EconVersations: Economics of Slavery Reparations (episode 213)

Dr. Dan Sutter, of the Manuel Johnson Center for Political Economy, hosts EconVersations, a program that explores the role of free markets in promoting prosperity through conversations with Manuel Johnson Center faculty and guests. In this episode, Dr. Sutter interviews “Insert Name Here”, Dr. Walter Block, the Harold Wirth Eminent Scholar at Loyola University, as they discuss Economics of Slavery Reparations.

Episode Transcript

(00:00):
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(00:44):
Now here's your host, Dr.
Dan Sutter.
Hello and welcome to E!
Conversations.I'm your host, Dr.
Dan Sutter of the Johnson Center
for Political Economy at TroyUniversity.
Slavery was a moral abomination
and a great stain on the history
of the United States, a nationfounded on equality and freedom.

(01:04):
The Civil War broughtenormous death
and destructionto our nation, but
resulted in emancipationand the end of slavery.
What,if anything, should our nation
do today to rectifythis wrong from the past?
This question drives the currentdebate over reparations
for slavery
payments from the governmentto compensate for this wrong.
Is this debate merelyabout using government money

(01:25):
to buy votes,or is there an injustice
that could be reasonablyand properly addressed?
Join manyConversation Slayer's Dr.
Walter BLOCK,
who's the Harold Worth Eminencescholar at Loyola University
in New Orleans and a seniorfellow with the Mrs.
Institute.
Dr. Byock
is a distinguished Austrianand libertarian economist.
He earned his Ph.D.

(01:45):
in economics from ColumbiaUniversity, and prior to that
taught at RutgersUniversity, Baruch College,
Holy Cross and the Universityof Central Arkansas.
In addition
to also working as an economistwith Canada's Fraser Institute,
he has written or edited over25 books and author and hundreds
of academic journal articlesand opinion pieces.
Welcome to The Conversation's,Walter.

(02:08):
Thanks for having me.
Good to be with you then.
We want to start with a piecethat you wrote
on this question of reparationsa few months ago,
and you had a very a greatI thought it was struck
me as a great exampleto to lead off with this
talk about the ideaof a stolen watch
and how that relatesto the reparations debate.

(02:29):
So if you could take a momentto explain this perspective on
the debate.
Yeah, well, I suppose my
grandfather stoleyour grandfather's watch.
And then what my grandfather didwith your grandfather's
watch is he gave it to his son,who was my father,
and then my fathergave it to me.
And now I have this watch,

(02:51):
and it's still got yourgrandfather's picture on it.
So there's no questionthat it was a stolen watch.
Well, now, what should happen?
Should I go to jail?
No, I'm not really a thief,although I'm
a holder of stolen property.
But I didn't realize it.
The picture of your grandfatheris indistinct.
And let's say I'm innocent.
But now you come alongand you say.

(03:13):
Hey, Walter,
I noticed your watch.My great grandma
or my grandfatherhad a watch just like that.
Can I see it?
And I show it to you.
And then you say,Hey, that's really my watch.
Because your grandfather'sstole it from my grandfather.
And let's stipulate that there'sno dispute as to the facts.
We agree on the facts.
Well, sure, I keep the watch.

(03:34):
Or should I give it to you?
Well, it seems very clear to methat I should give it to you.
And justice would requirethat I give you the watch.
The government doesn'tget involved at all.
I just give you the watch.
And now justice has been donea little belatedly.
But you know what the heck?
You didn't cover this until now.
And that would be the situationnow in slavery.

(03:57):
What happened is that the slave
masterstole something from the slave
labor, stole his dignity, stole
lots of stuff.
I mean,it was a despicable situation.
And and now comes the question.
Well, should any reparations bemade similar to the wristwatch?

