Why reparations for slavery could help boost the economy

June 4, 2014

A man is silhouetted in the "Door of No Return" at the House of Slaves on Goree Island near Senegal's capital Dakar

In the May 21 issue of The Atlantic, Ta-Nehisi Coates re-opened the question of whether the United States government should pay reparations to African-Americans for the crimes of two and a half centuries of slavery, 60 years of Jim Crow-style segregation and decades more of racist housing policies, zoning and community development. His conclusion — that a great accounting of wrongs must take place, as well as a decision about how to make amends for them– has inevitably sparked disagreement. But set that aside. Imagine we have decided yes, as a society we must pay a price for these injustices, and it must be large. Those payments could well constitute the stimulus that the U.S. economy needs to take it into the next century.

To the economy, stimulus is stimulus, as long as it’s done right. Whether it is paid to a group of people based on where they live, their ethnicity or their religion might matter to politics, but to the economy, it doesn’t matter —  as long as the money is put to work through either consumption or investment. The reparations-as-stimulus idea gets a short mention from Coates, who writes that:

“In the 20th century, the cause of reparations was taken up by a diverse cast that included the Confederate veteran Walter R. Vaughan, who believed that reparations would be a stimulus for the South.”

Vaughan, a former confederate soldier turned Idaho politician, recognized that “pensions would financially benefit former slaves and would indeed be a semblance of justice for their years of forced labor,” according to an article in the summer 2010 issue of Prologue magazine, a publication of the National Archives.  But the outcome Vaughan looked for involved “ex-slaves spending their pensions in the South in order to give the devastated southern economy a financial boost.”

Vaughan’s vision is too simplistic to apply to modern times. Today reparations would affect 44.5 million Americans, most of whom are in a position, or could eventually be in a position, to do far more than spend. The stimulus would lead to both entrepreneurship and investment and potential direct poverty alleviation for 3.2 percent of the total population, assuming that cash-based reparations payments would be large enough to lift even the poorest recipient above the poverty line.  This would affect the roughly 27 percent of African-Americans who were below the poverty line in 2012.

Put those elements together and there is a prime case for stimulus that would both alleviate poverty directly, and provide payments to people who can either grow their investments or start or expand businesses.

A bird flies past a statue commemorating the liberation of slaves on Goree Island near Senegal's capital DakarAny reasonable program would start with direct cash payments of sufficient largess that it should be able to eliminate any reasonable consumer debts and allow the recipient access to retail banking services (the poor are notoriously under served by financial institutions). This assistance could immediately affect more than 30 percent of the participants in the Temporary Assistance for Needy Families program, boosting them in such a way that they no longer need to receive benefits, according to figures from the Urban Institute. The payments would be a huge boon for the states who administer the block grants behind these programs. Imagine similar reductions in the number of users of food stamps and medical programs.

The drawback is that one-time payments are temporary and we do not want to find ourselves, one or two years down the line, back where we started. Coates spends a good part of his essay talking about the development of major cities and how African-American communities developed within them. This is where reparations can have a more lasting effect. All of these historically blighted neighborhoods need to be modernized. Universal broadband and Wi-Fi Internet access is a great start, and should be combined with transferable tax credits to encourage new business formation, particularly if new businesses start with local ownership. By making the tax credits transferable, with some limitations, these programs would encourage outside investment so that these new businesses can expand and more easily access capital markets.

Coates has given us a lot to think about. The temptation is to argue about what is ethically “right.” But in doing so, we shouldn’t ignore the also interesting possibility that we could be looking at a pilot program for a new America.

TOP PHOTO: A man is silhouetted in the “Door of No Return” at the House of Slaves on Goree Island near Senegal’s capital Dakar, March 16, 2007. REUTERS/Finbarr O’Reilly

PHOTO: A bird flies past a statue commemorating the liberation of slaves on Goree Island near Senegal’s capital Dakar, March 16, 2007. REUTERS/Finbarr O’Reilly



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The economic opportunity will come in buying shares of KOOLS

Posted by Snosnarty | Report as abusive

“The temptation is to argue about what is ethically “right.” ”

Right, who gives a toss about what right anymore.

“The drawback is that one-time payments are temporary and we do not want to find ourselves, one or two years down the line, back where we started.”

