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What is the historical relationship between race and economic inequality?

Module: HST4605 Race and the Desire for Difference

By May El Mantawy


Race and capitalism have often been tied together in historical debate due to the consideration that the forced labour system of slavery was a prelude to capitalism, and potentially the first example of a system of an exploitative nature for the sake of profit. With this setting the basis for economic affairs in America, it is inevitable that the subjugation of non-white people (particularly African Americans) through laissez-faire economics would materialise. Throughout the years, economic inequality has been used as a vehicle for limiting the social mobility of non-white citizens. Race and economic inequality have thus become intertwined due to the circumstances that the capitalist system was founded on, transforming ideological racism to systematic racism.


Thomas J. Sugrue has asserted that “housing patterns […] maintain racial barriers and perpetuate the social, economic and political marginalisation of African Americans.”[1] It has been well established that a necessity for entering the middle class of America is to be a homeowner; owning a home has been described as “that final badge of entry into the sacred order of the American middle class of the Eisenhower years.”[2] With Sugrue’s assessment that the issue of housing has become a crucial method for maintaining racial barriers, and Ta-Nehisi Coates’ statement that homeownership is instrumental to entering the American middle class, it is clear how the relationship between race and economic inequality comes together. With the introduction of the Federal Housing Administration (FHA) in 1934, the average American was led to believe that private homeownership would become much more achievable through the agency’s assurance that it would be possible to receive loans for home building and purchasing. There was an extensive regulation system regarding eligibility for this funding and loans, and inevitably these provisions worked towards the subjugation of non-white/black Americans.


The FHA Underwriting Manual discusses “inharmonious racial groups”[3] and how valuators of properties must “determine whether or not incompatible racial or social groups are present [and] the possibility of the location being invaded by such groups.”[4] The Manual then goes on to evaluate that “if a neighbourhood is to retain stability […] properties shall continue to be occupied by the same social and racial classes. A change […] generally leads to instability and a reduction in values.”[5] The Manual issued by a government-led agency clearly suggests that non-white/black and white people living in the same community together would be deemed ‘incompatible’, and therefore further perpetuates the idea that housing should be racially segregated in order for society to run harmoniously. By creating a negative connotation between racial integration and the financial value of a neighbourhood, the Manual subsequently creates the narrative that having a non-white family in a predominantly white neighbourhood would be financially viable, therefore giving white people an opportunity to inadvertently develop racism out of fear of the value of their home deprecating.


These views were further enforced by the introduction of racial zoning through redlining districts according to the value of neighbourhoods. Areas were categorised as ‘A (Best)’, ‘B (Still Desirable)’, ‘C (Definitely Declining)’ and ‘D (Hazardous)’.[6] The areas that were given the ranking of ‘A’ were most-likely middle class, predominantly white neighbourhoods, whilst areas with the ranking of ‘D’ were expectedly neighbourhoods that were typically largely occupied by low-class black families. “Residents of areas rated ‘C’ and ‘D’ were unlikely to qualify for mortgages and home loans, […] little or no financial backing […] to build in such risky neighbourhoods […] thus perpetuated a vicious cycle of neighbourhood decline.”[7] The fact that racially homogenous communities were unable to qualify for federal loans, or even the opportunity to build themselves housing of a better quality, meant that racial minorities (particularly black people) were further confined to substandard housing: “Bankers seldom lent to black homebuyers […] the result was that blacks were trapped in the city’s worst housing.”[8] With these racialised restrictions backed by federal agencies, it became acceptable and a norm for minorities, especially black people, to be excluded from the real estate market and to be classified as a threat to property value.


Robert O. Self has described these as “an apartheid-like set of racial restrictions”[9], succinctly summarising the nature of these restrictive covenants as they worked towards the machinery that resulted in untold numbers of black people subjugated by capitalism and economic inequality. Assertions that “n*ggers seemed to be natural impediments to the making of moral communities”[10] makes it quite clear that the attitudes held towards the presence of black people in communities were quite a negative one – not only is the language used extremely abusive and derogative, but the assessment that black people would dilute the population and make the community an immoral one, and therefore giving white people the opportunity to utilise racism as some sort of protective method, portrays the way in which economic inequality based on race has been used as a vehicle to subjugate black people and to limit their social mobility.


