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The Economics of Slavery in the United States.


Could White Fear be the sole hindrance to Economic Reparations?

One of the most historically misunderstood, and insulting phrase in both Conservative White, as well as Conservative African American Communities is the phrase: “Slavery Reparations”. It has become a highly insulting phrase because it basically paints a negative word picture of both groups. For African Americans it paints a word picture of a shiftless and lazy people, with their hands stretched out expecting something they did not earn and blaming white Americans for all their socio-political, legal, and economic problems. For white Americans it paints a word picture of a collective group of morally bankrupt racists whose only mission is to build personal wealth and global dominance in the name of antiquated belief systems, racial purity, and white supremacy.

However, once we remove the historical word picture and its negative connotations - some black, as well as some white Americans, both conservative and liberals – do feel that - if not white Americans as a collective group - then perhaps the United States government does owe black Americans something for their years of bondage, discrimination, and economic exclusion. However, besides the1863 approval of the Emancipation Proclamation; the 13th and 14th Amendments to the constitution, the Voting Rights Act of 1965, to include subsequent Affirmative Action Laws, and the 2008 election of President Barack Obama, exactly what does the US Government owe Black Americans – if anything at all?

From an economic perspective groups in support of reparations cites critical information provided by the U.S. Congressional Library (USCL) which documents profits from the sale of trafficked Africans and the US governments’ denial of economic restitutions.

For an example from 1660 – 1860, approximately a span of 200 years the foundation of the American economy was based on the slave trade and the free labor of Africans who were trafficked into the southeastern territories of the United States. Wealthy white Americans, who formed the US Government and were the predominant land owners, capitalized more from the selling and purchase of black Africans than from cotton or land. In 1800 the price of land was $1.00 per acre, cotton was .15 cents per pound, but one slave was approximately $600.00. By 1810 land was $1.50 per acre, cotton was .24 cents per pound but one slave was $900.00. By 1840 land remained at $1.50 an acre, cotton dropped to .15 cents per pound but the price of one slave had risen to $1,200.00. In 1860 the price of land rose to $2.25 per acres, cotton dropped to .10 cents per pound but the price of one healthy slave was $1,600.00.

By 1862 land increased to $2.50 per acres, cotton rose to .13 cents per pound and the price of a slave skyrocketed to $1,800.00. These numbers would indicate that the main source of white wealth in America during its early development stages was not cotton or land but slaves. By 1860 the total economic investment in slaves exceeded over $7,000,000.000 (seven billion) dollars – or the total business investments in both the northern and southern states combined for the same time period.

However, the cash crop of the southern states was cotton and to strengthen this industry the first cotton mill was built around Beverly Massachusetts in 1808. This technological advancement allowed the mass production of clothes and other essential cotton related goods such as curtains, cloths, etc. To keep up with supply and demand - from 1808 – 1817, slaves were bought and sold at increasing rates, and were forced to pick over one hundred and twenty six million pounds of cotton from the fields – all free labor. At .29 cents per pound, this resulted in the total white wealth exceeding fifteen million dollars. This type of wealth encouraged the creation of more and more cotton factories.

Fifteen years later or by 1850 there were over one thousand cotton factories within the eastern territories of the United States – which were built, and fueled by the purchase of slaves and forced labor. For white Americans cotton provided paying jobs, income, and wealth. Slaves on the other hand received only two change of clothes – one set for winter, and one set for summer. The clothes that were provided for the slaves did not come from the cotton they picked. Their clothes came from what was called “strand cotton” which was the cheapest, the poorest, and the lowest quality of material produced. In fact it was referred to as “black cloth” or “Nigger cloth” which was used to clothes over five million slaves.

