The Racial Wealth Monopoly

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How Big Business conquered America. Over the next few months the entire book will be here, new chapters posted every Sunday, for subscribers to read at no cost. If you want to get a physical book to mark up or share with others, just click on the picture above, visit your local bookstore, or check your favorite online seller.

The Racial Wealth Monopoly

That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties, and free choice of their occupations, which not only constitute their property in the general sense of the word; but are their means of acquiring property strictly so called.
—James Madison, Property, March 29, 1792

While the monopolization of wealth and political power by giant corporations and the billionaires they create has reached crisis proportions in this country, the monopolization of middle-class wealth by white people—and, particularly, white men—is also a crisis that keeps our country unequal and out of balance.

My mother’s family came to this country in the late 1600s from Wales and settled in Massachusetts. They did well over the generations; there are still places in that state named after the family, and since the early 1700s it’s a safe bet (looking at genealogical records my mom painstakingly compiled for decades) they were literate and educated. So it was only natural that Mom would go to college and graduate magna cum laude; her family was white.

My dad’s parents came to America from Grimstad, Norway, in 1917 and settled first in Chicago and then in northern Michigan. They were literate and educated, and by the 1930s they owned their own home in northern Michigan. My dad went to college for a few years on the GI Bill before dropping out because Mom got pregnant with me; he later bought a home with a loan made possible by the GI Bill. His family was white.

By the time I came along, my parents had benefited from centuries of education and wealth-building directed almost exclusively to white people. That’s not to say we were wealthy; my mom’s family lost everything in the Great Depression, and, in part because of that, her father died of a heart attack in his 30s when she was 13 years old. My grandmother raised her alone, working as the town clerk in Charlevoix, Michigan.

My dad’s father was a craftsman—a cabinetmaker—and made fine furniture, including, according to family lore, a piece that’s in the White House. But Dad only inherited from them his education and outlook: until I was five or six years old, he made a living selling Rexair vacuum cleaners and World Book Encyclopedias door-to-door, and we lived in a tiny two-room house in the poor part of downtown Lansing before he got a good union job in a tool-and-die shop that catapulted us into the suburban middle class.

I tell this history to illustrate that it’s a fairly common one for white Americans. Those of us descended from Europeans have almost always had at least a baseline of literacy and the generation-to-generation transmission of a sort of cultural wealth going back centuries that gave us an edge over African Americans and nonwhite Hispanics.

We also benefited from centuries of laws and policies in this nation that nakedly favored white people, even long after the end of both slavery and Jim Crow. My dad could go to college on the GI Bill and buy a house with its help, but of the first 67,000 mortgages that the GI Bill made possible, as Jamiles Lartey wrote for the Guardian, “fewer than 100 were taken out by non-white people.”42

This is particularly critical because home equity represents the vast majority of wealth held by middle-class and working-class families in America.

The house Dad bought when I was six for $13,000 in south Lansing was in an all-white neighborhood; most of the other dads in the neighborhood were also World War II vets like him and probably bought their houses the same way he did. And even if an African American family had succeeded in buying a home in our lower-middle-class neighborhood, they may not have lasted long before being harassed out of their new house.

I went to a brand-new school (the entire subdivision, including the school, was built in 1957, the year we moved in, on what had previously been cornfields) and got a first-rate education. An education system funded largely by property taxes did, in the 1950s and today, what it was designed to do in the late 1800s and early 1900s as public schools spread across the country: keep prosperous neighborhoods prosperous for future generations through good education, while letting poorer neighborhoods—particularly those where Black people lived—basically rot.

While Democratic Keynesian economics put into place by FDR in the 1930s created the middle class intentionally, it was also intentionally a white middle class, with numerous guardrails to keep it that way. The institutional barriers to people of color building wealth through education or home ownership did not vanish with the Civil Rights Act in the 1960s; as recently as 2012, Wells Fargo pleaded guilty to pushing Black and Hispanic families into exploding subprime mortgages while steering white families into traditional fixed-rate 30-year mortgages.

During the era from the 1930s to the 1980s, FDR’s New Deal economic policies of unionization and high progressive taxes kept wealth inequality at bay; the middle class actually grew their wealth and income faster than the top 1% did. And when the ’60s and ’70s came along and many of the entry barriers that blacks and Hispanics had previously faced began to fall (particularly in government hiring, which is nearly 20% of the economy), the middle class began to grow beyond just white people.

Chicago School libertarian trickle-down Reaganomics (particularly his war on unions and his tax cuts for corporations and the ultrarich) put an end to all that: they halted the growth of wealth and income for working people and erased the gains of minority families who were just beginning to emerge into the middle class but didn’t yet have multigenerational education or wealth to fall back on.

The wealth monopoly in America isn’t just the concentration of money in the hands of the top 1%; it’s also the concentration of wealth among white people.

Those Reaganomics policies that America has been groan- ing under since 1981—even through two Democratic presidential administrations—continue to push people of color underwater. Referencing a 2017 study by the Economic Policy Institute, a headline in the Guardian summarizes the entire crisis in a single sentence: “Median wealth of black Americans ‘will fall to zero by 2053’ warns new report.”43

It’s not just white people who have seized almost all working- and middle-class wealth; it’s largely white men. While Black men faced huge barriers to education, housing, and good jobs up to and through the 1970s (and still do, albeit less explicitly), so did white women (albeit less severe).

Prior to the early 1970s, women couldn’t get a credit card without their husband’s signature, pretty much regardless of their wealth or income.44 Women weren’t allowed to serve on a jury in most states until the mid-1970s,45 and possession of birth control—even for married women—was illegal in some states until 1965, when the US Supreme Court, in Griswold v. Connecticut, struck down that state’s law criminalizing the possession of condoms, diaphragms, and birth control pills even for married couples in their own homes.46

Women had a separate area in the help wanted section of the newspaper, and getting pregnant (or even married, for jobs like flight attendant or waitress) was a firing offense. Ivy League and military colleges were almost entirely all male until the 1970s (not to mention all white), and in 1963, white working women earned 59 cents for every dollar earned by white men (the ratios were similar across races).47

Much good work was done by civil rights and women’s rights legislation in the 1960s and 1970s, but conservative white men have continued to block the Equal Rights Amendment, which simply says, “Equality of rights under the law shall not be denied or abridged by the United States or by any state on account of sex,” since it was first written by Alice Paul and introduced to Congress in 1923. “Conservative” men have blocked it every year for generations.

While the top 1% now owns more wealth than the entire bottom 90%, the 61% of America that is made up of non-Hispanic white people48 owns the majority of middle-class wealth: for every $100 in wealth held by white families, Black families have $5.04.49 It’s hard to find a clear gender breakout of that white wealth, but it’s safe to say the majority of it is held by the roughly 30% of Americans who are white men.

These racial and gender-based monopolies of wealth in America keep down women and nonwhites, while producing a significant drag on the economic and cultural vitality of our nation.