(04:21):
And there are two schoolsof thought.
The extreme right wing says,no, no, no, no reparations.
And the extreme left wing says,yes, yes, yes.
All whites oweall blacks reparations. Hmm.
And I think the properlibertarian issue is neither.
It's neither thatno reparations at all

(04:41):
are owed, noris it that all whites.
Oh, all blacks money or or landor whatever or anything.
Why do I reject the first case,the right wing
case,the extreme conservative case?
Well, because there was theft.
And we libertarians believe thatwhenever there's theft,

(05:02):
there's no statuteof limitations on theft.
I mean, there is a
natural statute of limitations,and that is that
the burden of proof is always onpossession is 9/10 of the law.
So the burden of proof iswho wants to get reparations.
But but I think it's unfair.
I mean, if it was 5000 years ago
and you can prove that you're

(05:23):
grant, your great great,great grandfather
had his watch stolen.
So what?
I don't careif it's 5000 or 50 years ago,
it doesn't matter as long as youcan meet the burden of proof.
Now, it's true that there's anatural statute of limitations.
Namely, the further backyou go in history,
the harder it is to prove anythi
then youknow you should be compensated.

(05:46):
So I reject the right wing.
I also reject the left wing viewthat all whites
are all blacks reparations,because there are many reasons
for this.
First of all, slaverystarted with blacks in Africa.
One black tribe enslavedanother black tribe and sold
the slaves to the whites.
So there are bad blacksin the sense

(06:07):
that great grandfatherblacks were thieves.
And then there were even black
slave ownersin the United States.
So they should pay ortheir grandchildren should pay.
And not be paid.
Then there's the questionI'm Jewish.
My folk came to this country

(06:28):
in 1905, which was longafter the demise of slavery.
So why, you know, why should Ior my grandparents or
anything that Irish people cameafterward?
A lot of people cameafter slavery
and a lot of blackscame after slavery
from the Caribbean, from Africa.
So why should they be owedanything in the U.S.

(06:50):
context?
So I reject both sides.
And a lot of times libertarians
rejectboth the right and the left.
But now it's just sort ofget into this
one thing that is particularly,I thought,
great about your perspectivethere is that so often
the left wing approach,
the progressive approachto reparations,

(07:10):
is just viewing this in acompletely incorrect of a racist
racial justice perspective,where you've got one group,
you have one race.
Did something badto the other in the past.
But if you but there is a basisto think about this, you
the injustice that happenedhere.
At the individual level,
there were some individualsand they create

(07:31):
they did this tremendousviolation of human rights to
seize other peopleand hold them as property.
And so if if we begin with thatand understand
that there were some individualswho did this terrible,
terrible thing and otherswho were victimized by that,
we will sort of see likethere is like an individualist
as opposed to racial justiceor collectivist approach

(07:52):
to this this problem.
And and so there is possiblysomething that we want to
try to address.
Absolutely.
Look, supposethere's some guy in Harlem and
and there's somebody inLouisiana picked my state.
I'm a professor in Louisiana,
and this black guy in Harlemhas a Bible

(08:13):
or has some proofthat his great great grandfather
was a slaveon this Louisiana plantation.
And he comes to the courtand he says,
what should have happenedin 1865
was that we have ex postfacto law.
What's ex post facto law?
Ex post factolaw is we declare things illegal

(08:34):
even though they were legalat the time.
The Nuremberg trials in inGermany
was an exercise in expost facto law, namely
the German defense waswe were just following orders.
You're supposed to kill Jews,you're supposed to kill blacks,
supposed to kill gays.
And what the Nuremberg trialssays, well, you know,
we don't think so.

(08:54):
We think that that was improper
and we're going to punish youeven though you obey the law.
And we we concede thatthat was the German law.
Well, up until 1861, say
it was legal everywhereto have slavery.
And yet we are now
we libertariansare going to impose ex
post facto law and say thateven though it was legal then,

(09:15):
we thinkit never should have been legal.
And we're going to act as if itnever should have been legal.
So what should have happenedin 1865?
What should have happened
is that the slave ownersshould have
not only jail,but should have been
made a slave of the ex-slaves.
That would be the radical view.
And certainly all of thisproperty, since he's a slave

(09:36):
and all of his propertyis no longer his.
It should have been given tothe slaves to compensate them.
That's where you sort ofget this 40 acres and a mule.
Stuff from because that wasroughly the approximation.
You know, let's say this slaveowner had a plantation of,
I don't know, 100 acres,and there were ten slaves
that he should have gotten acres and 1/10 of the mules

(10:01):
and 1/10 of the farm equipmentand all that.
Okay.
So here's this black point.
And what he doesis he goes to court and says,
My great grandfather was a slaveon this plantation.
There were ten slaves and Iwant 1/10 of this plantation.
And I think he should get it.