Regardless of how you mean to accomplish this I assure you that you will find yourself back where you started. How about we just give everyone with two ear lobes a hundred grand? No? Why not? Makes just as much sense.

Posted by mogar | Report as abusive

Where do such programs start and stop though? The Native Americans are still waiting for theirs.

Posted by smokeymtnblues | Report as abusive

It doesn’t create wealth. It only shifts it. It might be stimulative for those who get payments but someone else has to give up something and that would be anti- stimulative.

Posted by Bruno1996 | Report as abusive

OK. Take more from some to give to others does what?
Every slave owner still alive can pay every slave still alive.
Since 1964, $17,000,000,000,000 has been paid by the tax payer for the was on poverty, isn’t that enough?

Posted by CindyBP | Report as abusive

sorry but 50 years of affirmative action “is” your reparation. That’s all you are going to get. Don’t squander it because it is not going to be around forever.

FYI: MLK was the leader of the integrationists. Integration means to combine discrete elements into one. Ergo MLK was a monoculturist. Black folks need to assimilate into mainstream American culture just like every other minority who came to this country as immigrants. To argue otherwise is to argue against MLK’s dream…

Posted by TheJokker | Report as abusive

You think race relations are bad now just keep pushing this reparations BS…

Posted by Ernest74 | Report as abusive

My grandmothers family were Stewarts. After Culloden, they lost their lands to the Crown. When will they receive reparation? And let’s not forget, it was Africans and Arabs who captured the slaves in Africa to begin with. So let them pay reparation.

Posted by JayDavis | Report as abusive

Same failed logic. Not only are the ancestors of slaves not entitled to reparations, but reparations wouldn’t boost the economy.

Taking money away from people who know how to use that money to boost the economy & giving it to people that don’t have a clue how to do that makes no sense.

Take $1000X from entrepreneurs that could use that money to expand their businesees or create new ones & instead give it to people that will spend it at Walmart helps Walmart, but not the economy in general.

Here’s something else to thing about.
1. Everyone on earth today, regardless of color, may’ve descended from slaves;
2. Slavery was founded in Africa by black people, who kidnapped their neighbors, bound them in chains, & sold them throughout the world;
3. Slavery may never have been introduced in America, but for blacks in Africa;
4. Blacks in America are far better off today because they were kidnapped, bound up in chains, & shipped to America by other blacks in Africa, & they should be grateful to their kidnappers for doing that; and
5. Black Islam played a dominant role in the slave trade.

Islam established the black African slave trade 600 years before Europeans arrived. The majority of slaves were obtained by Islamic raids into Africa. Plus, Islamic slave owners castrated slaves that worked with, or were in close proximity to, Islamic women.

Thomas Buxton urged in his book “The African Slave Trade and its Remedy” (1839) that a delegation sail to Africa to conclude treaties with African chiefs and kings, and convince them that, instead of capturing and exporting slaves, they could make a steadier (and more virtuous) profit in manufacture, and the selling of their produce. Through honest commerce, they could buy the guns, beads, cloth, and trinkets they desired. Buxton emphasized the then-novel view that the missionary impulse in Africa was not enough; commercial (non-slave) trade was the key to improving things on the African continent; non-slave commerce would be the salvation of Africans.

Several nations such as the Ashanti of present-day Ghana and the Yoruba of present-day Nigeria were involved in slave-trading. Groups such as the Imbangala of Angola and the Nyamwezi of Tanzania would serve as intermediaries or roving bands, waging war on African states to capture people for export as slaves. Historians John Thornton and Linda Heywood of Boston University estimate that 90 percent of those shipped to the New World were enslaved by Africans and then sold to European traders. Henry Louis Gates, the Harvard Chair of African and African American Studies, has stated that “without complex business partnerships between African elites and European traders and commercial agents, the slave trade to the New World would have been impossible, at least on the scale it occurred.” (See Henry Louis Gates Jr. “Ending the Slavery Blame-Game”. Archived from the original on 23 April 2010. Retrieved 2012-03-26.)

