The Economics of Jim Crow and Apartheid

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The Economics of Jim Crow
and Apartheid: A
Comparative Analysis
Gavin Wright
World Economic History Congress
Stellenbosch University
9-13 July 2012
Civil Rights Economics
[according to Wright]
• Southern business leaders saw no conflict
between segregation and economic progress
• Acquiescence in 1960s only in response to
economic pressures
• Black economic gains were large
– not just for the middle class
– not mainly at white southern expense
• After the fact, desegregation was an economic
boon to the region as a whole
PER CAPITA INCOME (% of U.S.)
1880 - 2009
Per Capita Income (%US)
1
South Atlantic
0.8
West South
Central
East South Central
0.6
Source: Statistical Abstract of the United States
0.4
1880
1890
1900
1910
1920
1930
South Atlantic
1940
1950
East South Central
1960
1970
1980
West South Central
1990
2000
2010
Jim Crow South as PoliticalEconomic Equilibrium
• Blacks excluded from vote, cities, industries
• Separate and unequal schools
• Politics dominated by black-belt planters
– Chief beneficiaries of race discrimination
• Economic progress for whites only
Per Capita Spending ca. 1915
County Groups
Counties under 10%
Per Capita
Per Capita
White
Black
$7.96
$7.23
9.55
5.55
11.11
3.19
12.53
1.77
22.22
1.78
black
Counties 10% to
25%black
Counties 25% to 50%
black
Counties 50% to 75%
black
Counties 75% black and
over
Feedback: Labor Market to Schools
• Rosenwald Fund expert (1930s): “If commercial
courses were offered in the negro school there
would no doubt be tremendous pressure to get
into them and the only result would be keen
disappointment for almost everyone.”
• James Field at Union Bag in Savannah (1940s) :
“When I filled my application out…I put ninth
grade instead of twelfth, because I figured they
didn’t want…no smart black man, in order to get
hired. I was hired.”
Survey of Alabama Employers
Not a single case before 1960s where a firm
“drawing on cost calculations, business
norms, or abstract concept of justice chose
to desegregate the work place or break
down job discrimination…Even in
retrospect, off the record, within the
confines of their own offices, businessmen
did not recall that the racial order created
‘impediments’ or ‘difficulties’ for enterprises”
[Greenberg, Race and State (1980), 231, 233]
South Carolina, 1918-1981
o f A ll T e x tile
W o
Black Share of Textile Workers
20%
15%
S h a re
10%
Male
5%
Female
0%
1918 1923 1928 1933 1938 1943 1948 1953 1958 1963 1968 1973 1978
EEOC Flyer
Unlearning Prejudice
• “When I read this comment [that blacks
were good workers], I was curious because,
from all I have heard, the Negroes we are
employing are shiftless, lazy, don’t want to
work and leave as soon as they are hired.”
• A systematic company study showed “no
discernible difference in productivity.”
• By 1969, “virtually all the large companies
here have begun to preach a doctrine of
equal, color-blind employment”
Compulsion vs. Voluntarism
• Plans for Progress 1961
– Troutman: “Compulsion is not the thing. I’m a
lawyer. I can show you how to get around the
Executive Order. It’s got to be voluntary.”
• Major progress came only with compulsion
– EEOC actions
– Private lawsuits
– Federal contract compliance
• Greatest gains at large covered employers
Quasi-Voluntarism & Learning
“There is something about the threat of
prosecution that makes voluntary programs
work much better.” [Ray Marshall 1965]
“By the 1980s, leading firms had troops on
hand who were fighting for equal opportunity
programs. They had internalized the civil
rights movement.” [Dobbin, Inventing, p. 158]
Gains were greatest in the South.
EEOC Shares
20
BLACK OCCUPATIONAL SHARES BY REGION:
EEOC Employers, 1966-2002
Percent of Total Employees
15
White Collar
South
White Collar
Non-South
Skilled Crafts
South
Skilled Crafts
Non-South
10
5
0
1966
1972
1978
1984
1990
1996
2002
Black Male Income
27500
MW
NE
20000
15000
SOUTH
10000
5000
1950
1960
1970
1980
1990
2000
Male Income
Net Black Migration into South
1870-70 to 2005-10
Black Voter Registration
Black Elected Officials
% BEOs/% Population 2001
Alabama
Mississippi
County
Commission
0.979
0.749
All Elected
Officials
0.717
0.565
SOUTH
0.375
NON-SOUTH
0.095
Michigan
0.150
New York
0.079
Southern Senators by Party
Southern Governors by Party
Poverty by Region
Infant Mortality by Race 1955-1975
Commonalities:
U.S. South and South Africa
• Cheap Black Labor for Farms and Mines
• Coalition with White Working Class
• Schooling to match segregation of labor
– Black disfranchisement
• Resistance to global trends 1940s-1960s
– Economic modernization ≠> racial progress
– “Highest Stage of White Supremacy” (Cell)
• Post-Revolution Revisionism
Segregation and Petty Apartheid
Education for Segregation
“The school must equip him [the Bantu pupil]
to meet the demands which the economic
life of South Africa will impose upon
him…He must learn not to feel above his
community…There is no place for him in the
European community above the level of
certain forms of labour…”
[Hendrik Verwoerd 1954]
Post-Revolution Revisionism
When segregation ended, “you can’t find a
single white person who remembers it.”
[Quoted in Chafe, Remembering Jim Crow, 182]
“It was practically impossible in 1995 to find
anyone who would admit to having been a
supporter of apartheid.”
[Clark and Worger, South Africa: The Rise and Fall of Apartheid, p. 9]
Contrasts (Partial List)
• Demography:
– SA 15%-20% White
– South 20%-40% Black
• Constitutional Structure:
– Jim Crow South in defiance of U.S. law
– Multiethnic politics, multiracial categories
• Geography: Region vs. Nation
• SA Job segregation legally imposed
• Economic Structure (mining & parastatals)
Did the Apartheid Economy Fail?
• Declining growth mainly from deterioration
of gold mining [Feinstein, 203-210]
• Colour bar adjusted to labor market
pressures, whites gained [Mariotti 2010]
• White poverty abolished after 1948
• Major decline came only with political
turmoil, sanctions, capital flight
[Ramphale 2008]
South Africa
South
Africa
Income by Race
Semi-Professional % by Race
Routine White-Collar % by Race
Commonalities despite Contrasts
• Regime Change only under heavy pressure
Crucial difference in timing
• Outcome favorable for all major groups
Inman-Rubinfeld: South African federalism as
credible commitment
• Deindustrialization undermines gains
• Rising within-race inequality
What are the long-run implications?
Economic Legacies of Apartheid
• Extreme Inequality
– Poverty
– Education
– Health conditions
• Protected, inefficient manufacturing sector
– Decline of labor-intensive production [Rodrik]
• High unemployment
– Mismatch: economic structure and labor force
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