A quote about Capitalism/Racism

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Aug 2016
4,065
Dispargum
#21
what is the financial incentive for racism ?
If you understand that slavery is a form of racism and that slavery was highly profitable....
If you need a more modern example, keeping Blacks out of certain neighborhoods to maintain high property values is also a racist practice that enriched whites while denying the financial benefits of home ownership to Blacks.

It all boils down to the belief that the wealth pie is finite and the only way for one group to get a bigger slice is to give a smaller slice of the wealth pie to another group.
 
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Jan 2011
13,499
#22
If you understand that slavery is a form of racism and that slavery was highly profitable....
If you need a more modern example, keeping Blacks out of certain neighborhoods to maintain high property values is also a racist practice that enriches whites while denying the financial benefits of home ownership to Blacks.

It all boils down to the belief that the wealth pie is finite and the only way for one group to get a bigger slice is to give a smaller slice of the wealth pie to another group.
Oh I agree about the "wealth pie" and made that very same point in a prior post

Historically, slavery in itself is not racist per se (see slavery for debt in antiquity)... It becomes racist when only a certain "race" ("race" is really a US specific term, in most other countries -especially European ones- it is not in use) is subjected to it and all "members of that race" are presumed to be slaves...

"keeping blacks out of certain neighborhoods" was being done because (some) people in those neighborhoods were already racist, not because non racist people were financially incentivized to become racist....

Also it does not really deny the benefits of home ownership as there are many other neighborhoods to chose from... Note also that there are some practices in the US that seem strange to europeans, like policies re "no pets, no children" in certain condos for example..... Its a similar logic to the above, whereby existing owners do not want any factor that could potentially disturb their "peace and quiet"
 
Aug 2016
4,065
Dispargum
#23
Historically, slavery in itself is not racist per se (see slavery for debt in antiquity)... It becomes racist when only a certain "race" ("race" is really a US specific term, in most other countries -especially European ones- it is not in use) is subjected to it and all "members of that race" are presumed to be slaves...

"keeping blacks out of certain neighborhoods" was being done because (some) people in those neighborhoods were already racist, not because non racist people were financially incentivized to become racist....

Also it does not really deny the benefits of home ownership as there are many other neighborhoods to chose from...
The video in the OP only gave American examples, so slavery as a racist policy makes sense in that context.

Actually, red lining, "keeping Blacks out of certain neighborhoods" was official policy in many places. In some cases the government was involved. In other cases it was banks, real estate agents, and other people who had a vested interest in high property values. There was a widely held belief in America that once Blacks started moving into a neighborhood home values would fall. Sometimes it became a self-fulfilling prophecy - the belief itself became a made reality. People who may not have initially been racist did have financial incentives to apply this racist policy.

Over the last 75 or 80 years home ownership is perhaps the greatest factor driving the creation of middle class wealth in America, and the home values of whites have risen much faster than the home values of Blacks. Not all home prices rise at the same rates. Many of the homes that were available to Blacks actually saw their values fall. Red lining ensured that the best homes, those most likely to rise in value, were reserved only for whites while Blacks were only allowed to own the least desirable homes, the homes least likely to rise in value.
 
Oct 2009
3,556
San Diego
#24
I am not so sure about that.... the fact that they did not call it "race" does not change much..... Not sure when the concept of "race" first came up, but it certainly existed for millenia before someone came up with a name for it....

Also I am quite sure there were plenty of return seeking capitalists in the roman world (but again the word "capitalist" did not exist back then)

Again- you are not catching the meaning.

There is no evidence from Roman writings that they gave much thought to the color of anyone's skin.

Rather- they saw the distinctions between the peoples they came across as purely cultural. If you could build stone temples... you were considered civilized- just like them.

This is not to say they did not economically exploit people- it is to say they did not do so on the basis of skin color.
If you got conquered- you might end up a slave- but to the Roman way of thinking this did not make you less than human. You fought... you lost. The penalty for losing was slavery.

Like the feudal Europeans- they had to invent Other distinctions they used to justify their exploitation of others.