Although cotton proved to be lucrative, it was not the only source of initial white wealth. In 1848 gold was discovered by James Marshall at Sutters Mill in Coloma in what is now the state of California. This territory was purchased in 1849 from Mexico under the “Treaty of Guadalupe Hidalgo”. Immediately after the purchase massive gold deposits were discovered. This discovery ushered in the great Gold Rush of California in 1849. At $12.00 to $35.00 per ounce, within four years of the purchase over $200,000,000 (two hundred million) dollars of gold was extracted in the Sierra Nevadas, and surrounding mountains of California. The largest nugget weighed 160 pounds and was discovered in 1854 at Carson Hill in what is now Calaveras County, California.

However, the greatest fortunes were acquired by merchants who sold the equipment than the miners. This remarkable event ushered in perhaps the greatest mass migration in U.S. history to date. To be specific it ushered in the greatest so called ‘white migration’ from the four corners of the globe. The California territories were already occupied by Native Americans, Mexicans, and a few free slaves who had escaped to Mexico and settled the west coast. To ensure that the newly discovered wealth remained in the hands of white Americans the California legislature passed a Foreign Minors tax, which required a $20 monthly fee (approximately $500 today) for non citizens. Since only whites were considered citizens access was limited to all others. Any non white person attempting to mine was met with white violence. Those who persisted were jailed or lynched. As a result, by1852, 95% of all miners were white men.

Native Americans, Black Americans, Mexicans, Asians or basically any non-white could pan gold only as a slave - or servant to a white male. By 1848, approximately 6000 miners earned $10,000,000 (million) dollars. By 1849, approximately 40,000 miners earned between $20 - $30 million dollars. By 1852, the peak year of mining approximately 100,000 miners earned over $80,000,000 (million) dollars.

In addition to the monopoly of gold, cotton, and textiles - according to the information provided by the U.S. Congressional Library - from 1660 to 1865 the initial wealth, and inherited wealth of white Americans can be traced directly back to government give away to wealthy white males. From the tobacco industry, to the liquor industry, the shoe industry, leather goods, automobiles, farming, banking, textiles, and the railroad systems – white males benefited from subsidies provided by the U.S. government.

From 1862 – 1912 under a government give away program titled “The Homestead Act” the U.S. government promised any European American who wanted to come to America up to 160 acres of free land. Under the Homestead Act all the European had to do was live on the land for five years and at the end of the 5th year the land was theirs – free of charge. Approximately 600,000 European families were given free land under the Homestead Act. This was prior to, and leading to the apogee of the cotton industry. The success of the cotton industry resulted in the creation of railroads to move the cotton from point to point. To support this industry and to encourage the immediate construction of railroads the U.S. Congress literally awarded railroad owners and companies all the land up to 6 miles east to west - or north to south of the railroads they laid – free of charge. The only restriction was that the land could not be sold or given to any person of color. The additional land, if needed was sold to the white railroad owners by congress for five cents an acre. Within a short time it was discovered that the railroad companies owned more than two million, six hundred thousand acres of land. The owners, after purchasing land for five cents an acre, would sell the land that was not needed for their railroads for approximately twenty five dollars an acre – or a $24.95 profit per acre.

In addition to the land give away to railroad companies, in early to mid 1850 the Federal Government reserved approximately fifty million acres of land for ranchers and grazers specifically for cattle grazing. The Federal Government paid for the maintenance, the fencing, and any improvements of the land while the ranchers benefited from the sale of their private livestock. One might conclude that such give-a-ways by the government happened generations ago however, such action continued in the 21st Century during the presidency of Ronald Reagan. When President Ronald Reagan took office, the Federal Support Program for Farmers was $4,000,000,000 (four billion). It was the previous amount the government set aside to help struggling farmers. President Ronald Reagan increased the fund from four billon to $57,000,000,000 (fifty seven billion). From 1986 to 1989 the Reagan Administration distributed approximately $600,000.00 to farmers for Federal Aid. Unfortunately, Black farmers received little to nothing. In fact, Black farmers had to file a grievance with the Federal Government for what little was left of the Farm aid subsidy.

