Module: HST4605 Race and the Desire for Difference
By: Arianna Koffler-Sluijter
The historic relationship between race and economic inequality is that the racial structures of capitalism have been used to increase the overall wealth of white people and decrease that of black people or other non-white populations. This relationship often features self-fulfilling prophecies and a fluid yet cyclical nature. The focus of this essay with be twentieth century America as the ‘most striking fact about American economic history and politics is the brutal and systematic underdevelopment of black people’.[1] It is obvious that poverty is distributed along racial lines in America as ‘31 percent of all blacks in the U.S. are poor, 22 percent of all Hispanics but only 9 percent of all whites’.[2] It is imperative to note that this relationship is not passive and it did not develop accidentally, the main feature of the relationship between African Americans and poverty is that they have been forced repeatedly and in various methods into that negative economic situation, and not without protest. The main ways that African Americans have been forced into ‘entrenched poverty’ are related to both the home and the workplace, and the consequences of systematic racism in the ability of white people to rely on a social network whilst black people are ‘working without a safety net’.[3]
Labour is one factor that has been used to increase black poverty, thus affecting the historic relationship between race and economic inequality in that the very levels of employment as well as other things like union relations have been affected by clear racism. Firstly, the official rate of unemployment in the United States in 1961 was just 6% for white people, whilst it was 12.4% for non-whites, clearly showing a racial disparity as the non-white rate of unemployment is double that for whites.[4] This higher rate of unemployment for non-white peoples in America had the effect of ‘transforming non-whites (and recent white immigrants) into a reserve of cheap labour’, which only exacerbated problems with minority population’s acceptance into unions as they were seen as a threat to white people’s wages.[5]As alluded to, ‘relations between black Americans the union movement were often hostile’ in the period 1900-1930 in the ‘American Federation of Labor’s era of hegemony’, and though there was improvement between 1930 and 1960, by the mid-1960 these relations had ‘began to fray’.[6] Without access to unions, African Americans did not have the same ability to call upon powerful external bodies when fighting for rights in the workplace. In summary, the historic relationship between race and economic inequality is affected by labour and employment in that on the basis of race, non-white peoples are more likely to be unemployed, with this only increasing in periods of economic crisis, and even when employed, they would be unable to join mainstream unions.
Black people have historically been restricted from homeownership, and building on that restricted from certain neighbourhoods, which in turn increased black poverty as homeownership is a gateway to access to other types of credit. Homeownership was, and is an incredibly important goal many work in America towards as it can be seen as an ‘emblem of American citizenship’ or a verifiable mark of entry into the sacred order of the American middle class’, thus by being blocked from such an achievement, African Americans were ‘locked out of the greatest mass-based opportunity for wealth-accumulation in American History’.[7] There were two main ways to restrict African Americans from becoming homeowners, these were contract mortgages and restrictive convents. These methods share some links to the Home Owner’s Loan Corporation and the Federal Housing Administration, which is reflected in that ‘white household’s outsized share of wealth is deeply tied to the country’s history of racial social institutions’.[8] Firstly, contract mortgages were a kind of ‘predatory agreement’ wherein the seller would maintain possession of the deed of the property, and if the buyer missed a month’s payments, the seller would take both the don payment and the property itself as profit, leaving the buyer at massive loss.[9] This type of mortgage was the one most associated with African American prospective homeowners, as ‘during this period, according to one estimate, 85% of all black home buyers who bought in Chicago bought on contract’.[10] They were forced into this type of contract as though the Federal Housing Administration ‘insured private mortgages, causing a drop in interest rates and a decline in the size of down payments’, they did this mainly for white people.[11] Thus white people in America had a ‘legitimate credit system’ to rely upon, whilst ‘blacks were herded into the sights of unscrupulous lenders who took them for money and for sport’.[12] The second way of keeping African Americans from homeownership was much more explicit in that it was a ‘clause in the deed forbidding the sale of the property to anyone other than whites’.[13] Being unable to legitimately own a home meant that African Americans did not have the ability to use that property as leverage in obtaining other types of credit or the ability to acquire equity. However because of contract mortgages, African Americans were not in a neutral position compared to white homeowners, rather a negative one. Alongside these methods of keeping individual black Americans from homeownership, the Federal Housing Administration insured the concentration of the African American population into certain neighbourhoods, creating ghettos. Created in 1943, the FHA ‘adopted a system of maps that rated neighbourhoods according to their perceived stability’; these maps gave an A rating to majority white neighbourhoods and D rating to majority African American neighbourhoods, which were then ‘usually considered ineligible for FHA backing’.[14] The creation of ghettos through redlining was also helped by the phenomenon of ‘white flight’, i.e. the movement of white populations out of urban spaces and into the suburbs, however the use of the metaphor of flight ‘shifts focus away from the complicated political production of suburban communities in place’.[15] The consequence of this practice of redlining was that in the period 1955 to 1970 ‘4% of whites and 62% of blacks across America had been raised in poor neighbourhoods’ as ‘redlining destroyed the possibility of investment wherever black people lived’.[16] In this way, the FHA maps were a self-fulfilling prophecy as those areas rated D became areas of instability, but it was due to their ratings, not because African Americans lived there. It would be naïve to say that this was a passive process either on the side of the racist American establishment or African Americans, the formation of such groups as the Contract Buyers League demonstrates a level of consciousness of the situation.[17] In conclusion, even though these policies were outlawed by the 1968 Fair Housing Act, the damage had already been done. The racial justification for locking black Americans out of homeownership and wealthy neighbourhoods ensured their inferior economic position compared to white Americans. To summarise, being unable to legitimately own a home or own one in a wealthy neighbourhood, affected African Americans ability to accumulate wealth, therefore furthering their entrenched poverty and furthering the negative relationship between race and economic inequality.
