Current Affairs

Keeanga-Yamahtta Taylor on Why Racism Has Been Profitable

The author of “Race for Profit” on how capitalism has restricted Black wealth accumulation.

Keeanga-Yamahtta Taylor is a writer, educator, and activist. She has authored numerous books on racial inequality and Black liberatory movements, including From #BlackLivesMatter to Black Liberation, and the forthcoming Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership. She is an Assistant Professor & the Charles H. Mcilwain University Preceptor at Princeton University. Last year she spoke with Nathan J. Robinson on the post-Civil Rights housing gap, the white middle class, and Michelle Obama.

Nathan J. Robinson:

Hello, Current Affairs listeners. This is Nathan J. Robinson, I’m the editor of Current Affairs magazine, and I’m here with Keeanga-Yamahtta Taylor. Thank you so much for talking with me. 

Keeanga-Yamahtta Taylor:

Oh, thanks for having me on. Glad to be here. 

NJR:

What I really think is important about this book [Race for Profit] that you are filling in an often neglected piece of an important historical story about race and economics in the twentieth century, because when we discuss housing discrimination, people often talk about redlining and they talk about the 1930s and 40s and the period in which Black Americans were explicitly excluded and subject to racist programs from the FHA and the government. But you’re looking at the 60s and 70s. You’re looking at the period after that. And you make a point that I think is not emphasized sufficiently, which is you develop this concept of “predatory inclusion” and you say that when it went from exclusion to inclusion, that actually that was an illusion. That was kind of a myth, and it clouds our understanding of how inequality has persisted.  

KYT:

Yeah, I think that it is the kind of typical narrative that has been produced to understand the Black movement and its relationship to the state, that it has been one of ongoing, cumulative progress over time, and that really, in the 1940s and 1950s with the onset of the Cold War, what is referred to as either Cold War liberalism or racial liberalism, develops to eventually say that discrimination is real so it’s not being made up by African Americans, but how we deal with it is to stop discriminating, and to just simply include Black people into the existing structures of these societies that have of course produced this vibrant and robust white middle class. 

And if given the same opportunities, if included in the same types of ways, then the dynamism of American Capitalism can produce the same kind of outcome for African Americans, and so there’s a concerted effort to essentially remove race from the law in the United States, particularly in the North. I mean, almost exclusively in the North until the Civil Rights movement of the 1960s, but what we find with housing—and we find it in other areas as well, but the focus of my book is on housing—is that the efforts to include African Americans don’t produce the same outcomes. They produce different outcomes that are deeply scarred by the continuation of racism and discrimination, even if it’s done so within the framework of colorblindness, meaning that there are no longer restrictive covenants telling African Americans where they can or cannot live. There’s no longer state sanctioned housing discrimination as there was up until 1968, but even without that, you still have Black people who are treated differently in the housing market. You still have African Americans who are treated differently by the real estate industry, and differently by banks, and part of this is because of the cumulative impact of racial discrimination and divestment of Black enclaves over time, meaning that those areas are then viewed by the banking industry, by the real estate industry, as impaired, and that impairment, as a result of discrimination that was practiced by these very same institutions as a result of the kind of impairment that is created by divestment, that becomes the pretext for treating Black renters and Black homeowners differently from their white peers. It becomes the basis for underwriting that is defined by risk. That the greater levels of poverty, the greater distress of Black housing, the greater concentration of substandard housing means these areas are considered to be risky. So that creates the context for higher interest rates, higher fees, different banking practices that in many ways produce the same kind of exploitative outcome or the same kinds of exploitative practices that create financial disparities and particular financial deficits for African Americans, what Black people up through this period refer to as a “race tax.” And so predatory inclusion is a way of drawing attention to the continuity of these practices, even when the formal structures of race and discrimination have been removed. 

NJR:

You make the points that until we understand how markets work, until we understand the kinds of economic actors that are determining who gets housing and how housing is valued, we’re not going to understand why we see the persistence of the Black-white wealth gap and the gap in homeownership, and you point out that markets are social things. They are based on the social designs and expectations you said of a public molded by racially consciousness, and the other thing you say is that the real estate industry and the mortgage lending industry were only too happy to embrace color blindness because there was an opportunity. Inclusion creates a greater opportunity to profit. It’s a whole new set of customers to squeeze wealth out of. 