(10:23):
Or the money, the value of it,that would be a complication
as the
you know,
it might be difficultto give him, you know, ten acres
in the middle of the plantation,
but in some wayhe should be compensated,
but not from the government,
not from taxes,because we all pay taxes.
Rather, this guy whosegrandfather was the slave owner

(10:45):
and he should give the valueof, say,
1/10 of that plantation to thisguy, a black guy in Harlem.
And I thinkthat would be justice.
So we reject the
the right wing viewthat says no reparations at all.
We reject the left wing view,
and we have anindividualist view
which is compatiblewith libertarianism.

(11:05):
We're individualists.
And that would,I think, be justice.
Now, when we think aboutthe injustice that happened,
it seems like we were taught
you mentioned a little bitabout the value of the
the slaves laborthat was taken from them.
And there is also the fact that
they lost their freedom,their dignity, their autonomy.

(11:26):
The horrible stories of slavefamilies being torn apart
because the master wants to sellone slave away.
There is that horrible humanlike loss of freedom,
but that's the one where it'ssort of like
barring a time machine,it's not clear
how how you could compensatethat the people

(11:46):
who were truly deprivedof their freedom for that.
So, I mean, as much as we might
look at thatpart of the injustice,
it's hard to seeafter more than 150 years later
how there is muchthat can be done.
I mean, you know,
depending on one's viewof an afterlife where anything
maybe they've been compensated,aided,
they've receivedsome compensation

(12:06):
in the intervening years.
But there's
there's not much that it seemsthat we can do here,
as unfortunate as it might be,because
you would be giving moneyto people
who didn't have their autonomyand freedom
and dignitytaken away from that.
They've never been heldas slaves,
so it's hard to compensatethe actual victims
in that case, right?
Absolutely.
You can'tget blood out of a stone. And

(12:30):
what is it?
The perfectis the enemy of the good.
We can't do perfect justice.
We can only do the best we can.
I mean, 150 years have gone by.What can you do?
But the ownerof that plantation,
the great grandson of the slaveowner, is innocent.
He didn't engage in slavery,
which is kidnaping, in effect,or long term kidnaping.

(12:51):
He's innocent.
All he owes is what whathe never should have gotten.
Now, if there are ten guysfrom Harlem, say,
each of them can provethat they owned that
their grandparents were slaves,well, then the whole kit
and caboodlehas to go to those ten guys,
the ten blackgrandchildren. And.

(13:12):
And this guy never should have
got that in the first place,because in 1865, what happened
is that his grandfatherkept that plantation.
He never should have keptthat plantation.
And justice, to the extentthat we can now impose it
this late in the day,
consists
of undoing thatbased on this fact that it was

(13:33):
an unjust law that allowedslavery in the first place.
Now. One issue raised herethat might be relevant,
as is the idea that we have hadlike 150 years in between here.
If somebody had been compensated
a hundred years agoor 150 years ago, we know that
fortunes can be won and lost.

(13:54):
And so there are you know,we have a numerous intervening
generations here to sort of say,like if your great grandfather
had received this compensation,
there's no guarantee thatwouldn't have already been lost.
So there have beenno inheritance
to come down to you today.
So you know, simply
is there any issue herethat you see with us

(14:15):
in terms of like, Well,we you know,
we simply don't knowwho would have
ended up with this money,especially in a dynamic economy.
Somebody could have investedin the wrong business.
They could have lostall of their money.
So who knows what the pathof the trickle down of that
wealth are over the course ofgenerations might have been.

