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By Isabel Nuesse

In his latest piece in The Star, “Time for an end to ‘white economics’”, Yannick Beaudoin reminded us that economics is a construct that was created by people and informed by the experiences and qualities of their cultures.

With an economic system founded on ‘white’ perspectives and patriarchal principles, it’s no wonder we’re seeing glaring racial disparities as the series of crises we face – environmental, social and economic- continue to progress. The algorithm is biased.

Facebook is undergoing a similar look at their own inherent biases in their algorithms. The social media giant has been under scrutiny for developing bias in its AI that disproportionately impacts minority groups. This news started the #StopHateForProfit movement.

Since, as Yannick points out, economics is a human construct – a code or a set of algorithms we program, we have the power to re-engineer them to pursue environmental and social wellbeing as the top priority in our economy.

And the same goes for the mandate of powerful companies like Facebook. The shift has already started. Companies like Cola-Cola, Disney, McDonald’s and Starbucks have boycotted advertising on Facebook to take a stand against these issues coming to light. Under this scrutiny, Facebook’s team says they are going to update their algorithm.

Yannick makes a clear call to action:

“We must demand and contribute to ending white economics so that new, generative and inclusive well-being economies can emerge… [We must] “innovate a well-being economics based on dignity, fairness, participation and nature.”

The “Founding Fathers” need to be “Founding Communities”

If we are to redefine our economics for the benefit of all, we must include more people with different cultures and experiences into our decision-making.

Despite the many ways we are seeing how the current economic system can be actively racist and is not serving the most marginalised communities, policymakers, aren’t quite taking the necessary steps to recalibrate the economic algorithm to serve everyone – as an economy should intend to do.

Creating Economic Recovery Policies that Reduce the Racial Wealth Divide

Arriving at a non-biased economic system will take work. The IPCC report, “White Supremacy is the Pre-existing Condition” outlines how policymakers can commit to closing the racial wealth divide. It begins with understanding the underrepresented communities that have been so heavily burdened by the crises.

Rich with new data and analytics, the report gives policymakers have better grounding to tackle an outdated system and offers eight tangible solutions to ensure the Economic Recovery Reduces the Racial Wealth Divide – and how to pay for this.

Emergency Measures

  1. Improved Racial Data Collection as Part of Emergency Investments
  2. A Racial Equity Audit as Part of Stimulus Oversight and Policy Development
  3. Income Support that Expands to Guaranteed Income
  4. Postal Banking

Emerging from Recession

  • Medicare for All- Universal Health Care Delinked from Employment
  • Expanding Inclusive Housing and Ownership
  • Federal Jobs Guarantee. With Living Wage
  • Baby Bonds

Paying for Policies using Tax Schemes:

The report outlines multiple tax schemes that can pay for a socially just recovery, including:

Upside Down Tax Subsidies and Taxing the Top (Millionaire Surtax, Financial Transaction Tax, Progressive Estate Tax, Wealth Tax, Tax Excessive CEO Pay and Shutting Down the Hidden Wealth System).

Our role

I propose that just as we’re seeing with Facebook, it’s now up to each of us to, effectively, ‘boycott’ our current economic system, in order to invest fully in the development of a new one. One that prioritises black and brown communities and our finite planet ahead of the financial profits of a few.

You think you can help us re-write the code?

Blog by Isabel Nuesse

The COVID-19 pandemic has brought long-avoided issues in the US into the light – such as the rampant racial wealth divide – and has sparked the world’s largest civil rights movement.

For instance, in Boston, white households have a median wealth of $247,500, while Dominicans and Black Households have a median wealth of close to zero.[1] And that was before COVID.

Now, the US is facing hugely disproportionate death-rates for Black and Native people than LatinX, Asian or White Americans. See the chart below:

On June 10th, Jerome H Powell, the Federal Reserve Chair said, “This is the biggest economic shock in the U.S and in the world, really, in living memory. We went from the lowest level of unemployment in 50 years to the highest level in close to 90 years, and we did it in two months.”

The Institute for Policy Studies suggests that White Supremacy is the pre-existing condition that has made the COVID-19 pandemic deadlier for people of colour. The racial wealth divide is a result of the history of the United States in of upholding the ideals and structures of White Supremacy, which disadvantage communities of colour.

The Institute for Policy Studies has identified eight solutions to ensure the post-COVID economic recovery diminishes the racial wealth divide and moves toward greater equity in wealth and assets:

  1. Improved Racial Data Collection as Part of Emergency Investments
  2. Racial Equity Audits of Crisis Relief and Recovery Policies
  3. Income Support that Expands to Guaranteed Income
  4. Postal Banking
  5. Medicare for All: Delinking Universal Health Care from a Job
  6. Expanding Inclusive Housing and Ownership
  7. Federal Jobs Guarantee with Living Wage
  8. Baby Bonds

We would highly recommend reading the full report to dive deeper into the racial wealth divide in the US and how we can start to Build Back Better toward a more equitable society.

You can follow the Institute for Policy Studies on social media – Twitter, Facebook, Instagram.


[1] https://www.bostonfed.org/-/media/Documents/color-of-wealth/color-of-wealth.pdf