I'm Elise, you you're listening to Ted talks daily, the racial injustices at the heart of America's past and present have exploded into a serious reckoning this year. And economist William Sandy Darity has made racial equality, notably through reparations, central to his work in his Ted 20-20 conversation with Ted's current affairs curator, Whitney Penington Rogers Fandi gives us the context. We need to really understand what reparations in the United States would mean in this context about the racial wealth gap is really eye opening, and he makes a convincing case about how reparations could help heal the nation.

We are really pleased to have William Sandy Darity as our guest today. Welcome, Sandy. Thank you for having me. I'd like to begin with a personal story. My grandmother was the daughter of a woman who was the child of persons who were enslaved on Rose Hill Plantation in North Carolina. And as a consequence, my sister and I are the fourth generation removed from slavery. My grandmother also lived in a town in North Carolina called Wilson, which was a tobacco stapling center.

She lived in a town that was characterized by the classic pattern that's featured in many, many southern towns in the United States. There was a railroad track that ran between the black side of town and the white side of town as an act of separation that was emblematic of the Jim Crow period in the United States. There was a point at which I wanted to go and see a movie happen to be a Disney movie, after all, an old Disney movie called Davo Girl and the Little People.

But it was being shown at the White Theater in Wilson, North Carolina.

And my parents refused to let me go because they said we would be compelled to sit in the balcony. And they viewed this as an indignity that they were not going to stomach. And so I wasn't able to go. I was very hurt because I really wanted to see this movie. But I also came to realize, as I grew a bit older, that this was an indignity that was relatively minor in a social context in which lynchings and white massacres had become quite routine.

So I would like to emphasize that when we think about the case for reparations, we are thinking about a case that is not exclusively centered on the harms and injustices and atrocities associated with slavery itself. But we have to view slavery as a crucible that created a subsequent array of atrocities that are associated with white supremacy in the United States. And those atrocities include those that were the product of slavery itself, but also of nearly one hundred years of legal segregation in the United States, accompanied by white mob violence and frequent frequent intervals.

And so we usually refer to that as the Jim Crow period. And I want to emphasize, when people say there are no living victims of slavery, there certainly are a number of us who are living victims of the Jim Crow period. Of course, if the nation waits long enough to engage in an act of redemption and compensation, we won't be alive any longer. But a national act of procrastination is not a justification for avoiding paying the debt. And then, of course, in the aftermath of the period of legal segregation, the Post Civil Rights Act, where we have a set of circumstances in which there are ongoing atrocities inclusive of mass incarceration, police, executions of unarmed blacks, the persistence of discrimination in employment, housing and credit markets, as well as something that I'm going to emphasize and the remainder of my comments, the immense racial wealth gap in the United States.

Now, in our book From Here to Equality, which is authored with Kirsten Mullen, who happens to be my spouse. We define reparations as a program of acknowledgement, redress and closure for a grievous injustice. Acknowledgement constitutes a circumstance in which the culpable party acknowledges or recognizes that it has committed a vicious harm. And it also acknowledges or recognizes that it has benefited from the execution of this vicious harm. Redress is the act of restitution on the part of the culpable party.

And here we're going to talk in a moment about the role of the wealth differential in the United States between blacks and whites as a critical component of a redress process for black American descendants of U.S. slavery. The final component is closure, which is a point at which the culpable party and the victimized community come to an agreement that the debt has been paid and no further claim will be made unless there's a renewal of the atrocities that have taken place in the past or a new array of atrocities is forthcoming.

So I want to focus next on the wealth differential and the wealth differential is best captured by the magnitude of these types of. Princes in black and white wealth, black Americans constitute approximately 13 percent of the nation's population, but only possess about two point six percent of the nation's wealth. Collectively, across the globe, there's approximately 300 trillion dollars in wealth, 100 trillion dollars, or about a third of that is in the possession of American citizens, and 90 percent of that is in the possession of white Americans.

So we have a situation in which black Americans constitute a much, much higher percentage of the U.S. population than they do in terms of their share in in the nation's wealth. This translates into a circumstance in which the average black household has approximately eight hundred thousand dollars less in net worth than the average white household. Another way to think about this is as the fact that there are three white billionaires Jeff Bezos, Bill Gates and Warren Buffett, who are worth more than the collective 80 percent of black Americans who are at the lower end of the wealth distribution.

But it's not just a matter of the billionaires wealth that explains this gaping differential. For example, 25 percent of white Americans have a net worth in excess of one million dollars, but it's only four percent of black Americans. And wealth is important in terms of being distinguished from income wealth as a stock concept. It's the difference between the value of what we own and what we owe. The net value of our property income, in contrast, is is a flow concept that's most closely associated with our earnings.

