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Juneteenth Marred By An Economic Fallacy

28 Saturday Jun 2025

Posted by Nuetzel in Economic Development, Slavery

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1619 Project, Abolition, Antebellum South, Capital Deepening, Civil War, Coercion, Emancipation, Juneteenth, Nathan Nunn, Phil Magness, Redistribution, Reparatiins, Rod D. Martin, Slavery, Welfare Loss

The Juneteenth holiday (June 19th) marks the anniversary of the abolition of slavery in the U.S. It should be viewed as a celebration of basic human rights. However, in purely economic terms, slavery was (and still is in many parts of the world) a complete revocation of property rights (self-ownership). But not only was slave-holding the worst sort of theft, it represented a total suspension of the labor market mechanism and had dire consequences for long-term economic development, especially in the south.

Government sanction of slaveholding in the southern U.S. and an extremely low effective wage for slaves promoted an excessive and inefficient dependence on, and utilization of, the low-cost input: slave labor. As a result, slavery created an obstacle to economic development, innovation, and capital deepening. The overall impact on the U.S. was to reduce economic welfare and development, and the dysfunction was obviously concentrated in the south.

That hasn’t stopped some activists from making the claim that slavery enabled the success of American capitalism. For example, this book contends that:

“… the expansion of slavery in the first eight decades after American independence drove the evolution and modernization of the United States.“

The so-called 1619 Project has promoted this narrative as well. Interestingly, this is similar to claims made prior to emancipation by defenders of slavery.

Of course, one can’t overemphasize the injustices suffered by American slaves, like those of other enslaved peoples throughout history. But it is foolhardy to attribute the long-term economic success of the American economy to slavery. Even today, 160 years after emancipation, it’s a safe bet that most Americans would be better off without its legacy.

To be clear I’ll outline several assertions I’m making here. First, if slaves had been free workers, they would have enjoyed freedoms and captured the value of their labors from the start. (Though it is not clear how many Africans would have come to America voluntarily as free workers, had they been given the opportunity. Some, however, were already enslaved.)

Under this counterfactual, more efficient pricing of labor would have led to deeper capital. At the same time, while many black non-slaves would still have worked in agriculture, blacks would have been more dispersed occupationally, working at tasks that best suited individual skills. The resulting efficiency gains would have been magnified by virtue of working in combination with more capital assets, enhancing productivity. And these workers would have been free to build their own human capital through education and work experience. Meanwhile, government would not have wasted resources enforcing slave ownership, and plantation owners (and other slave holders) would have made more rational resource allocation decisions. All these factors would have produced a net gain in welfare and improved economic development from at least the time of the nation’s founding.

There is no question that enslavement and the welfare losses suffered by slaves (and many of their descendants) far outweighed the gains captured by those who employed slave labor, as well as those who consumed or otherwise made use of the product of slave labor. A proper economic accounting of these losses acknowledges that slaves were denied their worker surplus and their ability to earn an opportunity cost, and they were often punished or tortured as a means of coercing greater effort. This serves to emphasize the implausibility of the argument that the America reaped net economic benefits from slavery.

Slavery was so powerful an institution that it permeated southern culture and perceptions of status. Wealth was tied-up in slave-chattel, and the free labor made for a handsome return on investment. Thus, both economic and cultural factors acted to lock producers into an unending series of short-run input decisions.

Furthermore, as Phil Magness explains in a letter to the Editor in the Wall Street Journal:

“… slavery’s economics … largely depended on government support. Fugitive slave patrols, military expenditures to fend off the threat of slave revolts and censorship of abolitionist materials by the post office were necessary to secure the institution’s economic position. These policies transferred the burden of enforcing the slave system from the plantation masters on to the taxpaying public.“

Meanwhile, the distortions to the cost of labor slowed the adoption of a variety of production techniques, including horse-drawn cultivators and harrows, steel plows, and steam-powered machinery. In other words, planters had little incentive to modernize production. Other technologies commonly used in the north during that era could have been applied in the south, but only to its much smaller share of acreage dedicated to grain crops.

