New Narratives, Bold Ideas: A Conversation on Race and Inequality with Economist Darrick Hamilton

The story of America’s history is often told through the lens of rugged individualism — a nation that prospers because success and wealth are available to all who work hard enough. This narrative, which has found new life in recent election debates, is deeply problematic because it fundamentally ignores the ways in which powerful government systems have embedded opportunity into certain communities, and systematically denied it to others. Unpacking the causes and consequences of these systems — health care, taxes, finance, criminal justice, and others — on racial and economic inequality in the United States is at the heart of Darrick Hamilton’s life’s work.

An associate professor of economics and urban policy at The New School and current president of the National Economic Association (formerly Caucus of Black Economists), Hamilton spoke with America’s Tomorrow about the power of narrative in today’s racial politics and the bold, scalable reforms he believes are necessary to address America’s legacy of inequality and disinvestment.

In your work you critique the prevailing narrative around race and opportunity in America as a “post-racial myth.” Can you explain what you mean by this?  

The post-racial narrative is remarkably consistent across party lines and across racial groups — it has become knee-jerk in American politics. It says that a lot of the legacies of discrimination have been dealt with within the Civil Rights movement, and the remaining disparities are the results of actions or inactions on the part of Black communities themselves. Embedded in this is the notion of personal responsibility — that Blacks need to recognize their own complicity in perpetuating inequality. From the President to leaders in the GOP to members within the Black community, you hear rhetoric that is couched in this expectation that it is up to Blacks to pull themselves up by their bootstraps, and government’s role should be to incentivize them to do so.

The problem is this narrative is wrong. It ignores the large structural barriers that continue to exist in our society, it ignores the way that the existing distribution of wealth empowers certain populations and disempowers others, and it ignores the very large role that government continues to play in influencing markets so that they continue to benefit those who already hold wealth — who are disproportionately White. Take the mortgage interest deduction in our taxes — though it supposedly is intended to help Americans build wealth, it’s not putting people into homes, it’s rewarding those who already have homes. And if we look at the history of homeownership in America, we see that it was the government that generated a White middle class following World War II by giving returning veterans access to free higher education, low-interest loans to start businesses, and low-cost mortgages through the G.I. Bill. These policies were not extended broadly, however, and Black veterans in particular were not given the same access, and the legacy of that inequality is passed forward. Overcoming inequality is not about “incentivizing” Black communities because it’s not about their behavior, it’s about the resources — the endowment — they’ve been deprived of.

What kind of policies do you propose to empower, instead of “incentivize,” Black communities?

Capitalism without capital locks in inequality, so if we’re going to have a capitalist system, let’s arm people with the capital to be able to participate in it.  The problem of inequality is bold, so our solutions must be bold and they must build wealth and assets.

Baby Bonds: My colleague William Darity and I have talked a lot about baby bonds — endowing every child with a protected, government trust account that will mature when the child becomes an adult and can be used for some asset-enhancing activity. They would be funded on a scale — so you imagine Oprah Winfrey’s kid would get $500, but a poor family might have up to $50,000 per child, with an average somewhere around $20,000. These baby bonds would provide individuals with seed capital so they can invest in some asset that will appreciate over time: they can put a down payment on a house, have a debt-free higher education, or start a business. This wouldn’t guarantee success, but it would provide assets to empower the opportunity for success.

Federal Job Guarantee: The biggest problem with labor bargaining power is the threat of unemployment. When unemployment rates are high, the threat of being destitute causes workers to accept lower wages and bad working conditions. But if we guarantee federal jobs that offer living wages and benefits — like most government jobs do — to anyone who wants one, we solve a lot of problems. It would dramatically reduce the need for health insurance reform because everyone would have access to a job with benefits, and the private sector will have to do the same to attract workers. It would drive wages up in the private sector because businesses would have to compete with the living-wage government jobs. Considering the country needs billions of dollars in infrastructure repairs that the private sector is not currently incentivized to take on, it would be feasible to create public works projects like we have in the past to create more public jobs.

Curriculum Reform: The way we structure our curriculum in grade schools right now, we end up with not only segregation across schools, but within schools. We have structured classes so that predominantly White students are placed in the higher-achieving classes and Black students in lower-achieving ones. Instead, we should be thinking about how we can give everyone access to the “talented and gifted” curriculum, and to quality teachers who are sympathetic to the students they are dealing with.

We have precedent for these kinds of programs: federal jobs through the Works Progress Administration (WPA) during the Depression, asset investments through the G.I. Bill, huge investments in universal grade school education. This dominant myth that markets are the ideal solution for every problem, economic or otherwise, is distracting from the fact that government can, and has been, effective at connecting Americans to resources and opportunity.  

As an economist who studies racial inequality, what do you think is necessary to build an inclusive, thriving economy?

I think we need to change the whole narrative around how we define economic health. The focus should not simply be on reducing the deficit. This current focus on reducing spending is ironically at odds with economic health, because by focusing only on reducing the deficit you are often stifling growth by cutting government spending, programs, and other sources of stimulus. Rather, we need to talk about the ways in which our economy is enabling to the greatest human capabilities of its citizens. The measure of our economic success should be: How well is this society allowing people to achieve the goals they set for themselves to their fullest extent?

Read the rest of the April 7, 2016 America's Tomorrow: Equity is the Superior Growth Model issue.