KYT:

Yeah, absolutely—this is important in terms of understanding the transition around Black access to housing in the first place, because it is true that it’s ultimately the urban uprisings of the, or current throughout the 1960s that finally compel the federal government to change its policies, in regards to redlining, particularly the Federal Housing Administration which was in charge of the U.S. Government’s role, intervention in the homeownership market, and so that part is true, but it’s also the case that as early as 1954—the Housing Act of 1954 is the first public policy that allows for the creation of some—of federal tax dollars directed at low income homeownership in urban areas. And so part of this is in reaction to urban renewal which had displaced tens of thousands of Black homeowners and renters, and this is when public housing becomes very popular and necessary for the federal government as a way to house displaced residents, but not everyone could have access to public housing, so for African Americans whose income exceeded the limit placed on public housing, homeownership became an alternative, and so over the course of the 60s, the FHA is constantly changing its practices and policies to allow some more Black homeowners as a way to open up new market possibilities as the white housing market began to saturate in the early 1960s. So then, by I think 1960, 62% of white people are homeowners. There is a need as homeownership becomes more central to the U.S. economy. There is a need to expand the field of homeowners. It’s the same reason why the U.S. finally began to relax its restrictions on single women as homeowners in the 1970s, because there’s a never ending search for new customers, for new consumers, but with regards to African Americans it was contingent on one important factor: that the housing remain segregated.  So the FHA, and the real estate industry, and the bankers were willing to relax their prohibitions on Black homeownership on the grounds that Black homeowners continue to be segregated to the cities because of the way that race shapes property values in the United States

So the idea of allowing for the entry of African Americans, even middle class Black people into predominantly white suburbs was a problem that no one would tolerate because that represented a threat to property values in the minds of white homeowners, the real estate industry including the banking sector, and so these were the conditions into which Black people become homeowners which then creates the basis for a completely different experience of homeownership in comparison to white people so that when the original suburban building boom happens in the 1940s and 50s, these are not the same conditions under which Black people are becoming homeowners. Those houses that were being built in the suburban developments were new. There were historically low interest rates as well. The housing that African Americans were being relegated to on this segregated basis in cities was old, and interest rates were on the way up. So you have older, distressed properties that are much more expensive, that required more care, that are concentrated amongst a population that is disproportionately poor, that has been marooned at the bottom end of the employment ladder, and that has much less wealth in general to rely upon to rehabilitate, to fix this older housing stock that they have been confined to. 

NJR:

Well, your book is a scholarly text and it’s mainly concerned with policy, economics, and history, but one of the most striking things about it is these stories you tell about the actual experiences of Black homeowners in the 20th century. I mean, you begin with the story of this woman Janice Johnson – 

KYT:

Mm-hm.

NJR:

– who buys a house in I think the early 1970s and the kind of house that it was and the kind of deal you were offered, and the other – I mean, really, there’s part of your book that is so disturbing where you talk about the consistency of rats –

KYT:

Mm-hm.

NJR:

– as part of the Black experience of home in the 20th century and just how much of the housing stock that Black people were confined to was infested. I mean, just serious rat infestations and how obvious that is if you listen to the people who actually had the experiences of the time. 

KYT:

Yeah, I was trying to convey how central the issue of housing is. And I say that, and in some ways could be surprising, of course. Housing is important. Everyone always talks about it. But in this period, everyone talks about housing as sort of a backdrop of Civil Rights issues. So it’s education, housing, and jobs. And it’s listing in that way may indicate somewhat of its importance, but I think that when it becomes too much a part of the general framework by which we understand discrimination from a certain era, we can miss how absolutely critical it was to working class and poor Black people. African Americans are disproportionately poor and working class. And it meant that their housing conditions were precarious, and so if we want to understand this question about the urban rebellion, about the political and social upheaval of the 1960s, then you have to understand the condition of Black housing on the one hand, and if we want to know why this became such an important aspect of public policy in the 1960s. One of the largest bills in terms of its allocations and effects over time is the 1968 Housing and Urban Development Act, and yet we know so little about it.

Everyone knows about – everyone who knows about these things knows about the 1968 Fair Housing Act, but very few people know about the Housing and Urban Development Act, and I think in some ways that is because the urgency created by the absolute lack of safe, sound, and affordable housing in the 1960s has been lost, and so I wanted to give some impression about why the crisis in safe and sound housing has such a catalyzing impact in Black politics, and when you read about the ubiquity of rats, and you read about —there was a riot in Philadelphia in 1964, and a report that was produced found that 100% of rat bites experienced in that city happened in Black neighborhoods.

NJR:

Yeah, that was incredible to me. 

KYT:

It gives you some insight into why people would quote unquote “burn their own neighborhoods down.”

