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Racial inequality: a political economic analysis.

Do white workers benefit from racism? This question has plagued radical activists for decades, and remains relevant today in the face of a persistent segregation nearly as pervasive in the left as in the rest of society. Yet the distribution of the costs and benefits of racism among different groups of whites has rarebly been studied in more than an anecdotal manner. Thus, despite its statistical density and academic prose, the political importance of Michael Reich's Racial Inequality: A Political Economic Analysis cannot be overstressed. While his answer is not completely compelling, Reich's carefully constructed study provides some of the most comprehensive evidence available that working-class whites have a material stake in fighting racism.

Reich first argues that racial inequality has been surprisingly stable in the face of widespread demographic, economic, social and political changes over the course of this century. He shows that "much of the recent improvements in black incomes relative to that of whites reflects cyclical forces and a one-time structural change--the decline of the agrarian South--and that racial inequality has persisted within metropolitan areas and private industries.

(pp. 10-11) By showing how transient are the forces operating to equalize the economic positions of blacks and whites, Reich's work provides a sobering counterweight to the argument, largely based on the growing parity in the black and white earnings and occupational distributions (particularly among women), that racism has been on the wane over the last two decades. By placing these improvements in their unique historical context, Reich reveals the superficiality of the conservative conviction that competitive market pressures will by themselves work to eliminate racial discrimination. Taken in conjunction with his empirical critique of orthodox discrimination models and his theoretical demonstration that discrimination is compatible with profit maximization, Reich has built one of the most thorough cases available for the superiority of a class-based analysis of racial inequality.

His demonstration that racism works against the interests of white workers is more problematic. He shows statistically that as black-white income inequality increases, income inequality among whites also increases. In other words, as blacks do worse relative to whites, wealthy whites do better relative to poorer whites. This is taken to show that racism allows capital to benefit at the expense of white as well as black labor by weakening its bargaining power. From this he concludes that "most white workers lose from racism and ... rich whites benefit." (p. 158) His econometrics are well crafted; unfortunately, however, the conclusion does not necessarily follow from the premises. It is quite possible, after all, for racism to raise the absolute level of all white incomes, with the greatest share acruing to the wealthy. In this case, racism would benefit all whites while also increasing income inequality among whites.

Income rise not only as wages rise, but also as the probability of being employed and holding a good job increases. The greater the extent to which blacks are forced to stay at the bottom of the occupational hierarchy and bear the brunt of unemployment, the easier it will be for whites to fill in at the top. Assuming that class-struggle effects then tend to lower white wages in more highly discriminatory firms, the conclusion that white workers experience a net loss from racism requires that the latter effect dominate the former. The only evidence Reich provides which would directly support such an interpretation is in a Table (Table 7.6), where he shows that for men median white earnings go up as black/white relative earnings increase (between industries). But these figures refer only to persons currentlu (1970) in the labor force who were employed in the previous year, and hence do not include white income gains from their greater profitability of being in the labor force and having held a job? While white earnings may be lower in more discriminatory firms, the chances that a white person will be able to work there are correspondingly greater, and the most we can conclude about the impact of discrimination on whites is that a trade-off exists between wages and employment.

Income distribution, in other words, can be a function of race as well as class relations. Racism can have a contradictory income effect: it can transfer income from blacks and poorer whites to wealthier whites in the form of lowered wage rates. Which effect predominates in determining the incomes of poorer whites cannot be foretold simply from an intrafirm bargaining model. While Reich's results do show a class-struggle effect from racial inequality operating between wealthier and poorer whites, his more general conclusion that poorer whites are hurt overall by racism remains unsupported.

Income gains, of course, only a subset of the possible economic benefits which racism can provide, which in turn are only a subset of all the "material" interests whites might have in racism.

Thus even if Reich had shown that white incomes were absolutely as well as relatively lowered by racism, it would not necessarily follow that racist whites were acting against their own interests. If they were, how could one explain the 300-year history of white racism as a mass (as opposed to class) ideology? Yet this is a problem for Reich, because wages are the only material interest he considers. He thus argues that the degree of economic commonality between blacks and whites, the character of the state, and labor market conditions combine to determine the extent of interracial cooperation. The long-run benefits to whites from cooperation can therefore be obscured by more immediate economic and political pressures, leading whites to act against their own interests.