No matter how bad slavery & antebellum oppression for blacks in America was, it paled in comparison to the horrors they & their descendants would have faced in Africa, including continual wars, starvation, oppression, lack of conveniences, disease, etc.
Perhaps blacks should pay a privilege tax to America for providing them sanctuary from the wars, horrors, backwardness, deprivations, diseases, famines, & oppressions of Africa. Please read Keith Richburg’s “Out of America,” or just watch the evening news.

Posted by MoFreedom | Report as abusive

Be careful what you wish for African Americans. “Reparations” means to “Make Whole” as in — after this, we don’t owe you crap! You got your money, now you’re on your own, forever, to compete equally!

First, 14 Caribbean nations are suing European nations through the UN appeal for slavery. Where does it stop, how many must pay it, and to whom and where are they now?

The only reparations that worked were post war reparations to nations the governed the money strictly to rebuild manufacturing and hospitals — NOT to people!

Reparations for slavery and dislocated peoples in nations has failed to achieve any lasing benefit for those receiving it since the 1700’s. In not one case did a disadvantaged population receive reparations and do anything but spend quickly all they got on nothing of lasting value. Our first reparations of 40 acres and a mule ended with carpetbaggers. Look at entire nations that tried repeatedly to give the victims money as if it would lift them to self sufficient status. Haiti did many times, and all they got were massacres and despots. Fiji. A dozen African nations all ending up with spending sprees and returns to poverty. The delusion that lower income Americans would spend their instant money on opening a business is yet another bleeding heart liberal fantasy. Here are the solid reasons , aside from the fact that my grandparents moved here after the Civil War, and I owe them nothing.

1. There Is No Single Group Clearly Responsible For The Crime Of Slavery

2. There Is No One Group That Benefited Exclusively From Its Fruits

3. Only A Tiny Minority Of White Americans Ever Owned Slaves, And Others Gave Their Lives To Free Them

4. America Today Is A Multi-Ethnic Nation and Most Americans Have No Connection (Direct Or Indirect) To Slavery

5. The Historical Precedents Used To Justify The Reparations Claim Do Not Apply, And The Claim Itself Is Based On Race Not Injury

6. The Reparations Argument Is Based On The Unfounded Claim That All African-American Descendants of Slaves Suffer From The Economic Consequences Of Slavery And Discrimination

7. The Reparations Claim Is One More Attempt To Turn African-Americans Into Victims. It Sends A Damaging Message To The African-American Community.

8. Reparations To African Americans Have Already Been Paid many times over through programs.

9. What About The Debt Blacks Owe To America? This is a big one no person ever starts to debate due to immediate accusations of racism.

10. The Reparations Claim Is A Separatist Idea That Sets African-Americans Against The Nation That Gave Them Freedom.

Posted by filmdirector1 | Report as abusive

If money & affirmative action were going to lift black communities out of poverty, $17,000,000,000,000 should have done it.

What is Michael now saying? That $17,000,000,000,000 & 50 years of affirmative action weren’t enough?

Here’s my advice to Michael, “Fool me once, shame on you. Fool me twice, shame on me.”

What’s really hurting black communities is the fact they’ve grown up on the myth (fostered by persons like Michael Maiello & Ta-Nehisi Coates) that their ships (i.e. reparations) will come in. So, instead of taking the bull by the horns & helping themselves, they’re resigned to sitting around & waiting for others to do it for them. But each day that they wait puts them further behind.

Perhaps the creators of the myth should pay black communities reparations for all the harm they’ve caused them.

Posted by MoFreedom | Report as abusive

Why stop here… Surely the Native Americans are owed huge reparations for being virtually wiped off the planet and stripped of all their lands – shouldn’t they be 1st in line for Federal Govt handouts?

Maybe we should get Germany and Japan to pay huge reparations for all the American soldiers and sailors killed and wounded in WW II;

Aren’t the Mexicans owed Trillions $ by us for our stealing Texas and California from them and invading their country.

Slavery ended 150 years ago; and those people actually affected have been dead for 100 years, as have their 2nd and 3rd gerations. Blacks in this country today are owed the same as everyone else – a fair and equal chance to get a good job and to get ahead – nothing else – Not Another Handout!

This is REDICULOUS thinking by Maiello who probably had a deadline for this article and this was all he could come up with..

