Ms. Hannah-Jones interviews Duke University economist William A. Darity, one of the most prominent academic voices behind the $13 trillion number. Darity has advanced similar dollar amounts in his scholarly work, including a 2022 article in the Journal of Economic Perspectives. As with the Hulu episode, he offers this figure while eliding difficult questions about financing this redistributive payout.
Vaguely sensing that there’s no such thing as a free lunch, Hannah-Jones asks where the federal government would get the money to pay such a massive amount. Wouldn’t taxes have to be raised, she queries. Mr. Darity confidently asserts that no such action is necessary.
“It’s a matter of the federal government financing it in the same way that it financed…the stimulus package for the Great Recession” and the COVID-era CARES Act, Darity continues. To do so, the federal government need only “spend the money but without raising taxes.”
This verges on tooth-fairy economics.
This is from David R. Henderson and Phillip W. Magness, “The Tooth-Fairy Economics of Slavery Reparations,” American Institute for Economic Research, March 7, 2023.
Another excerpt:
If the Federal Reserve monetized the whole amount, base money, which is currency in circulation plus bank reserves, would increase by $13 trillion. M2, the conventional measure of the money supply, is 3.96 times the monetary base. If that relationship held, then increasing the monetary base by $13 trillion would increase M2 by 3.96 times $13 trillion, which is $51 trillion. M2 is currently $21 trillion. $51 trillion is a whopping 245 percent increase. So if the spending occurred all in one year, inflation would be about 240 percent. Critical Race Theory would unite with Modern Monetary Theory in an inflationary spiral.
Thanks to Jeff Hummel for checking our M2 numbers in an earlier draft.
Read the whole thing.
READER COMMENTS
Knut P. Heen
Mar 7 2023 at 11:10am
Bad news for the descendants of Genghis Kahn and Julius Caesar. Compound interests over so many years are tough to pay.
Monte
Mar 7 2023 at 12:49pm
Reparations is antithetical to the whole notion of personal responsibility. It and CRT are meadow muffins that should land with a resounding splat in a place where they can’t fertilize the seeds of discord.
The son shall not bear the iniquity of the father,… – Ezekiel 18:20
nobody.really
Mar 7 2023 at 1:08pm
Robert Nozick, Anarchy, State, and Utopia (1974) at 231.
Monte
Mar 7 2023 at 4:59pm
Nozick also argues (from the same book) that “only a minimal state limited to the narrow functions of protection against force, fraud, theft, and administering courts of law could be justified, as any more extensive state would violate people’s rights.” He only supported distributive justice if brought about by free exchange among consenting adults from a just starting position, and it is on this premise (the just starting position) that Ta-Nehisi Coates makes his case for reparations.
Coates falsely claims that “In 1860, slaves as an asset were worth more than all of America’s manufacturing, all of the railroads, all the productive capacity of the United States put together” and that this wealth “worked its way down to the current generation of Americans.” But even if we were to accept this at face value, Richard Epstein, in his piece, The Case against Reparations for Slavery (May 27, 2014) points out:
The sin of slavery, or any unpaid debt thereof, rests only with those who supported or practiced it. We could, like Oliver Cromwell, have the guilty disinterred, retried, and executed, but to what end?
nobody.really
Mar 9 2023 at 11:39am
Nozick … only supported distributive justice if brought about by free exchange among consenting adults from a just starting position….
Really?
1: Nozick rejected the idea of distributive justice in the absence of free exchange, consenting adults, and a just starting position?
2: More surprisingly, Nozick acknowledged that free exchange among consenting adults beginning at a just starting position could result in the kind of injustice that would justify government intervention to promote distributive justice?
I had read Nozick to support pretty much the opposite conclusions—but it’s been a while.
Perhaps so. A man robs you of a large sum. When you sue him to recover the funds, he produces evidence that he blew that money at the racetrack. But subsequently he had won the lottery and is now wealthy. Are you entitled to reimbursement?
