The case against reparations for slavery and colonialism

In 2024 the California Reparations Task Force recommended that each black descendant of slaves living in California receive $1 million as “reparations” for slavery. Meanwhile, Caribbean nations have asked the United Kingdom to enter a “meaningful conversation” over reparations for the Atlantic slave trade. Further, the African Union has designated 2025 as the “Year of Reparations” and is demanding payments running into the trillions. While essays making a case for reparations are well known (for example by Ta-Nehisi Coates), I’ve not seen an article that aggregates all of the many arguments against. So, here goes in twenty four soundbites:

(1) First, to state the obvious, none of the people who would receive reparation payments were ever slaves. Slavery was abolished in the British Empire in 1833 and in the USA in 1865, so about 6 or 7 generations ago. While monetary compensation for a wrong done to a person is an accepted concept, compensation for wrongs done to fairly distant ancestors is not.

(2) But even though slavery was generations ago, if, as a result, their descendants are worse off today, doesn’t that justify reparations? Well, those descendants are not worse off financially as a result of slavery. The GDP-per-capita of typical West African countries (Gambia, Ghana, Sierra Leone, etc) is about $2000. But many Caribbean countries (Dominican Republic, Barbados, Trinidad and Tobago, etc) have a higher GDP-per-capita in the range $10,000 to $20,000. Meanwhile, the median household income for black Americans is higher still at about $60,000. That is below the overall American median ($80,000) but, in purely financial terms, American descendants of slaves are much better off than under the counter-factual history where their ancestors had remained in Africa. Indeed, many Africans today envy the status of American descendants of slaves and yearn to migrate.

(3) But aren’t today’s descendants owed the money that should rightfully have been paid for their ancestors’ labour? Well, since farm labourer has been a common occupation worldwide, we know how much money labourers tended to leave to their descendants, and that is nothing (they needed it for themselves and didn’t have spare money to pass on). So even if slaves had been free men, treated well and paid a fair wage as farm labourers, they’d have spent it, they would not have passed much wealth to their descendants.

(4) But the farm owners did pass on wealth, which derived from slavery, so shouldn’t the descendants of those slaves have a share of that? Well, a person living in the slavery era would likely have around 200 descendants today (or none), so there is no clear link between that person and any inheritance today. What typically happens to family farms is that one sibling inherits the farm (often after working on the farm for low pay for decades) while the other siblings leave for other directions in early adulthood. Further, the vast majority of white people receive no inheritance at all deriving from as far back as the slavery era. Even where a rich person leaves a substantial inheritance, that wealth tends to dissipate over 3 or 4 generations. Multi-generational propagation of significant wealth is unusual. Where successive generations do well it is more often the case of capable parents having capable children who also generate wealth.

(5) But doesn’t slavery, and the ongoing injustices into the Jim Crow era and beyond, mean that black Americans were unable to build up intergenerational wealth? Yes, that’s true. But, we can ask, do white Americans benefit from intergenerational wealth? Some do, yes, indeed a minority are hugely wealthy, but most don’t. Only 30% of white Americans receive any significant inheritance, and the median inheritance for white Americans is below $10,000. Those numbers are worse for black Americans (only 10% of whom receive a significant inheritance) but, the majority of white Americans are also not inheriting lifestyle-changing amounts of money.

(6) But weren’t black American families “redlined” (prevented from getting loans for home ownership) and so held back? Yes, a larger fraction of black households than white households were redlined, but even so 85% of households that were redlined were white (are they owed reparations?). And if a family hadn’t been redlined, they might still not have had the financial standing to have been granted a home loan. From 1940 to 1980, over the redlining era, the fraction of white households owning their homes went from 43% to 75% (increasing by a factor 1.7), but the figure for black households also climbed from 21% to 56% (by a factor 2.7). There is a lot of history here, but no simple conclusions to be drawn.

(7) But aren’t black families generally much poorer than white families, and isn’t that a legacy of past injustices? Well, since the distribution of wealth, even within a race, covers a large range and is highly skewed, summarising it in one number isn’t sensible. In fact, the income profile for white families in America differs markedly from that for black families only at the upper quartile. The bottom half of the white distribution and the bottom half of the black distribution look much the same: neither has much stored wealth.

There are indeed big differences right at the top end, such that there are proportionately fewer black multi-millionaires, but if we’re talking about redistributive taxation to remedy social ills, shouldn’t we be concerned with the bottom half of the distribution?

