How Economic Theory and Policy Reinforce Racism
In this podcast 'How Economic Theory and Policy Reinforce Racism' William Spriggs, the AFL-CIO’s chief economist, discusses the inadequacies of the pandemic economic rescue package and the influence of mainstream economic theory. He further explores how mainstream economic theory continues to fail everyone, especially Black communities, by disregarding history.
Comment from our editors:
In this insightful podcast, William Spriggs explores some of the historical events in the US that present active institutional discriminatory policies towards 'Black' communities in the housing and labour sectors. These policies are at the foundation of today's segregation, inequality, and inequity; and, continue to influence the policy responses of the Covid-19 crisis that we now face. The consequences of Covid-19 and policy outcomes in the US and UK have shown clear differences in impacts by 'race' and 'class'. As explained in this podcast, this is no fortuity and the causes can be traced to historical policies and institutional practices. The reason posited for continuous discriminatory practices is a belief in the market that delivers a kind of impartial judge, where 'race', for instance, is viewed exogenous to the system. Spriggs explains how in a market-based society, theories such as the marginal productivity of labour, claimed to be a-historical, a-contextual and value-free, are used to legitimise e.g. the level of unemployment of ethnic minorities, differences in skills and ability and, consequentially, differences in income levels. By following this belief religiously and actively disregarding history and policies of occupational and housing segregation, institutions and the discipline of Economics are left unaccountable for the harm they caused to Black communities and of other minorities. Whilst universities around the world have started including courses where certain 'histories' are taught, unfortunately, in the words of William Spriggs:
"to remove the scarring, is going to be a problem because it’s not in the training of economist to do that, even when they know good and well the history of the policies that they put in place, even though they know everything that we did to create this imbalance there, there’s that unwillingness to say, you need to have an industrial policy response in this environment".