Posted by willich6 | Report as abusive

“Vaughan’s vision is too simplistic to apply to modern times. Today reparations would affect 44.5 million Americans, most of whom are in a position, or could eventually be in a position, to do far more than spend. The stimulus would lead to both entrepreneurship and investment and potential direct poverty alleviation for 3.2 percent of the total population, assuming that cash-based reparations payments would be large enough to lift even the poorest recipient above the poverty line. This would affect the roughly 27 percent of African-Americans who were below the poverty line in 2012.”

There are not 44.5 million people who are decendents of slaves. You are talking about just giving money to a race, not reparations. Reparations would have to be given to, and only to former slaves, and then those reparations would be divided among their decendents for each individual. I find your opinion that all black people are vicitims of slavery to be stereotyping at the least and possibly backwards racism if you truly believe they are victims based solely on their color of their skin.

Posted by TheNewWorld | Report as abusive

Seriously… What planet are some people living on? Because it’s not the one I’m living on, that’s for sure. I wish all the bleeding hearts that seem to be so twisted over stuff like this, would just get some therapy and let people get on with their lives. It’s like they just aren’t happy unless they’re trying to torture everybody with some guilt trip about something. Slave reparations, global warming, saving all the doggies and kitties… It’s always something.

I’m part Native American. Do I have money coming to me? I have no idea… And I don’t care to know. I control my destiny. I don’t need money for something that I wasn’t alive to experience. Get over it… All you’re doing is trying to give people an excuse to feel sorry for themselves.

Posted by dd606 | Report as abusive

While I do agree with reparations, if it was to be done it should have been done 100 years ago (and it probably should have beyond ’40 acres and a mule’), the point of the editorial is probably right, it would be a massive economic stimulus.

On a side note, many comments, starting with the first one about ‘KOOLS’, goes to show that racism is indeed alive and well in this country, contrary to right the right says. Go figure the vast majority of racists are on the right. Particularly the 30-40% of the right that thinks Obama was born in Kenya.

Posted by USAPragmatist2 | Report as abusive

Cool, I am Scotch/Irish, can we add the UK to the list of those who have to pay? My family was persecuted and starved to the point we moved over seas and restarted in squaller.

Posted by Slammy | Report as abusive

OOPs meant to say ‘While I DO NOT agree with reparations’

Posted by USAPragmatist2 | Report as abusive

So the taxpayers can boost the economy by handing money out to citizens? Why don’t we borrow it from the Chinese like we did for the last 800 billion effort?

I think Detroit already demonstrated this economic principal on a city level. Let’s take money we do not have and give it away. After that let’s apply for a bailout. This is like a dog chasing its tail, amusing but useless.

Maybe the education system could focus on teaching common sense rather than common core and we would be subject to authors like this who do not have any common sense.

Posted by KyMark | Report as abusive

I’ve thought long and had about this and can confidently state that “reparations” for slavery’s descendants might be just but impossibly impractical to deliver.
The best that can be hoped for is to support the poor robustly, allowing them to finally integrate fully into the society.

Posted by BetterThanThat | Report as abusive

Are you kidding me? Really?

Posted by smit1610 | Report as abusive

Who are we supposed to pay exactly? The ancestors of the dead?
Blacks are owed NOTHING…not even an apology.
Its called HISTORY and evolution. There has been death and power throughout the world and history.
Is the way their CURRENTLY act our ancestors fault too?
How many decades before they consider themselves Americans and not African Americans?
Current Africa is almost exactly the same as it was 200 years ago….death…rape…mass killing.
Is that the whites fault too?
Family structure is seemingly genetic. The Greeks and Romans understood family and honor…thats why they developed most all of the modern world.
Native Americans are also part of that evolution, deserving no apologies at all.
You choose to live in the reservations, just like many blacks choose to live in the “ghettos”.

Posted by KNoose000 | Report as abusive

We’ll start with the Sultan and Attaturk then.

Posted by lkofenglish | Report as abusive

In that case no one would get retribution as African Americans themselves also owned slaves and whites were also made slave at that time as well. So you see it seems its not going to work.