Not only did governmental and federal agencies ensure that black people in America would be inhibited from receiving housing loans (and subsequently entering the middle class), but this was also achieved through working-class white people who feared the depletion of their property value. It became clear that “the presence of a single, non-white family on any block was sufficient to mark that entire block black”[11] and therefore the view that black people were “threats to property values”[12] materialised. Across America, vigilante organisations rapidly developed following the Second World War – notably the West End Cooperative Corporation (WEEC) in Atlanta. The WEEC actively worked towards expelling black families from their communities in the hopes of keeping their areas racially pure, to not run the risk of being labelled racially inharmonious by the FHA. As aforementioned, just the presence of a non-white family could cause the ranking of a district to deteriorate and subsequently destroy the value of property, meaning that the fear of non-white people and integration became justified, and white people were provided with enough reason to inadvertently act out their racist ideologies.


The WEEC initially took the pacifist method of using “capitalism and conversation”[13] – essentially, they believed that if white people were to purchase homes off of black people and encourage them to move into black-only neighbourhoods, they could “effectively remove all Negroes from the West End.”[14] When this manipulative method began to lose its effectiveness, like many white people, the WEEC resorted to methods of violence: “arrest any black caught in a white section of town. All offenders […] turned over to the police, beaten with blackjacks, and locked up for being drunk.”[15] This display of violence towards black people which then resulted in the imprisonment of innocent individuals clearly portrays how black people were deemed the lowest priority when it came to not only economic equality, but equality in general. Black people were continuously pushed further down in social ranking in order to enable the best for those who were considered superior – white people. Renowned real-estate developer William Levitt’s views on the issue of housing and race act as a microcosm towards general views on this topic: “We can solve a housing problem, or we can try to solve a racial problem. But we cannot combine them.”[16] Levitt’s statement that it is impossible to fix the housing situation, as well as the racial problem spanning across America quite evidently, shows how intertwined race and economic inequality are. Seemingly, subjugating and inhibiting black people from achieving social mobility was the chief vehicle for achieving economic stability and fixing the housing problem which materialised after the Great Depression and Second World War.


Black people and racial discrimination towards them were essentially used to ensure the best for white citizens, echoing behaviour present during slavery where black people were used for the benefit of white Americans. Through the overt oppression of black people – both violent and non-violent – it is blatantly clear that the relationship between race and economic inequality is so deeply rooted that it is impossible for white Americans to move forward economically without inhibiting the social and economic mobility of black people. The foundations of the capitalist economy are so deeply rooted in racism that it would be impossible to fix the racial problem without causing detriment to economic gains.


According to N. D. B. Connolly, “confinement of black people to rental housing […] had profound social and political consequences.”[17] Whilst the discriminatory treatment of black people regarding housing has proved to keep them in substandard, low-quality housing, such confinement has caused greater implications. For African Americans, it was near impossible to obtain secure employment if housing was not maintained. Lisa McGirr made the assessment that “restrictive housing covenants and institutional redlining made it extremely difficult for minorities to obtain housing and jobs.”[18] Not only was it difficult to find housing, but it was also difficult to find jobs that would hire racial minorities. Non-white people, specifically black people, would then be trapped in the vicious cycle of being unable to afford quality housing, and due to their substandard housing (or even lack of housing), they were inhibited from acquiring employment that could potentially work towards bettering their chances of affording a better standard of living. This vicious cycle essentially meant that black people were stuck in the working class of America, reinforcing their inferiority and inhibiting their social mobility, thus ensuring that economic inequality has been used as a vehicle to subjugate non-white people and to protect the white upper/middle class from becoming inharmonious or racially impure. Kenneth T. Jackson ties this together wholly: “the most striking feature of black life was not slum conditions, but the barriers that middle-class blacks encountered in trying to escape the ghetto.”[19] Economic inequality has thus been used as a vehicle for keeping black people in the ghetto, inhibiting their transition into the black middle-class and therefore impeding their chance for social mobility.