From 1800 – 1866 the US Government also owned all major gold mines, and silver mines. In 1862 a general law was passed which took the mines out of government control and the land once owned by the government was given to a select group of white male business owners identified as private developers. All they had to do was promise to develop the mines and the government would fund the project. This was basically free money towards wealth dominance. However, from a conservative white American viewpoint, all this initial wealth is the direct result of hard ‘white’ labor and white ingenuity. By contrast, from both the conservative, as well as liberal African American perspective the origin of white wealth paints a totally different reality. For most white Americans who subscribe to the fallacy that their forefathers earned their wealth through hard labor is an indication that they do not know their history…..and why should they, certain aspects of their history was never taught, particularly the reality of inherited wealth and the lingering legacy of slavery and modern day racism – which exist in the monopoly of modern day wealth. Historical data would suggest that the initial wealth of white Americans and approximately 60% of the current wealth of white Americans was a direct result of either free slave labor, or government set asides.

Government set asides to corporations owned by white Americans continues today in the form of corporate bail-outs as was most recently witnessed between 2008 - 2009 with the automobile, housing, and banking industries – and into 2015. In fact, the US government spends approximately $92,000,000,000 (ninety two billion) on corporate subsidies per year. According to the Environmental Law Institute the Fossil Fuel industry alone receives over $70,000,000,000 (seventy billion) while the remaining is distributed to industries such as the oil and gas sectors. In addition to subsidies corporations are given approximately $58,000,000,000 (fifty eight billion) a year in tax breaks for “deferred” taxes on off shore profits. Other subsidies are offered to wealthy white Americans in the forms of Capital Gains, Carried Interests, and over $9,000,000,000,000 (nine trillion) in below market bank loans which banks sell to the general public at higher interest rates. These “give Away” programs have been justified under so called “Neo-Reaganomics” allegedly designed to create private sector jobs. The reality however is that the majority white owned corporations are acquiring over $2,000,000,000,000 (two trillion) in profits while decedents of African Slaves, whose free labor built the country are being labeled as “lazy welfare recipients” seeking reparations for what they did not earn.

In 1860, approximately 200 years after slavery, five percent of the total white population in America owned twenty five percent of the nations’ wealth. Approximately 150 years later in 1990 7% of whites owned 40% of the nation’s wealth. Approximately 24 years later in 2014 approximately 8% of whites own 95% of the nation’s wealth. This wealth is not necessarily new wealth. It is estimated that over 80% of the new wealth was handed down from generation to generation from free slave labor. What was not earned as a result of free slave labor was given to them by the US Government via handouts, subsidies, and government grants. Government give away programs or corporate subsidies were prevalent in 1980 awarding various corporate industries significant amounts of cash, debt forgiveness and tax breaks. A few examples are the Aviation/Aeronautics industry which received approximately $600,000,000 (six hundred million) tax free dollars. The trucking industry received approximately $600,000,000 in tax breaks. The Timber industry received over $400,000,000 in tax breaks just for clearing timber in developing areas. Technology firms received approximately $600,000,000 in tax breaks which basically went into the accounts of wealthy corporate execs – with no accountability from the government. In addition billions of U.S. government dollars are also distributed outside the country. According to a report from NPR (National Public Radio) over $5,000,000,000 (five billion) of the estimated $4,000,000,000,000 (four trillion) dollars budget is distributed to foreign governments. This is a kick in the head for decedents of African Slaves who continue to build the nation and is seeking far less in reparations.

To most white, as well as black Americans who do not know the history of initial wealth in America the term “Slavery Reparations” is ridiculous, offensive, and preposterous. The American white supremist believe that if not for the slave trade and the genius, hard work, and generosity of their white forefathers, black Americans would still be starving and killing each others in the jungles of Africa. In their eyes slavery is history and black Americans need to get over it, and no white American living today had anything to do with slavery! After all, slavery was the norm, and the Emancipation Proclamation set the slaves free back in 1763 – the slaves earned, and was awarded the sympathy of a conscious nation - what more did they deserve? However, from the viewpoint of African Americans the justifications for reparations is based in historical economic exclusion, human trafficking, rape, murder, cultural destruction, and free labor imposed and supported by a government against the will of the victims without restitution.

