The problem of “who qualifies?” is explosive enough with hiring and admissions preferences. As the benefits at stake expand to the vast dimensions urged by Coates, the question will become more explosive yet. Does a mixed race person qualify? How mixed? What about recent immigrants from Africa or the West Indies? What about future immigrants? What about illegal immigrants from Africa who subsequently gain legalization—would amnesty come with a check attached?
3) Side effects will be large and unexpected.
Affirmative action characterizes some parts of the American economy more strongly than others, and in particular the public sector more than the private sector. This pervading fact has shaped the growth of the black middle class. Black Americans are 30 percent more likely than non-blacks to work in the public sector, where they earn higher wages relative to whites than they do in private employment. This strategy brought security to many black families in the years between 1970 and 2008.
But the strategy came at a cost.
First, the strategy tethered black economic advancement to the growth of government. That growth has become ever more fiercely contested in recent years. Since 2008, it has abruptly halted and reversed.
Second, the strategy detoured talented people away from the higher risks and rewards of the private sector, and especially from entrepreneurship. Black Americans are less than half as likely as white to own their own businesses.
A reparations plan is likely to prove even more distorting.
If paid to individuals as an income stream, reparations would dis-incentivize work.
If paid to individuals as a lump sum, reparations would expose one of America’s least financially sophisticated populations to predatory practices that would make subprime lending seem socially responsible by contrast.
If paid to institutions or collective entities … well, let’s look at that under another header.
4) The program will work severe inequities.
Affirmative action’s quirks and injustices are notorious. But they will be nothing compared to the strange consequences of a reparations program. Not all black people are poor. Not all non-black people are rich. Does Oprah have a housecleaner? Who changes the diapers of Beyonce’s baby? Who files Herman J. Russell’s taxes? Will their wages be taxed and the proceeds redirected to their employers?
Within the target population, will all receive the same? Same per person, or same per family? Or will there be adjustment for need? How will need be measured? Will convicted criminals be eligible? If not, the program will exclude perhaps one million African Americans. If yes, the program would potentially tax victims of rape and families of the murdered for the benefit of their assailants.
And if reparations were somehow delivered communally and collectively, disparities of wealth and power and political influence within black America will become even more urgent. Simply put, when government spends money on complex programs, the people who provide the service usually end up with much more sway over the spending than the spending’s intended beneficiaries. The poorer the beneficiaries, the more powerfully this rule holds—and it has held strongest of all in programs intended to aid the black poor. The District of Columbia public schools have excelled at delivering stable jobs to their unionized employees. They have failed their students.