Lydia Hylton

By Lydia Hylton

Every dollar of income in a white family leads to $5.19 in wealth. Every dollar of income in a Black family leads to only $0.69 in wealth. Money is flying out of the hands of Black individuals and out of Black banks, an irrefutable problem that Mehrsa Baradaran raises in her book The Color of Money and in her appearance in a Leadership for Society podcast.

The undeniable truth is that Black people have faced unparalleled discrimination throughout the history of American capitalism. Because of this ongoing inequality, we now live in a society where African Americans have fewer educational, professional, and social opportunities than their white counterparts. This is in large part due to the fact that 60% of Black Americans are unbanked or underbanked. This undercurrent of a lack of access to capital and credit silently perpetuates Black poverty.

Baradaran argues that this issue will not correct itself through economic forces because the system is fundamentally broken. In order to address these injustices, policy is necessary. And regardless of the policy chosen — regardless of whether you call it “reparations” — capital will be required to achieve meaningful progress.

Baradaran proposes in her interview that there are two main avenues for political change: integration and reparations. Integration requires subsidizing housing in higher-income areas for Black families. It requires bringing Black students into counties with better public school systems. It requires extending access to banking and credit outside the traditionally white clientele.

The avenue of reparations does not require integration. It instead argues that we should pour capital into low-income areas in the form of grants, scholarships, and housing subsidies. Black Americans need to be able to become homeowners — one of the perennial ways that white families accumulate wealth. Regardless of whether these homes are in Black or integrated communities, housing subsidies will be absolutely necessary. There is no way around injecting capital into Black communities if we are to address this issue.

Despite the overwhelming evidence that some form of reparations will be required to improve Black livelihoods, 81% of white Americans still oppose the policy, according to a 2016 PBS poll. In order to achieve equality, we must look beyond the policies that exist today and consider that the current condition is built on hundreds of years of exploitation of the Black population. We cannot expect people to be held to a constitutional contract that has failed to protect them for generations. Baradaran has clearly demonstrated that it is time for a new social contract that “deals honestly with the past [constitutional] breach.”

The inequality faced by Black Americans will not “get better with time” in the free market due to their ongoing lack of access to the jobs, banks, and credit that allow white Americans to build equity in their homes. We must confront the fact that capital is necessary, regardless of whether it’s called integration or reparations. We must still spread awareness and acceptance of this truth to tens of millions of Americans.