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The Problem with "Reparations"

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Tags Labor and WagesPovertyU.S. History


As the issue of reparations for victims of slavery rages within the Democratic party and on cable news stations, we encounter a common problem: virtually no one is addressing the specifics of how such a reparations effort would be administered. Who exactly would receive these reparations payments? Who would pay them? How would guilt and victimhood be determined? As is usually the case with American policy debates, this "debate" offers little more than an opportunity for pundits and activists to grandstand on related issues such as poverty and race — while avoiding the central topic at hand. Support or opposition then becomes nothing more than a matter of affirming one's political loyalties. The actual issue of reparations — and how they'd be paid out — is mostly ignored. This may be partly because the proposed schemes are nothing that could be properly called reparations at all. They're just an effort to expand government benefits for certain groups.

It is important to remember, however, that there is nothing necessarily problematic about the idea of paying reparations to the victims of a crime. In fact, the idea is essentially pro-private-property because it attempts to repay a victim for property stolen from him or her by another party.

After all, any decent legal system would provide for a victim of kidnapping and forced labor to obtain repayment for the time and labor stolen from him by the kidnapper. As Walter Block writes:

Justified reparations are nothing more and nothing less than the forced return of stolen property — even after a significant amount of time has passed. For example, if my grandfather stole a ring from your grandfather, and then bequeathed it to me through the intermediation of my father, then I am, presently, the illegitimate owner of that piece of jewelry. To take the position that reparations are always and forever unjustified is to give an imprimatur to theft, provided a sufficient time period has elapsed. In the just society, your father would have inherited the ring from his own parent, and then given it to you. It is thus not a violation of property rights, but a logical implication of them, to force me to give over this ill-gotten gain to you.

But here's the rub: in order to do this with an eye toward justice, one must identify specific victims and specific perpetrators. Potentially, as Block suggests, one could envision a legal case in which the heirs of victims would be paid reparations by the heirs of the perpetrators. But again, we still encounter the problem of identifying specific persons (and heirs) involved. Reparations cannot be paid in the abstract, as Chris Calton has noted:

[L]ibertarian ethics are not based on abstract moral claims; they’re based on concretely identifiable property rights. When a violation of a person’s property rights takes place, restitution is the logical means of compensating the victim ...

But in the real world [on matters of slavery] such a claim is incredibly difficult to prove. And failure to prove a legitimate property claim means that the currently recognized property title holds. Anything else would be committing a new injustice to give the illusion of correcting an old one.

Not surprisingly, current advocates for reparations conveniently ignore this last part. For them, a just outcomes can be achieved simple by declaring that one one group of people (the taxpayer) shall pay reparations without any attempt to establish anyone's guilt or innocence in the matter. A program that forces all taxpayers (whether guilty or not of any relevant crimes) to pay reparations to a specific group of people raises several key problems:

1. What if a taxpayer is descended from people who didn't even arrive in the country until after emancipation? That is, should a Japanese-American, whose immigrant ancestors arrived in the United States in 1910, be forced to pay reparations? How about descendants of Mexicans who arrived in the US in 1925?

2. What if the taxpayer has some ancestors who lived in the US before emancipation and some who arrived here afterward? Would that person's "reparation tax bill" be pro-rated to match the fraction of his ancestry that shared antebellum guilt?

3. What if a taxpayer's ancestors were abolitionists who opposed slavery?

4. What if a taxpayer has no ancestors who owned slaves?

The (Bad) Economics of Collective Guilt

Do not expect any pro-reparations policymakers to even attempt to answer these questions.  Naturally, where it is possible to establish a specific person profited from kidnapping and assault (i.e., enslavement) perpetrated by one's ancestors, then it would be potentially ethical and moral to demand reparations in these cases. 

To get around these difficulties, many activists may claim that "everyone" is guilty of slavery in an extremely abstract way. For example, perhaps one's ancestor once bought a cheap cotton shirt in 1858, and thus "profited from slavery" by buying inexpensive clothing. Or perhaps one's ancestor (even unwittingly) sold timbers to ship builders who made slaving ships. These arguments rely on the same twisted logic which would have us believe that people who buy gasoline are morally responsible for the brutality of the Saudi Arabian dictators, or that a teenager who smokes a joint is responsible for terrorism like that perpetrated on 9-11. (Yes, the US government created an ad campaign saying exactly this.)

This everyone-is-guilty claim, in fact, is one invented by the slaveowners themselves in an attempt to claim that all Americans — including people who claimed to oppose slavery — somehow directly benefited from slavery, and thus all abolitionists were hypocrites. It was always a desperate and unconvincing argument, but by putting these claims forward, the slavedrivers of old helped pave the way for the modern-day reparations advocates.

In real life, the only people responsible for slavery are the people who directly owned, sold, or traded in slaves; and the politicians who pushed to preserve, spread, or defend slavery through legislation and the state's police powers.

Slavery Suppressed Wages for Many Workers

Moreover, many non-slaves can be shown to have been negatively impacted by slavery because it acted to suppress wages. As historian Kerry Leigh Merritt describes in detail in her book Masterless Men: Poor Whites and Slavery in the Antebellum South, non-slaveholding whites in the South — who constituted a majority of the population — received far lower wages than they would have had they not been forced to compete with slave labor by a legal system designed to favor slaveowners.

The experience of white laborers illustrates how the benefits of the slave economy were highly concentrated among the wealthy elite. Yes, the chattel slaves themselves fared far worse than any other group. But that doesn't mean most non-slaveowners of the time were — to use the modern parlance —  "privileged" by the existence of the slave economy. In practice, it significantly lowered their income.

Ultimately, the issue shouldn't even be regarded as a complicated one. If "reparations" are truly that, then they can only be based on handing over stolen property from the thief to the victim (or their heirs). So long as these specific individuals are not identified, then the policy being discussed has nothing to do with reparations. It's just a wealth redistribution scheme.

Ryan McMaken (@ryanmcmaken) is a senior editor at the Mises Institute. Send him your article submissions for Mises Wire and The Austrian, but read article guidelines first. Ryan has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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