And wealth is more significant than income in terms of providing us with economic security and opportunities to fully participate in the society. Wealthier households have the capacity to survive income losses that might be associated with unemployment or medical emergencies. Wealthier families can provide their children with high quality education and debt free education. Wealthier families can have access to high amenity neighborhoods. They can also purchase legal counsel, valuable legal counsel. When confronted with the criminal justice system, wealthier families can leave bequests to subsequent generations to ensure their economic security and well-being.

So wealth is extremely significant, and the differentials that exist between blacks and whites are connected to sharp differences in economic opportunity and well-being. Indeed, it's very important to note that the major factor that dictates what an individual or a family's level of wealth is is the transfer of resources across generations, which means, in turn, that wealth captures the cumulative intergenerational effects of white supremacy in the United States. When we think about the black white differentials and so in from here to equality, we argue that the goal of a reparations program, a goal that is associated with the redress component of reparations, is to eliminate the racial wealth gap.

And this would be done primarily through direct payments to eligible recipients, black American descendants of U.S. slavery. In the book, we identify two standards for eligibility. The first criteria is what we refer to as the lineage criteria and eligible individual would have to demonstrate that they have at least one ancestor who was enslaved in the United States. And the second criterion is what we refer to as an identity criterion. And this is a criterion that says that an individual would have to show that for at least 12 years before the onset of a reparations program, the enactment of a reparations program or the enactment of a study commission for a reparations program, whichever comes first for at least 12 years before that, an individual would have to have shown that they self-identified as black, Negro or African-American.

The culpable party for making the payment is the United States government. The magnitude of the payment must be sufficient to eliminate racial wealth differentials within the course of a decade. I'd like to add finally that the coronavirus epidemic only further dramatizes the case for reparations. We've observed excess mortality on the part of black Americans. We've a. Deserved a collapse in black businesses, in black employment opportunities, and we've observed a high degree of crisis in terms of opportunities for education as our instructional environment has shifted from the classroom into the home via the Internet.

So as a consequence, we argue that it's important to continue to commit to the case for reparations in the midst of the pandemic. It's always an urgent time to adopt reparations. It has been an urgent time for one hundred to fifty five years since the end of American slavery, where no restitution has been provided. It's time for the nation to pay the debt. It's time for racial justice. Thank you so much, Sandy, for for all of that and for explaining yourself a little bit and also talking to this moment and I think and thinking about this moment, you know, obviously the subject of operations is not a new one.

It's something that we have been having conversations about for a very long time. And I love to hear you just sort of explain why you feel this moment might be different from others in making progress towards this.

I think that there has been a shift in the terrain that became evident in 2019, even prior to the coronaviruses pandemic and prior to the widespread recognition of the phenomenon of antiblack police violence, which the black community has been well aware of for for a long, long time. Even prior to that, I think in 2019 there was a signal shift in the environment with respect to attention that's being given to reparations. I'm not sure how to explain why that was the case, but for the first time in my lifetime, we had serious and credible political figures who were contesting for the presidency of the United States, actually uttering the term reparations and potentially talking about whether or not there would be the grounds for introducing some sort of study commission for reparations through congressional legislation that had never happened before in my lifetime.

And it seemed to me in 2019 that the nation was having the most animated conversation about reparations and on the political stage that had ever taken place since the reconstruction era in the United States. So I think that the more recent chain of events has produced greater momentum for serious consideration of this idea. I think people are no longer dismissing it out of hand. I think they are trying to think about what the consequences would be for our nation of adopting a reparations program for black American descendants of slavery in terms of our moral future as well as our social future collectively.

And so the idea of reparations, of course, stems from this concept of 40 acres and a mule. Right. That after the abolitionists, like freed slaves, would receive 40 acres and a mule, a promise that the government, of course, never made good on. And so I let's get to some of the details of the plan that you put forward in terms of thinking first about what the value really is of that 40 acres and a mule today.

So in other terms, you know, how do you quantify the full debt that you believe is owed to descendants of American slaves in 2020?

So the the moment of the failure to provide the 40 acres is really is really a critical epic in American history. You know, I think it shapes the basis for the immense racial wealth gap that we observe today. So if we start with the moment in the immediate aftermath of the civil war where the formerly enslaved were promised 40 acre land allotments, the minimum estimate of what that that amount of land should have constituted would have been about 40 million acres. What happened initially was about 40000 of the formerly enslaved individuals were settled on 400000 acres out of the allotment that General Sherman had had specified in special orders number 15, which came closer to five point three million acres stretching from South Carolina to northern Florida.

But only only 400000 acres were actually ever settled. And toward the end of 1865, Andrew Johnson, Lincoln's successor after Lincoln was murdered, reverses the policy of settlement of the formerly enslaved altogether and restores the land to the former slaveholders. At the same time, the Homestead Acts were being activated in the United States, providing large tracts of land to white settlers in the western part of the United States on tracts of land that had been appropriated and seized from the Native American population.

