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Equity, Race, and Wealth - International Perspectives

Paper Session

Saturday, Jan. 4, 2025 12:30 PM - 2:15 PM (PST)

The Marker Union Square San Francisco, Archer
Hosted By: Association for Social Economics
  • Chair: John Komlos, Professor Emeritus, University of Munich

The Ideological Basis of Systemic Racism

John Komlos
,
Professor Emeritus, University of Munich

Abstract

An economic system that favors some segment of the population over another segment is considered unjust, according to Rawlsian or even Kantian principles. Theoretical equal opportunity is insufficient for a just economy. There must be de facto equal opportunity for an economy to be considered just. Insofar as capitalism, as currently constituted in the US, disadvantages the poor from birth, it is unjust. The disadvantages arise because the poor are confined to neighborhoods with poor schools thereby depriving them of access to an excellent education they need in order to enter the labor market on an equal footing with those born into wealthy families. Those disadvantaged are disproportionately marginalized members of minority groups. That makes the economy covertly racist. Racism does not have to be intentional. Mainstream economics is covertly racist because it preserves the status quo, thereby providing theoretical support for an economic system that contributes to keeping disadvantaged groups at the bottom of the socio-economic hierarchy. In such cases, we speak of institutional, structural, or systemic racism. The institutions and legal structures of the economy are such that the descendants of slaves, Hispanics, and Indigenous groups are trapped in poverty.

Mind the (Racial Wealth) Gap: Results from the SCF 2022

Robert B. Williams
,
Sulon Bibb Stedman Professor of Economics Guilford College

Abstract

Arguably, the racial wealth gap resides at the core of our system of racial stratification. Just last month, the Federal Reserve released its 2022 Survey of Consumer Finances, considered the gold standard in household wealth surveys. In the accompanying articles, the authors paint an ambiguous picture. On the one hand, they argue that the growth in median Black and Hispanic household wealth have each outstripped the growth in median White household wealth since both 2019 and 2013. Over these same periods, they note that the absolute dollar gaps in household net worth nonetheless have increased substantially.

This paper examines this newest survey carefully and contextually - not simply to 2013 -, but how the racial wealth gap has evolved since 1962. It investigates the change in asset ownership rates across the racial groups along with their shifting asset values. It examines how debt holdings have evolved over time with special attention to the specter of spiraling student loan debt that is shackling many young householders, particularly among Black and Hispanic college graduates. Indeed, some are contending that student loan debt is serving as a new form of debt peonage.

Orthodox economists may view the survey results with some optimism regarding the closure of the racial wealth gap. This paper uses a decidedly stratification lens as it acknowledges both persistent racial discrimination and the Wealth Privilege model of wealth accumulation. As such, it concludes that the survey results offer little hope that the racial wealth gaps will close absent major structural changes including reparations.

Making Economics Sense of the Science of Discrimination, Inequality, and Identity

Francis Nyonzo
,
JamiiForums

Abstract

History and Experiences of people differ, and thus there is always a social, physical or economic distance between one person to another. A person will appeal to the group that he/she feels close to and treat differently those who are distant from him/her. This is not a problem as it calls for improvements for people of a group that is negatively affected by the discrimination applied. This is a positive thing as it leads to competition which is essential for economic development. This paper describes various ways that discrimination is manifested and the importance that comes with it. For example, the principle of impartiality requires an ethical man to treat equals equally, that is treating unequal people differently which is discrimination in a positive way of being fair, thus the paper has described how discrimination is used to reduce inequality and treat people fair.

Inequality in the Distribution of Wealth in Mexico

Gustavo Vargas
,
National Autonomous University of Mexico

Abstract

This paper presents an analysis of the growing wealth inequality in Mexico using heterodox microeconomic analysis applied to some firms operating in the national economy.

International institutions such as the World Bank, as well as some national institutions, affirm that one of the most important problems of the national economy is that labor productivity in Mexico is experiencing a process of stagnation and even decline, which is explained by the lack of commitment and discipline of the workers, by their lack of preparation, education and training. From the above, they conclude the need for diverse government policies in favor of work efficiency and, above all, to grant subsidies and financial support to companies.

A set of cases of large firms operating in the national economy shows that labour productivity has increased substantially over the past twenty years, and that this wealth has been unequally and unequally distributed between workers and firms. Corporate profits have grown with the productivity of labor, but wages and salaries have not received the benefits of rising labor productivity. Therefore, rather than a policy of subsidies to companies, it is necessary to have a policy of distribution, if not equitable, less unequal in the distribution of wealth generated by companies, workers and society as a whole. In this sense, the income distribution policies of the current administration seem adequate to reduce social income inequality in Mexico, but they are not enough to alleviate the poverty of workers. The document concludes by making proposals for a less unequal distribution of national wealth.
JEL Classifications
  • B5 - Current Heterodox Approaches