The notion that people were LESSER than you- based upon nothing but an aspect of their appearance- did not manifest until the colonial exploitation by europe of people's with less advance technology.

And it was not based upon any valid objective criteria- you exploited people to make money from them. And if you transhipped people who were immediately identifiable as being NOT like your people... you could justify your cruelties by making them defacto subhuman in your own mind.

try and find instances of racial enslavement prior to the era of European Colonialism...

It is a relative NEW idea- and it was borne of capitalist opportunism and persisted as a result of capitalist opportunism.
 
Jan 2011
13,499
#25
Again- you are not catching the meaning.

There is no evidence from Roman writings that they gave much thought to the color of anyone's skin.

Rather- they saw the distinctions between the peoples they came across as purely cultural. If you could build stone temples... you were considered civilized- just like them.

This is not to say they did not economically exploit people- it is to say they did not do so on the basis of skin color.
If you got conquered- you might end up a slave- but to the Roman way of thinking this did not make you less than human. You fought... you lost. The penalty for losing was slavery.

.
I do not see how that made them any less racist.... The nazis had a similar outlook.... They considered -for example- slavs and european jews to be untermensch, even though they had the same skin color as the supposedly superior "aryans"... Are we going to claim that the nazis were not racist because skin color was not a consideration for them ?

Your point about technological advancement is a good one, historically groups have tended to consider less technologically advanced groups as inferior. Unfortunately for black Africa, it was significantly behind Europe and (and to some extent even North Africa) at the time when the need for slave labor in the Americas was becoming significant..
 
Jan 2011
13,499
#26
The video in the OP only gave American examples, so slavery as a racist policy makes sense in that context.

Actually, red lining, "keeping Blacks out of certain neighborhoods" was official policy in many places. In some cases the government was involved. In other cases it was banks, real estate agents, and other people who had a vested interest in high property values. There was a widely held belief in America that once Blacks started moving into a neighborhood home values would fall. Sometimes it became a self-fulfilling prophecy - the belief itself became a made reality. People who may not have initially been racist did have financial incentives to apply this racist policy.

Over the last 75 or 80 years home ownership is perhaps the greatest factor driving the creation of middle class wealth in America, and the home values of whites have risen much faster than the home values of Blacks. Not all home prices rise at the same rates. Many of the homes that were available to Blacks actually saw their values fall. Red lining ensured that the best homes, those most likely to rise in value, were reserved only for whites while Blacks were only allowed to own the least desirable homes, the homes least likely to rise in value.
Here is an article on the topic

https://www.washingtonpost.com/news...years-ago-its-still-hurting-minorities-today/

In the 1930s, government surveyors graded neighborhoods in 239 cities, color-coding them green for “best,” blue for “still desirable,” yellow for “definitely declining” and red for “hazardous.” The “redlined” areas were the ones local lenders discounted as credit risks, in large part because of the residents’ racial and ethnic demographics. They also took into account local amenities and home prices.

Neighborhoods that were predominantly made up of African Americans, as well as Catholics, Jews and immigrants from Asia and southern Europe, were deemed undesirable. “Anyone who was not northern-European white was considered to be a detraction from the value of the area,” said Bruce Mitchell, a senior researcher at the NCRC and one of the study’s authors.


The discriminatory practices captured by the HOLC maps continued until 1968, when the Fair Housing Act banned racial discrimination in housing.


So first it was not only against blacks but generally against communities seen as less prosperous. Second the article's author, does not make the case that people were financially incentivized to become racist ... And asian and jewish communities are now quite well off in the US (not sure anyone specifically tracks catholics in terms of financial performance) so redlining as a cause of economic underperformance is not so clear
 
Aug 2016
4,065
Dispargum
#27
"The “redlined” areas were the ones local lenders discounted as credit risks..." - the reason for red lining was financial.

