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Transcript
Rob Johnson:
I’m here today with my friend Andre Perry. He’s a senior fellow at the Brookings Institution and the author of a book that came out, I think quite ahead of the curve in May of 2020, called Valuing Black Lives and Property in America’s Black Cities. And it’s put out by the Brookings Press. It’s Brookings Institution Press I believe more formally, and it just seems like now everybody’s immersed in what Andre was illuminating a little over a year ago. And obviously that book came out, so you were thinking about it well before that time.
And a lot of people think about problems, but you seem to have a vision of what was causing these problems, that now other people are locking onto. So let’s start with what inspired you to write the book? What did you see on the horizon, and tell us a little bit about what you developed over the course of writing the book.
Andre Perry:
Well, there’s two major reasons why I wrote the book. One is I would go back home, to my home town of Wilkinsburg, Pennsylvania, and I would visit the home where I grew up. And as the story was told to me as a child growing up, that my mother at the time of my birth, she was poor. She already had a child when she was 15, had me when she was 17. And the story is told that there was a deal made between my maternal grandmother and the woman I call Mom, her name is Elsie Boyd, and Elsie Boyd was an older matriarch in the neighborhood that took in kids.
And a deal was made that she would take me in to this home, 1320 Hill Avenue, Wilkinsburg, Pennsylvania. And my brother came, and then as I was growing up she reared or informally adopted a lot of children that she took in, between 12 to 15 kids at various stages. Some would stay a few weeks, some would stay a few months. I would stay until I graduated from high school.
And so that home that we grew up in is worth so much to me personally. But when you look at the list price of that home, really you could pick it up for by agreeing to pay taxes on it, and comparably, homes across a nearby neighborhood are worth thousands of dollars more. So I wanted just to see the overall conditions that led to me growing up in that home and its impact today, and when I started doing that, I found that my Mom lived in areas that were red lined.
She lived in areas where there was urban renewal, or highway construction, or in the case of my Mom it was actually the building of a civic arena that forced her to move to Wilkinsburg, and there were a lot of things that happened in the past. And I forgot to mention one other thing, that my father who was born in Detroit eventually became a heroin addict, he was probably abusive, and he died in a prison right outside of Detroit, Jackson State Penitentiary, now known as Michigan State Penitentiary.
And so also when I looked at where he lived, he lived in areas that were red lined, where highway construction forced him to move. They both, my Mom and my father, were surrounded by racial housing covenants so they couldn’t leave. And so I just started studying the conditions, and what I found after comparing home prices in Black majority neighborhoods to those in White areas, and what my team of Jonathan Rothwell and David Harshbarger, we controlled for education, crime, walkability, all the fancy [inaudible 00:05:11] metrics, because we wanted to get an apples to apples comparison between homes.
And what we found pretty much astounds, that homes in Black neighborhoods are under priced by 23%, about 48,000 per home. Cumulatively there’s a loss of about 156 billion in lost equity. And you know Rob, to put that in perspective how big a number that is, 156 billion would have financed more than eight million four year degrees, based upon the average cost of a four year public education. It would have paid for or financed more than four million Black owned businesses based upon the average amount Black people use to start up their firms.
It would have replaced Lake Michigan 3,000 times over, covered all of Hurricane Katrina damage, and is double the annual economic burn of the opioid crisis. So my father who was a heroin addict, if he lived in areas that the housing was market rate or the White rate, he would have had better infrastructure, better schooling, greater opportunity to go to college or start a business. And I say all the time that there’s nothing wrong with Black people that ending racism can’t solve.
When things go wrong in Black communities we blame the people, and we don’t look at the policies that extract wealth on the daily. So for me, what I’m working on and the meat of my project is to remove the dregs of racism that throttle the growth in Black communities. And that should happen, that if you remove these dregs you’ll see people get greater equity, have a greater chance to go to college, a greater chance of starting a business. And so that’s the meat of the enterprise. And there’s one thing, and I’ll just go through this briefly.
When I was in education, I did a lot of work in education in New Orleans post Katrina, and I wouldn’t hear this same refrain over and over again. They would say, “If we could only fix the schools, everything would be all right,” not seeing that schools are connected to housing segregation and the way that finance leads to schools with predominantly Black people in it getting 23 billion dollars less than their White counterparts. And so when people say, “If we can fix the schools,” and ignore how schools are financed, then they’re just burying their head in the sand to the structural inequality that is really the problem.