Whilst the other factors assessed so far that affect the relationship between race and economic inequality in that they are systematic effects on individuals, the lack of a network to rely upon is a consequence that affected the system. Due to this system of racial capitalism, black people in America are maliciously and systematically rejected from the ability to call upon help from networks in order to help in the event of economic downturn. Racial capitalism can be defined as ‘the process of deriving social or economic value from the racial identity of another person’.[18] Though ‘whiteness has been a source of value throughout [American] history, conferring power and privilege on the possessor’, the value of people of colour in such a racist system ‘has been valued differently and more ambiguously’ as that value is fluid based upon what best suits the needs of the white establishment.[19][20] The proliferation of the racial capitalist system ‘has occurred not in spite of the exclusion of blacks but because of the brutal exploitation of blacks as workers and consumers’.[21] In the racial capitalist system, the ‘strongest roots of Black poverty are anchored firmly in the capitalist marketplace’.[22] Because of this system of exploitation and subjugation, African Americans are unable to call upon a social network of less formal aid, therefore in times of crisis, on top of already being less well off, they face a much harder fall that their white counterparts. The definition of a social network is that they are ‘conduits for the many informal types of help, assistance and support that allow individuals to flourish and that sustain community life’.[23] Not only do white people ‘tend to have broader access to influential and supportive ties that provide them with a variety of social advantages’ in the first place, but they will also ‘maintain a greater proportion of their resource-providing ties’ than people of colour.[24][25] White people have a better hold on their social networks as non-white peoples are more likely to live in communities with ‘lower levels of homeownership, higher crime, higher poverty, higher unemployment, lower rates of education and higher foreclosure rates than similar situation whites’.[26] The historic relationship between race and economic inequality is so entrenched that it has almost become self-policing in that as individuals, African Americans have no social network to call upon because that entrenched poverty is so widespread.
In conclusion, the historic relationship between race and economic inequality is that through various means to do with both the home and the workplace, race has been used as a justification to enforce economic inequality. In America specifically, this is visible in their history as black people being locked out of the workplace and homeownership in general, as well as unions and white neighbourhoods.This systematic racism is so entrenched that it means the lack of a social network within African American communities to support each other in times of crisis, and with their already negative economic position, crises hit harder in the first place.
Footnotes [1] Manning Marable, How Capitalism Underdeveloped Black America: Problems in Race, Political Economy and Society (Chicago: Haymarket Books, 2015), p. 1. [2] Ibid, p. 48. [3] https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/- Ta-Nehisi Coates, “The Case for Reparations”, The Atlantic (June 2014), accessed 5/4/2019. [4] Ibid, p. 53. [5] Antoine L. Joseph, The Dynamics of Racial Progress: Economic inequality and Race Relations since Reconstruction (Florence: Routledge, 2005), p. 154. [6] Ibid, p. 137. [7] https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/- Ta-Nehisi Coates, “The Case for Reparations”, The Atlantic (June 2014), accessed 5/4/2019. [8] Jeannette Wicks-Lim, “It Pays to be White: Assessing how White people benefit from race-based economic inequality”, Dollars and Sense 324 (2016): p. 24. [9] https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/-, accessed 5/4/2019. [10] Ibid. [11] Ibid. [12] Ibid. [13] Ibid. [14] Ibid. [15] Robert O. Self, American Babylon: Race and the Struggle for Post war Oakland (Princeton, N.J.: Princeton University press, 2003), p. 2. [16] Ibid. [17]Ibid. [18]Nancy Leong, “Racial Capitalism”, Harvard Law Review 126, no. 8 (2013): p. 2152. [19] Ibid, p. 2154. [20] Ibid, p. 2155. [21] Marable, How Capitalism Underdeveloped Black America: Problems in Race, Political Economy and Society, p. 2. [22] Ibid, p. 43. [23] Markus H. Schafer and Nicholas Vargas, “The Dynamics of Social Support Inequality: Maintenance Gaps by Socioeconomic States and Race?” Social Forces 94, no. 4 (2016): p. 1795. [24] Ibid, p. 1800. [25] Ibid, p. 1801. [26] Ibid.
Bibliography
Books
Antoine L. Joseph, The Dynamics of Racial Progress: Economic Inequality and Race Relations since Reconstruction (Florence: Routledge, 2005).
Manning Marable, How Capitalism Underdeveloped Black America: Problems in Race, Political Economy and Society (Chicago: Haymarket Books, 2015).
Robert O. Self, American Babylon: Race and the Struggle for Post-war Oakland (Princeton, N.J.: Princeton University Press, 2003).
Articles
Nancy Leong, “Racial Capitalism”, Harvard Law Review 126, no. 8 (2013): pp. 2151-2226.
Markus H. Schafer and Nicholas Vargas, “The Dynamics of Social Support Inequality: Maintenance Gaps by Socioeconomic States and Race?” Social Forces 94, no. 4 (2016): pp. 1795-1822.
Jeannette Wicks-Lim, “It Pays to be White: Assessing how White people benefit from race-based economic inequality”, Dollars and Sense 324 (2016): pp. 21-26.
Websites
https://www.theatlantic.com/magazine/archive/2014/06/the-case-for-reparations/361631/ - Ta-Nehisi Coates, “The Case for Reparations”, The Atlantic (June 2014), accessed 5/4/2019.
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