(8) But doesn’t America’s current wealth overall derive from slavery, so don’t the descendants of slaves deserve an equal share? Well, no, slavery does not produce long-term wealth. That’s a basic misunderstanding of why we are richer today. We are richer because of technology, because we are better at doing things and better at creating things. The industrial North of the USA was always richer than the slave-based economy of the South, and it is on industry and technology that today’s wealth is built. Slavery enabled a minority of Americans to live very cushily on the backs of their slaves (only 2% of whites owned slaves), but very little technological innovation came from slave states. Indeed, one could argue that mechanisation and innovation would have happened faster without the availability of slave labour to work farms, since that meant that mechanisation wasn’t needed. The slave labour went mostly into consumer goods (sugar, cotton, tobacco) that boosted the lifestyle of white people at the time, but not into infrastructure such as railways or technology that promoted long-term prosperity.

(9) But aren’t black Americans suffering from “intergenerational trauma” as a result of a dire history of slavery and Jim Crow, that leads to poorer outcomes for them today? No, there is no evidence for any such concept, it has been invented purely for ideological reasons. While a mother’s malnourishment in pregnancy could well affect the child, there is no evidence that humans suffer incapacitating “trauma” from events long before they were born.

(10) Anyhow, Western countries with welfare states already have massive transfers of wealth from richer citizens to poorer citizens. Thus there already is massive and ongoing “reparations” occurring. Black Americans are 13% of the population but pay only 6% of the taxes while collecting 26% of the welfare.

The total government spends on black Americans (welfare, social security, education, Medicaid, Medicare, etc) amounts to about $1.5–1.8 trillion a year, whereas total taxes (Federal, State, Local, etc) paid by black Americans comes to about $450–530 billion. This adds up to a net transfer of $21,000—$28,000 per black person per year, ongoing (white Americans are roughly break even on this calculation, noting that overall the US government spends $5000 per person per year more than it receives in tax, thus adding to the US debt).

For comparison, Canada subsidises each indigenous citizen by $7300 per year, New Zealand does so at $8700 per Maori per year, and Australia does so at $14,700 per Aboriginal Australian per year; all figures in US dollars, but note that all such estimates depend on what expenditure one includes, so take them as indicative only.

(11) A reparations payment would not be the end of it. The next generations of black Americans could say: “I’m also a descendant of slaves, where’s my reparations payment?” If you’re thinking that parents would hand down wealth, or that reparations would solve the problems that lead to such requests, then you are being somewhat hopeful. Note that “affirmative action”, initiated in the 1960s, was intended to be a short-lived policy, but 60 years later its advocates regard it as just as necessary. If you start reparations payments you’ll then be asked to continue them indefinitely.

(12) Further, reparations would not solve problems such as racial gaps in educational achievement or crime rates. We know this since we can control for income when making comparisons, and family socio-economic status does not explain the disparities. While it is often claimed that poverty causes crime, it is more the case that crime causes poverty, or, rather, that the character traits that tend to lead to crime also tend to lead to poverty.

(13) But wasn’t the transatlantic slave trade both unique and uniquely evil, and doesn’t that justify penance? No, slavery has been a feature of most human civilisations, and other slave trades were as bad. The North-African Barbary Pirates, operating from 1500 to 1830, are estimated to have taken a million slaves from Europe. About 12 million Africans were taken West to the New World as slaves in the the Atlantic slave trade, but more, perhaps 18 million, were taken East in the Arab slave trade (though they have fewer descendants since the Arabs often castrated male slaves). Meanwhile slavery of Africans by Africans was routine and rampant. The Europeans and Arabs did not start the enslaving of Africans, they bought slaves from an already existing system of slavery. Similarly, slavery was endemic to Native North American societies, well before Europeans arrived, and practices included slaves being human sacrifices at potlatch ceremonies.

(14) The most notable aspect of British and American involvement in slavery wasn’t (as is sometimes asserted) that white people started it, it was that they finished it. Once the British had decided that slavery was morally wrong, passing the Slave Trade Act in 1807, they then put huge efforts into eradicating it. The Royal Navy’s West Africa Squadron patrolled the Atlantic intercepting slave ships and preventing other nations from trading slaves. They intercepted 1600 slave ships, freeing 150,000 slaves, and effectively ended the Atlantic slave trade. This involved a huge expenditure and a large commitment of men and ships.

Part of the rationale for expanding the British Empire by invading African nations was to stop slavery. As just one example, in 1851 the Royal Navy bombarded Lagos (in modern Nigeria) and replaced King Kosoko, who was refusing to sign an anti-slavery treaty, with his more compliant uncle, who did sign. Similarly, when the British invaded Benin in 1897, part of the rationale was to end systems of slavery and human sacrifice in that nation.