"it was not only against blacks but generally against communities seen as less prosperous.... And asian and jewish communities are now quite well off in the US" - Discrimination against Jews, Catholics, and Asians is also racism (Yes, even against white Catholics, by some definitions of racism. Any abuse of power by one group against another could be racism.) Asians, Catholics, and Jews escaped poverty by moving out of the red lined neighborhoods. Blacks did not. When Blacks applied for mortgages in non-red lined neighborhoods, they were often denied out of fear that Black neighbors would lower property values in previously all-white neighborhoods. Jews and Catholics could blend in with white Protestants. Asians also became "acceptable" to the people who enforced red lining. Blacks were always "unacceptable."

"the article's author, does not make the case that people were financially incentivized to become racist" - the author doesn't deny it either.

From Wiki: Redlining - Wikipedia
"In 1935, the Federal Home Loan Bank Board (FHLBB) asked Home Owners' Loan Corporation (HOLC) to look at 239 cities and create "residential security maps" to indicate the level of security for real-estate investments in each surveyed city. On the maps, the newest areas—those considered desirable for lending purposes—were outlined in green and known as "Type A". These were typically affluent suburbs on the outskirts of cities. "Type B" neighborhoods, outlined in blue, were considered "Still Desirable", whereas older "Type C" were labeled "Declining" and outlined in yellow. "Type D" neighborhoods were outlined in red and were considered the most risky for mortgage support."
and
"Private organizations created maps designed to meet the requirements of the Federal Housing Administration's underwriting manual. The lenders had to consider FHA standards if they wanted to receive FHA insurance for their loans. FHA appraisal manuals instructed banks to steer clear of areas with "inharmonious racial groups" "

Financial incentives leading to a racist results

Here are the definitions of the four color coded areas:
"Green areas are "hot spots"; they are not yet fully built up. In nearly all instances they are the new well planned sections of the city, and almost synonymous with the areas where good mortgage lenders with available funds are willing to make their maximum loans to be amortized over a 10-15-year period -- perhaps up to 75-80% of the appraisal. They are homogeneous; in demand as residential locations in "good time" or "bad"; hence on the upgrade".
"Blue areas, as a rule, are completely developed. They are like a 1935 automobile still good, but not what the people are buying today who can afford a new one. They are the neighborhoods where good mortgage lenders will have a tendency to hold loan commitments 10-15% under the limit."
"Yellow areas are characterized by age, obsolescence, and change of style; expiring restrictions or lack of them; infiltration of a lower grade population; the presence of influences which increase sales resistance such as inadequate transportation, insufficient utilities, perhaps heavy tax burdens, poor maintenance of homes, etc. "Jerry" built areas are included, as well as neighborhoods lacking homogeneity. Generally, these areas have reached the transition period. Good mortgage lenders are more conservative in the Yellow areas and hold loan commitments under the lending ratio for the Green and Blue areas.
"Red areas represent those neighborhoods in which the things that are now taking place in the Yellow neighborhoods, have already happened. They are characterized by detrimental influences in a pronounced degree, undesirable population or infiltration of it. Low percentage of home ownership, very poor maintenance and often vandalism prevail. Unstable incomes of the people and difficult collections are usually prevalent. The areas are broader than the so-called slum districts. Some mortgage lenders may refuse to make loans in these neighborhoods and other will lend only on a conservative basis."
The Racist Housing Policy That Made Your Neighborhood

Red lining was all about distinguishing between good real estate investments and bad investments - in other words it's all about money. Keeping Blacks out of the better neighborhoods was driven by the desire to maintain the quality of those real estate investments. That's called a financial incentive.
 
Jan 2011
13,499
#30
"The “redlined” areas were the ones local lenders discounted as credit risks..." - the reason for red lining was financial.

"it was not only against blacks but generally against communities seen as less prosperous.... And asian and jewish communities are now quite well off in the US" - Discrimination against Jews, Catholics, and Asians is also racism (Yes, even against white Catholics, by some definitions of racism. Any abuse of power by one group against another could be racism.) Asians, Catholics, and Jews escaped poverty by moving out of the red lined neighborhoods. Blacks did not. When Blacks applied for mortgages in non-red lined neighborhoods, they were often denied out of fear that Black neighbors would lower property values in previously all-white neighborhoods. Jews and Catholics could blend in with white Protestants. Asians also became "acceptable" to the people who enforced red lining. Blacks were always "unacceptable."