NJR:

I mean, I had heard the line in Gil Scott-Heron’s “Whitey on the Moon

KYT:

Mm-hm.

NJR:

“A rat done bit my sister Nell and Whitey’s on the moon.”

KYT:

Mm-hm.

NJR:

But I had never thought about the fact that the line is in there because he is describing the biting of children which is an experience that actually happened to a lot of people, and parents couldn’t protect their children from poison.

KYT:

Very widespread.

NJR:

Yeah. One of the things I like about your book is you really help in a very concrete way collapse this conceptual distinction between the “de jure” and “de facto” segregation, and you really show what it is that causes residential segregation to persist, the channels through which capital flows, and what determines who has wealth, and who doesn’t, how assets are valued, the construction of house prices and the fact that that it doesn’t happen by magic, it happens because of people’s preferences, and I like that you really make it very vivid understanding how these numbers come about. 

KYT:

I think that one of the issues in this period I described earlier of Cold War liberalism or racial liberalism is the idea that the market is the great equalizer, that once we remove race from the law and integrate African Americans into American Society, then the market will help resolve these issues, that this was the problem, was the intervention of the state—the intervention of banks, of private individuals disrupted the natural ability of the market to provide goods and services for people. It’s a completely ridiculous idea, but it was a dominant idea in the U.S. And it’s an idea that persists.

I was at a meeting, a community meeting, about housing in Philadelphia a week ago, and there’s a big debate about rent and what is fair market rent, and someone said, “Well, fair market rent is what someone under reasonable circumstances is willing to pay for something.” And so the whole process just sounds so natural, sounds like it’s a part of the world that we live in, and so I wanted to spell out clearly that the market, just like everything else in our society that is not made of glass, and metal, and wood, and steel, is a social formation. It’s a social creation that is dictated by social norms, and in this society, racism is a social norm, and so all of that is absorbed into this thing that we call the market that dictates where the best places for houses should be, that dictates who we consider to be good neighbors, that dictates what is considered to be a desirable neighborhood. These are all subjective, highly influenced ways of looking at the world, and housing is not only no different from that, but it is the most susceptible to those things, and in the United States it takes on a particular importance because there’s such a weak welfare state in the U.S. that people’s investment in their homes is what dictates or determines what their quality of life will be. The difference being that for white people, the home is an accruing asset, or it has been historically, and for African Americans it has become a debt burden, but understanding that means that you really have to understand the way that the market was constructed, and the way that it functions, and its susceptibility to social norms which in the U.S. is always influenced by race. 

NJR:

I don’t want to put words in your mouth here, but I wonder if you’d agree with the sentiment that you can’t fight racism without having a really clear economic analysis. It seems to me that that’s one of the main implications of your book, is that until we understand the distribution of wealth and the mechanisms by which it occurs, the fight against racism is not going to make substantial progress. 

KYT:

Well, I think that often in the U.S. we talk about racism as also part of the natural world, that it’s this thing that exists in the atmosphere. So if we want to understand the violence of white people throughout most of the 20th century in terms of the attacks on Africans Americans who threaten to be their neighbors, then it’s, well, white people just don’t like Black people. White people don’t want Black neighbors, and it’s not until you introduce the economic dimensions of this into the argument that it begins to make sense. So what I said previously about the centrality of homeownership in determining the quality of life of individuals in the United States helps to make sense of the hysteria of white people when it comes to having Black neighborhoods, because if the real estate market has been structured in such a way that the perception that Black people lower property values intrinsically, then when you have Black people introduced into your neighborhood, you’re not necessarily thinking of them as neighbors. You’re thinking of them as destroying your retirement. You’re thinking of them as destroying your ability to send your children to school, which produces a certain kind of hysteria. And so, the economics of understanding white racism but also the multiple ways in which Black people have been exploited is critical to understanding the Black experience of the 20th century, and the central part of that has been the organized plunder of Black communities that has been created in part by residential segregation, the captive market created by segregation where Black people literally – to breach those borders – it’s not quite the same stakes, but to breach those borders during the period of time that I was writing about opened African Americans up to brutalization, to death, to bombings, to all kinds of violence. So the market is violently captured, and once that happens everything from eyeglasses, to books, to food, to housing is inflated. The prices on all these things are inflated. So black people refer to this exploitation as the “race tax,” but it’s critical to understanding the higher levels of poverty among African Americans. It’s not just low wages. It’s not just jobs on the low end of the employment ladder. It is the way that Black people are systematically extracted from because of racial segregation. 