(14:36):
Yeah, money is very difficult.
Land is a lot easier.
I mean, there were 100 acresin this plantation.
Usually plantationswere bigger than that,
but hundreds a nice round numberand the land sits there.
So you don't have any problemwith present
discounted value of moneyand interest rates and and money
put it in the bank for 50 yearsand even,

(14:57):
you know, 2% is going to amountto a lot more. Now.
But we can sort of cut throughall of that
and mainly look at the landbecause it was the land
that the slaves worked onand according to John Locke,
the way you get to own propertyis to mix your labor with land.
Well, who was mixing his laborwith the land?
Was it was it the plantationowner or the overseer?

(15:21):
No, it was the slaves.
So in justice,the slaves own that land.
And with land, it'sa lot easier to see.
You're quite right. When.
When you starttalking about money.
Well, he could have invested itthis way
and he could have gamblingaway. And.
And you get intoall sorts of complications,
which
I suppose it's importantto talk about that, too.

(15:42):
But the main impetusor the main lesson
I think that the Libertarianshave to offer both sides
is this individual, thisreparations, namely that land.
He he never should have keptthe slave owning,
never should have kept,and he never
should have been ableto give it to his kid.
To his kid.
And now the presentowner in Louisiana, say,

(16:03):
or South Carolinaor wherever it is.
And by the way, there wasslavery in the north as well.
So so this applieswherever there was slavery
and wheneverthe burden of proof can be met
now. And another issue herewould be that as we look across
is we look back in US history.
I mean, we certainlywe fought a civil war

(16:25):
that helped end slavery.
And so those are any issuesthat you see in terms of like
if somebody could say, well,my great great great grandfather
fought in the Civil Waron the union side
to try to help end slaveryand was killed in that.
And so, you know,is there any offsetting element
of having, like, you know,not only were your parents not

(16:46):
or maybe you have maybe in yourin your family tree,
you've got some slaveholders,
but there are also
some union soldiers who foughtand died for the cause.
I mean,
it seems like we get into a lotof a lot of pretty difficult
questions here.
Oh, boy, do we.
And there were brothersfighting on both sides

(17:06):
against each other.
You know, one brother
Joe was fighting Peteand they were brothers
and they were shootingat each other.
It was justa horrible situation.
But I want to take issuemaybe do a little push back.
I don't believe there was acivil war in 1861, a civil war.
My understanding is each sidewants the one the whole country.

(17:29):
The Spanish Civil Warwas a civil war
because the commies andthe fascists each wanted to run
Spain.
The civil war of 1917in Russia was a civil war
because the White Armyand the Red Army each
wanted to run the whole placemore accurately.
What happened
in 1861 was not a war,a civil war, because each side

(17:51):
didn'twant to run the whole place.
The North wantedto run the whole place,
but the Southjust wanted to secede
and by the way,there was slavery in the North
as well.
So you can't say, well,it was fought to end slavery
because it was slaverythroughout the whole country.
And Abraham Lincoln.
I owe this to Tom de Renzo,a colleague of mine

(18:12):
once said, paraphrase,If I want to save the union.
That's what I want to do.I want to save the union.
And if the best wayto save the unions
to endslavery, I'll end slavery.
And if the best way to savethe union is to keep slavery,
I'll keep slavery.
So it wasn't a war to endslavery.
It was war to end secession.

(18:33):
Now, happily, it ended slaveryalso because from a libertarian
point of view,slavery is an abomination.
I mean, it's maybe the secondworst thing after mass murder
that human beingscan do to each other.
So happily,slavery did end then.
So that would
be my reaction to that pointthat you made.

(18:55):
One, we have another issue here,and there is a Duke University
economist, or William Darity,
very prominent
among economists as a voicein favor of reparations.
And he pointsnot just to the Civil War
or the failure to compensatethe freed slaves in 1865.