Southern agricultural practices were “frozen in place”, as Rod D. Martin puts it. Ultimately, had southern planters adopted labor-saving technologies, and had southern governments shifted resources away from protecting slavery as an institution toward more diversified economic development, the antebellum economy would have experienced more rapid growth.

Growth in demand for cotton exports was certainly a boon to the south during the years preceding the Civil War, but the reliance on cotton was such that the southern economy was heavily exposed to risks of draught and other shocks. Furthermore, the lack of industrialization meant that southern states captured little of the final value of the textiles produced with cotton. The inadequacy of transportation infrastructure in the south was another serious detriment to long-term growth.

The work of Nathan Nunn, which is cited by Martin, generally supports the hypothesis that slavery retards economic growth. Nunn found a strong negative correlation between slave use and later economic development across different “New World” economies, as well as U.S. states and counties.

Martin goes so far as to say that the Union’s victory over the Confederacy was due in large part to economic under-development attributable to slavery in the south. That narrative has been challenged by a few scholars who claimed that the south was actually wealthier than the north. The owners of large southern plantations were quite well off, of course, but estimates of their wealth are unreliable, and in any case slaves themselves were highly illiquid “assets”. That meant planters would have been hard pressed to raise the capital needed for investment in labor-saving technologies, even if they’d had proper incentives to do so.

On the whole, there is no question the north was far more industrialized, diversified, and prosperous than the south. It was also much larger in terms of population and total output. Thus, Martin’s assertion that slavery explains why the south lost the Civil War is probably a bit too sweeping.

Nevertheless, the slavery “ecosystem” helps explain the south’s historic under-development. It was characterized by artificially cheap labor, illiquidity, a lack of diversification, a rigid social hierarchy based on the aberrant ownership of human chattel, and state subsidization of slave owners. These conditions restricted the supply of investment capital in the south. This was a drag on economic development before the Civil War. Those characteristics, along with the direct costs of the war itself, go a long way toward explaining the south’s lengthy period of depressed conditions after the Civil War as well.

It’s certainly not a knock on the slave population prior to emancipation to say that they were not responsible for the success of American capitalism. It’s a knock on the institution of slavery itself. Our wealth and the bounties produced by today’s economy are not supercharged by the efforts of slave labor in the distant past. If anything, our prosperity would be far greater had slavery never been practiced on U.S. soil.

I oppose reparations as a form of redistribution partly because most prospective payers today have absolutely no connection to slave-holding in antebellum America. It’s ironic that certain activists now argue for reparations based on imagined economic benefits once used to defend slavery itself.

The Anti-CRT Revolt: Banning a Racist Curriculum

16 Wednesday Jun 2021

Posted by Nuetzel in Critical Race Theory, Education, racism, Uncategorized

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1619 Project, Black Lives Matter, Critical Race Theory, Disparate impact, Food Deserts, Jim Crow, Living Wage, New York Times, racism, Systemic Racism, Unconscious Bias, Zinn Education Project

Suddenly it’s dawned on many people of good faith that our educational, business, and other institutions have been commandeered by adherents to critical race theory (CRT), which teaches that all social interactions and outcomes must be viewed through the lens of racial identity and exploitation. In fact, it teaches that racism is endemic, whether conscious or unconscious, among people deemed to have privilege. They are labeled as oppressors, especially anyone with white skin. Furthermore, CRT holds that racism is systemic, and therefore the “system”, meaning all of our institutions and social arrangements, must be radically transformed. Some or all of these tenets are taught to our children in public and private schools, and they are embedded in anti-bias and diversity training delivered to employees of government, non-profits, and private companies.

Standing Up To It

It’s easy to see why many have come to view CRT as a racist philosophy in its own right. Teaching children that they are either “oppressors” or “victims” based on the color of their skin, is a deeply flawed and dangerous practice. The revelation of CRT’s cultural inroads has prompted an angry counter-revolution by parents who hope to purge CRT from the curricula in their children’s schools… schools that they PAY FOR as taxpayers. Many other fair-minded people are offended by the sweeping racism and identity politics inherent in CRT. And yet its proponents continue in attempts to gaslight the public. More on that below.