Maybe not gratuitously shared—but I suspect slavery generated tax revenues, including tariffs on the importation of slaves and the exportation of slave-produced goods. Tariffs financed the federal government throughout much of the slavery era.
Counterfactuals pose many challenges. Maybe you could argue that the institution of slavery so soured relationships between people in Africa and people in the US as to impede other forms of commerce. But in the absence of the institution of slavery, pretty much all of those black workers Richard Epstein refers to either would never have existed, or would have been living in Africa—and in that case, the primary impediment to business would have been challenges of communication and shipping.
I would qualify this remark. I don’t deny the ingenuity of Justin Bieber—nor the ingenuity of J.S. Bach. Yet one amassed vast wealth, and one did not—for reasons that had nothing to do with their individual ingenuity. Wealth is a function of a society, not merely an individual. I’ve been enriched by the fact that I live in a democracy with property rights, educational institutions, the music of J.S. Bach, etc.—dynamics that, yes, survived the demise of slavery and Jim Crow.
(In fairness, I expect Epstein would be unstinting in his willingness to share democracy, property rights, educational institutions, the music of J.S. Bach, etc., with America’s black citizens. This is starting to sound like “One Tin Soldier“….)
I largely agree. Alas, “those who supported” slavery include governments such as the US government. (Recall the Fugitive Slave Act?)
“There’s no point in beating a dead horse. [fn: Except for the sheer joy of it.]” Scott Adams, The Dilbert Principle (1996).
Monte
Mar 11 2023 at 10:26am
All valid comments, nobody. I’m just philosophically opposed to the idea of reparations.
Slavery was promulgated and institutionalized by the Confederacy. It was also destroyed by the Union, which should have compensated the victims of slavery under Sherman’s Special Field Order No. 15 (40 acres and a mule) within a reasonable period of time. On that score, I would argue there should be a statute of limitations. We could also have the matter permanently settled by referendum, but tyranny of the majority and all that rot.
Whichever unfair outcome prevails, this can of worms it’s going to further divide the country.
Mark Z
Mar 7 2023 at 12:51pm
So she wants to recreate both the economics and politics of the Weimar Republic here in the US. What could go wrong.
nobody.really
Mar 7 2023 at 1:40pm
You can find the New York Times 1619 Project here. When I scan the text, I find that the word reparations appears exactly once, in this sentence: “‘June and I hope to create a dent in these oppressive tactics for future generations,’ Angie Provost told me on the same day this spring that a congressional subcommittee held hearings on reparations.” (And the figure $13 trillion appears exactly nowhere.)
I listened to it on Audible and found it interesting and informative–if sometimes repetitive. (That will happen when you have multiple authors addressing similar topics.) I didn’t get a lot out of the poems, but I especially liked the discussion of African American contributions to music. Give it a read/listen; you might like it.
JFA
Mar 7 2023 at 4:40pm
I only have access to the “Look Inside” view on the book’s Amazon website. On page 472 alone, the word “reparations” appears 7 times. The topic appears to take up quite a large chunk of the concluding essay (appearing on at least 9 pages of the 27 page concluding essay) and makes some cameos in Kendi’s essay. It is also mentioned quite a bit in the Hulu series.
cfbandit
Mar 7 2023 at 4:57pm
pg 472 is the start of the essay about Justice that forms the basis of the episode on Justice, where Darity is interviewed and gives his famous number.
JFA
Mar 10 2023 at 8:51am
“I too read the book, and this information is not in there.”
So now you recognize that the book has quite a full discussion of reparations, contrary to your earlier statement and contrary to nobody’s claim that the word “reparations” appears only once.
nobody.really
Mar 10 2023 at 2:04pm
I don’t retract anything I’ve said.
I surmise our dispute hangs on two ambiguities: What “the New York Times 1619 Project” refers to, and what “centerpiece” means.
Regarding the first ambiguity, I provide a link to The 1619 Project as published in the New York Times Magazine. A scan reveals no reference to “$13 trillion” and only one reference to “reparations.” There is, however, a book called The 1619 Project with different text. When I go to Google Books to scan the document, I still find no reference to “$13 trillion,” but 11 pages containing the word “reparations.”