The USA, of course, fought a civil war to end slavery, in which 360,000 Union soldiers died. So, yes, European-origin white people had been slave owners and slave exploiters (like many other peoples throughout history), but they were the first to utterly repudiate slavery and seek to eradicate it, both in their own lands and worldwide.

(15) But wasn’t Britain built on slavery? Its canals and railways? Well no, there was little slavery on British soil, and while there were some black African slaves brought to Britain, as early as 1772 the courts ruled that slavery had no legal basis in English law and that no person on British soil could be kept in bondage or sold. The canals and railways were built by white British people who had previously been agricultural labourers, attracted by higher rates of pay, along with Irish “navvies” escaping famine in Ireland.

(16) But doesn’t Britain’s current wealth derive from exploiting its empire? Well, no, Britain did not get rich and powerful because it had an empire, Britain got an empire because it got rich and powerful. And it got rich because of the industrial revolution. The ability to colonise, that is the large-scale organisation of society and ability to send armies of soldiers across the globe in ocean-going ships and with superior weapons and technology, was founded in home-grown economic and technological development, and done largely with British coal and British iron.

The goods that Britain gained from its colonies (spices, sugar, tea, cotton, tobacco, silk, porcelain, and gold and jewels) were consumer luxuries that improved the quality of life, which Britain could now afford because of its wealth, but they were not the origin of that wealth.

Likely Britain is not wealthier today owing to having had colonies, compared to a counterfactual history where it had simply traded for goods. After all, armies are hugely expensive, and the administrative effort put into colonies was a diversion away from what actually contributes to long-term prosperity, namely technological innovation. The effort of conquering and then controlling an empire likely cost about as much as any financial benefit gained from the empire.

(17) But isn’t Britain still benefiting from having appropriated the wealth of former colonies? Well, if we list European powers that had overseas colonies (Britain, Spain, The Netherlands, Portugal, France) they are not noticeably richer today than European nations that did not (Switzerland, Denmark, Norway, Iceland, Poland, Sweden). It’s hard to see any pattern there. Again, countries did not become rich through overseas colonies, rather, they developed colonies because their home-grown economies generated wealth.

Wealth does not come from exploiting colonies, it comes from technological advance and figuring out better ways to do things and better ways of organising society, and all of this is easy to copy across borders, which is why European countries have arrived at a similar wealth today, regardless of the former ownership of colonies.

Thus, for example, Britain and Poland today have a similar GDP-per-capita despite very different histories. It’s worth noting that between 1764 and 1989 Poland was continually invaded, bullied and controlled by its neighbours, including the imposition of a disastrously bad economic system from 1945 to 1989, and yet after a relatively short 35 years of self-control it is now prosperous and peaceful. Recent history matters, but distant history seems to matter less than one might suppose.

(18) But didn’t being colonised stunt the economic development of those countries, from which they are still suffering? Again, no. Looking around the world we can see what factors lead to economic development and wealth. They centre around technological progress, and are facilitated by having market economies and respect for private property along with strong legal institutions, good educational systems, and good “human capital”, along with investment in public infrastructure.

It’s hard to make the case that this package of conditions was worsened by colonisation. Indeed there are former colonies (Singapore, Hong Kong) that are now as rich as their previous colonisers. Colonisers were indeed often oppressive and sometimes brutal and yes they extracted taxation, but that’s different from the question of whether, over the long term, the economic development of colonies was slowed down or sped up. Two economists studying the issue found “a strong and uniformly positive relationship between colonial European settlement and development” and argue that “any adverse effect of extractive institutions associated with minority European settlement was more than offset by other things the European settlers brought with them, such as human capital and technology”.

(19) But didn’t Oxfam calculate that Britain had exploited trillions out of its empire? Yes, two academics calculated that Britain extracted wealth amounting to a current value of £50 trillion from India. That calculation added up the value of all the goods that were exported from India, saying that, by taxing India to pay for goods, Britain had got them at far below a fair price. They then compounded the sum at an interest rate of 5% a year to arrive at its value today.

This is a bizarre calculation that bears no relation to how economies work. It supposes that we are richer today because surpluses from past agricultural production have been accumulated in the nation’s bank account. In actuality, most governments are heavily in debt, and today’s higher standard of living doesn’t come from building up piles of agricultural surplus, nor from monetary reserves in the nation’s bank account, it comes from progress in technology. It’s hard to argue that, over the long run, contact with the West and its superior technology has overall harmed the technological development of other countries, compared to the counterfactual where there had been no such contact (just as the West today undoubtedly benefits from current technological development in the Far East).