And so for me, it’s an exploration of my home town, how I grew up, my upbringing, but it’s also just my effort to remove these dregs of racism in markets, not just housing but markets that affect the quality of life of Black people.
Rob Johnson:
Mm-hmm (affirmative). So it’s fascinating to me because you’re talking about essentially people acting as though these indicators are some kind of scientific objectiveness, and what value is, is subjective and psychological, and based on what you might call many unconscious traditions and fears, as well as the number of acres or the number of storeys or the number of bedrooms. And that interaction between the value of the house, on the one hand its ability to create what I’ll call collateral to foster all kinds of things that improve the quality of life, and what you might call the feedback that when those things aren’t there it depresses the way in which the house is assessed for that which is around it.
Well, when you see the spiral, the only way it seems to me, just listening to you, you can break out of it, is to get into that subjective psychology and fear. Now, I remember when you and I have talked in the past, not online but just in conversation, you’ve mentioned to me that there’ve been some examples where White people are essentially put in the living room to sell the house or have the house assessed, and just changing the art work and the books on the shelf changes how people perceive the house.
Andre Perry:
Yeah. You know, if folks been reading the New York Times or many newspapers all across the country, there’s been a recurring story in different locations of people who essentially are either trying to refinance a home, sell a home, and they get an appraiser. And whether they’re in a Black neighborhood or a White neighborhood, the original appraiser comes in very low, and they suspect something’s wrong because they can look at how homes are valued right across the street and go, “That doesn’t line up with what just happened right down the street.”
And so, many Black home owners have done their own sort of test case or social experiment. They removed the books, the art work, and actually get White stand ins. In one case the White stand in was a husband so you had a inter racial couple. In the first case the Black wife was there, was present, when the appraiser came. And the second time around, the White husband stayed, and this is after removing all the art work and books. And eventually the second appraiser came in $140,000 higher or something around that.
In a case in San Francisco, came in $400,000 higher. In another case in Indianapolis, $120,000 higher. And so it is really the very idea of a White savior that is taking place, and when you see a White person and you get a higher valuation you’re really seeing the intrinsic value of whiteness take hold, that they see whiteness and somehow the property is miraculously hundreds of thousands of dollars more.
Now, it’s clear that in my mind, this is almost theft. Because when you’re talking about losing 140,000 dollars, you’re really talking about throttling a person’s ability to start a business, to get another home, to pass on generational wealth. I mean, it’s theft. But the one thing I don’t like about the reporting on this is that it’s almost focused on individual appraisers, and it says, “Hey, this is a problem of individual appraisers.” No, this is also a function of structural racism.
You know, my research looks at the impact of the Black concentration in a neighborhood and how that leads to wealth extraction in a systemic way. And as you put it, that there’s these cultural subjective practices that are really inhibiting wealth development. And I’ll just be very clear about this. The price comparison model that appraisers use when they compare a home within a neighborhood that’s been discriminated against over time, you essentially just recycle the discrimination over and over again.
And let’s also be clear that 85% of appraisers are White and 75% are male, and we know that there is a connection between representation and outcome in all subjective types of exercises. And one more thing, let’s not forget the history, that the price comparison model was also a tool to keep Black people out of neighborhoods. And so we clearly need new practices that are devoid of this tradition, because it’s really limiting wealth development, and sometimes encouraging theft in my opinion, when it comes to the valuing of homes.
Rob Johnson:
Mm-hmm (affirmative). Let me ask, I’m thinking of what I’m going to call comparative geography, are there places where this phenomenon is extreme and other places where it’s quite diminished and where essentially it’s not profound? I’d be interested where we should live if we want to overcome racism for a Black person. What’s a place where you’re going to get a fair shake?
Andre Perry:
Lynchburg, Virginia, let me tell you, there’s a 85% difference between equivalent homes in Black neighborhoods and White neighborhoods. Meaning if you helicoptered a home from a Black neighborhood and put it in a White one with similar social circumstances, again similar educational levels, crime levels, it would increase in value by 85%. I mean, it’s insane. And then on the flip side, you have places, like national believe it or not, where it’s a plus 10% value in Black neighborhoods. Now, that is fraught because when we looked at the home ownership rates and other factors, it’s a very older home owner in those neighborhoods, so clearly those places are vulnerable to gentrification.