Posted by Arreb | Report as abusive

I find it interesting that, after slavery was abolished, essentially no one tried to go back to their homeland. I believe that after the civil war, there was a government program to help African Americans return to their homeland and essentially their were few takers.If you compare how the African countries treat their citizens with how the US treats their citizens, you can see why no African Americans want to immigrate back to their homeland. Because of this, I propose that African Americans should be taxes to pay for the better life they now have.

Posted by 1DukeZ | Report as abusive

Ok. I suppose the French and the Germans and the Spanish should be demanding reparations for the slavery and death suffered under the Romans. This is a bunch of crap. The people of today should not suffer for the crimes of the past.

Posted by Cranberries | Report as abusive

Most of the black population in America has been intermixed with the Caucasian population at one point or another. Would the Caucasian part of a black person have to pay the black part of the black person???

Posted by nose2066 | Report as abusive

The author should be tried for treason and stupidity.

Posted by zekel | Report as abusive

As long as it is paid in bitcoins I agree…great idea!

Posted by Degenerate | Report as abusive


Boost on, Mikey. Boost until you can boost no more. My family didn’t arrive in the US until the 1920’s so we just don’t have a dog in the slavery reparations fight.



Posted by mschlee | Report as abusive

Justice demands a closure as it did with Japanese Americans and Holocaust victims of Germany. It is a moral obligation.
Most of the commentary posted is sheer ignorance, perpetuated by a subpar western-led-lying education. Whites have never been held responsible for their “reigns of terror” and constantly mischaracterizes the real causes of black plight.

Posted by FutureCEO | Report as abusive

Can this journalist be this much of a simpleton? What has throwing dollars at the problem done thus far? Does this demographic just serve as a “Vote Plantation” for the Democratic Party? Everyone knows education is the great equalizer, but the Democrats never put any energy into it. Maybe they know once education plucks them out of poverty the Democrats will have no votes. “Give a man a fish, and you feed him for a day; show him how to catch fish, and you feed him for a lifetime.”

Posted by Ronnievanzandt | Report as abusive

I think it is rather frightening that a bizarre, illogical, fringe idea is being put forward in a respected news outlet.

MoFreedom has already pointed out the myriad flaws of your article, but I just can’t get over how in a world full of “extreme” ideas, someone can seriously propose a wealth transfer to a single race and then pretend as though that would be beneficial for the economy as a whole.

The existence of this article in this outlet is something far more worthy of concern than the content of the article itself, which is nothing more than a child’s yearning for a utopia.

Posted by HarryAngstrom | Report as abusive

Paul Krugman still thinks an alien invasion would be even better.

Posted by HarryAngstrom | Report as abusive

I believe the ‘best’ reparation that America can pay, would be to finally and forever sweep the country clean of racists, bigots, and all others who feel racially superior to ANY other human being…. Let us truly judge people on the content of their character, and NOT the color of their skin, or their gender, or their nation of origin.
Won’t happen…. But if you want to dream with me, we can try.

Posted by edgyinchina | Report as abusive

One likes to imagine that such dumb ideas are outside the realm of educated political discourse. But one is frequently disappointed.

Posted by Jim1648 | Report as abusive

Recently I added Reuters home page to my toolbar favorites and have turned to you instead of the Google news page as I felt your columns better written with a higher selection of relevant news stories. Moe garbage as this will clear you from the toolbar.
This dribble of an opinion is as realistic as coming up with using Shirley Temple movies as a proper guideline for dealing with the challenges of life. What a complete waste of newsprint and data usage. Previous comments have brought up enough facts for arguments to not waste any more time or thought on this asinine proposal.
Focus on reality and todays issues with practical articles.