(20) A similarly bizarre calculation argues that the West owes $100 trillion to the Caribbean countries. This figure was arrived at by evaluating damages that a slave might be awarded by a court today for “lost labour, lost life, loss of liberty through false imprisonment, personal injury, mental pain and anguish, and gender-based harm”, and multiplying this by the total number of slaves, and then suggesting that this sum should be paid to the current governments of the relevant countries.

Why they think that current governments should be paid for the suffering of long-dead citizens (who cannot themselves be compensated) is not explained nor justified. Perhaps the advocates are thinking that the higher the sum they ask for the more they are signalling their abhorrence of slavery? But it amounts to saying that people today who have never been slave owners, and whose current wealth owes almost nothing to slavery in the now-distant past, should make vast payments to people who have never been slaves and whose current circumstances also bear little relation to past slavery.

(21) But didn’t colonial powers divide Africa with arbitrary lines on the map, causing ongoing ethnic conflict? To some extent, yes, though this has been exaggerated. But the argument supposes that there was little ethnic conflict prior to the European arrival (totally untrue), and that there would have been less if the Europeans had not arrived (also dubious). Further, many other parts of the world, such as the Balkans and Eastern Europe, have also undergone as many boundary changes, and this does little to explain why some nations are relatively wealthy today while others are not. It’s also worth remarking that those keenest on the idea that the West must pay reparations tend to be among those who insist that, when it comes to those Western nations, ethnic diversity and multiculturalism are a “great strength”, not a weakness.

(22) In any case, the Caribbean countries have received around $200 billion in foreign aid since 1960, principally from the US. Africa has received over $2 trillion in that time. Opinions vary on whether this has helped Africa, since aid can undercut the local economic development from which true prosperity comes. Massive reparations payments would similarly remove the ability of a home-grown economy to operate and develop properly.

(23) Let’s also emphasise that a huge fraction of the technology that underpins the world economy today was invented by white Europeans in Western countries. Since patents expire after 20 years, nearly all of this technological know-how is now available to the rest of the world pretty much for free. Take, for example, electricity, invented by white Europeans (Faraday, Maxwell, Volta, Tesla, etc) and now worth trillions a year to the world economy. Or take the sources of nearly all mechanical power worldwide, first the steam engine (invented by Europeans), then the internal-combustion engine (Europeans) and the electric motor (Europeans).

Or computers, or mobile phones, or the internet, or the recent developments of AI. Or much of our understanding of genetics, and the Haber–Bosch process, which underpins the “green revolution” and has greatly increased food yields, or a vast list of other things including much of medical science and the vast array of modern drugs. All of this took decades and centuries for the West to develop (along with China, Japan and others, but it’s not them asking for reparations), and which now underpins the economies of the rest of the world.

The fact that Western technological know-how, and Western ideas of how to organise society to generate wealth are now available to the rest of the world pretty much for free, is a huge boon to everyone else and massively outweighs any residual economic negatives from slavery or colonisation. In contrast, the countries asking for reparations have contributed almost no technological development that has then benefited others.

(24) Overall there is no economic basis for the request for reparations. So why is it now being demanded, over a hundred and fifty years after slavery was abolished in the Western world? Likely this comes from the rise of “critical theory” which now dominates much of academia. This simplistic one-trick theory attributes all disparities in outcome to “oppression”. If there are differences in wealth between groups or nations, then it must be because the richer ones have oppressed the poorer ones. No other explanation can be considered. If there is no current oppression, but there are still wealth gaps, then these must be the ongoing consequence of past oppression. And the only remedy for this is reparations on a scale sufficient to result in equality of outcome.

This is a fundamental misunderstanding of how the world works and what leads to prosperity. Poverty needs no real explanation, since for millennia it was the lot of all of humanity. By the standards of today’s West, everyone in history lived in poverty. What led to the prosperity of today’s West was not (as certain academics might tell you) that one group decided to exploit the other groups (in fact most tribes fought with neighbouring tribes most of the time over most of history). The West’s wealth was instead generated internally, it came from figuring out better technology and better ways of organising society.

An investigation into what factors drive prosperity would look at market economies, respect for private property, strong legal institutions, good educational systems, free trade, and public infrastructure (electricity, piped water, sewage systems, roads, railways, communications networks, etc).

Cultural factors that could also be important might include attitudes to free speech and free enquiry, an absence of oppressive religion, a willingness to respect the public good and reject crime, a lack of corruption (such that administrators serve the public good, not themselves and their extended families), and a willingness to collaborate with fellow citizens (rather than a tribalism that sees others as unfriendly). In the end it seems to come down to human capital and to a populace adopting the attitudes and policies that lead to prosperity. The recipe is not a secret and is there for others to adopt.