The race for capital

The inequalities built into the United States have mystified me for a long time.  I was born and raised in Maine, a poor state and, incidentally, the whitest state in the Union by a wide margin (well, maybe Vermont can compete).  We were taught that black people had been – and continued to be – discriminated against by society from an early age; I can remember Mr. Casey in seventh grade – he had an amazing moustache, and the girls all had a crush on him – writing outlines on a transparency projector about Martin Luther King, and about equal opportunity, and about bias and Native American oppression and slavery and the Klan.  I had good teachers: they told me that the story of America wasn’t a great one, even if it had some good moments, and that we all had a responsibility to make up for the evils of our past.

They also taught us, though, that Maine had a good place in all of this.  It wasn’t sugar coating either: Maine basically spent the last of its great hope for the future in fighting the evils of the Confederacy.  My state – and when I say “my state”, I know my family only moved here in 1972, and thus I have no personal claim on any of this – had a higher volunteer rate to fight the Confederacy than any other state, had a higher proportional loss of men in the war, and in its brightest moment, Joshua Chamberlain and the 20th Maine regiment turned the tide in the Battle of Gettysburg, and likely turned the tide of the entire Civil War.  I’m proud to be the son of a state that sacrificed more than any other to destroy slavery, to give rise to the 14th Amendment, to break the back of racism.

And yet, roughly half of my state voted for Trump in 2016.

Racism is, unfortunately, at the core of the Western experience.  It takes many forms locally – Mitteleuropa prefers anti-Semitism; the Francophone countries seem to reserve their tribal hatred for the Arabs; the English simply despise everyone at the same time but the Irish are a unique form of scum to them; and let’s face it, Canada, the systemic hatred for First Nations is your common legacy even though you want to pretend you’re past these sorts of things – but the American racism against Blacks is the epitome of the Western racist model.  It is built into our Constitution, the three-fifths clause allowing slaves to be counted towards Congressional representation despite their utter denial of human rights being probably the most unethical moment of consensus politics to have come to pass.  Until the post-World War II period, when inexplicably African men and women chose to immigrate to the United States despite all indications to the contrary, the only Blacks in this country were here by lack of choice and the hardiness of their ancestors.  America as a whole did everything in its power to dehumanise Blacks for centuries; it wanted its labour power because it didn’t have enough pliable poor white people to turn out its industrial agricultural crops, but it wanted to ensure that those human beings never thought of themselves as whole.

But then again, the United States also gave rise to the only abolitionist movement that actually forced the issue of the elimination of slavery to that of war.  Wilberforce convinced the people of Great Britain to end the slave trade first, then slavery in general, with a civic movement.  France and other colonial powers gave up sanctioned slavery (local forms persisted into the 20th century) largely due to an almost obvious acquiescence to the logic of human equality.  Even the Russian Empire gave up its local version of slavery due to the weight of liberal public opinion which had invaded the thought processes of its nobility.  But in the US, a hardcore of slavers faced off against what proved to be an even harder core of anti-slavers, they fought what was proportionally to population the most deadly war in the modern era in term of combatants killed (World War II was deadlier, but since the Nazis and the Soviets, and to a lesser extent US and UK strategic bombing commands, busied themselves more with killing civilians, it takes the cake).  The anti-slavers won, and not just won, they won with greater loss of life and, seemingly, less spoils, than any other winning cause in recent history.  What they won was a couple of constitutional amendments – which were gutted over the proceeding few decades – and the freedom of several million slaves who were then subjected to over a century of un-civil, anti-legal violence and hatred.

What’s interesting, though, is the naïveté of the abolitionists and the Radical Republicans who waged this war.  There was a belief at the time, it seems, that once legal freedom was won, then the playing field would be levelled and the freed slaves could become “normal” people.  Over time, revisionists have ascribed this attitude to a kind of subconscious white supremacy – that is, so the theory goes, many who fought to free Black slaves believed in their inherent inferiority as people, and thus releasing them from bondage wouldn’t fundamentally impact the way in which they related to white people in general.  A narrow Marxist view takes this further and ascribes to the North a more sinister motive: by releasing the slaves from bondage and forcing them into the wage economy, the overall value of unskilled and agricultural labour in postbellum America would be reduced, both in the South and the North, thus further enhancing the relative value of stored capital versus labor and making capitalism that much more dominant.  Some proto-Marxist thinking of this kind is what encouraged copperhead Democrats to organize unskilled labour in New York and elsewhere in 1862 and 1863 to riot in opposition to the war, including race riots which sought out and killed free Blacks as being representative of the creeping loss of labour worth represented by the end of Black slavery.