Regarding the second ambiguity, does it make sense to say that the word “reparations” appearing on 11 pages out of a 624-page book–with five of those pages in the Notes and Index sections–makes reparations the centerpiece of the book? Some people might find this plausible. After all, many people say that Jesus is the central figure in the Bible, notwithstanding the fact that his name and words appear on a tiny fraction of the book’s pages. Others might say that such conclusions reflects motivated reasoning.
It seems clear that, in making his post to the American Institute for Economic Research, Henderson was not referring to either the text published in the New York Times Magazine or to the book, but rather to the Hulu series–and specifically the last episode of that series. Henderson wants to say that providing $13 trillion in reparations would have significant economic consequences. I want to say that, whatever you may think about the Hulu series or about reparations in general, I found value in the earlier works. In this, we don’t disagree; we’re just making different points.
JFA
Mar 10 2023 at 2:53pm
I think it’s a little disingenuous to say “the 1619 project only includes one instance of the word “reparations”” and then reference the audible version of the book in the next paragraph. The implication of your comment is that the 1619 project doesn’t concern itself with reparations, when that is obviously not the case. I would also say the NHJ wouldn’t say that “1619 project” only refers to the NYT print edition. That’s why the title has carried over into multiple media, including book, TV, and classroom curricula.
Question: how would authors of and contributors to the 1619 project answer the following: are reparations an essential part of what you seek to achieve with your project? Could the project have been completed with arguing for reparations?
My sense from all that I’ve read and all the interviews I’ve heard NHJ give is that she would answer “yes” to the first question and “no” to the second. Does that mean that it’s central? I dunno… but it certainly doesn’t play a bit role either.
nobody.really
Mar 10 2023 at 4:26pm
That’s a fair critique. Now that I check, the Audible version is of the book version, not the NYT Magazine published version. I’m chagrinned that I did not recall the discussions of reparations after listening to the book.
But this bolstered my view that reparations are NOT the central part of the book. Otherwise, I would have remembered it! Then again, by the end of an 18-chapter book, perhaps I had just lost focus….
I can’t read their minds. But all but one of the essay authors contributing to the NYT Magazine version also wrote chapters for the book version. And since the NYT Magazine version did not seem to emphasize reparations, I see no reason to conclude that reparations suddenly became central to their arguments when published in book form.
Moreover, of the six text pages that contained the word “reparations” in the book version, 100% of those pages appeared one chapter authored by Nikole Hannah-Jones; the other 17 chapters (and their accompanying poems) contain the word “reparations” a grand total of zero times. (Again, the word “reparations” also appears on five pages among the Notes and Index. And again, I did not find the figure “$13 trillion” in any of the texts.)
In short, I find no basis for the suggestion that seeking reparations—let alone specifically seeking $13 trillion in reparations—was central to the arguments of the authors, with one possible exception. And the idea that we could discern the intentions of the authors who did NOT refer to reparations based on the remarks of the one author who DID refer to reparations—that seems like straightforward motivated reasoning to me.
cfbandit
Mar 7 2023 at 4:50pm
I too read the book, and this information is not in there. It is in the Hulu companion special rather than in the original project itself. (David, it would have been super helpful if you had noted this was part of the Justice episode! I had to go digging as I thought it might be from the capitalism episode.)
Ms. Hannah-Jones, to her credit, senses as a journalist that there’s problems with Darity’s argument of doing it all at once. Even CalMatters is looking at Darity’s input with a critical eye to the CA task force on reparations.
I suspect some move will be made to make reparations but a straight cash outlay financed is likely not the final solution even in a very progressive state such as California, much less than federal government.
Andrea Mays
Mar 7 2023 at 3:12pm
Floccina
Mar 7 2023 at 3:59pm
Would $13 trillion be about $320k per ADOS? That is my rough math. Why wouldn’t the amount be what would bring black wealth up to that of the median white citizen, I think about $60k each?