(19:16):
He also points to the historyof Jim Crow, and in other cases,
there were definitelysome instances of of economic
aggression against blacksafter the end of World War Two.
I mean,the Tulsa massacre was one.
You know, oftenit really sort of sparked
almost by the success of BlackWall Street in Tulsa

(19:38):
and then following all the waythrough
to redlining with
discriminationin housing after World War Two
that helped that helped
keep black familiesfrom buying houses
that were going to appreciatein value and so forth.
Do you see these offensesor actions
after the Civil Waras part of this equation?

(20:00):
And how might we were approacheswhere we want to actually try
to address things separately or
lump it all into two one?
One problem that hashas to be tried, addressed.
Well that'sthat's a can of worms.
That'sthat's a very important question
and I would divide it into two.

(20:21):
I would say that
the Jim Crow legislationwas totally unjustified.
It acted invidious againstblack people
and the people responsible forthat should be sued.
And they're all gone now.
But their children have
that they shouldn't have had
because these people
should have had

(20:42):
their will taken away from them
because they should have beenimprisoned for doing that.
Right.
In other words,I'm a legislature legislator
and I am responsible for JimCrow legislation.
And that is a crime fromthe libertarian point of view.
And I bequeath my possessionsto my son.
Well, he shouldn'thave been bequeathing anything.

(21:04):
I should have been put in jailfor him
for passing Jim Crow legislationin the first place.
Okay.
So that's one one answer.
And then whatever else follows,black people who are hurt by
this should be ableto see my son or my grandson
for their wealth.
But now the other questionis racial discrimination.

(21:27):
And here I'm guidedby three economists.
Gary Becker My Ph.D.
dissertation advisor at Columbia
by Thomas Sowelland by Walter Williams.
And I have to brag a little bit,I am, I think,
the only coauthor of WalterWilliams.
I think I'm not sure,but I am a coauthor is.
And I don't think he coauthoredanything with anyone else.

(21:48):
And what these three people sayand what I think
all good economists say isthat discrimination is impotent,
to hurtthe target of discrimination
and therefore nocompensation is owed.
For example, we we pass a lawsaying that, I don't know,
black people can't

(22:11):
make a certain amount of money
or we have a minimum wageor something like that.
And and then what happens?
Let's say right noweveryone is making $10 an hour
and now we have a lawagainst black people
in the labor market.
And this shifts the demand curvefor black labor to the left.
And now blackpeople are making $7 an hour.

(22:34):
Well, if everyone is making$10 an hour,
we have a theory
in logical revenuetheory of productivity, namely
that wages tend to reflectthe marginal revenue product
and the black
marginal revenue product is thesame as it was before the law.
The law doesn't change long termrevenue product.
So now if you hire a whiteperson, you make no profit,

(22:56):
which is fine in equilibrium,there are no profits.
But if you are a black person,you make $3 an hour.
So it's going to underminethat sort of a situation.
So I don't think that the reasonthat black people
make less money than whitepeople is due to discrimination.
Again, based on the work of

(23:17):
Gary Becker,who won a Nobel Prize,
and Thomas Sowell and WalterWilliams,
who should have won Nobel Prizesbut didn't.
And I think just based on basic
economicsthat the refusal to deal with
somebody is not a rightsviolation.
Look, you have a yellow tie.
I hate yellow ties,
and I'm going to havenothing to do with you.

(23:39):
Did I violate your rights?
No, I'm.
But I'm discriminated
against youbecause you have a yellow tie.
And if a lot of peoplediscriminate against you
because you have a yellow tie,well,
your wages will tend to go lowerthan they otherwise would be.
But then you'll bemore of a bargain.
So other people will hire youand you'll be back
where you were before.

(23:59):
So the discriminationagainst yellow tie wearing is
impotent to really hurt you.
So if you want to find outwhy blacks earn less money
than whites,you have to look elsewhere.
Now, recently the state of
California and then I thinkalso the city of San Francisco
have had panelsto investigate reparations.