In any event, the end of slavery could never lead to an equality of opportunity for Blacks, because of the simple fact that they emerged from bondage without capital.  This made them effectively unique in the American landscape (I’m going to put aside the First Nations for this essay, as there are more intentionally genocidal motivations against them in all of North America, not just the United States, that makes comparisons between Blacks and First Nations a much more complex discussion – and come on, isn’t talking about Black race issues complicated enough for the under-5000-word format?).  Many, many other immigrant groups arrived in America post-Revolution with little or no formal capital, but those groups had access to capital accumulation which was forbidden to Blacks.  Take, for example, the dirt poor Anglo-Scotch-Irish which were dumped in North America: many were effectively shipped in order to avoid public financing of their care via the Dickensian poor house system, in the wake of Anglo-Scotch enclosure acts and Irish socially induced famines.  But on arrival in New York or Montreal or Baltimore, these white people were able to homestead out west – often on credit – and thus acquire the starting point of capital which could enable future investment and return.

By having access to the disenfranchised land capital value of a vast continent, simply by virtue of not being Black – and let’s face it, not being Black or First Nations was the only requirement, although it also helped to not be legacy Spanish on the west coast – the immigrants who “made this country great” (both Canada and the US, by the by) were able to start with nothing, get an opportunity for free, and see what they could do with it.  Plenty of other immigrants came with a little bit of personal or communal capital and thus started with a leg up, and yes, a lot of immigration was in the lower middle and middle middle classes, along with the bourgeoisie cream at the top, but the success of those with absolutely nothing to still be able to find access to capital creation is a vital part of the story of North America.  And not just North America: it’s the story of Australia, and New Zealand, and Argentina: countries where native disenfranchisement made the distribution of land to the otherwise destitute possible, and which enabled those otherwise destitute to have access to capital to enter into the marketplace on a peer-based footing in the new capitalist society.  Not an equal footing: capitalism doesn’t promise equality, it only promises an opportunity to compete in the market – if you have capital with which to play.

Some people will probably be bothered with the idea that non-Black immigrants to North America got “free capital” – surely, they’ll say, they had to pay their way over, they had to bring a few copper shillings so as to afford their first hovel and first meals.  Yes, I’d agree to that – but remember Blacks didn’t “have to pay their way over”: they were shipped over without their consent, and certainly without a deposit balance in their favor to start things off when they got off the boat.  Whites did have to pay for the land they occupied (well, the poor ones did – they had to buy it from people like George Washington who were gifted huge swathes of land, or from the government that seized it by fiat), but they bought it at, if you will, subsidized prices.  Land sales were a form of welfare without the direct payout: selling land that the government had acquired for nothing at a nominal value was only nominally different than giving it away.  But Blacks couldn’t purchase it because they had come over with nothing and their labor was taken from them without recompense.  Whites came over with often close to nothing, but got paid when they started washing dishes or pushing a plow or whatever.  Capital was both given, in the form of free or effectively free land, and was allowed to accumulate, in the form of wages paid for freely negotiated labor.

The end of the Civil War could have involved a scheme of land distribution to slaves, much as the end of serfdom in Russia or the Ottoman Empire involved land redistribution of some sort.  But it didn’t.  Throughout the postbellum South, property rights were largely respected for pre-war holders, with the sole exception of their rights to bonded slaves.  It was not only respected, but with few exceptions, land and immobile property was returned to antebellum holders even if they had actively participated in the rebellion, the exceptions being concentrated among those who really ticked off the occupying Union armies.  But even then, seized land by and large wasn’t distributed or made available as “unoccupied property” or homestead property to former slaves; it was largely sold at auction to what became known as carpetbaggers from the North, with cash or credit at the ready.  Blacks had been forcibly imported, and at the one opportunity they may have had to join the US “free land” distribution game, they were stopped by a specious deferral to the absolutism of contract law in the capitalist system.