NJR:

And it becomes almost impossible to build wealth, and I think that’s critical to destroying the right-wing myth about well, “we’ve gotten rid of the de jure segregation, therefore, over time, as time goes on, we can increasingly blame Black people for whatever persists, for the gap that persists because the period of time in which discrimination happened recedes further and further into the past,” but you say in the book, there has not been a single time in the last hundred years that –

KYT:

Mm-hm.

NJR:

Black people have had access to the same kind of housing, to a fair housing market. 

KYT:

What I said earlier, for white people historically, homeownership—the owning of a home has been an asset that has accrued over time and allowed white families to have intergenerational wealth. For African American families, this has simply not been true. Black housing, Black homes have always been valued at less than white homes. Black neighborhoods where there are concentrations of Black people are valued as significantly less, and so it has embedded a disparity and inequality into American society where our ability to accrue wealth personally, again, determines not just the quality of our own lives, but the quality of the lives of the people in our family.

If it is the case that African American housing and property is always viewed as less than that of white people, then the acceptance of this social arrangement, of buying a home as a way to secure your future, means that Black people are always at a deficit. And it is a deficit that is completely impossible to overcome. And so this is the way that the wealth gap was created, but it’s perpetuated over time, and that unless we are able to remove homeownership as the singular, important investment that families make that assure a certain trajectory for their future, that there is no way to overcome that gap, and there’s no way to bridge the disparity. 

NJR:

I also wanted to touch on just another piece of writing that you did recently that would seem unrelated, but I think has some similar themes which is that you reviewed Michelle Obama’s memoir for the Boston Review

KYT:

Mm-hm.

NJR:

And one of the central themes of your review of that memoir which is—I mean, you recognize Michelle Obama’s status as an icon. You recognize her importance, but you are quite critical of the perspective that she takes, and one reason that you are critical is because you seem to think that Michelle Obama doesn’t seem to recognize these kinds of dimensions of racism, and the sort of factors that create inequality and make it persist. 

KYT:

Well, I think she does recognize it. I think my bigger issue is that she accepts it. 

NJR:

Mm, okay. 

KYT:

And not acceptance as “this is a good thing,” but that this is the world that we live in. This is our reality. And so racism exists. She’s not one of these people who, “I don’t see race, race doesn’t exist.” She and, I’m sure [Barack] Obama, absolutely see that racism exists, but they accept it as almost a natural phenomenon for which there is very little you can do on a social basis, and therefore, what you must do is prepare yourself for how to navigate a racist world. And so it’s a very kind of individual-oriented way of adapting to the inequality that exists in society, and that means that you focus on making yourself the best person capable of doing that. It means that you focus a lot on developing personal networks with people who can help you overcome that.

There’s a lot of focus in Michelle Obama’s work and in her book on mentoring, on role modelling, and all of these approaches that are aimed at helping an individual navigate discrimination in the world, and the larger point I was trying to make was that even as Michelle Obama lauds this particular path as the most effective way to deal with discrimination, she does so by ignoring her own experiences, which is that Michelle Obama was able to go to a very high functioning, well-known public school in the city of Chicago because it was built not in a neighborhood near her, but it was built in a Black working class community in the aftermath of successive uprisings in the 1960s. There were riots in Chicago in 1966, and then again specifically on the West Side of Chicago in 1968, and as a result of that, a magnet school intended to pull students from across the city was built in an area on the west side of Chicago in its aftermath in the late 1960s and early 1970s of which she was a beneficiary of and really the whole thrust of the Black insurgency of the late 1960s is what helped to create the conditions, the political pressure to force the political establishment to open up new opportunities for Black people who wanted to enter into electoral politics, and it also helped to force the political establishment to create openings for the emergence of a small but highly visible Black middle class of which Michelle Obama would certainly become a member of, and so the collective political struggles of the 1960s are what created the pathway for her to even exist, and in her view she doesn’t see that, and so what she has come to the conclusion of is that through her particular hard work, through her networking, through all the individual things that she did, that is what set her apart from other people in her neighborhood who met a different kind of fate and whose lives experienced a different kind of outcome.

So, I would say she’s drawn the wrong conclusions about what led to her own success, but because of her level of success, this is what she counsels in the rest of the world, so there’s no systemic analysis of anything. There’s no sense of the collective as a way to respond to the persistence of racism and descrimination, and that way it’s a biography that really is emblematic of the times that we are living in, which there’s a kind of fetishizing of the individual and individual circumstances that are most supreme. 

NJR:

Yeah, I may have mischaracterized your argument a bit, for which I apologize. 

KYT:

No problem. 