But that’s what’s happening in most cases where you see list prices of homes so low, that eventually only people with cash can buy them. I mean, your home town of Detroit for instance, there are thousands of properties priced below a point that a bank won’t back with a mortgage. And so the only way you can acquire a home is through a contract, and there’s no regulation between those kind of contracts between a buyer and seller, so there’s a lot of just unsavory practices going in those things.
But again, there are some places where home values are higher in Black communities, and it tends to be in areas where there’s higher Black home ownership, anchor institutions like HBCUs, Black owned banks, or also government entities where there’s a lot of or higher rates of employment because we know Black people have a better chance of being employed where there’s lots of public sector jobs. And so there are some factors that tend to sort of increase value, but overall it’s much more devaluation as I say it.
And I use the word devaluation to put action, so to say that there’s a purposeful or disparate impact on the assets in Black neighborhoods. They’re being devalued. And part of my mission is to calculate that Black tax if you will, so that we can restore the value that’s been extracted by racism.
Rob Johnson:
Mm-hmm (affirmative). This is how they say, I think a tremendously important context that you’re exploring. Are there international comparisons? We know that the original sin of America, that racism is very profound, but do you see similar kinds of influence in marketplaces outside the United States?
Andre Perry:
You know, I’ll put it this way, because clearly in many different contexts, at least in the industrialized world, that you see a lack of investment in Black neighborhoods and immigrant neighborhoods. And there’s so many sort of these boards that are created to essentially determine value, and those boards or these organizations that set the value of various things from homes to bond ratings to a number of issues are steeped in racism. And so when I look at homes in communities that are persistently undervalued or not invested in, you can also find similar bodies that have essentially deemed these neighborhoods unworthy of investment until White people move in and then miraculously there’s a heightened value. It’s insane.
I encourage people to go to the Brookings website, the Devaluation of Assets in Black Neighborhoods. It’s a report that anchors my book, Know Your Price, Valuing Black Lives and Property In American Black Cities. But the report, it can be found on the Brookings website. But you see as the concentration of blackness increases, the price decreases, and it’s very linear. But the reverse is true, as the population of White people increase in a neighborhood so does the value. And it goes without saying, you’re really seeing that intrinsic value of whiteness really appear or come out of the wash in the value of homes.
Rob Johnson:
Last question on this kind of comparative theme. What happens to Latin communities relative to White communities, and again relative to the Black community?
Andre Perry:
Yeah, we’re actually starting that research now. I will say this, I suspect a similar phenomenon but not the exact same thing, because remember it was anti-Black policy that really shifted the systems in housing, employment discrimination, and in other areas. It was really anti-Black policy, and certainly other people were caught up in that. We still see for instance home values in formerly red lined areas generally lower than other, in spite of the population in it.
So that impact of red lining still has a drag on the communities, regardless of people who are in it. And this is something that we also found, Black people are no longer the predominant group in formerly red lined areas. It’s Hispanics and Whites, then Blacks, who live in those areas. And you see sort of worse outcomes in those areas regardless. So I would venture to say that as brown people move into Black neighborhoods, and you’re seeing this all over the country, their wealth is being robbed by those same anti-Black policies overall.
So I think you’ll see a similar sort of devaluation, but I think that you’ll see it more pronounced in Black neighborhoods because it was anti-Black policy that led to many of these practices that extracted wealth.
Rob Johnson:
So in this what I’ll call spiral or interactive amplifying loop, we see the lower valuations diminish what you might call the wealth power collateral, upon which a more vigorous system can be built. Educational institutions, small businesses, probably things like transportation opportunities or people who could reach out a little further to explore jobs that are more viable if getting from here to there was easy to do. There are all kinds of [inaudible 00:23:31] quality of healthcare clinics, all of these things which you’ve shared with me are, how do I say, intertwined with these valuations.
I’m a doctor’s son. I think the diagnosis that you have what you might call excavated from your childhood and made systematic, it seems to me about the stuff I have served in around Detroit and suburban Detroit on the lower east side. But I’m a doctor’s son so the diagnosis is brilliant. But doctor, what’s the remedy? How are we going to get out of this spiral? Where’s the leverage point?
