An Economic Program for #BlackLivesMatter

A twofold full-employment program would mightily advance the fight against mass incarceration and racist policing. Guaranteeing access to employment and income would also reduce prison recidivism. Employing people to handle "broken windows" would transform the trappings of poverty from an excuse for police harassment to paid community work. And millions of people whose livelihoods are currently dependent on an ever-expanding prison-industrial complex would be able to secure employment and income elsewhere, allowing stronger working-class organizing for a rollback of the prison state. Currently, prison closures have devastating effects on the communities for which these institutions act as economic anchors.

2. A Tax Overhaul

In the current economy, we tax labor and industry, which suppresses employment and offshores profit, and we leave the real-estate sector mostly untaxed, encouraging the accumulation of real-estate fortunes. Real-estate property includes not just buildings but, crucially, the land upon which they're situated. The buildings themselves — plumbing, woodwork, etc. — deteriorate over time until they require refurbishing, so the speculative commodity in real estate, the investment that stands a chance of appreciating in value over time, is really just land. Speculation in the land market has instituted a great deal of the structural racism that characterizes white supremacy today.

The postwar impetus to maintain segregationist housing policies was the protection of property value. When millions of Southern-born blacks swept into Northern cities, millions of whites fled for new suburban residential developments, taking their capital with them and driving down the land value in black areas. White home buyers (who make up the vast majority of home buyers nationally), with their wealth bound up in real estate, wouldn't have black people depreciating it with their proximity. Moreover, the Federal Housing Administration, in a policy designed to protect this access to landed wealth, was more likely to guarantee mortgages in communities that adopted racially exclusive charters. This policy "redlined" neighborhoods with low "residential security," or land value, depriving black neighborhoods of access to financial  services for decades.

The appreciation of land value was at the heart of Wall Street's recent mortgage bubble and its racist predatory lending, by which 53 percent of all black wealth was destroyed. "Mortgage investors," meaning land-market speculators, would buy up houses and sell them once the land value had increased, making off with the gain. To keep prices rising, the real-estate/financial complex offloaded garbage loans on unsuspecting black families, who have suffered a massive wave of foreclosures in the years since the crash.

Education is also linked to land value. Pegging school resources to property taxes undermines equality from two directions: well-to-do people are driven to move into ever more expensive neighborhoods for fear that their kids will be conscripted into inferior schools (thereby further concentrating education funding), while schools in poor areas degrade as wealth flees, driving down land value in the already underserved area.

Keeping land untaxed also gives landowners an incentive not to develop properties in poor areas, since it's thereby free to hang onto an undeveloped plot until white people decide that the neighborhood is "up-and-coming" and bid up the land value. In the short term, this leads to abandoned buildings and vacant lots — that is, to slums plagued with "broken windows." In the long term, it has a catastrophic effect on communities: while these plots of land remain undeveloped, our tax system holds down the housing supply at a time when a severe urban housing shortage has city land prices skyrocketing. And this, in turn, fuels a community-bulldozing wave of gentrification whose primary beneficiaries are the land-speculating interests.

To stop those interests, we must shift from taxing labor and toward taxing monopoly and land rents. The American political economist Henry George, whom King cited in his economic advocacy, famously proposed a 100 percent land-value tax as the only tax capable of ensuring equality amid economic development. As the board game Monopoly (invented by George devotees) makes clear, even when everyone starts with equal money, private rent extraction inevitably directs all funds into a few hands. George saw taxing the full rental value of land as the only way to develop an economy equitably — that is to say, without producing poverty constantly. And several local jurisdictions in George's native Pennsylvania tax land, albeit not at 100 percent. No human created the land, and so no one — not an absentee slumlord, not Goldman Sachs — should be extracting its value from the people who live on it.

3. Baby Bonds

In the end, black people in poor areas will always be vulnerable to disastrous community disruption as long as white people control the vast majority of wealth. It is wealth (the stock of overall resources someone controls), rather than income (the inflow someone receives over a year), that ensures true economic security — waiving the income a job provides is less intimidating to a person with independent wealth. As bad as income inequality is in the United States, wealth inequality is even worse, as those born rich get richer and those born poor stay that way. As long as white people can take advantage of lopsided bargaining positions to outbid black people for land use, the land remains whites' to claim and distribute. The only true and permanent way to alleviate the many ills detailed here is to close the racial wealth gap.

The political challenges to implementing a reparations program — which we support — were daunting from the outset and are now possibly prohibitive. To address this dilemma, Duke University's William A. Darity Jr. and the New School's Darrick Hamilton have proposed another innovative program that they estimate would close the wealth gap within a few generations. Even those who cannot concede our premise — that black people have been condemned to poverty by public policy, not by their own lack of ambition and discipline — will surely agree that no newborn child is to blame for his or her impoverished condition, and that each one deserves a fair chance at leading a fulfilling and comfortable life. Darity and Hamilton have thus suggested a "Baby Bond" program aimed at these newborns. Everyone born into a "wealth-poor" family (any family below the median net-wealth position) would be granted a trust fund at birth that would mature when the person reaches 18, whereupon the grantee would obtain access to the fund. The further below median the family is, the larger the fund the infant would receive, such that the lowest quartile would receive a $50,000 or $60,000 bond. Note that although this program is not limited to the descendants of black slaves, its effect is quite similar to the one desired from a reparations program: eliminating the wealth advantage that white Americans command over their black countrymen.

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Karen E. and Barbara J. Fields highlight law professor Derrick Bell's 1990 essay "After We're Gone: Prudent Speculations on America in a Post-Racial Epoch," in which the writer imagines space aliens purchasing all the black people from the United States, whereupon "post-racial America" must truly confront, "straightforwardly, for the first time…the problem of who gets what part of the nation's wealth, and why." With white supremacy gone as an organizing principle for social relations, it becomes clear that resource distribution was the question all along. Implementing a program of guaranteed employment and income, a taxation policy targeting monopoly and land rents, and a system of wealth-equalizing baby bonds would eliminate material insecurity for all people — blacks, whites and others — thereby eliminating white supremacy's reason for existence.

These policies may seem like a long shot in the current political environment. But if the #BlackLivesMatter movement continues to increase its political power, it can channel support from Americans who already favor more equitable wealth distribution into a truly transformative program. It seems to us that the thrilling movement shutting down transit and commerce operations has the power not just to get more civil-rights reforms, but to transform the foundation of our society. It has the power to make black lives be treated as though they finally, truly matter.

    • Mychal Denzel Smith
    • Mychal Denzel Smith is a Knobler Fellow at The Nation Institute and blogger for TheNation.com. As a freelance writer, social commentator, and mental health advocate, his work has been seen online in outlets such as the Atlantic, Salon, Al Jazeera English, Gawker, the Guardian, Huffington Post, the Root, the Grio, and GOOD.<...

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