In the minds of African Americans reparations is nothing new. In 1991 The Japanese recovery Act authorized the United States Government to make reparation payments to Japanese Americans who were relocated to internments caps during World War II. While their treatment was horrible it was far less than what African Americans suffered for over 400 years in physical labor, psychological abuse, and cultural destruction. For their few years of internment, Japanese Americans were compensated at $20,000.00 each.

At the end of World War II America and its allied compensated the German government over $14,000,000,000 (fourteen billion) in reparations. The American government gave these then hostel nations, and alleged hostel people apologies, debt forgiveness, and war reparations. In fact, the United States Government paid out WWI reparations, WWII reparations, and Vietnam Reparations, Within the past decade America has paid war reparations to various alleged hostel nations such as Iraq, Iran, Afghanistan, Syria, Russia, and Libya – to name a few. African Americans on the other hand built America and throughout Americas major wars including the internal Civil War, African Americans fought alongside white Americans against both foreign and domestic enemies - even though they were treated as third class citizens. Through it all African Americans remained loyal to the country but for their years of loyalty, sweat and tears all they have received to date are modern day jim crow era treatment, ghettos, no-to-low paying jobs, mass incarceration, racism, drugs and the stigma that the condition of their communities are solely their fault. Despite how over the years they have applied for loans to develop their communities and build businesses to employ their people only to be rejected by the white owned banks and other government owned financial institutions – or overcharged for basic services.

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Could White Fear be the sole Hindrance to Reparations?

During the reconstruction era black Americans made significant strides in the areas of politics, economics, and education as a free people. Unfortunately, by the 1870’s this rapid progress was met by violence orchestrated by white terrorists groups like the KKK (Klu Klux Klan) and related spin-off racist organizations. The KKK acted on behalf of the Democratic Political Party who viewed black Americans as making too much progress, too fast - at white Americans expense and their mission was to slow, and in most cases stop the rapid spread of black socio-political and economic progress through terrorist activities such as murdering blacks, burning and bombing churches, burning black businesses, schools, and destroying any progressive black organization while simultaneously forcing blacks to align with the Democratic Party or die.

These terrorists’ acts continued until the US Congress passed the “Forced Bill” in 1871 which gave the Federal Government the authority to prosecute KKK members, as well as members of other white supremacy organizations. This bill slowed the terrorist activities but did little to stop them. Without adequate legal recourse African Americans succumbed to the terrorist tactics and eventually lost all they had gained. These were unfortunate realities as African Americans felt then and now, they have played a vital role in building the nation of America and all they wanted in exchange was not government handouts but to live prosperous as free people.

In the 21st Century, African Americans feel that their cry for monetary rewards has more to do with economic redemption than slavery reparations. They also feel that the subject would not be an issue today if they were left alone and their successful townships like the Greenwood neighborhood (1921) near Tulsa Oklahoma were not destroyed by angry white Americans while the US government tuned the other cheek. African Americans felt that every black success, as a collective group of people was met with white terrorists’ acts born out of fear of black progress. They site examples like the New York City Draft riot (1863), the Atlanta race riots (1906), Chicago race riot (1919), Washington DC race riots (1919), Knoxville Tennessee riots (1919), East St Louis Massacre (1917), and Rosewood Massacre (1923), just to sample a few. For African Americans it would appear that white fear is the greatest enemy of their success and if white Americans would overcome their fear of black economic progress then reparations would not be an issue.