Without any seed capital – and again, keep in mind that every other major immigrant class (even the Japanese and Chinese on the west coast, although the Japanese were subject to a retrograde land grab during World War Two) were given the opportunity to get some effectively free seed capital via the frontier and homestead land distribution processes of the 18th and 19th century – Blacks were thus forced to face the emergence of radical American capitalism without any table stakes.  I’ve mentioned in a prior essay the Game of Life by Milton Bradley; in the 1978 version, even if you decide to go to college, you still start out with $500 and your first year’s salary; Blacks emerging from the Civil War and the passage of the 13th and 15th Amendments didn’t even have that.  Most of them, moreover, emerged illiterate – not by choice but by an enforced denial of access to education by their former owners – and with family and civic structures that bore the debilitating effects of the uncertainty of ownership by the criminally indifferent.

But it was 1867, and there was hope, right?  Well yes: the occupying Union armies generally tried to at least cull back the legal structures which prevented released slaves from participating in civil society.  Blacks who were literate could hold office and effect some change; all Blacks could vote.  But still, the Union victory was not just a victory over slavery: it was a victory for the emerging logic of an absolutist version of private contract law.  Radical Republicans wanted Blacks to emerge from slavery and prove that their prior masters were the evil idiots that Douglass and Garrison and John Brown had proclaimed the slaveholder class to be, but they also wanted government to stay out of any and all private property relationships between men, and wanted men to contract with one another in a kind of holy singularity, where collectivity – whether it be via unions, socialism, communism, or whatever – was as abhorred as bondage itself.  It was an era of Spencerism – survival of the fittest but more than that, survival on the assumption that we are all created equal, creation being the foremost point.  The fact that I was created equal but had capital at that moment of creation and you were created equal but had no capital at that same moment was deemed to be equality full stop.  Or rather, the ethos even of the Radical Republicans was that we are born equal, but the greater equality at inception of some of us was of no import in considering whether we could enter into contracts on equal terms.

This, then, is the core of the problem with the American issue with Black experience.  It really isn’t that we as a society think Blacks are inferior or bad or whatnot – although to be sure, lots and lots of people, including more people that I know that I’m comfortable admitting to, do have either an explicit or just-under-the-surface bias to that effect.  I’m not going to gloss over centuries of explicit racism in American society, but I would say that that is a human problem, not an American problem.  Some of the most racist people I know are African and Asian and South Asian – in fact outside of North America, expresssing open racism, or anti-semitism, or religious prejudice, or just plain tribal ethnic hatred is easy and free.  For all sorts of bad reasons, human beings seem to hate the other.  But America’s problem is different – in fact it’s made even more markedly different by the fact that most of society does actively want to not be racist or tribalist or whatever any more.  In my experience in North America, it really is “most” – not “the vast majority” mind you, witness the persistence of Trump’s core constituency, but yes, really, most – people of every background in this vast strange continent want to be as nice to everyone as they can be.

Our problem on this continent, though, is rooted in the fact that there is only one group – Blacks – who came here as immigrants without access to capital and without the right to accumulate it.  And even after they theoretically gained the right to accumulate it after the Civil War, they were blocked at every turn until really around the Carter administration and the passage of the Community Reinvestment Act to do so.  When you have no capital, you have no access to credit; thus basic “good banking” concepts prevented Blacks from having access to the most basic forms of mortgage finance that every other immigrant used, individually and collectively, to build starter capital.  The vast majority of southern Blacks coming out of slavery had no leverageable skill: they were unskilled agricultural laborers, or else they were servants.  Those skills aren’t like being trained as a blacksmith or apprenticed as a cobbler, where there is some future cash flow from your human capital that you can use to borrow against.  Blacks came to North America effectively already owing money that they could never repay; they were brought over to perform tasks which were readily replaceable and subject to the whim of a low-value capitalist; and then the final nail in the coffin, once released from bondage, they were given no starting capital via land redistribution, and they were implicitly and explicitly barred from access to the financial system.

And today, whites look at Blacks with the same kind of naïvete of the Radical Republicans.  Why are they complaining about opportunity, when they have full legal rights?  Putting aside the fact that people with what Hannah Arrendt or Erich Fromm would describe the “authoritarian mindset” are drawn inexorably to policing, and they are also those who are most resentful of their own lack of status in white society, and thus are more likely to oppress Blacks simply because they are evil, even good and honest and upright white people make a fundamental mistake when they think Black people are “just like them.”  They aren’t, simply by virtue of the fact that – rare exceptions like Barack Obama whose parents came post-1960s aside – Black people in the US come from families and backgrounds who were fundamentally different than every other immigrant that makes up the 98% of North Americans who aren’t of First Nations heritage.  They were forced into capitalism without capital, and their families were forced to participate in the capitalist system without the ability to access the money system which allows everyone else the chance to accumulate capital.