In fact, those allotments were 160 acre allotments, and we estimate today that anywhere from 45 million to 90 million Americans are beneficiaries of those allocations because of the intergenerational effects of wealth transfers. So this is the starting point. We could use the present value of the 40 million acres as an estimate, as a lower bound estimate of what the magnitude of a reparations bill should be. And in the work that we've done, this comes to approximately four to six trillion dollars, depending upon which interest rate you use to compound to the present.

But. In the work that we do, we also argue that what's really critical is to address the gaping racial wealth gap, the black white wealth differential, and to do that, it would require somewhere in the vicinity of 10 to 12 trillion dollars at the low end estimate of what would be required for erasure of that differential.

Well, and from that 10 trillion dollars, we're talking about individual payments or payments, rather, to individuals. This is not about money being funneled into the programs, but actual checks that individual descendants of American slaves. Is that right?

Yes. So the idea here is that if you're going to eliminate the racial wealth differential, you have to do it by taking the precise step of providing direct payments to the individuals who are eligible. If you go the indirect route, you will have a dilution of the delivery of the resources to the individuals who deserve them or merit them. So, for example, if you pursue some sort of neighborhood based or community based operation in a world in which gentrification is running rampant, it would be very difficult to ensure that the resources would go to the folks who are supposed to receive them.

So. So, yes, one of the central objectives of a reparations program is to provide direct payments to the eligible recipients. I'm certainly open minded about the prospect of having other kinds of programmatic initiatives that could be pursued. For example, providing resources and funds to historically black colleges and universities might be a potential option of what could be done with a reparations fund. But for substantive and symbolic reasons, the preponderant use of the funds must be direct payments to eligible recipients.

And let me add, when I talk about payments, I don't necessarily mean cash payments per say. The objective is to eliminate the racial wealth gap. So what you really want to do is to build assets for black Americans and those assets could be built in the form of trust accounts or endowments, not necessarily in the form of outright cash payments.

And I mean, I think one of the big questions for a lot of people is sort of where do we get the money? So I think that I start with a rejection of the scarcity principle that underlines the view that you have to take money from payday to produce money for pot. I think that our most recent experience with the overnight provision of approximately two and a half trillion dollars to try to cope in some way with the coronavirus crisis indicates that the federal government is not constrained by tax payments to proceed with making new expenditures.

So. So from my perspective, the government can simply set up a program of reparations payments and create the resources or create the funds that would address the needed amounts. You could do it over a period of years to make the annual vig not quite as high. You could do it over the course of a decade, for example. But there's no tax base constraint or revenue based constraint on the capacity of the federal government to make additional expenditures. The only substantive constraint is the potential for producing high rates of inflation.

And so you would necessarily have to design a reparations project or any new expenditure program in such a way that you mitigated the inflation risk.

I want to get into some of the criticisms of of not just your plan, but reparations in general. But first, let's let's take a question from the audience. So Paul Rucker asks, Will reparations work with the current system stay in place? Seems like payment of reparations would quickly go back to the white community.

So there was a sketch on Dave Chappelle's Show when it was still on the air in which reparations were given the black Americans and all the money flowed back to white American corporations because there was no infrastructure of black businesses that folks could actually purchase products from. So so one response to this question is the money wouldn't quickly go back to the white community if an important aspect of a reparations project was the development of of black businesses or black enterprises. So that's one answer.

The second answer is associated with the point that I made a moment ago, that there are multiple ways in which the payments could be made. And if the payments are made in the form of an endowment or a trustee, you wouldn't have the money flowing out to any one in an instantaneous fashion. People would have to make more discrete decisions about how to use the funds and when to use the funds. And so you potentially could have resources being devoted by individual black Americans to infrastructure development within the black community, where there would be an opportunity to actually purchase goods and services from from other members of the black community.

So. So I think, you know, it's it's a question of whether or not you have a black business infrastructure and it's a question of whether or not the payments are made in such a way that they're not outright cash payments that flow immediately out of people's hands.

You know, one of the things that's really compelling to me in talking with you is that I know that you were at one point not supportive of the idea of reparations. And so I'm curious to hear what sort of made you skeptical and what changed your feelings.

So around 1989 and Economism, Richard, America first approached me about writing the introduction to a volume that he had assembled where he had requested a group of economists to construct estimates of the magnitude of reparations program. And at the time, I told Richard. Well, you know, I think reparations is something that's ethically sound, but I don't think it's ever going to happen that this is something that's really in the vein of speculative fiction and it's just not going to occur.

So why are we going to invest time trying to work on a reparations project or collect essays about how much it would actually cost? And Richard said to me with great wisdom, I didn't realize the depth of the wisdom at that time. But he said read the essays and write whatever you choose to write. But I want you specifically to write the introduction. So I proceeded to read the essays, and the more that I read, the more that I became convinced that not only was reparations project for black American descendants of U.S. slavery something that was vital to do from a moral standpoint, but it was vital to do from a practical standpoint, and that even if the odds were extremely.

