There have been calls recently for reparations - that white Americans must pay to black Americans for the atrocities of slavery. It has been estimated that the price tag of these reparations to be upwards of $12 trillion. Slavery was evil. There’s no question about that. But when it comes to reparations for slavery, the question is who should pay? The simple answer is the people who actually committed the crime. But since none of those people are alive today, the advocates for reparations believe the descendants of slave owners should pay. But who are those people?
At the start of the Civil War, the United States had 32 million people which is one tenth of its current population of 330 million. There were only 9 million people living in the southern states, and 23 million living in the northern states. So, only 28% of the population of the United States during slavery lived in the south where slavery was legal. And of those people living in southern states, only 25% were part of a family that owned slaves. So, approximately 7% of the people living in the United States during the time of slavery owned or directly benefitted from slavery.
Slave ownership was not as pervasive in the south as its often presented because slaves were expensive. A slave cost about $1,000 in 1860 which is equivalent to $34,000 in 2020. So, mainly the wealthy plantation owners were the ones who could afford to own slaves.
Over 50% of the people in the United States today trace their ancestors coming to the United States after the end of the Civil War, so they had zero connection to slavery - 40% of United States citizens ancestors came from Europe through Ellis Island between 1870 and 1914. So, if we extrapolate the numbers out, approximately 3.5% of the people in the United States today have ancestors who owned slaves. So, the crime of slavery which tends to be placed on all of white America can only be traced to the ancestors of a small percentage of white Americans. And beyond that, is it fair to force people to pay the price for the crimes of their the great-great-great grandparents? And if so, should we do that for all crimes, not just owning slaves? Should we throw the law-abiding children of a murderer in jail to pay for his crime?
People claim that the great wealth of the United States was directly a result of slavery, and that America was built on slavery. But the exact opposite argument can be made. Slavery hurt the economies that relied on it. Slavery is a bad business model. People, workers are motivated best and produce the most through positive incentives and rewards, not by fear or the sting of the whip. The most prosperous markets are the freest markets. Free markets rely on free people. You cannot have free markets with slave labor.
But the slave-based economy was not even the main contributor to the wealth of the United States during slavery. At the time of the Civil War, 90 percent of the United States’ manufacturing came from northern states. The free states were twice as prosperous and wealthy as the slave states. That was one of the main reasons why the North won the Civil War. They had the wealth and the resources to outproduce the south in war manufacturing.
Slavery was a detriment to wealth creation of the south because the slave mentality kept the economies of the south and its people suppressed, rooted in the past. Relying primarily on slave labor, there was very little incentives for innovation and invention, nor the need to embrace industrialization which was flourishing in the north. The south was on the backend of the industrial and technological revolutions not on the forefront like the north because of their reliance on slavery.
Slave labor was essential to the southern economies at the time, but there are very few people who still enjoy the benefits today. There were rich plantation owners who gained their wealth from slavery, but many of those plantation owners lost most of their wealth in the Civil War, and the ones who survived the war struggled just to keep their head above poverty after the war by using sharecroppers.
The United States great wealth was amassed in post-civil war years. One of the greatest economic expansion in our nation’s history occurred in 30 years after ending slavery from 1870-1900. During that time, the northern economy grew at an exponential rate as they embraced the technological revolution while also welcoming European immigrants striving to be free.
The southern states which were stuck in their agrarian past struggled as they stubbornly tried to reinstitute slavery under the guise of sharecropping and implementing repressive Jim Crow laws. Only certain cities like Birmingham, Alabama which embraced manufacturing and industrialization flourished in the south. So, the proposition that the country was built primarily on the backs of slave labor is an extreme exaggeration.
The United States became the world’s economic super power in 1920, 65 years after the Civil War as a result of the technological revolution from 1870-1914. John D Rockefeller and Andrew Carnegie built their businesses and amassed their fortunes during that time.
The overwhelming majority of the country as we know it today was built after the Civil War, the roads, buildings, infrastructure. The transcontinental railroads were built primarily by Chinese and Irish immigrants after the abolition of slavery. The big cities such as New York, Chicago, Detroit, Cleveland, Cincinnati were built into what they are today during the late 19th century.
In 1850, the total population of New York City was 560,000 people. Today the population is 8.4 million. The first skyscraper, an 11-story building, in New York City was constructed in 1889. The entire New York Skyline was built decades after the ending of slavery.
As we have seen, the more freedom, the more prosperity. The free economy of the north was much more prosperous than the slave economy of the south. The American economy took off and amassed its great wealth after the abolition of slavery, not because of slavery.
That’s where China has made their mistake. If they embraced freedom for their people, and free market capitalism for their economy, they would already be the world’s economic super power by far. If they had 1.4 billion free people, unfettered by the rigid constraints of a totalitarian regime who were allowed to pursue their own goals and ambitions, to create and innovate, they would produce prosperity beyond their wildest ambition.
And that is also the lesson for the United States. Embracing anti-freedom and repressive policies whether it was during slavery, or the Jim Crow laws, or the restrictions and regulations imposed by a heavy-handed federal government, or repressive socialist policies, deny the freedom necessary for the people and the economy to reach the full expression of their potential.