Chiefly through real estate, economic inequality has proved to be a key method to ensure hegemony over non-white (especially black) American citizens. The historical relationship between race and economic inequality runs so deep due to the suggestion that slavery stands as a prelude to capitalism; indicating that the capitalist economy that still stands in America relies on oppression on racial grounds. The ongoing, vicious cycle of African American poverty can largely be explained by the racialised economic policies that came into effect in the 1930s – such discriminatory legislation set the basis for not only the lack of social mobility, but also the irrational fear and violence expressed towards black people. A capitalist economy created the fear towards African Americans and therefore this racial logic explains why capitalism “never quite worked the same way for everybody.”[20] This fear of black people in middle-class white neighbourhoods is something that is still prevalent today, as shown by the murder of Trayvon Martin in 2014 by a white neighbourhood watchman, subsequently triggering the launch of the Black Lives Matter movement. It is fair to then suggest that the relationship between race and economic inequality has subsequently enabled racist ideologies to emerge and that the presence of a capitalist economy that has its foundations in racial logic is what motivates the primal urge for self-preservation and competition, therefore providing white people with a reason to oppress those who threatened their chances at prosperity and stability. This displays the importance of the relationship between race and economic inequality as it has set the foundations for racist ideologies in America and suggests that racism did not emerge until oppressive capitalist norms came into play.

 

Footnotes

[1] Thomas J. Sugrue, The Origins of the Urban Crisis: Race and Inequality in Post-war Detroit (Princeton: Princeton University Press, 1996) p. 36 [2] Ta-Nehisi Coates, ‘The Case for Reparations,’ The Atlantic (June 2014) [3] Federal Housing Administration, Underwriting Manual: Underwriting and Valuation Procedure Under Title II of the National Housing Act with Revisions to April 1, 1936 (Washington, D.C.), Part II, Section 2, Rating of Location [4] Ibid. [5] Ibid. [6] Mapping Inequality: Redlining in New Deal America, https://dsl.richmond.edu/panorama/redlining/#loc=0/-67/-281&opacity=0.8 [Accessed on 7 April, 2019] [7] Thomas J. Sugrue, The Origins of the Urban Crisis (Princeton: Princeton University Press, 1996) p. 44 [8] Ibid., p. 34 [9] Robert O. Self, American Babylon: Race and the Struggle for Post-war Oakland (Princeton: Princeton University Press, 2003) p. 106 [10] N. D. B. Connolly, A World More Concrete: Real Estate and the Remaking of Jim Crow South Florida (Chicago: The University of Chicago Press, 2014) p. 7 [11] Kenneth T. Jackson, Crabgrass Frontier: The Suburbanisation of the United States (Oxford: Oxford University Press, 1985) p. 209 [12] N. D. B. Connolly, A World More Concrete (Chicago: The University of Chicago Press, 2014) p. 7 [13] Kevin M. Kruse, White Flight: Atlanta and the Making of Modern Conservatism (Princeton: Princeton University Press, 2005) p. 55 [14] Ibid. [15] Ibid., p. 47 [16] Kenneth T. Jackson, Crabgrass Frontier (Oxford: Oxford University Press, 1985) p. 241 [17] N. D. B. Connolly, A World More Concrete (Chicago: The University of Chicago Press, 2014) p. 7 [18] Lisa McGirr, Suburban Warriors: The Origins of the New American Right (Princeton: Princeton University Press, 2001) p. 44 [19] Kenneth T. Jackson, Crabgrass Frontier (Oxford: Oxford University Press, 1985) p. 133 [20] N. D. B. Connolly, A World More Concrete (Chicago: The University of Chicago Press, 2014) p. 7

 

Bibliography

Coates, T., ‘The Case for Reparations,’ The Atlantic (June 2014)


Connolly, N. D. B., A World More Concrete: Real Estate and the Remaking of Jim Crow South Florida (Chicago: The University of Chicago Press, 2014)


Federal Housing Administration, Underwriting Manual: Underwriting and Valuation Procedure Under Title II of the National Housing Act with Revisions to April 1, 1936 (Washington, D.C.), Part II, Section 2, Rating of Location


Jackson, K. T., Crabgrass Frontier: The Suburbanisation of the United States (Oxford: Oxford University Press, 1985)


Kruse, K. M., White Flight: Atlanta and the Making of Modern Conservatism (Princeton: Princeton University Press, 2005)


Mapping Inequality: Redlining in New Deal America, https://dsl.richmond.edu/panorama/redlining/#loc=0/-67/-281&opacity=0.8 [Accessed on 7 April 2019]


McGirr, L., Suburban Warriors: The Origins of the New American Right (Princeton: Princeton University Press, 2001)


Self, R. O., American Babylon: Race and the Struggle for Post-war Oakland (Princeton: Princeton University Press, 2003)


Sugrue, T. J., The Origins of the Urban Crisis: Race and Inequality in Post-war Detroit (Princeton: Princeton University Press, 1996)


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