Four Centuries of Black Economic Progress in America: Ideological Posturing versus Empirical Realities.

• Author: Vedder, Richard K.

The United States has begun its fifth century since Africans were first forced to migrate to America as slaves. Recently, a growing narrative, promoted especially by the New York Times in its 1619 Project, suggests that the most distinguishing characteristic of America's "exceptionalism" is not as traditionally stated. (1) Most past writers have stressed the highly successful introduction of modern representative democracy centered around the rule of law and fortified by foundational documents such as the Declaration of Independence and the Constitution. In addition, they sometimes have stressed the extraordinary economic success observed in the competitively capitalistic society responding to individual property rights, market incentives, and entrepreneurship that emerged over the past couple of centuries. In contrast, the Times narrative argues that the truly exceptional dimension of the American experience is the exploitation of its black population, beginning with slavery but continuing to the present day (New York Times Magazine 2019b). To be sure, this narrative has been heavily criticized by professional historians and others (Forman 2020; Wilentz, 2020; Wood 2020).

This reassessment of the past has, of course, spread far beyond the mostly affluent and highly educated Times readership to the entire society, leading to massive demonstrations, particularly after the police killing of George Floyd on May 25, 2020. Beyond the riots, destruction of property, toppling of monuments, and calls to disband police departments, major changes have been coming to traditionally fairly sedate venues, such as college campuses. For the past two generations, universities have attempted to counter allegations of racial discrimination and inequality, institutionalized first in "affirmative action" and then in massive "diversity and inclusion" bureaucracies on many campuses. But many apparently consider that not to be enough. For example, in a new collegiate expression of the ascendant cancel culture, Yale removed the name of John Calhoun and Princeton that of Woodrow Wilson (its own president for eight years) from buildings or programs because of these men's unfair or prejudicial treatment of black Americans.

There are, in my judgment, roughly speaking, two different contemporary interpretations of the treatment of blacks in America. The ascending new wisdom is that widespread discrimination and rejection of blacks by the dominant white culture has brought continuing, maybe even increasing, misery and despair to the black population. However, there is a quite different alternative perspective, which I outline in some detail here.

I document that it was indeed true that America's slaves were highly exploited, far more than some popular accounts of slavery have indicated. The elimination of that exploitation proceeded slowly in fits and starts over several generations after the sudden end of what once was termed that "peculiar institution" in 1865. I argue that in the generation after the end of the Great Depression around 1940, including some years after the passage of the Civil Rights Act of 1964, black Americans made major progress, narrowing economic differentials between them and others, especially whites, while discriminatory barriers began a real decline. Indeed, by some indicators, progress actually slowed beginning within a decade of the passage of landmark federal legislation. Market forces, especially labor markets, in the middle of the twentieth century worked to make better, more productive, and therefore more remunerative use of the sizable nonwhite population, benefiting both blacks and the nation as a whole. One century after the end of slavery, American blacks were making substantial progress economically, and overt racial discrimination, while still present, was in significant decline, despite some highly publicized evidence to the contrary in the American South.

I then argue that black progress over the past half-century or so has been far more uneven, not mainly because of some undeniably real residual racial prejudice of whites against nonwhites but rather largely because of the law of unintended consequences. Governmental efforts to alleviate poverty and other problems disproportionately hurt Americans of African descent, destroying robust family lives, leading to reduced participation in the work force, and making disproportionate numbers of blacks de facto wards of the state.

Yet despite the inefficiencies and failures of government programs, the contemporary narrative that blacks are on average living in despair because of continued discrimination and are unjustly profoundly unhappy relative to other Americans is likely highly exaggerated. General Social Survey data show that the gap between whites and blacks who consider themselves "not very happy" shrunk by more than 50 percent between 1972-76 and 2012-14 (Iceland and Ludwig-Dehm 2018).

