The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together (One World Essentials)

by Heather McGhee

The “we” who can’t seem to have nice things is Americans, all Americans. This includes the white Americans who are the largest group of the uninsured and the impoverished as well as the Americans of color who are disproportionately so.

Contrary to how I was taught to think about economics, everybody wasn’t operating in their own rational economic self-interest. The majority of white Americans had voted for a worldview supported not by a different set of numbers than I had, but by a fundamentally different story about how the economy works; about race and government; about who belongs and who deserves; about how we got here and what the future holds. That story was more powerful than cold economic calculations. And it was exactly what was keeping us from having nice things—to the contrary, it had brought us Donald Trump.

In my gut, I’ve always known that laws are merely expressions of a society’s dominant beliefs. It’s the beliefs that must shift in order for outcomes to change.

The authors concluded that “making the changing national racial demographics salient led white Americans (regardless of political affiliation) to endorse conservative policy positions more strongly.”

thinking about a more diverse future changed white Americans’ policy preferences about government.

But did white people win? No, for the most part they lost right along with the rest of us. Racism got in the way of all of us having nice things.

It is progressive economic conventional wisdom that racism accelerates inequality for communities of color, but what if racism is actually driving inequality for everyone?

I didn’t set out to write about the moral costs of racism, but they kept showing themselves. There is a psychic and emotional cost to the tightrope white people walk, clutching their identity as good people when all around them is suffering they don’t know how to stop, but that is done, it seems, in their name and for their benefit.

The zero sum is a story sold by wealthy interests for their own profit, and its persistence requires people desperate enough to buy it.

Helper was an avowed racist, and yet he railed against slavery because he saw what it was doing to his fellow white southerners. The slave economy was a system that created high concentrations of wealth, land, and political power. “Notwithstanding the fact that the white non-slaveholders of the South are in the majority, as five to one, they have never yet had any part or lot in framing the laws under which they live,” Helper wrote. And without a voice in the policy making, common white southerners were unable to win much for themselves. In a way, the plantation class made an understandable calculation: a governing class will tax themselves to invest in amenities that serve the public (schools, libraries, roads and utilities, support for local businesses) because they need to. The wealthy need these assets in a community to make it livable for them, but also, more important, to attract and retain the people on whom their profits depend, be they workers or customers. For the owners in the slave economy, however, neither was strictly necessary. The primary source of plantation wealth was a completely captive and unpaid labor force. Owners didn’t need more than a handful of white workers per plantation. They didn’t need an educated populace, whether black or white; such a thing was in fact counter to their financial interest. And their farms didn’t depend on many local customers, whether individuals or businesses: the market for cotton was a global exchange, and the factories...

Nunn found that the well-known story of deprivation in the American South was not uniform and, in fact, followed a historical logic: counties that relied more on slave labor in 1860 had lower per capita incomes in 2000.

The Homestead Act of 1862 offered 160 acres of expropriated Indigenous land west of the Mississippi to any citizen or person eligible for citizenship (which, after the 1790 Naturalization Act, was only white immigrants) if they could reach the land and build on it. A free grant of property! Fewer than six thousand black families were able to become part of the 1.6 million landowners who gained deeds through the Homestead Act and its 1866 southern counterpart. Today, an estimated 46 million people are propertied descendants of Homestead Act beneficiaries.

During the Great Depression, the American government told banks it would insure mortgages on real estate if they made them longer-term and more affordable (offering tax deductions on interest along the way)—but the government drew red “Do Not Lend” lines around almost all the black neighborhoods in the country with a never-substantiated assumption that they would be bad credit risks.

The New Deal transformed the lives of workers with minimum wage and overtime laws—but compromises with southern Democrats excluded the job categories most black pe...

Then the GI Bill of 1944 paid the college tuition of hundreds of thousands of veterans, catapulting a generation of men into professional careers—but few black veterans benefited, as local administrators funneled most black servicemen to segregated vocational schools. The mortgage benefit in the GI Bill pushed the postwar white homeownership rate to three out of four white families—but with federally sanctioned housing discrimination, the...

The federal government created suburbs by investing in the federal highway system and subsidizing private housing developers—but demanded racial covenants (“whites only” clauses in housing contracts) to prevent black people from buying into them. Social Security gave income to millions of elderly Americans—but again, exclusions of job categories left most black workers out, and southern congressmembers opposed more generous cash aid for the elderly poor. You could even consider the New Deal labor laws that encouraged collective bargain...