Andre Perry:
You know, and I say broadly, nothing grows without investment. What the Vietnamese philosopher, and excuse me for mispronouncing the name, Thich Nhat Hanh?
Rob Johnson:
Yeah, Thich Nhat Hanh, yeah.
Andre Perry:
Yeah. Yeah. And one of my favorite quotes was, “If you see a head of lettuce and it’s not growing,” and I’m paraphrasing, you don’t blame the lettuce. You look to see if it’s getting enough water, if it’s getting enough sunlight, if the soil’s rich. You never blame the lettuce. But when it comes to Black communities and development, we’re constantly blaming the lettuce. And so we need to make sure the soil is rich, that it’s getting water. In other words, we need to invest in the infrastructure and the other surrounding things that will lead to growth.
And so the remedy is around investment. The ultimate bad play on this is let’s arrest people. Let’s make communities safer by arresting people. And you’re literally extracting people from the neighborhood, which makes matters worse. And so the ultimate, broadly speaking, is to invest in communities, to remove these sort of heirloom of segregation, these appraisal practices and other real estate practices that were prevalent during a time of segregation.
We’ve got to remove these things and replace them with ones that are anti racist, that encourage inclusion. And you know Rob, this is something that we’ve talked about in private. We really have a warped sense of return on investment and risk. You know, a horrible practice or tradition developed from red lining is that the home owner, the federally backed home owners loan corporation deemed Black neighborhoods too risky for investment, when in fact it was the segregated communities that imperiled Black people long term.
But when you look at interest rates, when you look at investment, we’re almost rewarding what’s actually causing harm. And also, we’ve got to rethink what the return on those investments are. We’re constantly investing in things that ultimately, and this was exposed by the pandemic, that ultimately leads to worse death rates, worse economic outcomes, worse housing outcomes for people of color. And as demographics shift, we’re becoming a minority White country.
You know, that calculus is just not going to hold up. It’s putting all of us in peril, and I say this all the time. If we’ve learned anything from this pandemic, it’s that when our neighbors are sick we are then vulnerable. And that’s true economically as well, it’s not just a medical phenomenon. So we have got to invest in the people that have not been invested in. I mean, I generally study under appreciated assets, meaning if you just add water it will grow. Well, the under invested assets are in Black communities. They’re in the Black entrepreneur. They’re in Black housing, and it’s to ensure that people have stable housing, have an opportunity to buy a home, to start a business.
And so when we get there, we will enlargen the proverbial pot. I’ll give you one just quick example of that. Black people represent about 14% of the population but only 2% of the employer firms in the United States. If the employer firms matched the Black population, we would have 800,000 more Black businesses in the economy. 800,000. Greater productivity, greater employment, just overall more wealth in the system. And so in that regard equity is stimulus, and so if we just invested toward equity, you would see everyone benefit from that productivity. But we just don’t see it that way because our warped perspective of risk is so off we don’t see the true return that can come from those investments.
Rob Johnson:
Yeah. I’m going to speak for this audience, a little economist here, but the notion of investment and incentives in property rights, the centerpiece of your work, is not unlike the analogy to climate change where what you invest in, and your money and your profit and so forth, can have very, very severe side effects. And so in some ways, and I loved when you brought up the prison industrial system, I know a very imminent scholar who I just made a podcast with, Peter Temin from MIT is writing a book called Never Together about how the White system resisted change or pushed back. War on poverty becomes war on drugs kind of, they’re just different chapters from right after reconstruction to the present.
But where it came to in the modern period was this enormous expense on mass incarceration. Note no expense or no budget really allocated for the education of the people in prison so they don’t return. And the enormous expense on what I’ll call weaponized law enforcement, which is what you might call damaging the communities. And so the notion of investment I understand, that’s how the place is organized in an unmindful way. Part of the mindfulness is seeing the side effects of how these systems work or what kind of almost like mutants, like high turbo charged law enforcement is a symptom of dysfunction and doing more of it isn’t healing anything. And-
Andre Perry:
And let me just… I just want to bring something up to accentuate that point. Higher education is usually on the discretionary side of state budgets, and in places where private prisons really took off it really squeezed, and as more money went in towards those investments you also took away money from higher education. So not only were you not educating the people who, whether you extracted people from communities or workforce and extracted that, then you don’t educate them while they’re in prison, and then you remove resources for the remaining population to get educated. I mean, it’s just the wrong investment strategy that only helps a few.