The Slave Era, 1619-1865

If one were to evaluate the relative importance of a class of people solely by their share of the population, black importance in America peaked probably about the time of the American Revolution. The first federal census of the new nation in 1790 showed that blacks constituted 19.3 percent of the population, with that proportion falling steadily and at an increasing rate until 1860, when it was only 14.1 percent (U.S. Bureau of the Census 1975). The 2010 census showed that 12.6 percent of Americans revealed their race as "black or African-American," but another 2.9 percent of the population declared two or more races, presumably a large number of them with some African ancestors (U.S. Bureau of the Census 2011). Although the decline in the relative importance of blacks in terms of population after 1790 could be attributable to factors such as differential birth or mortality rates, a very important factor was international immigration flows, which throughout most postcolonial American history were dominated by either whites (primarily Europeans before 1965) or other nonblack immigrants (e.g., newcomers from Asia or Latin America).

An interesting and excessively neglected aspect of demographic change was the extraordinary growth in the free black population in the antebellum period. For example, between 1790 and 1810 the number of free blacks in the country tripled, in part because northern states and territories (e.g., the Northwest Territory created under the Ordinance of 1787) made slavery illegal. On the eve of the Civil War in 1860, nearly half-a-million blacks were free, some 11 percent of the black population, and, indeed, thousands of them were slave owners themselves. Although a pioneering black historian has argued that free blacks bought slaves primarily for humanitarian reasons (e.g., to improve conditions for friends or relatives) (C. Woodson 1924), some other scholars think that a profit motive similar to that seen among white slave owners was of paramount importance (for example, see Lightner and Ragan 2005 for a fuller discussion of the issue).

All indications are that slavery persisted but did not particularly flourish in the generation after the beginning of the American Revolution. Two things, however, soon changed that: the Industrial Revolution in Britain and the invention of the cotton gin by Eli Whitney in 1793. The Industrial Revolution greatly increased the demand for cotton, and Whitney's machine, which effectively removed the seeds from raw cotton, dramatically improved labor productivity and thus drastically lowered labor costs. These developments worked to dramatically increase the demand for cotton, fostering increased demand for agricultural slave labor and, with that, increased the price of slaves.

In 1802, the price of a prime field hand was about $600, but it tripled by 1860 to $1,800--in a period of moderate price deflation (Conrad and Meyer 1958). In inflation-adjusted prices, slaves in 1860 cost roughly quadruple their counterparts fifty-eight years earlier, reflecting sharp increases in the value of the output attributable to slaves. To some writers in the early part of the twentieth century, this suggested slavery was becoming unprofitable (Phillips 1918, 1929). After all, the price of slaves was rising, but the price of cotton on average was falling over time. However, by the mid-twentieth century both traditional historians such as Kenneth Stampp (1956) and statistically oriented economists such as Alfred Conrad and John Meyer (1958), Yasukichi Yasuba ([1961] 1971), Richard Vedder and David Stockdale (1975), and others affirmed Stampp's view that slavery was on average solidly profitable on the eve of the Civil War, although those buying slaves around 1860 obviously ultimately lost badly on their investments.

How badly were slaves treated? In the most discussed account of slavery, Time on the Cross (1974), Robert Fogel and Stanley Engerman argue that slaves were treated pretty decently, earning not much less than they would have if free and benefiting from a highly productive system of plantation agriculture that resulted from the economies of large-scale production. It did not pay profit-maximizing plantation owners to beat slaves a lot, to provide them with insufficient caloric input, or to divide families. Robert Fogel, perhaps stung by criticism that he seemed insufficiently morally indignant even though he was married to a black woman, later showed how slavery led to rising moral indignation over "the peculiar institution" (see Fogel 1989). In significant part because of his slavery research, Fogel became a winner of the Nobel Memorial Prize in Economic Science.

A full reprise of the vast debate over Time on the Cross is beyond the scope of this essay. As I argued nearly a half-century ago (Vedder 1975), the evidence is rather clear that slaves were pretty severely exploited. In a competitive market economy, workers usually earn approximately what economists call their "marginal...