The groundswell of opposition to CRT is evident in explosive meetings of school boards across the country, as well as recent school board elections in which slates of candidates opposed to the teaching of CRT have been victorious (see here, here, and here).

In addition, we’ve seen a number of recent legislative or administrative initiatives at the state level. There are now, or recently have been, efforts in 22 states to ban or restrict the instruction of CRT. In some cases, institutions found to be in violation of the new laws are subject to deadlines to remedy the situation. Otherwise, funding dispersed by their state’s Department of Education may be cut by ten percent, for example.

But It’s Speech

As happy as I am to witness the pushback, it’s fair to ask whether the most severe restrictions are reasonable from an educational point of view. For example, as a social philosophy, and as wrong-headed as I believe it to be, there is no reason CRT can’t be discussed alongside other social philosophies, failed and otherwise, without endorsement. For that matter, we should not insist that schools shield children from the fact that racism exists, and CRT certainly has its place along the spectrum of racism.

For my own part, I believe elective classes covering CRT as one philosophical position among others should be defended, as should instruction in the history of American slavery and Jim Crow laws, for example. However, mandatory training in CRT is unacceptable and, to the extent that students or employees are required to accept its tenets, it constitutes compelled speech. To the extent that certain groups of students are identified as inherently biased, it is a form of defamation and a personal attack. 

Legislation

Some states are attempting to ban CRT outright. Others have imposed strictures on certain messages arising from the CRT curriculum. The Florida Department of Education just passed an extremely brief rule stating: 

“Instruction on the required topics must be factual and objective, and may not suppress or distort significant historical events, such as the Holocaust, and may not define American history as something other than the creation of a new nation based largely on universal principles stated in the Declaration of Independence.”

The Florida rule prohibits teaching the 1619 Project as part of the history curriculum. This revised “history” of our nation’s founding was sponsored by the New York Times. It insists that the Revolutionary War was fought to preserve American slavery, an assertion that has been condemned as false by many historians (see here and here), though the Left still desperately clings to it. I have no problem with a prohibition on false histories, though again, it’s important for students to learn that slavery was the subject of much debate at the nation’s founding and that it persisted beyond that time. No one kept those facts from us when I was a child. And they didn’t brand white students as oppressors.

While a rulemaking by a state Department of Education is better than nothing, it’s a far cry from an actual piece of legislation. A bill signed into law in Idaho in late March contained substantially the same provisions as the rule promulgated in Florida, but it didn’t proscribe the 1619 Project. The same is true of the bill signed into law in Oklahoma in early May. 

In Texas, the state senate passed a bill in May that would ban instruction in any public school or state agency of any of the following:

“… one race or sex is inherently superior to another race or sex

an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;

an individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;

meritocracy or traits such as a hard work ethic are racist or sexist, or were created by … members of a particular race to oppress members of another race.”

A new law in Iowa and abill signed by the governor of Tennessee in late May contained similar provisions, essentially banning instruction of some highly objectionable tenets of CRT. However, the Iowa and Tennessee laws are careful to spell out what the law should not be construed to do. For example, these laws do not:

“—Inhibit or violate the first amendment rights of students or faculty, or undermine a school district’s duty to protect to the fullest degree intellectual freedom and free expression.
—Prohibit discussing specific defined concepts as part of a larger course of academic instruction.
—Prohibit the use of curriculum that teaches the topics of sexism, slavery, racial oppression, racial segregation, or racial discrimination, including topics relating to the enactment and enforcement of laws resulting in sexism, racial oppression, segregation, and discrimination.
“

A bill in the Missouri House mentions a few such protections. However, the Missouri bill is general in the sense that it explicitly bans the instruction of CRT by name, rather than simply blocking a few unsavory messages of CRT, as detailed by Texas and a few other states. Utah’s legislation, which is awaiting the governor’s signature, is also quite brief and explicit in its prohibition of CRT. I greatly prefer the Texas approach, however, as it makes clear that discussions of CRT in the classroom are not precluded, as might be inferred from the language of the Missouri bill. 

But, But… You Just Don’t Get It!