And it really is horrible for the community. So it’s this never ending cycle that we have to break, and again it’s rooted in this false sense of value. And I just want… I’ll tell you in another way. There’s another way to interpret my housing data, that when people look at Black communities they see twice as much crime than there actually is. They see worse education than there actually is. And they assume that that’s caused by the people in it. And it’s like you know, there’s really structural barriers that predict for this kind of outcome, and we need to remove those policies, those systems, that just constantly extract wealth and opportunity from Black people.
And one of the things we did for our studies is that we show, using Raj Chetty’s data that show how devaluation leads to lower economic mobility, and it’s not surprising where you see high devaluation you see lower economic mobility overall. People just are not advancing because of this. And so it’s just a death spiral that occurs when you don’t invest in things that are worthy of investment.
Rob Johnson:
I remember in 2016 I ran a conference, INET ran a conference in Detroit on race inequality. And though she couldn’t appear, she had a conflict, a woman at University of Michigan, Heather Ann Thompson, spent a lot of time with me talking about what was happening based on mass incarceration. And one of the big effects that she found in her work was when they essentially created privatized prisons, the pressure to get the beds filled if you will, led to more arrests, particularly of dads, in Detroit.
Second phase is after more dads are arrested, the performance of children in schools goes down. Third phase is the teachers who do not have complete control of the environment, including things like fathers of the children they educate going to prison, are being evaluated on the children’s national test scores and the best teachers started leaving because they couldn’t escape the environment. They were getting a downgrade over which they had no control.
So the whole thing was disintegrating. And then the final piece that she taught me, and I can share with you and the audience here of some papers that she’s written, the final was at the time of the census the people who were convicted of felonies cannot vote but they weren’t considered citizens where their family resided. They were considered citizens in the congressional district where the prisons were located. And so the state legislature got what you might call turbo charged for the accelerating the benefits to the prison and the prison owners in expanding that, to the further detriment of the people in the city of Detroit.
Andre Perry:
Yeah. You know, it is such a death spiral in that regard. I mean, and it really shows how interconnected our policies are. So when people talk about White supremacy and systemic racism, that’s what they’re really addressing, that there’s no real silver bullets, no panaceas. You can’t say, “Just close our private prisons.” Yet that would be a good thing, but it’s also about reforming housing systems. It’s also about reforming or abolishing the way we finance education. All of these things are so interconnected that you really do need to take a systematic approach to removing them, that not only must we change the prison industrial [inaudible 00:36:40] that killed my father essentially. We also have to change the school systems that extract wealth. We have to change the housing systems that extract wealth.
Andre Perry:
We have to change health policy, and let’s be clear. The health cost of injuries in prison is also a drag on state budgets. And so when people are injured because of fights and other issues in prison, that money is leaving the higher education realm. So these things have to be taken care of in a systemic way, and that’s what I try to talk about in my book. Certainly we should have people pointed by reforming or abolishing systems in one area, but we can walk and chew gum at the same time. We can have people work on criminal justice and education, and housing, and healthcare and other quality of life.
Andre Perry:
I can’t stand when people say, “I’m just going to keep my head down and work on my issue.” No. You know, we need leaders who can see the interconnectedness of oppression and really untangle all of that, because if you don’t, you may miss a critical component that is really harming the life chances of people in our communities.
Rob Johnson:
Once again, my father was a downtown physician at a practice largely of Black patients, and his father had set up two hospitals on the south side of Chicago. And I can hear echoes of the kind of, what you might call pain of my father’s observations. But you bring things into greater focus. And my dad, he left a very prestigious academic appointment and so forth to focus on that practice. He became a professor of clinical neurology rather than a professor publishing scientific research. And his sense was at times despairing about how we could get out of this spiral which seems…
Rob Johnson:
I mean, I’m talking about being a little boy and learning these things from him in the 70s. It seems the spiral has gotten a lot further out of control even since that time, particularly on the front tier of law enforcement we talk about. But I still keep hearing these echoes. That’s the diagnosis, hit the nail on the head, where are the remedies? Is this something that involves national legislation? Is this something that involves what you might call… You’ve unmasked this terrible process. Is it activism that presses things? Where do the activists focus? Is it counties? Is it communities? Is it states? Is it city governments? Is it everywhere? I don’t know, but I’m trying to figure out what you might call a remedy strategy, and I need your help.