There’s a valid question of what to do about all of this.  How does society responsibly atone for the moral failings that made this state of affairs possible?  Every now and again we’ll probably find an easy win that will make us all feel better – for example, redlining in the federally-guaranteed mortgage market.  Especially since the US mortgage market is effectively a federal enterprise, we could easily relax underwriting standards for Black borrowers, could easily force servicers to impose a more lenient set of standards for arrears collections and foreclosures, and even create alternative ownership structures which allow lower-income Black borrowers to accumulate rights to equity faster than a mortgage repayment structure might otherwise allow – particularly if equity is accessed to start a business, or pay for education, or other capital-accumulative activities.  High fives all around, it’s nice, it rewards prudent risk taking, blah blah blah.

But the fact will remain that Blacks stuck in the revolving-door incarceration system, who are stuck in sub-class school systems due to jurisdictionally-driven funding structures, will remain behind the curve.  And from a “just outcome” perspective, it doesn’t seem fair to simply give away money to a class of people which include those who have overcome their challenges to be successful members of the polis, who might get a check or some legal advantages but whose singular achievement of overcoming starting from less than nothing in a holistic cultural sense isn’t being recognized for the real success that it is.

The closest analogy is that of post-Apartheid South Africa, which I bring up with some trepidation, though, because the American experience is not remotely comparable to South Africa.  Again, white Americans in the 1860s were slaughtered to defeat the idea that racial slavery was acceptable; part of the intellectual complexity of the American problem is that we both paid for the sins of slavery with blood, and then like many human beings, our society then proceeded to commit new sins in the name of race which now demand a new sacrifice.  But to say this country hasn’t paid reparations is not correct; the reparations we now owe are for the sins committed since roughly 1881 and the end of Reconstruction, not for the stain of what existed from 1619 to 1865.  South Africa, in establishing institutions like minimum Black ownership of large corporations and enforced Black directorships and the like, was overcoming an essentially original sin of racism; America is a young heroin addict who went cold turkey in their twenties, made up for its failings and atoned for how they had treated its family during the bad years, and then got hooked on Oxycontin after a car accident in their thirties.

What do you do with the second-time loser?  You can’t trust them any more, really; I get why Black Americans are so fed up, and candidly, why they are so unimpressed with white people in Seattle and the other Portland who riot and pull down statues.  “Yeah, yeah,” they say, ” you’re feeling guilty, but we’ve seen this before.”  I don’t know what you do with the addict who can go to rehab, can do all twelve steps, but who will end up back in the alley at some point.  I think in this case, you just handicap the race.  And since the race, in this, the only of all possible worlds, is at least temporarily about capital, then you have to look to money to make the system work.

Best as I can figure, Blacks should have a 139 year moratorium on paying taxes – until 2159.  139 years ago the Union left the South and effectively threw the released slaves back into an implicit bondage by an even more virulent southern reactionary core.  The post-Reconstruction southern Democratic political leadership made John Calhoun look like John Adams.  But I digress; I like a tax holiday because it allows for two different forms of capital accumulation: either the Black wage earner can save 30% more of their paycheck than white people, or they can take a job which they feel is better and more morally fulfilling for 30% less pay – that is, they can accumulate personal, moral capital, instead of just getting a payout.  As for the problem from 1881 to today, it’s been too long to untangle ownership rights, so a distribution of equity ownership of southern (and complicit northern) corporations seems unworkable, but tax records do exist, so another suggestion is every company and every property in a state which passed Jim Crow laws pays a certain percentage of accumulated capital and increase in market value since 1881 to the federal government, which then just retires debt.

All of this is unworkable.  It’ll never happen.  And a tax grab only inspires the worst of K Street corruption.  But the legacy of Black slavery in the United States is awful and just isn’t getting better, and as a white guy, I continue to feel terrible that I was given an unfair advantage in what is the fundamental contest of our society, that of capitalism and the market.  I don’t necessarily like the moral tensions of that contest, but I have to acknowledge that it exists; I’d much prefer, however, to let my fellow competitors have a fair chance.  Let’s be creative and make it a fair race.