How long of actually having a reparations program come into realization that it was something that I was obligated to pursue? And let's talk a little bit of I think about some of the criticisms that people do have of reparations, you know, I think first one of the big ones you hear is if this is a way to sort of close the wealth gap. You know, is it really fair that, you know, descendants of slaves who have earned themselves into the one percent would also be eligible to receive these checks?

And how do you respond to to those who say that reparations project is not an anti-poverty program?

It's an act of justice, restitution that has never been paid before, and so there is no criteria associated with the conditions of living eligible recipients that should block them from access. Now, if individuals like an Oprah Winfrey said, I'm so wealthy, this this payment really is not of importance to me. I'd rather it go to somebody else. That's their discretion. But they certainly are eligible to receive it when reparations payments were made to victims of the Holocaust by the German government.

There was no inquiry about the economic status of the eligible recipients when reparations payments were made to Japanese Americans in the United States to compensate to some degree for their unjust incarceration during World War Two. No one asks how much is that particular individual earning or how much are they worth before they were given their twenty thousand dollar payment? So so I think the same is true here.

And then for those who also think, you know, this money maybe would be better served if it were funneled into social service programs. You know, if you're thinking about money that might support failing education systems or might support police reform and other ways of sort of prevent black Americans from attaining and maintaining wealth. What are your feelings about that?

So none of those approaches that I've seen, particularly kind of social programs and some grandson's universal programs of redistribution, would meet the task of eliminating the black white wealth differential in the United States. None of them have the capacity or the wherewithal to erase the black white differential in wealth. And so they're they're simply not sufficient. And I'm particularly taken by providing resources for education. And as as a university professor, of course, I'm fairly passionate about educational attainment.

I'd be a hypocrite if I wasn't. But but in terms of thinking about the racial wealth gap, educational attainment doesn't hold much promise at all. And see, here's a notorious statistic that I think is very telling on this score. Black heads of households with a college degree have two thirds of the net worth of white heads of households who never finished high school. So you're not going to eliminate the racial wealth gap simply by giving black people more and better education, because you're not going to interrupt the intergenerational transmission effects that are associated with moving resources from one generation to the next.

If you continue to have a community that doesn't have any resources to transfer to subsequent generations. And let's take another question from the audience. So Alma asks, I'm concerned about proving eligibility, not because of the challenges of being able to track down genealogy records, but also because of the exclusion of members of the African diaspora who have lived live in the United States. Can you speak more on this issue? Yes.

So first of all, there's no question that the types of criteria that I've talked about for eligibility will give genealogists a huge amount of business. But one thing that we propose in the final chapter of From Here to Equality, which is the chapter where we detail a program of reparations, is that the federal government and the process of establishing the reparations project could provide resources to individuals who are trying to establish their their legitimate claims for reparations, resources for the genealogical research.

There could be an agency that could be established that would do the genealogical research on behalf of of individual claimants. The other issue that's raised is, are the contours of who would be included and who is excluded from this particular type of reparations project. And, yes, the individuals who are more recent black immigrants to the United States, particularly after the 1960s, which is the vast majority of recent black immigrants to the United States, they would not be eligible for this program.

The anchor for this program is the failure to provide the formerly enslaved with the 40 acres that they merited at the end of the period of enslavement. And this failure is what has had long repercussions for living black American descendants. Of U.S. slavery, individuals who are more recent immigrants from other African countries don't share that particular historical effect. And I think that that's what defines the unique position of this particular client. If folks believe the more recent black immigrants do have some form of reparations claim, then I encourage them to try to develop it.

But it's not the same one that's based upon the cumulative effects of slavery, Jim Crow and ongoing white atrocities in the United States.

And, you know, you so you've been doing this work for a long time. And I think as we're running out of time here, I'm just curious about your sentiments, about how you you feel in terms of the progress that is being made towards this and how how far away or close you feel we are to seeing a plan like yours realized or any sort of restitution realized for descendants of American slaves.

So like most economists, I'm horrendous at forecasting. And so I'm not entirely sure what's going to evolve. I will say this. The momentum that exists in the present moment is promising. And I would say that, you know, in the year 2000, when Michael Dawson Ravana Popoff did a major survey, they found that only four percent of white Americans were in favor of reparations for black Americans. That figure is closer to about 20 percent now. And almost half of all millennials are in favor of reparations.

So so the direction seems to be going in in the proper way. And I think that there is a significant amount of support at minimum for the creation of a commission to study reparations.

Thank you all so much for being with us today. Thank you to Sandy. Appreciate it. Thank you. And good to see you back here. And good to be here.

Thanks, PUREX.