“Plutocrats use dog-whistle politics to appeal to whites with a basic formula,” Haney López told me. “First, fear people of color. Then, hate the government (which coddles people of color). Finally, trust the market and the 1 percent.” This type of modern political racism could operate in polite society because of the way that racial resentment had evolved, from biological racism to cultural disapproval: it’s not about who they are; it’s about what some (okay, most) of them do. He went on, “Dog-whistle politics is gaslighting on a massive scale: stoking racism through insidious stereotyping while denying that racism has anything to do with it.”

For a few moments in a tape-recorded interview in 1981, however, the right-wing strategist for Presidents George H. W. Bush and Ronald Reagan, Lee Atwater, admitted to the plan: You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites…. “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”

In railing against welfare and the war on poverty, conservatives like President Reagan told white voters that government was the enemy, because it favored black and brown people over them—but their real agenda was to blunt government’s ability to challenge concentrated wealth and corporate power.

In the social democracies of Northern Europe, families are far more economically secure; middle-class workers there don’t have American families’ worries about their healthcare, retirement, childcare, or college for their kids. But if government tried to secure these essential public benefits for families in the United States, in the political culture of the last two generations, it would signal a threat to the majority of white voters. Government help is for people of color, the story goes. When you cut government services, as Reagan strategist Lee Atwater said, “blacks get hurt worse than whites.” What’s lost in that formulation is just how much white people get hurt, too.

In fact, white high school dropouts have higher average household wealth than black people who’ve graduated from college.

As with so many economic ills, student debt is most acute among black families, but it has now reached 63 percent of white public college graduates as well and is having ripple effects across our entire economy. In 2019, the Federal Reserve reported on what most of my generation knows: student debt payments are stopping us from buying our first home, the irreplaceable wealth-building asset. It’s even contributing to delays in marriage and family formation. And by age thirty, young adults with debt have half the retirement savings of those who are debt-free.

In 1978, a ballot initiative known as Proposition 13 drastically limited property taxes by capping them at 1 percent of the property’s value at purchase, limiting increases and assessments, and requiring a supermajority to pass new taxes. Property tax revenue from corporate landowners and homeowners in the state dropped 60 percent the following year. The impact was felt most acutely in public K–12 schools; California went from a national leader in school funding to forty-first in the country. But Prop 13 also swiftly destroyed the local revenue base for California’s extensive system of community colleges and put them in direct competition for state funding with the more selective state schools and universities. The resulting squeeze accelerated the end of the free college era in California. Between 1979 and 2019, tuition and fees at the four-year public colleges increased eight-fold.

The racist nature of our mass incarceration system has been well documented. White and black people are equally likely to use drugs, but the system is six times as likely to incarcerate black people for a drug crime. Sentences for possession of crack cocaine, which is more widely used by African Americans than whites, are about eighteen times harsher than penalties for the powder version of the drug, which is used more often by whites. For decades before policy changes in 2010, this sentencing disparity was about one hundred to one.

The option to treat poverty and drug addiction as a public health and economic security issue rather than a criminal one has always been present. Will our nation choose that option now that white people, always the majority of drug users, make up a soaring population of people for whom addiction takes over? The woes that devastated communities of color are now visiting white America, and the costs of incarceration are coming due in suburban and rural areas, squeezing state budgets and competing with education. It’s not a comeuppance but a bitter cost of the white majority’s willingness to accept the suffering of others, a cost of racism itself.

“But the FHA would not make or guarantee mortgages for borrowers of color,” she said. “It would guarantee mortgages for developers who were building subdivisions, but only on the condition that they include deed restrictions preventing any of those homes from being sold to people of color. Here we have this structure that facilitated…white homeownership, and therefore the creation of white wealth at a heretofore unprecedented scale—and [that] explicitly prevented people of color from having those same benefits. To a very large degree, this was the genesis of the incredible racial wealth gap we have today.”

I underwent a steady process of unlearning some of the myths about progressive victories like the New Deal and the GI Bill, achievements that I understood to have built the great American middle class. The government agencies most responsible for the vast increase in home ownership—from about 40 percent of Americans in 1920 to about 62 percent in 1960—were also responsible for the exclusion of people of color from this life-changing economic opportunity. Of all the African Americans in the United States during the decades between 1930 and 1960, fewer than 2 percent were able to get a home loan from the Veterans Administration or the Federal Housing Authority.

By the end of the 1990s, a bipartisan majority voted to repeal most of Glass-Steagall, the law that had protected consumer deposits from risky investing for decades since the Great Depression. Free of restraints, the financial sector grew wildly and with few rules.

This is where the age-old stereotypes equating black people with risk—an association explicitly drawn in red ink around America’s black neighborhoods for most of the twentieth century—obscured the plain and simple truth: what was risky wasn’t the borrower; it was the loan.