Knut P. Heen
Mar 8 2023 at 10:15am
I got the impression from the JEP-article that one of their approaches was to look at the wealth difference today between the groups, not the median but the mean.
David Seltzer
Mar 7 2023 at 6:38pm
Who is to pay reparations and who would be exempt? Do the descendants and of those who fought slavery and Jim Crow and often died, pay reparations and to whom? Do those disparate groups who supported the civil rights movement or registered voters in the South pay reparations? What constructive policies can be enacted that remove obstacles for black earners such as minimum wage laws?
CalGirl
Mar 12 2023 at 9:43pm
Exactly David….what monstrous, perpetual gov’t dept. will be set up to sort through, make ‘rules, for “reparations.” How does it right a wrong to ask people who were never slave holders to give pay-outs to people who were never slaves? What do we do in fairness for the increasing population of mixed race citizens? How do we determine who those are whose ancestors arrived to this country long after 1860’s (as did 2 grt-grt-grandparental families in my past). Do they pay? What if they came from a minority group discriminated against…sometimes in the workplace to the point of death…like the Italians, Irish, Chinese, Japanese, Eastern Europeans? What if we, as families, already “paid at the office? There’s this: My Pennsylvanian 3x grt-grandfather fought the Civil War fr first 3-mo militia assignment, re-upping after 1st 3-yr enlistment ended, & was killed at end of the war, 6 February, 1865. A religious man, he believed in the Union, & abolishing slavery. He was 45 yrs old at death, had been wounded 2x, always returning to his rank. He left 6 orphaned children. After the war, a sleezy citizen/neighbor, stole government pensions for his youngest children (those over age 13 were on their own). The youngest child, at age 21, sought redress through the government. At his “mediation” w/the gov’t, the thief claimed “my lawyer cousin said you can’t do anything to me b/c I already spent the money.” That youngest child “won” & was repaid $700. His sister, my ancestor, got a used pump organ as settlement fr the thief. The loss of their father, & any financial relief, affected my family for the next century. The other part of my family was Quaker or Mennonite. One of them is buried in a rural PA cemetery under an obelisk that reads “A Friend to the Slave during American Slavery.” He was a part of the “Underground Railroad.” In addition to all this, my husband, from Virginia via ancestral North Carolina, is provably a percentage Senegalese…Will he receive a reparation for his blood percentage? The Indian tribes of our West use a blood percentage formula for distributing tribal rights and membership/shared incomes. Believe me..(we worked Indian Health Service Units, US Public Health for a decade)..it is demeaning, difficult, & subject to graft. Have we come to that failed system on a national level?
Who will sort this all out? How could it ever be “fair?” Never ONCE did my family ask for reparations. They gave their lives and treasures to “do the right thing,” as so many have done to defend and protect our Union, our American citizens through wars, Depression, even pandemic. Now, in addition, is my descendancy from these people to be punished financially for it once again 160 years later, though we were not part of the problem, but part of the solution?
Skip Mendler
Mar 7 2023 at 7:58pm
If one owes a debt that cannot be repaid, then one goes through a process called bankruptcy.
Floccina
Mar 8 2023 at 12:13pm
I don’t want to be rude but perhaps one way to fund reparations would be to allow ADOS sell or to rent their right to live and work in the USA. So they could move to another country and collect the money from the sale or collect the rent. My sister in law is a cardiologist in Honduras who like to come and practice in the USA, I think she would pay enough for someone to live on to get that right.
David Henderson
Mar 8 2023 at 3:05pm
What are ADOS?
Monte
Mar 9 2023 at 12:18am
American Descendants of Slavery.
Sheldon Richman
Mar 9 2023 at 9:21am
Bravo! And the race theorists will still say it’s not enough.
nobody.really
Mar 9 2023 at 12:10pm
If anyone is looking for the real story of tooth fairy economics, click here.
Jerrad
Mar 12 2023 at 8:03am
The UK just wrapped up it’s taxpayer-funded Slavers’ payoff in 2015/17? For almost 2 centuries, English taxpayers paid off the cost to slavers for the debt they accrued from the outlawing of human slavery
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