Perhaps the greatest challenge for reparations in 2015 is not that the government can’t afford it - but white supremacy fears it – particularly where it relates to black success and empowerment - and this fear has manifested itself in violent behavior towards African Americans legislatively through various Jim Crow era policies. Perhaps white fear has manifested itself through the mass incarcerations of people of color, and the killings of unarmed Black men by police officers and black Americans exclusion from due process and Grand Jury cases. Perhaps it is manifested by unethical judges and private prisons sponsored mainly by wealthy white americans and the US courts. Perhaps it has manifested itself through the objectification of black women’s bodies and hair – demoralizing them for not looking “white” enough. The author ‘Michelle Alexander’ describes modern day white fear in her book titled; “The New Jim Crow” with the subtitle “Mass Incarcerations in the Age of Colorblindness”.

Perhaps it's manifested in the perception of black Americans thinking too highly of themselves and threatening the social order of white power structure, white dominance, white privileges, and the perception of white supremacy. Perhaps it’s the same fear behind the creation of the KKK, and related white terrorist organizations in the southern states. Perhaps its the same fear behind the destruction of the historical black townships and instigation of race riots. Its a fear that has systematically – and by design – demolished and suppressed African American wealth, mobility, social, and financial progress over the past three centuries. African Americans feel that white fear has manifested itself in various structural forms to the point that it has once again become the fundamental functions of practically every private and government institution - and with the reduction of the white male birth rate – it will get much worst before it gets better, and organizations like the NRA will ensure that the Second Amendment will remain the law of the land guaranteeing white American right to gun ownership in preparation for what they see as an inevitable race war of the 21st century. Perhaps rejecting reparations is more about denying the humanization of black Americans - and the prevention of black wealth which may threaten white socio-political, and financial stability. Perhaps the foundation of this fear is in the perception of black retribution, vengeance and retaliation for generations of abuse under policies of systematic oppression.

In the eyes of both African Americans, as well as white Americans who support Reparations white fear was the motivation behind the assassinations of President Abraham Lincoln, Medgar Evans, Fred Hampton, Harry and Harriette More, Dr. Martin Luther King Jr., Mississippi Civil Rights leaders, President Kennedy, Malcolm X, Trayvon Martin, Renish McBride, Oscar Grant, Jonathan Ferrell, Michael Brown, Sandra Bland, and other questionable deaths of people of color in the hands of police officers – and the motivation behind the mass arrests and incarcerations of young men of color, and those who support their social struggles. White fear is perhaps the motivation behind anti-Islamic rhetoric and immigration. White fear is perhaps the main reason Donald Trump is leading the popular presidential polls of 2015 - 2016. Perhaps white fear is used to justify senseless aggression towards minor crimes committed by black and brown Americans while major crimes committed by white American aggressors are approached with kid gloves – particularly if the aggression is towards people of color.

Perhaps white fear is protected via the original institution of a ‘police state’ which is the motivation behind Grand Jury exonerations of white police officers who kill unarm people of color. However, white fear is much more complex than race – it’s motivation can also be found in the maintenance of a ‘class’ base society which explains why even poor white Americans are also being mistreated by police officers and unfair legal practices. African Americans are hard pressed to understand this fear when historically more Americans as a whole are killed by white terrorists groups than by African Americans, and the greatest threat to American economic stabality and way of life are not people of color or foreigners but internal white supremacist organizations, corporate fraud, and greed – initiated predominantly by white men.

America reached an important milestone in 2011 which indicates that for the first time in the history of the United States, more minority babies than white babies were born. It is estimated that most new borns will be racial minorities which include; Hispanics, Blacks, Asians, and other nonwhite races leading to white Americans constituting a minority group. Perhaps this projected trend instills additional fear among white supremacy organizations and opponents of reparations - fear of change, fear of losing privileged status, or reverse discrimination, and fear of unwanted groups in their communities. Similar fears were evident during the years following World WI, WWII, and Viet Nam. Even though immigration was a low threat, phrases such as “invasion,” “blockbusting,” “forced integration” and “white flight” were commonly used terms as it related to social order, and defending white culture.

