Restitution for American Slavery
A forensic economics approach
Sibylle Scholz, Chrissi Jackson
Descendants of African American slaves have never been compensated for one of the worst crimes against humanity. The lost wages suffered by slaves and the asset value of slaves to the slave holders are estimated to be well over one trillion US dollars in today’s money. Equally important is the value of the promise of land to freed slaves, commonly known as Forty acres and a mule.
The word restitution is used deliberately meaning the recovery and return of benefits obtained through improper means. Slavery in the United States was particularly abominable because it was chattel slavery, meaning people were the property of owners and bought and sold as property. As such, slavery was the largest and most important input in agricultural production in the 19th century in the US.
A common argument against reparations for American slavery is that it was legal at the time. However, at the Nuremberg trials, where Nazis were brought to justice after WW II, the US prosecutor Robert H. Jackson said common law recognizes rules of conduct (that individuals must be held accountable for their actions) and that this is sufficient to establish guilt and judgments of wrong doings, regardless of precedent.
In the case of slavery, Europe tacitly permitted slavery in its colonies, but slavery was prohibited in Europe and Africa, and for Natives in the Americas. It was widely recognized that chattel slavery and permanent slavery was morally wrong and this is sufficient to establish guilt and judgments of wrong-doings in the US.
In the US slavery ended with the Confiscation Acts and Emancipation Proclamation in 1863 and the 13th Amendment made slavery illegal in 1865. The Civil War started in 1861 and ended in 1865 and many slaves fought in it, both as slaves for the South and as wage labor for the Union. After Abolition in 1865, Special Field Order No. 15 of the US Army confiscated 400,000 acres of land along the Atlantic coast of Florida, Georgia and South Carolina and approximately 18,000 freedmen where settled there. They were each given 40 acres, but on a temporary basis. They were also to receive a mule, left over from the war. This coined the expression “Forty acres and a mule.” At the end of Reconstruction in 1877 most of that land was given back to Whites.
The Southern Homestead Act of 1866 was designed to make 40 acres available to those emancipated from slavery – known as Freedmen. This transition went along as well as it could while US Federal troops oversaw this plan. But in 1877 troops retreated and these arrangements disintegrated. Census data does not separate White and Black farmers until 1900, but W.E.B. Du Bois estimated that Black farmers owned 3 million acres in 1875 and 8 million in 1890. The peak year, from census data, shows 12 million acres in 1910 fully owned by 175,290 non-whites and partially owned by 43,177 non-white farmers. Roughly, this is 60 acres per farm.
Because of the rising prices in cotton, many of those Black farmers did very well initially. But as Jim Crow laws set in and racial segregation was the norm in Southern States, farm operating contracts became more difficult for Blacks to secure. By the 1930s, there was a collapse of the economy and many farms, including Black owned ones were abandoned. In the 2010 Census there are 45,000 Black owned farms listed.
In 1863, over 90 percent of Blacks lived in the South. The majority of the population in South Carolina and Mississippi were African Americans. And more than 40 percent in Georgia, Alabama, Louisiana and Texas.
Starting in the early 20th century more than 6 million Afrodescendants began the Great Migration. Also known as the the Great Northward Migration or the Black Migration. These African-Americans moved from rural Southern states to the urban Northeast, Midwest, and West. Only recently many African Americans moved back to the South, especially Atlanta, but also Birmingham and other cities that offer good economic opportunities.
The 1910 agricultural census shows over 3 million farms in the South farming 354 million acres. This is down by 7 million acres from the 1900 census. Those figures continued to decline over time. Currently, the South farms 270 million acres. Maps of this census show that almost all farms in the South were less than 80 acres, except for areas around Savannah.
The census of 1910 does not distinguish between sharecroppers and tenants. It lists 670,000 Black tenant farmers and 1,200 Black farm managers cultivating 27 million acres. This amounts to 40 acres per farm. Both tenant farming and sharecropping existed well into the 1950s. The census of 1910 shows the largest number of Black farmers compared to census data before and after. This shows, that the Southern Black community was capable of farming 27 million acres of land, cultivated by 670,000 Black families. But these families were denied the ownership of this land and had to till as sharecroppers withholding any opportunity to accumulate assets. In essence, slavery converted into feudalism, the very system many of these White landowners fled from in Europe. For the White landowners, not much changes between the previous system of chattel slavery and sharecropping in terms of economic gains. Both systems allowed for an economy that benefited Whites, and that left Blacks marginalized with no outlook for improving household income or for accumulating any assets.
The lack of the opportunity to accumulate assets means descendants of these families remain asset poor as well. Current poverty programs only address income and not assets. Thus asset poverty persists to this day. While this holds true for Whites as well, Black asset accumulation is much more difficult. Throughout US history, lynchings and illegal seizures of Black-owned farms were common in the rural South. Also common was the discrimination against Black farmers to obtain loans and farm assistance. African-American farmers were either denied or had to wait longer for loan approvals. In agriculture, where timely availability of credit is imperative to run a farm successfully, receiving credit for seeds is meaningless if the time for planting has already passed.
Based on these events and historical data, a dollar value can be calculated for the promise of Forty acres and a mule. Applying the 2017 average value of Southern Agricultural land at $3,200 US dollars per acre, the total value of land farmed by Black tenants in 1910 is $86.8 billion US dollars. This represents assets that were denied the Black community.
There are other researchers who have calculated damages suffered by Afrodescendants. Thomas Craemer, a sociologist at the University of Connecticut, used Field Order No. 15 and the Reparations Bill. He then attached an average price of $3,020 per acre in 2015, and multiplied this by 3,953,760 slaves from the 1860 census. This yielded a number of $486 billion US dollars.