(24:21):
And one of this
this really strikesis that is kind of odd
because Californiawas not a slave state.
There was no slaverythat we know of in San Francisco
because those were settledrelatively late before the
you know,the start of the Civil War.
If a government at some level

(24:42):
you could lookat the governments of
Louisiana, Alabama, other stateswhere there was slavery
and say there might still besome some liability here
if slavery didn'toccur in California.
Is there reallyany justification there
for forlike the state of California
trying to jump in and givereparations from the state?

(25:05):
Well, I'monly kidding in this response,
but I think we're talking aboutsecession before.
I think we ought to secede.
Not all of California, but justthe west coast of California.
Kick them out of the country.
They're crazy.
I mean, not just on this issue,
although they're certainly crazyon this issue,
but on so many,many more issues.

(25:25):
I mean, they're justa bunch of left wing maniacs,
not all of them.
Not 100%.
There are libertarians andand non progressives.
I don't think that progressive.
I think they're regressive.
But that's another issue.
I think this is grotesque.
It's just stealing money frompeople to give to black people.
Mm. Yeah,because I mean, in my mind

(25:47):
it really makes a mockeryof this whole idea
that there were actsof injustice and we, you know,
perhaps we need to as best
we can, 150 yearsafter the fact, go back
and try to do what we canto make up for
four acts of injustice,you know,
simply turn it into like,
okay, we're going to givegovernment money,
which ultimately is taxed awayfrom other people.

(26:09):
I mean, we're going to give itto some selected citizens
and not others.
It is really sort oflike using this
as sort of a coverand like I said,
I mean, to my mind,it sort of really undermines the
the whole moral forceof of the the question here.
Yeah.
I think thegovernment should be colorblind.

(26:30):
I know that the lefties hatethat word colorblind,
but colorblind seems to meto be an aspect of justice.
You just look at peopleas people
and the color of their skinor that pigment
should be irrelevantto any of this.
Well,I think that's an point of being
raised as well,because, I mean, from
a libertarian perspective, it'ssort of like why

(26:53):
I find the whole racial justiceand thinking
that's all in racialterms is so offensive
is that you're lookingat collectives
of groups of peopleas opposed to individuals.
And I think, you know,
libertarianswould be particularly be,
you know, emphasizingyou need to judge people
as individuals,
you know, and that sort oflike what the market you know,

(27:13):
how it underminesdiscriminations
by looking at the workersas individuals and realizing
this person's
marginal revenue is just as highas this person's.
You know, I,
I want to hirethe one that's not being valued
properly in the market.
And so, you know, it's
just this whole thingof making sure
we focus on individualsas opposed to groups.

(27:34):
Which Icouldn't agree with you more.
So let's see, we onlyhave a little bit of time left.
So it's just I think any
anythingthat we haven't gotten to today
that you'd like to share with uson this perspective,
on this topic?
Well,I think it's very important
to promote liberty
and libertarianism because thisis a very contentious issue.

(27:55):
And I think that we libertarianshave something to contribute
that neither the rightnor the left has to contribute.
And all too oftenwe're conflated with the right.
People think libertarianism isjust a branch of right wing ism,
and the Federalist Societysort of is guilty of this.
And I don't mean in a bad way.
They are very nice that theyallow libertarians among them,

(28:17):
but people get the mistakenimpression that we're
part of the right wing.
We're notpart of the right wing.
We are unique,We are sui generis.
We are the only peoplewho have our finger
on the pulse of justice, theright wing and the left wing.
I mean, the right wing is okayon on economics,
not to bad on economics, buthorrible on personal liberties.

(28:40):
The left wingis horrible on economics,
but not too badon personal liberties.
We libertarians are goodon both of those areas.
And each of those other sidesthinks we're inconsistent
because,
you know, if you favor libertyin one area,
you can't favor libertyin the other area.
No, we're the only ones whofavor liberty across the board.

(29:00):
And I think it's very important
that this message be gotten out.
And I thank you for having meon your show.
And and we're doing the Lord'swork here.
Thank you for coming on.
And I thank you all for joiningus, joining us again.
Next timefor another E conversation.
This has been e Conversations,

(29:20):
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Johnson Center for PoliticalEconomy at Troy University.
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(29:42):
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