to perceived stability (Coates 11). Primarily white neighborhoods were rated "A," while Black neighborhoods were rated "D." Redlining also decreased the value of homes in Black neighborhoods. Normally, families can make a profit as the price of their house increases over time. However, the devastating effect of redlining was that Black people's homes lost value in comparison to those homes and communities in "A" rated areas (Coates 12). Black families were locked out of the chance for wealth accumulation that their white counterparts enjoyed.

The 17th-century political philosopher John Locke suggests that being denied the right to housing demands recompense. Locke states that people have inalienable rights, rights that cannot be taken away from people (Locke). The government must provide its citizens basic protections since the state and people are in a contractual relationship, who are otherwise “in a state of nature . . . free and equal” (Locke). Such rights include the right to housing. Since the government cannot infringe on the right to housing, Locke suggests that the government must give due recompense to Black families who saw the value of their property plummet (Locke). The U.S. actively punished Black success, so the government must pay Black families for the material opportunities it took away from them (Coates 50). Reparations are not charity, but payments for what Black homeowners are owed.

CONCLUSION

New perspectives are uncomfortable, but lead us closer to the truth. Using the language of economics to break down structural racism is much like departing Plato's Cave. Economics gives us a new perspective to view what is obscured. Economics helps explain more truthfully how our systems continually oppress Black people in the labor market and policymaking arena. Economics also proposes economic solutions to address employment discrimination and property theft. Economic language becomes a means to reach the end, which is the truth. We depart the cave.

Applying economic language to social systems may not be easy. One must go out of one's comfort zone. The person who leaves the cave to the outside world experiences discomfort. The person is used to the dark interior of the cave, not bright sunlight. Leaving the cave is not easy.

By plucking up the courage to leave the cave, however, one walks closer to the truth. Allies and advocates, who challenge themselves to take on various perspectives, find myths unravel before their eyes and come to better understand systems of injustice. Now, we are one step outside of the cave. It's time to keep walking.

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