However, Creamer’s methodology suffers from false assumption. Specifically, Field Order No. 15 states that “three respectable Negroes, heads of families ….. shall have a plot of not more than forty acres of tillable ground.” In other words, the intention of Field Order No. 15 was not to give 40 acres to each slave, but rather to a portion of such individuals that would be able to conduct agricultural production on 40 acres. Also, Reparations Bill H.R. 29 which was introduced in 1867 by the Radical Republican Senator Thaddeus Stevens, states that “each male who is the head of a family …. or each widow who is the head of a family…” shall receive 40 acres. In other words, the promise was not 40 acres for all slaves, but rather land for a family unit of, perhaps, four or five, which would be necessary to successfully till 40 acres. This shows, that Craemer’s calculations overestimate the value of the potential assets of Forty acres and a mule that was due to the Black community after Abolition.
If the Reparations Bill would have been enacted, approximately 800,000 families would have been given 40 acres of land. The value of this land, in 2017 dollars is $102 billion US dollars, a number similar to the one calculated using Black shareholder farming in 1910. In other words, the unfulfilled promise of Forty acres and a mule can be valued between $86.8 billion and $102 billion US dollars using the capacity of Black farmers as sharecroppers in 1910 and the potential of Black family units as farmers in 1867. From a strictly forensic economics approach, these calculations represent the failed promise of Forty acres and a mule. It is important to note, that these numbers hold steady for over 40 years and they demonstrate the importance of an economy based on agriculture in the South of the US which was denied to the Black community.
Other economists have looked at the total value of slavery to the economy before Abolition. On one hand, slavery was unpaid labor; on the other hand, slaves were like capital that had a value in the market place. Larry Neal, an economist at the University of Illinois, Champaign/Urbana, looked at wages between 1620 and 1840 and compounded these at 3 percent into the 1980s. His estimates for lost wages during that period are $1.4 trillion in 2016 US dollars. It shows how much White farmers benefited from slavery. Richard Vedder, an economist at Ohio University, estimated a similar number, $5 to $10 trillion US dollars as an accumulated gain in wealth for White Southerners.
Tim Worstall, a journalist, used the market value of an enslaved person, and then calculated the total wealth of having slaves, as an asset, at a compounded 1 percent to be about $1.75 trillion US dollars, or about $40,000 US dollars to each Afrodescendant today. Slaves had different prices depending on their skill levels as either artisans or domestics, or if they were known runaways or had physical impairments. Women commanded a higher price than men for obvious reasons.
But after Abolition this asset disappeared. French economist Thomas Pikkety developed a graph reproduced here as Figure 11, which illustrates the changing nature of wealth. This shows (indicated in red) how valuable slavery was to the economy.
All of these economic calculations related to slavery in the US are important as they demonstrate the value of slavery to the economy and to the structure of the economic system which persists until today. Adding the three most essential components of slavery, lost wages, the value of slaves and the lost promise of Forty acres and a mule amounts to an accumulated wealth of $ 3.83 trillion dollars. This amount is the lower value of the total range of damages suffered by Afrodescendants and does not include the damages that result from discrimination in access to farm credit, mortgages and many other asset accumulation opportunities. Such calculations should be seen as added to the total value of restitution owed to the Black community. No single calculation is sufficient to capture the wrong done and to right this to the descendants of American slaves.
Slavery was morally wrong, and this was widely recognized during slavery in the US. Amends in the form of restitution are due to the descendants of slaves in America. The Ninth Circuit Court of Appeals held that this restitution is a political claim, not a legal claim. To help frame this political claim, an estimate of the size and a partial package of reparations exposes the benefits that Whites have reaped from the Black community. The three most salient components of slavery calculated by economists can also help direct the policy for distributing restitution. For instance, lost wages, as is done commonly today, should be paid directly as cash payments, while damages associated with assets could be directed towards opportunities for assets building particularly in home ownership.
It is also important to note that the US has paid reparations to American Indians and to those American Japanese that were interned during WW II on the West Coast. Germany paid reparations to both survivors and non-survivors of Jews by giving direct compensation to survivors and establishing a fund that helped establish the Jewish State of Israel. Reparations acknowledge a wrong-doing. In the case of American slavery, there was a wrong doing, but more importantly slavery entailed a benefit to slave holders and the building of America and its success as a colony and country that rests on the backs of slaves. As such, it is not reparations that is called for, but restitution to account for the lack of paying for the labor of Africans that were brought by ships to the Americas, the ensuing value of chattel slavery and the denial of access to land with its concurrent sharecropper system that needs to be addressed. The arguments that it was “so long ago” and that is was “legal” simply do not acknowledge the benefits Whites reaped from this particular system of exploitation.
The above analysis only shows the scale of benefits in economic terms for Whites, for the period up until the early 20th century. This is an important period for the economic development of the US and in many ways established the US as the preeminent economic powerhouse it is today. Investing a few Trillion dollars in restitution into the African American community today entails a huge benefit to the US economy as a whole and should be welcomed at this particular juncture.
Sibylle Scholz holds a Ph.D. in Agricultural Economics from the University of Illinois, Champaign/Urbana and currently works as a forensics economist.
Chrissi Jackson is a writer, activist and co-founder of the Truth Telling Project.
Michael Kessler, Ph.D. for an early review
NAFE International Meeting, Evian Le Bains, France, May 2019, Presentation
Lisa Picarille, Editor
Janice Wood, Copy editor