Segment from Paying for the Past

What ‘40 Acres And A Mule’ Means Today

Before the end of the Civil War, Gen. William Sherman issued an order commonly known as “40 acres and a mule” that promised ex-slave families 40 acres of tillable land on the southeastern coast. However, after many families had settled on the land, the policy was reversed and the area was reinstated to white farmers and former slave owners. William Darity says this reversal had huge implications for African-American’s ability to accrue wealth, and catalyzed a staggering racial wealth gap. Brian talks with Darity about how “40 acres and a mule” shaped a racial wealth gap that affects millions of Americans today, and how Democratic presidential candidates should approach reparations policies.

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William Darity: I think the entire trajectory of how racial economic inequality has evolved in the United States would have been completely altered had the initial land allocation been made to the formerly enslaved.

Brian Balogh: This is William Darity. He’s an expert on the racial wealth gap and he’s studied wealth inequality for decades. Here, he’s talking about a policy from 1865 known as 40 acres and a mule.

William Darity: My suspicion is that we would not have this conversation or need the conversation about reparations at all had the initial order been implemented.

Brian Balogh: Before the end of the Civil War, General William Sherman issued an order that promised ex-slaves a large swath of coastal land that ran from northern Florida all the way up into South Carolina. Each family would be given up to 40 acres to farm and build a new prosperous life.

William Darity: This designation was made and actually executed up to the point where upwards of, I believe, 4000 slave families were settled on the lands. But the lands were subsequently taken from them and returned to the slaveholders or the former slaveholders by Andrew Johnson. This shaped the foundations for racial wealth inequality in the United States, a foundation that is experienced today in a quite dramatic fashion. Perhaps it’s the most extreme expression of economic inequality between Blacks and whites in the United States of any other measure that’s available to us.

Brian Balogh: Can you share with us your knowledge about what happened to some of these formerly enslaved people that had their land stripped from them?

William Darity: It could have had implications not only for opportunities to engage in farming, but also other kinds of possibilities at a future point, including real estate development, including the prospect of establishing rental properties for retail activity. Some of the land that was initially allocated to the formerly enslaved on the islands along the coast of South Carolina and Georgia has become some of the most treasured recreational properties in the United States today, Hilton Head Island and the like. Yeah, we would have had a very different kind of potential for Black economic development had the 40 acres actually been delivered. What we had instead was wealth deprivation.

Brian Balogh: Yet in spite of all the barriers, and they range from lynching to just terror, African Americans were able to acquire land of their own. Could you give us a sense of the scope, the number of African Americans, how much land they owned and what some of the barriers they faced were?

William Darity: In the aftermath of the Reconstruction era, the formerly enslaved community in the South managed to acquire upwards of 15 million acres of land by dint of their own effort and actually their high levels of motivation. That 15 million acres of land was Black-owned property at the start of the 20th century. In the course of the first 60 to 70 years of the 20th century, that land was seized, appropriated, owners were driven off of the land, and as you mentioned, in some instances the owners were lynched as a mechanism for taking over their property. So by the time we get into the 1980s, the best estimate is about one million acres of Southern land was still in the hands of Black Americans.

William Darity: This was a dramatic change and was a dramatic change that was associated with essentially a white terror campaign for the purposes of wealth stripping of the property that was held by Blacks.

Brian Balogh: Let’s talk economics for a second. Explain to us in simple terms why land is so crucial to wealth accumulation.

William Darity: Well, I always like to say that you had an acre of land on Manhattan you probably wouldn’t have to bother asking that question. But obviously properties in other parts of the country are typically not as valuable as the land in Manhattan. But I do want to emphasize that the value of land is not exclusively linked to the purposes of farming. That land is significant because it’s the site on which we engage in virtually all of our commercial activities as well as being the sites where we have residences. So as a consequence, ownership of land that can be transformed into a variety of purposes gives you a significant foundation for wealth.

William Darity: I think one of the richest landholders in the United States is probably Ted Turner. I think somebody estimated at some stage that Ted Turner’s landholdings are one-quarter of all of the land that’s held collectively by Black Americans.

Brian Balogh: Wow. What do people get wrong in their understanding or lack of understanding of the racial wealth gap?

William Darity: Maybe it might be helpful to illustrate how large the racial wealth gap is as the starting point here. If you were to look at the middle Black household and the middle white household in the United States, you would find that the middle Black household had a net worth that’s estimated at $17,600 and the middle white household would have a net worth estimated at $171,000.

Brian Balogh: Wow.

William Darity: At the median or at the middle of the distributions for each group, Black households have about 10 cents to the dollar that’s held by white households. I think that the thing that folks get most wrong is related to the perception of Blacks as being dysfunctional in the United States, I mean specifically Black Americans who are descendants of folks who were enslaved in the United States.