From 1998 to 2006, the majority of subprime mortgages created were for refinancing, and less than 10 percent were for first-time homebuyers. It was still a typical refrain, redolent of long-standing stereotypes about people of color being unable to handle money—a tidy justification for denying them ways to obtain it.

By 2006, up to 80 percent of option ARM borrowers chose to make only the minimum monthly payments. Housing values began to stall and slide in some areas, and immediately, more than 20 percent of these borrowers owed more than their house was worth. The option ARMs were ticking time bombs now nestled alongside other kinds of trap-laden mortgages buried in securities owned by pension funds and mutual funds across the globe. And it wasn’t just homeowners who were dangerously leveraged; the Federal Reserve had loosened the requirements on the five biggest investment banks, so they had been investing in securities based on debt with borrowed money thirty and forty times what they could pay back. In late 2007, when interest rates rose and housing prices started falling, the mortgage market at the center of the economy began to crumble. Wall Street firms that had bet heavily on the IBGYBG formula knew better than to trust the other investment houses that had done the same, and suddenly the market froze. By the time the housing market reached bottom, housing prices would fall by over 30 percent and all five of the major investment houses would either go bankrupt or be absorbed in a fire sale.

The union spread throughout the country during the 1880s, boasting seven hundred thousand members at its peak, including many southern chapters where an estimated one-third to one-half of its members were black. But its reign lasted only a decade as the 1890s saw the birth of Jim Crow, the end of black-white fusion politics under Reconstruction, and the promotion of white supremacy as a cultural and political force to unite whites across class.

After 2001, the country lost 42,400 factories in just eight years. The United States doesn’t build much anymore; in 2017, the total value of our exports was one of the lowest in the world.

The five U.S. states that have no minimum-wage laws at all are in the South: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Georgia has a minimum wage, but it is even lower than the federal one.

Think about it: if you came to a country and saw the class of people in power abusing another group, and your place in relation to both groups was uncertain, wouldn’t you want to align yourself with the powerful group, and wouldn’t you be tempted to abuse the other to show your allegiance? As they fought to be considered more white than black, Irish people gained a reputation in black neighborhoods as brutal enforcers of the racial hierarchy, attacking those beneath them to ensure their place. “Irish attacks on blacks became so common in New York City that bricks were known as Irish confetti,” wrote historian Michael Miller Topp.

Over the past few decades, a series of money-in-politics lawsuits, including Citizens United, have overturned anticorruption protections, making it possible for a wealthy individual to give more than $3.5 million to a party and its candidates in an election cycle, for corporations and unions to spend unlimited sums to get candidates elected or defeated, and for secret money to sway elections.

The Connecticut Citizens’ Election Program offered candidates the chance to qualify for public grants to fund their campaigns if they could collect enough grassroots donations from people in their district, in increments of five to one hundred dollars. In the first years after the reform, the change was dramatic. Candidates spent most of their campaigning time hearing the concerns of their constituents instead of those of wealthy people and check-writing lobbyists. James Albis, representative of East Haven, recalled, “I announced my reelection bid in February, and by April, I was done fundraising. So, from April to November, I could focus only on talking to constituents. Without public financing, I would have been fundraising through that entire period.” Corporate lobbyists had less sway over legislators’ agendas. Reform lifted the wealth requirement from running for office, too. “Public financing definitely made the legislature more diverse. There are more people of color, more young people, more women, and more young women,” noted the secretary of state, Denise Merrill.

This kind of reform has national popular support as well; among the most potent opposition messages is that it’s taxpayer money for politicians. Senator Winfield has a response to that: “Yeah, we are using the public’s money, but it’s the public’s government, and if you want it to remain the public’s government, you might have to use the public’s money. Otherwise, you’re going to have government by the few who have been paying for government.”

White people are the most segregated people in America.

Moving west: territories like Illinois and Oregon limited or barred free black people entirely in the first half of the 1800s.

In 1883, the U.S. Supreme Court struck down America’s first Civil Rights Act, and the Black Codes of Jim Crow took hold, with mirrors in the North. In the words of the preeminent southern historian C. Vann Woodward, “Jim Crow laws put the authority of the state or city in the voice of the street-car conductor, the railway brakeman, the bus driver, the theater usher, and also into the voice of the hoodlum of the public parks and playgrounds. They gave free rein and the majesty of the law to mass aggressions that might otherwise have been curbed, blunted or deflected.” Any white person was now deputized to enforce the exclusion of black people from white space, a terrible power that led to decades of sadistic violence against black men, women, and children.

No governments in modern history save Apartheid South Africa and Nazi Germany have segregated as well as the United States has, with precision and under the color of law. (And even then, both the Third Reich and the Afrikaner government looked to America’s laws to create their systems.)