"the article's author, does not make the case that people were financially incentivized to become racist" - the author doesn't deny it either.

From Wiki: Redlining - Wikipedia
"In 1935, the Federal Home Loan Bank Board (FHLBB) asked Home Owners' Loan Corporation (HOLC) to look at 239 cities and create "residential security maps" to indicate the level of security for real-estate investments in each surveyed city. On the maps, the newest areas—those considered desirable for lending purposes—were outlined in green and known as "Type A". These were typically affluent suburbs on the outskirts of cities. "Type B" neighborhoods, outlined in blue, were considered "Still Desirable", whereas older "Type C" were labeled "Declining" and outlined in yellow. "Type D" neighborhoods were outlined in red and were considered the most risky for mortgage support."
and
"Private organizations created maps designed to meet the requirements of the Federal Housing Administration's underwriting manual. The lenders had to consider FHA standards if they wanted to receive FHA insurance for their loans. FHA appraisal manuals instructed banks to steer clear of areas with "inharmonious racial groups" "

Financial incentives leading to a racist results

Here are the definitions of the four color coded areas:
"Green areas are "hot spots"; they are not yet fully built up. In nearly all instances they are the new well planned sections of the city, and almost synonymous with the areas where good mortgage lenders with available funds are willing to make their maximum loans to be amortized over a 10-15-year period -- perhaps up to 75-80% of the appraisal. They are homogeneous; in demand as residential locations in "good time" or "bad"; hence on the upgrade".
"Blue areas, as a rule, are completely developed. They are like a 1935 automobile still good, but not what the people are buying today who can afford a new one. They are the neighborhoods where good mortgage lenders will have a tendency to hold loan commitments 10-15% under the limit."
"Yellow areas are characterized by age, obsolescence, and change of style; expiring restrictions or lack of them; infiltration of a lower grade population; the presence of influences which increase sales resistance such as inadequate transportation, insufficient utilities, perhaps heavy tax burdens, poor maintenance of homes, etc. "Jerry" built areas are included, as well as neighborhoods lacking homogeneity. Generally, these areas have reached the transition period. Good mortgage lenders are more conservative in the Yellow areas and hold loan commitments under the lending ratio for the Green and Blue areas.
"Red areas represent those neighborhoods in which the things that are now taking place in the Yellow neighborhoods, have already happened. They are characterized by detrimental influences in a pronounced degree, undesirable population or infiltration of it. Low percentage of home ownership, very poor maintenance and often vandalism prevail. Unstable incomes of the people and difficult collections are usually prevalent. The areas are broader than the so-called slum districts. Some mortgage lenders may refuse to make loans in these neighborhoods and other will lend only on a conservative basis."
The Racist Housing Policy That Made Your Neighborhood

Red lining was all about distinguishing between good real estate investments and bad investments - in other words it's all about money. Keeping Blacks out of the better neighborhoods was driven by the desire to maintain the quality of those real estate investments. That's called a financial incentive.
I think you are making too much of it and mixing several concepts in one: risks, lending, poverty, race.... How would they - for example- keep a black person out of a neighborhood if that person would pay cash for a home ?

I'll give you another example.... Expats.... Having been one and knowing many, I can tell that when one wants to buy real estate in one's HOME country while working abroad , well one feels the pain... In most cases:

90%+ of banks wont lend to you
Those who will, will apply higher rates and you'll most probably have to go through a broker who will take an additional fee
And you'll have to supply a number of additional documents that are not required from local borrowers

Why ? is this racism ? is this red lining ?

No its bureaucracy and risk management... Banks dont like to deal with non standard cases (with expats they have to look at documents that they are not used to, get translations etc.. etc..)....Even though the collateral (the real estate) might be down the street from them, they will have to go through all kinds of procedures if you fail to repay and are abroad..... So they increase the risk premium.... One could argue its discrimination,,, But its not race based.....
 
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