PProtests against these legislative actions have shown a certain tone-deaf belligerence. According to an organization called Black Lives Matter at School and the Zinn Education Project, all the protesters want is a curriculum that illuminates:

“… full and accurate U.S. history and current events … rais[ing] awareness of the dangers of lying to students about systemic racism and other forms of oppression.”

One advocate says they must be free to teach the “truth” of our nation’s foundational and ongoing structural racism. The Missouri bill, they say, “fails to note ‘a single lesson’ which is ‘inaccurate’ or ‘misleads’ students.” It’s not as if it’s necessary for legislation to provide a series of examples, but be that as it may, these CRT advocates know exactly what many find objectionable. Essentially, their response is, “You don’t understand CRT! WE are the experts on systemic, institutional racism.” What they believe is somehow, every negative outcome is actuated by racism of one kind or another, past or present.

Divining the “Fault” Line

Are you below the poverty line? Earning less than a “living wage”? Are you unemployed? Is your credit score lousy? Do you live in a high crime area? In a “food desert”? Are you a single parent? Did you receive a failing grade? Is your rent going up? Did someone fail to defer to you? Did they “disrespect” you, whatever your definition? Were you scolded for being late? 

Of course, none of those “outcomes” is exclusive to people of color or minorities. But wait! Someone else is earning a decent income. They got good grades. They have a high credit score. They drive a nice car. They have skills. 

Does any of that make them guilty of oppression? Does this have something to do with YOU?

Well, you see, CRT teaches us that every unequal outcome must be the consequence of unjust, “disparate impacts” inherent to the social and economic order. To be clear, outcomes are a legitimate subject of policy debate, and we should aim for improved well-being across the board. The point that defenders of CRT miss is that unequal outcomes are seldom diabolic in and of themselves. Real indications of injustice, past or present, do not imply that any one class of individuals is inherently racist or behaves in a discriminatory manner.

Critical Theory Is a Fraud

Critical race “theory” is nothing but blame in fraudulent “search” of perpetrators. It is fraudulent because the perps are already identified in advance. It is “critical” because someone or something deserves blame. The real exercise is to spin a tale of misused privilege and biased conduct by the privileged perps against a set of oppressed victims.

CRT is not just one theory, but a whole slew of theories of blame. The very attitudes of the purveyors of CRT show they do not believe their “theories” are falsifiable. And indeed, allegations of unconscious bias are impossible to falsify. Thus, CRT is not a theory, as such. It amounts to a polemic, and it should only be discussed as such. It certainly shouldn’t be taught as “truth” to children, university students, or employees. More states should jump on-board to restrict the CRT putsch to propagandize.

The Critical Race Dialectic

07 Sunday Feb 2021

Posted by Nuetzel in Critical Race Theory, Social Justice

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1619 Project, Critical Race Theory, Critical Theory, criticalrace.org, Equality Under the Law, Immanuel Kant, Jonah Goldberg, Mark Robinson, newdiscourses.com, Overt Discrimination, Privilege, racism, Reparations, Revolutionary War, S.G. Cheah, Social Justice, Systemic Racism, Victimhood

The very notion of impartiality requires decisions that are independent of race, ethnicity, religion, gender, sexual preference, gender identity, or any other component of identity. The great irony of identity politics is its insistence on using characteristics of identity as the key drivers in a broad range of human decisions. It does so in an effort to redress injustices, often in the distant past. This necessarily penalizes individuals bearing no responsibility for the original injustices, and of course those penalties are also assessed on the basis of identity.

That would seem to limit the political viability of reparations for injustices of the distant past, but identity politics seeks to foster a sense of contemporary and immediate relevance to claims of compensable injustice. That’s one way to rationalize the kind of massive redistribution contemplated by this movement. Those who would stand to benefit must be convinced of their ongoing victimhood, and those who would pay must be convinced of their guilt: despite all good intentions, they practice unconscious bias in all of their actions, words, and thoughts. If successful, the possibilities for transfers of wealth and power in all matters are limited only by the negative-sum reality of this scam.

The kind of propaganda referenced above is the province of Critical Race Theory (CRT). S.G.Cheah explains:

“Critical Theory originated from Immanuel Kant’s Critical Philosophy. Critical Philosophy states that ‘proper inquiry is not about what is out there in reality, but rather about the character and foundations of experience itself.’”