This framework of countervailing forces is an insightful one, particularly since Reich combines it with a focus on class conflict among whites. His analysis of slavery, Reconstruction, and Jim Crow is especially rewarding in this regard. But because long-term economic interests are only one aspect of interracial alliance building--and a possibly contradictory one at that--Reich should be more qualified when he draws political conclusions from his historical examples. For example, when discussing the waxing and waning of interracial solidarity among New Orleans dock workers, he comments that "the threat of wage and employment cuts during economic downturns frequently led white workers to seek to protect their interests by attempting to shift the burden of recession onto blacks instead of maintaining their interracial alliance." (p. 244) A reasonable supposition, but one which does not accord well with the contention that whites can be made to see that "the achievement of racial economic equality need not occur at their cost." (p. 311) The short-run benefits to whites from racism are perhaps less than the long-run benefits from solidarity; but the former is a reality, while the latter is only a possibility.

Reich's discussion of the North is shorter and weaker. He focuses on how racism inhibited union-organizing efforts and thereby damaged the position of white workers in terms of wage gains, capital flight to nonunionized areas, and the commitment of the federal government to full employment policies. These are good points to make when arguing that whites have an interest in fighting racism, but they will never convince a committed pragmatist. Capital flight is international in scope, full employment is not even a possibility in a capitalist labor market and white workers frequently have made income gains by establishing racial monopolies on the best jobs. Few would disagree that the struggle to achieve these goals would be greatly strengthened if white workers fought racism, but it would certainly not guarantee that they would be more than partially achieved. Thus it is not inconceivable that ending discrimination would increase the competition for good jobs and substitute white for black unemployment, an outcome few whites could be expected to support. The resistance of white workers to racism is simply more risky than Reich would have us believe, a reality which may go some way toward explaining their historical failure to fight consistently for black/white equality. Attention to this point would have benefited Reich's discussion of the failure of the CIO to go beyond "equal pay for equal work" into issues such as job distribution, seniority rights, and community relations. While he laments its lack of vision, he offers no explanation of why it went no further than it did.

Reich's concern with displaying the common interests of black and white workers leads to a certain selectivity in his historical references. He says very little about racial conflicts outside the production process, an unfortunate omission given that slow economic growth and urban decline have created a zero-sum game for community resources played out along racial lines. He does not discuss the impact of imperialism on the post-Second WorldWar affluence among white Americans and its connection to racial ideologies. He does not comment on labor's reaction to the civil rights movement or to federal anti-discrimination programs (thsi is particularly to be regretted since the conflict between seniority rights and affirmative action is an obvious objection to Reich's political argument). Most strikingly, he says next to nothing about black resistance: black church and labor organizations, Garveyism, the civil rights and black power movements, and the urban uprisings are ignored as though they were irrelevant to a chapter entitled "Racism and Class Conflict, 1865 to 1975". Since he reduces racism to a form of class struggle rather than treating race and class as relatively autonomous and mutually constitutive social relations, these omissions are not surprising. But they limit the political lessons which can be drawn from his work.

Reich's conclusion that an economic basis exists for interracial unity is thus overly optimistic. By his own examples, one could also conclude that the economic basis exists for interracial conflict, particularly as the economy continues to stagnate. Political unity is a laudable goal, but it cannot be achieved by ignoring the conditions which encourage whites to identify their interests on a racial rather than a class basis.

The interconnections between race relations and class relations are crucially important to understand. Reich's discussion of the persistence of economic racism, his demonstration that racism has a class-struggle effect which works against the interests of white workers, and his analysis of counteracting tendencies in the formation of interracial coalitions are important contributions to this effort. Nonetheless, racism also unites white workers in a reactionary manner and black workers in a progressive manner, and forges a hegemonic alliance between white workers and capitalists. Furthermore, the economic impact of racism on white workers is mixed: they can benefit in the short run and lose in the long run, gain in job security and lose in income share, etc. Racism thus has a complex and contradictory impact on class formation and conflict, and the repeated litany of divide-and-conquer only goes so far in unraveling it.

Despite these qualifications, Reich's book is a substantial addition to the literature on U.S. racism. It provides a wealth of information and arguments against those who would claim that America has transcended its racist history. Both in terms of its strengths and weaknesses, it is politically and pedagogically useful works.
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Author:Shulman, Steven
Publication:Monthly Review
Article Type:Book Review
Date:Apr 1, 1984
Words:1837
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