Perhaps these fears became paramount at the end of 2015 with the rapid racial demographic change due to large immigration of people of color and the low white male birth rate. White fears are manifested today in the public backlashes that often occur against more permissive immigration and voter registration laws. White fear is manifested in the possibility of blatant reverse discrimination similar to the Jim Crow laws, the Asian Exclusion Act, or any of the many policies racist white Americans used to deny minorities access to jobs, education, housing, financial resources, and basic rights of civic participation. As demography relates to reparations the fears of a more racially diverse nation will most likely, in the eyes of African Americans become a greater hindrance to reparations - with white supremacy organizations leading the way as perpetrators of discrimination and obstructionists of racial and economic equality.

A New Day

Perhaps African Americans should abandon their quest for reparations and social equality and form new alliances with the changing demographics to ensure economic stability. Perhaps African Americans should accept the reality that conservative whites – who still have a stronghold on the American economy are not going to give away their wealth – whether it was inherited off the backs of free slave labor, or hard earned sweat and tears. Perhaps African Americans should accept the fact that the American Government – while not totally against them – is not necessarily on their side when it comes to reparations. Perhaps African Americans should come to grips with the fact that wealthy white Americans recognize they are rapidly becoming a minority group and will fight for their status of privilege using every resource possible – including the police force, the legal courts, and private prison systems to maintain the status quo - or continue to turn the other cheek to illegal ‘white’ immigrants entering the United. Wealthy white Americans mission is to battle for their rights and unlike black Americans who form prayer groups before and during battle - white Americans are warriors in the face of human challengers and they usually form prayer groups after the battle is won. Does this make them racists or unchristian like – not necessarily – in regards to human nature, its more an issue of survival. Perhaps their motivation is found in the biblical book of Genesis 1:28.

As a countermeasure perhaps it's time that African Americans (Black Americans) recognize the level of power and influence they have acquired whereby they no longer have to fight a people or systems designed against them simply for social recognition. Perhaps African Americans should realize that they have arrived in the 21st century to a place where they no longer have to beg, protest, plead, march, burn cities, or cry out for respect from any racial group, government, private organization, or nation. Perhaps African Americans should realize that if they acknowledge and respect themselves, as they are asking others to do - the term “Black Lives Matter” just might have a positive global impact on their communities, and the world. When African Americans become serious about changing their social and economic status, they will realize that they currently have the education, financial resources, and the political clout – which far exceed that of the reconstruction era to effect change, not just in their communities, but the world as a whole. Perhaps it's time for African Americans to replace the phrase “Slavery Reparations” with the term “Separate But Equal”. This is not a cry for a revolutionary separation of the races – but a new day for self-governance on a greater level than the Reconstruction Era of Black Wall Street.

Until that New Day of psychological freedom arrives, to all peoples who identify themselves as African American, Black American, or Americans of Color, I would like to offer the wisdom of the infamous Harold Melvin and the Blue Notes…….

“Wake up everybody, no more sleeping in bed. No more backward thinking, time for thinking ahead”.

Live, and let Live!


James Brown (author) from United States of America on February 25, 2016:

Hello Lawrence: Thanks for stopping by and commenting. During the research process of this article I glanced at other countries approach to similar challenges and thought NZ took a very practical and progressive approach. It's good to hear that the results benefited the society as a whole. Unfortunately Americas' social and economic foundation was built on class, race, capitalism, and fear which still haunts it today. The haves are using any and all means at their disposal to maintain wealth, power, and control over the have-nots. I suspect that's the norm in any society.

Lawrence Hebb from Hamilton, New Zealand on February 24, 2016:

This hub was interesting. The same happened here in NZ but about thirty years ago the country decided to allow the local indigenous people the right to claim compensation and the results have actually been good for both the people concerned and the country.

Granted NZ is very different in the way it's set up in that any group that wants to claim has to show 'historic right' going back to 1841 (when the treaty of Waitangi was signed) but it's something to think about!


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