Andre Perry:
Well, I put it this way. I call it we need a reparative culture. And it’s actually forming, and the talk of reparations has taken hold all across the country. You know, Sandy Darity’s work, Kirsten Mullen’s work on reparation has really come into focus. And we actually have some disagreements around that, because I always said that the injuries caused by racial injustice occurred at the federal, state and local level, and there’s a battle going on somewhat, a debate of sorts, that says we have to be focused enough to really drive for a federal reparations package, particularly for slavery and to cut checks.
Andre Perry:
However, I differ a little bit and say, “Hey, reparations is not going to come from Washington, it’s going to go to Washington,” that it’ll come from local reparations efforts. And we’re seeing this all over the country, Nashville, North Carolina, in Evanston. And states, California are considering reparations bill, Maryland, Virginia. And in different areas, education, housing. And so I think these tests of reparations at the local level will really inform reparations at a federal response. And ultimately I think that is what we need, a culture, a reparative culture where instead of building off of exclusivity, we build off of repairing.
Andre Perry:
And I see that change, it’s going to take a while, but that type of culture is already shifting. It’s painful because it’s going directly against this revival of White supremacy spurred by the Trump administration, but there is a culture, a reparative culture afoot. And let’s be clear that if we were honest, we believe in reparations, we just don’t believe in American and broadly speaking. But when it comes to reparations for Black people, then it becomes somewhat controversial.
Andre Perry:
Remember right after a few weeks of being socially distanced, the business community said, “Federal government, make us whole. You’ve forced us to shut our doors. You’ve forced us to shutter. The Federal government has to respond.” Well, what does it look like when a generation of people, or people have been socially distanced for generations. What kind of stimulus package does that look like? And so, we believe in reparations, but when it comes to Black people there’s some problem with it. And so we just need to invest in people who’ve been injured, and that will actually spur growth in so many other areas, so we should not be afraid of the word or the act of reparations.
Andre Perry:
But again, I see a reparative culture that’s emerging all across the country that will lead to the kinds of investments in Black America that will get us out of this mess.
Rob Johnson:
I tend to see in my own imagination or inference from things I see and read, a bit of a stroke between two cultures. One is the reparative culture, something like Pope Francis last year put out his encyclical and it was called, I think it was, how do I say, Fratelli Tutti, on the fraternity and social friendship, and it’s about the caring for others as being the essence of our mission.
Andre Perry:
That’s right.
Rob Johnson:
It’s not a me, it’s a we, As Mohammad Ali used to say in his two word poem.
Andre Perry:
That’s right.
Rob Johnson:
But the facts are that there are people in this time, after the pandemic, with disorientation related to change in the mode of production, technology, automation, [inaudible 00:44:42], who can miss the point and say, “Why is the money going to them?” And that culture, the us and them, the otherness culture, the polarized culture is resistant to the reparative culture which has a much more what you might call win-win vision.
Andre Perry:
That’s right.
Rob Johnson:
And I think this reminds me, I used to teach at Union Theological Seminary, and this was at the time where many of the students were involved with Occupy Wall Street and my kind of mentor in going there were James Cohen, how would I say, inspired and I consulted him on. And the situation that they kept emphasizing was how things would become so despairing that people would say, “I’m not going to what you might call be an economist and optimize. I’ve got to go for it, because I can’t live like this in a society.”
Andre Perry:
Yeah.
Rob Johnson:
And the bell weather, which I believe James turned me on to, to was Doctor King and A. Philip Randolph’s A Freedom Budget for all Americans. So when I’m thinking about your remedies, Doctor King was very careful to say don’t go get a supplementary budget for the Black people. Structure the budget.
Andre Perry:
Right.
Rob Johnson:
He thought there was obviously too much military spending and other things. Structure the budget for all people. And what I’m struggling with, I’m asking you, is how do we overcome that frightened culture and get to the kind of culture that Pope Francis is pointing to, the reparative culture that is a win-win. What-
Andre Perry:
I’m glad you brought up Pope Francis and LK, and really other spiritual leader. Reverend Barber is a name that should come up.