Posted by AlanDavid | Report as abusive

All of the racist vitriol spewed in these comments should be proof enough that reparations should be made to both Black Americans and Native Americans. For the record:
1. To 1DukeZ: The USA IS the homeland of Black/African Americans. Like you, slaves were born here, hence it’s their country just as much as it’s yours. As for “going back to their homeland”,you must be referencing how the US government colonized Liberia for the sole purpose of dumping former and freed American slaves, only to abandon their territory once their actions created a disaster;
2. For all of you who have trouble with math: most Americans receiving welfare are WHITE. Blacks only make up 13% of the entire US population, so even if every single Black man, woman and child were on welfare it wouldn’t even total a quarter of welfare checks,
3. Yes, Blacks make up a disproportionate percentage of those chronically poor and on welfare; however, they also make up a disproportionately large percentage of SURGEONS, MBAs, and MILITARY PERSONNEL — this despite the overwhelming obstacles that overt and subtle racism has strewn in their path,
4. For all those claiming “me to, I’m ____” answer this: Can anyone tell that you’re part ____ the moment you walk into a room? Than you have no idea what real racism is like. Despite shows like 20/20 and Dateline showing the reality of racism in everything from employment to teen vandalism, most white people still don’t get it — or refuse to
5. Lastly, don’t assume that Black Americans are as stupid as you’d like to believe. If given the chance — and the money — a lot would be improved in our economy. Just ask any Black youth given a 4-year college scholarship.

Posted by FreeNow | Report as abusive

leave the past in the past with the people who lived there.

Posted by logan4532 | Report as abusive

Thanks again Reuters for showing the world that you only employ insane leftwing nuts to write for you.

Posted by 99fatboy | Report as abusive

How do articles like this make it into the media? It’s so riddled with faulty assumptions it’s hardly possible to list them all without retyping the who piece.

2 options:
1. Strip assets from people who invest to people who consume. Yeah, that’ll help the economy. In a pseudo-Keynesian’s dream.
2. Print money and dole it out to the designated target population. Ever heard of inflationary?

Posted by mlebauer | Report as abusive

Weren’t the deaths of 596,670 men to right the wrong payment enough? Have not the lessons of Versailles given pause enough for what true misery can be created? Progressive thought’s fundamental flaw is the rejection of historical guidance; which allows extreme forces to come to the surface as its direct or indirect influence grows on a society, because it impedes conservative thought and action, and uses those very forces to continue its argument for greater power and social restructuring.

Posted by ANZUS | Report as abusive

78% of NFL players, 60% of NBA players . . . file bankruptcy within five years of retirement

Sounds like a plan.

Posted by OKane | Report as abusive

Seriously!?!?!? Whites have been slaves too. Think the Ottomans will give me some cash?

Posted by violetcc | Report as abusive

If paying blacks would stimulate the economy wouldn’t cities like Detroit, Philly, Jackson be economic powerhouses? The fact that this debate has been given the slightest thought disappoints me and I suspect every other ethnicity out there that has suffered hardships. The fact is that blacks disproportionately receive more government handouts anyway (nearly 50% to 13% of our population), add this to our prison population that we house, feed and supply medical care we are already in over our head. Cities with more blacks take extra resources. I am just convinced people who give thoughts to such idiotic ideas are very anti-American.

Posted by Caligal | Report as abusive

Sure, prove your from a family of slaves. Prove how your family was harmed and how much. Prove that you didn’t already receive benefits equalling far more due to AA programs and welfare programs aimed at minorities.

IF you qualify then we’ll start looking for those who are descendents of former slavers and see if they have still profited from it or haven’t loss power/money due to programs such as AA, welfare, and other programs designed around helping minorities.

But news flash. The VAST majority of Americans today are NOT descended from former slave owners. The VAST majority have gone through the same form of prejudices based on their nationality, accent, religion, or other factors and have risen above it.

Posted by Syanis | Report as abusive

Yes Yes shame on Reuters for printing this OP-ED piece that has sparked 40 plus comments. God forbid Americans have an honest discussion about the topics of slavery past and racism today. We don’t want to talk to each other about our feelings. Honestly I think the worst thing about it is trying to use economics to have what should be discussion about our feelings.

Posted by notnews | Report as abusive

I’m 100% with you, cause finding ANY reason, with at least minimum credibility, to pump more money into US economy is desperately looked for in this period of desperate economic policy.
My idea is, FED should organize national contest (with prizes paid in newly printed dollars and/or wheelbarrows for their transport) for the brightest exponential printing solutions.
To level the playing field only US citizens can take part. (Creative minds of Europeans with their recent negative interest rates out of the box thinking are competition of their own).

Posted by Wantunbiasednew | Report as abusive

The oil rich countries of west Africa–especially Nigeria–whose tribal chiefs and “alpha” tribes delivered their countrymen to the slave ships should start paying.

Posted by bluepanther | Report as abusive