NJR:

One thing is sort of that she’s kind of apolitical and individualistic, and she actually distances herself from politics, and so she’s not a political person, and one of the points that I think is sort of very satisfying in your review is that you kind of point out the way that this leads to pessimism and quietism, and you cite an example from the book, a story where Michelle Obama goes to I think a school and talks to some young Black girls –

KYT:

Mm-hm.

NJR:

– who say, “What do you plan to do about it?” And she admits that she doesn’t really have an answer, and one of the things that you’re kind of saying is that, well, these are policy choices that are made. We do have answers. The collective struggle. Power is assigned, and if you understand how it’s developed and how it moves, we can shift it. You kind of come away with a very—an almost much greater optimism than Michelle Obama might have. 

KYT:

Yeah, I mean those things are connected, which is if you don’t think that there’s any kind of collective or political solution, and she’s very cynical about it. I mean, she essentially says to them that rich people don’t want to pay taxes, which means that there’s gonna be no revenue for schools like this, so you have to figure out what to do. And she says, “Use school,” right? Use the education you have here to pull yourself out of this situation. And so part of that is some wealthy local businessman arranges for the same group of students from Englewood, which is a very poor, working-class neighborhood on the south side of Chicago—arranges for them to go to D.C. where Michelle Obama will escort them to Howard University so they can see what it looks like, being in college. And so it’s a very cynical view that rejects almost out of hand the idea that people have the collective ability to transform a situation, and the only time that she even talks about collectivity is when talking about voting, that voters collectively can put someone in, or take someone out of office. So in that sense, she has a very narrow conception of politics, and I think Michelle Obama tries to present herself as apolitical, but as I said in the book, she’s extremely political. 

She has been around politics her entire life. Her father was a committeeman for the Democratic Party, which was not a fancy position. It just meant that he went around and made sure that people in the neighborhood were registered to vote, know what candidates to vote for, take up small complaints, and so she had that experience. She was involved in every single one of Barack Obama’s local political campaigns on the city level in Chicago, on the state level in Illinois and his senatorial race, certainly both of his presidential runs. So the idea that somehow she’s just a good partner standing behind her husband who keeps running for political office… She’s distinctly political, but has a very narrow conception of politics that is tied directly to electoralism, and so that is the way that she thinks about it, which when you’re dealing with a roomful of Black teenagers who are highschool students, doesn’t really leave you much room to counsel them, because they can’t even vote.

NJR:

Well, if they study hard they can go to Princeton!

KYT:

So they don’t have—yes, exactly. They don’t have any political agency. So it’s a very cynical outlook. 

NJR:

Just one last thing I wanted to ask you which is reading your book, it struck me that one of the implications might be that without an explicitly racial transfer of wealth or push for that, you are never going to have racial justice, because you’re never going to close racial wealth gaps. What’s your take on reparations and the place of reparations in a left political agenda?

KYT:

I think the political struggle around reparations is quite important, because it is about drawing attention to the particular experiences of African Americans as formerly enslaved people and understanding the racism that was produced by the institutional of slavery, and then understanding the very long and reverberating consequences of that racism if we really want to understand the material underpinning of the Black experience in the United States, which I think is so central because part of the reason why these narratives of lapsed personal responsibility, cultural inferiority, family problems, all of the ways that the political establishment has thought to explain these disparities between African Americans and their white peers has really been a way of deflecting any kind of focus, analysis, investigation of the political system of the United States and certainly the market based economy that is essentially if you blame individuals for their own condition you don’t need to come up with any deeper understanding. You certainly don’t need a systemic analysis of the society that you live in to understand it.

And so a struggle around reparations would be about conducting a political campaign to understand the absolute centrality of slavery to American society and what that has meant well into the 20th and into the 21st century in terms of the ongoing impacts of racism. And I think housing in particular shows that simply integrating people into a particular system, shifting from exclusion to inclusion does not guarantee a just outcome when you’re dealing with an unjust framework, and so I think that there are multiple examples we can look at throughout American society to say that universal programs alone are not enough to overcome the financial deficits that have been created for Black people because of racism and discrimination. If we just took the example of Social Security, which is a universal program everyone pays into, and then is supposed to get a payment out of when they retire, that’s universal. But because Black people have worked in the worst jobs, and have been paid the lowest wages, that it means even with the distribution of Social Security, that disparity is reflected in the payout that you get. Black people get paid less because they worked for less. They worked under harsher conditions, and so just implemented a universal program doesn’t overcome that. You have to deal with the particular harms that were created by the institution of slavery. 

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