Rob Johnson:
Yeah, yeah.
Andre Perry:
Because unfortunately, we’ve seen a moral force that leaned on the fears and anxieties around exclusivity of this false notion of scarcity. And politicians, and we’ve seen certainly Donald Trump, lean on those fears and that immoral force as you will around it. We do need a moral force to counter that. We do need a prophetic voice around why we create businesses in fact to support communities. Why should we help each other. Why we should repair. And I do believe that we forget Adam Smith was a philosopher and this sort of we remove the moral obligation of our policies from the discourse.
And so when you’re talking about growth economically, you have to talk about it morally, socially. I’ll give you an example. When I used to work in education, one of the things, the questions, I used to get all the time was, “What’s the fastest way to close the Black/White achievement gap?” And I used to hate that because I used to say, “Well, the fastest way to close the Black/White achievement gap is to stop educating White people.” That would be the fastest way, but it would be the immoral way.
But the reality is we’ve done lots of immoral things, similar things, to close the proverbial Black/White achievement gap. We fired teachers en masse, we suspended kids. So the issue of can you or how do you close achievement gap, that’s not really a real question. You can, because all kids can learn. But there’s a moral component to this, that how do you do it is the real question. Are you going to improve educational outcomes by hiring more Black teachers, by providing more supports?
So this moral obligation to our questions must be present or you’ll constantly do immoral things to “solve problems.” And so for me, I’m glad you brought up Pope Francis, MLK, we’ll talk about Reverend Barber, because we don’t have enough moral language in our prescriptions. There’s not enough. Because we’re here, because we’re community, and if we’re not really trying to improve community, what are we going at? Because I can’t stand the tern data driven. No, we should be community driven. Use data to help improve it, but we’re missing the community in our analyses and in our solutions.
But we need that moral force, and this is where I’m a big fan of Reverend Barber and I don’t think he gets enough attention. Because as you mentioned MLK, his moral authority is what helped elevate our economic opportunities. It was his moral presence that really informed his economic analysis, and so we just need more of that work. And so I welcome it, I welcome it.
Rob Johnson:
I’m glad you cite Reverend Barber. He was also visiting at the Union Theological Seminary when I was an adjunct teaching there and I interacted with him quite a lot. And I mentioned our conference in 2016 at INET. It was three days after the presidential election. Obviously he’d been very involved in that, he was exhausted. He came in, in front of 250 economists, PhDs or aspiring economists, spoke for an hour and 26 minutes. And when he finished there was a Nobel laureate who will remain anonymous sitting next to me and he said, “I wouldn’t change one comma in that hour and a half speech. That was beautiful.”
Andre Perry:
Yeah.
Rob Johnson:
And Reverend Barber shared with me that he had done some graduate work in economics, but not in that kind of what you might call segmented for moral way that is a interactive fusion of the two notions. And his writings were beautiful. I recently had the good fortune, again via Union, to take a remote class with Obery Hendricks called the Kingdom of God and Political Economy. And by the way, he asked me to go back and say who was the real Adam Smith. Because I was the only economist in the group, so I had to bring Smith in. And if you study Smith in terms of intellectual history, everybody thinks his greatest work was the theory of moral sentiments.
Andre Perry:
That’s right. That’s right.
Rob Johnson:
And he had beautiful observations about the developing, marketing and manufacturing process, but it was in the context of the vision of the theory of moral sentiments. And there are so many things that are said, I should just create a list to put on the website, of him quoting things that contradict what you might call the obsessive free market fundamentalism, that avoids these cross overs, these side effects, the possibility for win-win shifts in policy.
Andre Perry:
But I say that it’s the lack of that moral reasoning included in all of our analysis, that’s part of systemic racism. It’s that lack of rigor in that regard that leads to a lack of rigor in all of our analyses. And for me, you cannot compartmentalize the how’s and the why’s from sort of robotic analysis on how to improve something. So for me, it’s central. It’s more important than getting your regression right and all these other things. How are you valuing people is a question that should be central in everything we do.
Rob Johnson:
Yes. I remember, again I refer to Peter Temin, he wrote a book called the Vanishing Middle Class that INET sponsored.
Andre Perry:
Yeah.