For a more detailed analysis of Kant’s “Critiques” of pure reason, practical reason, and judgement, see here. His primary focus was theology, but the adherents obviously found much broader application. The brief explanation quoted above is pretty accurate, and probably offers all the intellectual underpinnings critical race theorists require to push their agenda.

If one’s “experience” is the only evidence that matters, then the ravings of any lunatic must be taken at face value, and as truth. A concession to objective reality is tolerated only when and if it confirms an individual’s mood affiliation. And what defines one’s experience if not one’s inner feelings about events? Thus, regardless of facts, CRT would have us bow to mere feelings, perceptions, and assertions of harm said to be inflicted by the so-called “privileged”.

If I believe I’ve experienced racism, then CRT supports the conclusion that I have experienced racism. It is not confined to situations of overt discrimination. It goes for any conflict I might have with someone of a different race; any transaction in which I might feel disadvantaged; any life circumstance that I experience as “unfair”; or any judgement against me in a court of law. Racism is reality if I “experience” the world as racist (or sexist or homophobic or transphobic, for that matter.) These charges are conveniently leveled against those who have enjoyed any differential success in the world, irrespective of race, but primarily against whites and often Asians regardless of success.

Apparently, under CRT, one’s “experience” may extend to perceptions that today’s culture and institutions are evolved from any version of history one might choose to conjure. A prominent case are the lies promoted by the New York Times’ 1619 Project that the Revolutionary War was fought to preserve slavery. Jonah Goldberg’s thoughts on that topic are worth reading.

CRT has spawned some incredibly bad research. Here’s a review of two academic papers on the connection between the use of the “N-word” in LLP Google searches and 1) gun purchases “motivated by white racial animus”, and 2) “anti-black voting patterns”. The authors of those papers drew behavioral conclusions from mere coincidental events, based more upon their personal biases than objective evidence. They undoubtedly were aware of the weaknesses of using Google trends to gauge attitudes, but they willfully ignored that evidence.

CRT is being taught to our children in public schools and probably in some private schools. This is nothing short of an indoctrination campaign. Of course, CRT made much earlier inroads in higher education. A new web site, criticalrace.org, includes a searchable database on CRT training at U.S. universities, as well as links to a variety of articles on CRT. Many private corporations have been eager to jump on board with CRT. Take a look at the instructor’s notes on the poster boards at the racial struggle session shown below. Here is a longer description.

This is literally a propaganda putsch, and it is meeting with far more success than I would have thought possible. I’ve apparently misjudged the ability of my countrymen to think independently, or to think at all. Here are examples of the success of CRT advocates in convincing whites of their individual and collective guilt. There are individuals now so convinced of the guilt of all white people that they can’t help but make complete fools of themselves:

“We will only achieve tolerance and unity once white people accept that they are evil, repugnant, worthless trash whose very existence is a vomit stain on the fabric of society.”

Speak for yourself! I have to conclude that this poor woman recognizes something quite damning within herself, and she feels it necessary to project her innermost racism onto others who happen to share her skin color.

Now here’s a man to admire: Lt. Governor Mark Robinson of North Carolina. He isn’t having any of the CRT crap, and he knows how to give it back to the petty stringers in the media as well as anyone.

CRT is a lie, or many lies. Racists certainly walk among us, but to condemn all whites of racism, or to allege racism by any class with presumed privilege, is a gross violation of ethics. Guilt of recompensable racism cannot be established by mere claims about anyone else’s “experience” without impartial adjudication. The thoughts and actions of decent people are not dominated by racial animus or repugnance, and any presumption to the contrary must be rejected in the absence of objective proof. Everyone matters, and we must insist on equality under the law. That does not mean equality of outcome, and it is not an excuse for blaming negative outcomes on anyone skilled and/or fortunate enough to have enjoyed more positive outcomes. If the fact that blacks have not achieved average economic parity with whites is evidence of “systemic racism”, I would suggest it has more to do with short-sighted public policy efforts to engineer social outcomes than with racism. More on that in a later post.

Note: the graphic at the top is from New Discourses.

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