Photo by Matt Lee
In his book, The Souls of Black Folk, shortly after describing the abhorrent treatment of black laborers by white landowners in the late 1800s, W. E. B. DuBois comments: “The [black man] dimly personifies in the white man all his ills and misfortunes; if he is poor, it is because the white man seizes the fruit of his toil … if any misfortune happens to him, it is because of some hidden machinations of ‘white folks.’”
This controversial statement was written in the same book in which DuBois documents the woes of black American life in the early post-Civil War South. Many chapters cover the brutality endured by black workers in everyday life and the grim, complex reality of racial segregation and the feelings of subjugation it aroused. Yet none of this stops DuBois from vehemently opposing racial victimhood. His hesitancy to correlate black anguish with white prosperity should serve as a reminder that America’s conversation about privilege, power and oppression has strayed far from the original understanding of how social justice ought to operate.
There is no way to truly know the effects past injustices have had on modern wealth inequalities. To deny the fact that slavery, Jim Crow and voter disenfranchisement played a role in creating the racial wealth gap would be absurd. It is equally absurd, however, to point exclusively to past injustices when explaining the racial wealth gap.
The idea that past racism is primarily to blame for lower levels of black wealth is a relatively popular belief. Support for this narrative gave rise to the myth of the head start. Commonly touted by activists, such as Tim Wise and Ta-Nehisi Coates, this myth states that historic discrimination against black individuals has resulted in various intergenerational effects—particularly wealth inequality. The myth gets its name from an analogy involving an unfair foot race between white and black runners. Malcolm X compared it to a twisted knife wound. But the argument’s central claims do not hold up to scrutiny.
Failed Links Between Past and Present
The head start myth suggests that all white people are the beneficiaries of unmerited, preferential treatment and all black people are equally victimized by America’s past inequities. This philosophical framework is not only overly simplistic, but relies on numerous factual inaccuracies.
Its proponents often cite the Homestead Act of 1862, a federal land grant initiative that almost exclusively benefited white recipients—but which proved to be a massive agricultural failure. As Larry Schweikart notes in A Patriot’s History of the United States, many farmers who obtained land through the act achieved insufficient yields, due to the government’s mistaken strategy of attempting to incentivize non-farmers to practice agriculture:
Most [farmers] … should not have been farming … government subsidies in the form of absurdly cheap (and free) land though the Homestead Acts encouraged westward migration and farming by millions who, truth be told, were not good farmers … realistically, it was going to be accompanied by a large number of failures.
As Schweikart’s analysis reminds us, the impact of a particular policy will not always reflect its primary intent. It is important to avoid falsely linking the discriminatory nature of the Homestead Act with any tangible effects on modern day land ownership and wealth distribution.
Another assumption popularly espoused by those who believe in the head start myth is the idea that America’s wealth divide has increased, due to the war on drugs and mass incarceration—policies that are often attributed to institutional racism. Despite much controversy surrounding the effects of these policies, there is little evidence that incarceration is a significant factor in the racial wealth gap. As John Pfaff points out in his book Locked In, the vast majority of prisoners are serving time not for drug crimes, but for violent crimes and property offenses. Additionally, Pfaff notes that at one time higher rates of incarceration actually helped lower aggregate crime—an improvement that was undoubtedly beneficial to black communities with high crime levels.
Lowering overall levels of crime results in improved economic outcomes: that is undisputed. As the Center for American Progress has pointed out, decreasing crime increases overall savings per city and local housing values. The idea that anti-crime policies reinforce intergenerational poverty is unscientific.
Some argue that all white people are the recipients of intergenerational privilege. But this ignores the overwhelming data on the success of some formerly disadvantaged groups. Comparative analysis of different ethnic groups is vitally important when refuting the head start myth.
Comparable Groups, Disparate Outcomes
The internment of Japanese people in prison camps during the second World War was one of the most disgraceful policies ever enacted by the federal government and resulted in the destruction of countless years of accumulated net worth. As Thomas Sowell explains in his book Ethnic America, “Businesses built over a lifetime of hard work had to be liquidated in a few weeks. The financial losses of the Japanese Americans were estimated by the government itself at about $400,000,000—at 1942 price levels.” The damage was by no means permanent, however. Many Japanese Americans turned to contract gardening, an industry that absorbed three quarters of all Japanese business in Los Angeles. This, combined with intensive recourse to education in important fields, such as engineering and business, meant that Japanese Americans soon regained nearly all that had been lost. By 1959, Japanese Americans enjoyed incomes almost equal to those of their white counterparts.
The story of post-internment Japanese Americans is one of the most inspiring in the history of the United States. Never has one group achieved so much in so short a time after having been the victims of such brutal institutional oppression. But such perseverance in the face of a cataclysmic economic downturn was not limited to the Japanese. Many Chinese Americans who immigrated to the West at the tail end of the nineteenth century also arrived in the States with barely any money and with an exclusively agricultural skill set. First generation Chinese immigrants were severely discriminated against and were subjected to various racially motivated attacks, including the notorious Chinese massacre of 1871, which resulted in the deaths of 17 Chinese people.
Anti-Chinese legislation also actively prevented Chinese Americans from accumulating wealth at the same rate as their white counterparts. The Chinese Exclusion Act of 1882 barred Chinese immigrants from coming to the United States, in an effort to protect railroad jobs for white laborers. Chinese Americans had regained equal economic footing with their white counterparts by 1981. Anti-crime measures, cooperation with local police, and strong emphasis on practical education were the main contributory factors to Chinese American success, according to Sowell.
Economic comparisons between comparable groups suggest that the current racial wealth gap is an anomaly. Determining how this anomaly came to be requires an in-depth view of banking and homeownership practices since the 1960s.
True Causes of the Racial Wealth Gap
Net worth is directly correlated with homeownership. The most significant causes of today’s racial wealth gap, therefore, are not generational wealth transfers or the white head start, but the illicit banking practices of the latter half of the twentieth century, which incentivized low-income Americans to purchase homes they could not afford. This is evident in the fact that the racial wealth gap is increasing, despite equal opportunity laws. Housing policies can stifle wealth accumulation. One obvious example is the subprime mortgage acts, designed by Andrew Cuomo under Bill Clinton’s department for Housing and Urban Development. These subprime mortgages enabled predatory lending with little to no consequences for bankers who offered unsafe loans to risky lenders.
Such laws were actually intended to decrease the racial wealth gap between black and white homeowners. As Wayne Barnett has argued, Cuomo’s top priorities were satisfying lobbyists and gaining a reputation for being pro-social justice. According to Barnett, “Each mortgage was a commodity that could be sold again and again … Those are the interests that surrounded Cuomo, who did more to set these forces of unregulated expansion in motion than any other secretary and then boasted about it, presenting his initiatives as crusades for racial and social justice.”
Cuomo’s housing initiatives and similar policies have done more to exacerbate the racial wealth gap than nearly 200 years of institutional oppression—all in the name of social justice. Yet the narrative that historical racism is to blame for the current net worth gap between black and white Americans lives on.
The head start myth contains a grain of truth. But it also encourages drastic generalizations, which only increase tensions between opposing ideological factions in American society. In fact, many policies intended to exclusively benefit white Americans achieved no such thing; other oppressed ethnic groups have been able to accumulate wealth at an exponential rate; and the racial wealth gap has increased since the Civil Rights Act, mostly due to housing laws that incentivized risky homeownership.
Discussions of the racial wealth gap often ignore historical nuance. But only by discrediting the head start myth, through facts and reasoned analysis, can an honest conversation occur regarding what should be done about the racial wealth gap.