Rob Johnson:
And what I’ll call the meta punchline there, it resonates with what you might call the music that you’re playing for us today. He was convinced that wherever there were what you might call ups and downs in the economy and economic despair was heightened, it triggered racial animosity and otherness being heightened. It just went up and down in locked step, meaning across sections, across regions. The places that were in the deeper slumps were seeing an acceleration in racial animosity.
Rob Johnson:
But what he really came back to was this substituting otherness for togetherness was destroying the rungs in the ladder of potential for the future. As we were moving to a knowledge intensive economy based on high margin services at the top end and low margin services at the bottom end, education was the pathway. Just like in an earlier time the migration from the farm to the factory raised social productivity and prosperity, albeit painfully. But he was saying what’s happening now is like you said, roughly 14% of the population is Black but 70% of the population will be in the low margin services.
Andre Perry:
Yeah.
Rob Johnson:
And all kinds of people are voting to shoot themself in the foot and destroy the education, the system that should be for all of us. And by the way, those high margin services would experience a little more competition and maybe those wages wouldn’t be so extremely high, exacerbating inequality. But I just thought it was a brilliant analysis and it feeds right back into all the things you were talking about. I’ll add this to the table. Technology should not be a master, it should be a means to achieve social vision. And when you unleash it like it’s a god, like it’s going to take you there… I understand that there are people who even fight good technology because it protects their intellectual property rights or whatever, we see a lot of that in fighting. But unbridled tolerance of innovation and social adaptation no matter what can be very dangerous coming from that place, that wrong place of vision.
Andre Perry:
You know, there’s a couple of things you said I’m hoping I don’t forget. There is an importance to education in schools, not just formal education but certainly it involves it, that we’ve lost sight of one of the goals of public education. And it’s to learn how to work, play and grow together. And we just are missing that from our curricula. I mean, even when you’re talking about civic education, it’s very sterile in a sense of it’s about the three branches of government and not really about how we can work and live together civically so that we can create a better society.
In addition, and there’s one other thing in your last comment that spurred a thought, economist Darrick Hamilton and I were working on a project where we were trying to score or do equity scoring, meaning that the same way we score legislation’s potential impact on the budget, we should be looking at the potential impacts on people of color. Will it have disparate impact.
Because part of how I digested what you said is that we must build in structures that encourages inclusivity, but right now so many of our structures are built to create exclusive environments that cause harm. And so we’ve got to shift in so many ways, and we can. And again, I think we’re moving toward that direction, but the next five years, let’s be clear, it’s going to be painful towards that reparative culture that we’re describing.
Rob Johnson:
Yeah. Well, I think we’re getting close to the end of the day here, or of the episode. I want to thank you very much for just the way in which you illuminate things through the place that’s the greatest pain you’ve felt has enormous ramifications for the Black community. But it’s a wake up call across many, many regions as to where what you might call social theory has to go beyond what I’ll call the secular religion called economics. And I wanted to… I often use some kind of artistic thing to close, and I wanted to share a story with you.
My mother was kind of Scottish, and I guess that’s why I learned about a band called the Talking Heads when I was younger. But David Byrne of the talking Heads created a satirical Broadway play called American Utopia. This Broadway play is called American Utopia, but towards the end he has a song called Everybody’s Coming To My House. And he told the story the night that I was there about how he wrote that song cynically, that he was kind of mocking America and the what you might call fantasies about house while community was deteriorating, which reminded me of your work.
But he said, “I was cynical. Until I performed in Detroit, and there was a lady they called Mrs. V brought a bunch of children together. And they learned the song and they sang it, and then they called me and asked me to hear them, and they changed my song so that I do believe in it.” So I’ll find, for this broadcast and for you, on YouTube, the exploration. And it’s just a few minutes, six, seven minutes, highlighting Mrs. V and the song that, how would I say, the cynic was transformed into a warm optimist. That’s what you’re doing, and thank you very much.
Andre Perry:
And thanks for having me Rob.
Rob Johnson:
We’ll have to stay closely attended to your work, Darrick’s work, everybody else’s work that you turned us onto, and I hope in a few months I can bring you back and we’ll take it.
Andre Perry:
Let’s get it.
Rob Johnson:
Good.
Andre Perry:
I’m looking forward to it.
Rob Johnson:
And check out more from the Institute for New Economic Thinking at ineteconomics.org.