William Darity: One specific is an observation that frequently is made that the racial wealth gap is a consequence of educational differences between Blacks and whites. There’s no evidence to support this. In fact, Black heads of household with a college degree have two-thirds of the net worth of white heads of household who never finished high school. That’s one argument. A second argument we frequently hear is that the racial wealth gap is a consequence of family structure differences between Blacks and whites, that Blacks have less stable families, more female-headed families, and that explains why this gap exists.

William Darity: In fact, white families with a single parent actually have more than two times the wealth of Black families with two parents. Another argument that’s frequently made is that it must be because Black folks are too profligate, that we don’t save enough, we’re spendthrift. But if you look at the systematic evidence on savings behavior, you’d find that if you take into account a household’s income level, whites actually spend 1.3 times as much as Blacks. I think that that spending differential is facilitated by the fact that whites have greater levels of wealth.

William Darity: The foundation for the wealth gap in my estimation has to be intergenerational transmission effects, that Black parents, Black grandparents, have far fewer resources and far less of a capacity to provide financial support for the subsequent generations because of their own experiences in being deprived of wealth or being stripped of wealth.

Brian Balogh: Let me ask about the biggest myth about reparations. What would that be?

William Darity: I’m thinking about myths here in the sense of arguments against. One of the statements that’s frequently made is that there are no living victims, so this is not something that should be bothered with at all. It’s absolutely true. There are no direct living victims of enslavement in the United States. However, the case for reparations is not predicated exclusively on slavery. I really recoil when people sometimes talk about slavery reparations. The motivation for a reparation program is actually three tiers or phases of injustice and their cumulative consequences to the present moment.

William Darity: The first phase is slavery itself, but then we have to take into account the Jim Crow period as well and also ongoing racism and discrimination in the United States. All of those are things that have to be part of the compensation package.

Brian Balogh: Well, you’re certainly aware that a number of Democratic candidates for president who are running are talking about reparations. Does this give you hope? Are there any specific plans that you think would make a good start in carrying out reparations?

William Darity: I think that we’re actually at a rather remarkable moment. Perhaps this is the first moment since the Reconstruction era where major political candidates are even uttering the term reparations or having to respond to questions about what their position is on reparations. So there’s one candidate who has actually talked about a numerical value and that is Marianne Williamson. Initially she talked about a restitution that would amount to about $100 billion. I think I immediately complained that that sum was paltry in terms of the best estimates I’ve seen of what the compensation should be.

William Darity: She’s adjusted to say it should be between 200 to 500 billion dollars. I’m absolutely convinced that your minimum range estimates have to be in the trillions of dollars. But she is the only one I’m aware of who’s actually talked about an amount. There’s several candidates who have said that they are in support of the formation of a commission to study reparations and to develop a program of restitution. I think I’m personally very pleased with that. That seems like a critical step because I think it’s essential as a prelude to the development of a full reparations program.

William Darity: To the extent that there are political candidates who are saying that they’re in favor of that step, I think that this is a far more positive moment than any other I’ve seen in my lifetime.

Brian Balogh: Professor Darity, you’ve referred to this positive moment we’re at. How do you explain how and why we’ve arrived at this moment?

William Darity: I think it may be in part because of a certain degree of ferment that has been generated organically from within Black America where there is now an inclination on the part of a significant number of Black Americans to actually push presidential candidates to say where they stand on the reparations question, that this is becoming more and more of a litmus test in terms of their commitment to the needs of Black America.

Brian Balogh: William Darity is a professor of public policy, African and African American studies, and economics at Duke University.

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Paying for the Past Lesson Set

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Though the American Civil War concluded over 150 years ago, its effects still resonate in the social, economic, and political lives of millions of Americans. At the conclusion of the war, the federal government made efforts to rebuild the lives of former slaves. Though many of these “Reconstruction Era” efforts were well-meaning, they faced stiff opposition from former slave owners and politicians who did not want to enfranchise African Americans. As a result, many freed slaves faced generational socioeconomic hurdles preventing upward mobility.

21st century politicians and economists are still grappling with how to best address significant disparities in wealth and racial equality. One frequently discussed idea is the payment of reparations to descendants of former slaves. The goal is to properly fulfill the failed promise of Reconstruction Era policies and fight against systemic and historical barriers to advancement. However, these policies come in many different forms and are contentious for many Americans.

This lesson focuses on different aspects of reparations throughout American history. The goal is to force students to confront questions about how to best address ongoing disparities of race, wealth, and justice. How has the United States tried to address these questions in the past? Why has reparations endured as controversial issue in American politics today?