In order to have a more accurate picture of the effects of compensation/blood money/reparations, I wanted to produce the below gradient as a means of framing the individual conceptions of justice.
The considerations one must answer amongst these are:
- The principal amount stolen must of course be returned; but how much punitive damages, interest, and opportunity cost must be repaid?
- To include items such as loss of social rank and access to other opportunities
- How can the principal amount (and whatever additional repayments) be separated from items not associated with the theft?
- To what extent is economic harm created by the repayment, and how should that be mitigated (if at all)?
- To what extent does accomplishing repayment alter the incentive structure?
- When are claims settled once and for all?
The most immediate concern is the theft between two people.
The next concern is when, during the lifetime of the thief, the thief becomes bankrupted or otherwise financially impaired.
The next concern is when the thief passes property to another via inheritance or other gift (hence it is not an option to take the amount from the thief).
The next concern is when the recipient of the gift of the value of the stolen property becomes bankrupted or otherwise financially impaired.
The next concern is how does this translate or diminish across generations, both as to the rightful owners of the stolen property, and to the individuals currently in possession.
To elaborate more upon each consideration, I wish to provide as example the history of the middle North American lands now under the rule of the American Empire from about 1700 onward. Although it is a complicated history and likely I will miss items, still I think that this complexity provides the opportunity for the most suggestive explanation.
In the beginning, the very first thefts likely were amongst the native tribes. Is there any record of the original ownership of the lands, against which we could compare the configuration in which it was put by the Europeans? Furthermore, was the ownership of the lands profitable and suitable to the needs of the people, or were the original inhabitants hoarding lands that they had no chance of using?
Next, different groups of Europeans came and laid their own claims to territory, settling and fencing off areas. As they pushed north and west, they killed and expelled the natives as they went, eventually taking almost all of their land and driving them onto deserts. At one point the American Empire “purchased” the territory claimed by France. Oversimplifying, eventually Mexico and the American Empire faced off and the Americans took the Mexican territory. Following this period of war and expulsion, the DC government did pay some limited funds for tribal support, but also was party to several other offenses including the theft of mineral rights on one reservation by murder.
However, that was not the only theft or crime occurring on a mass scale. In addition to the historical subjugation of women, the Europeans, and their descendants in the 48 states, took to slave importation, stealing their labor and a great many atrocities besides. Such theft continued during the era of segregation, as various laws restricted colored persons’ employability, wages, working conditions, and living conditions.
So the claimants covered here are:
- Almost all of the women everywhere
- The original owners of the land, who had all the land stolen from them
- The members of the tribes and their descendants who had to deal with the consequences of intertribal war and war with the Europeans
- The members of the tribes who were expelled from their land and forced onto deserts, where for the most part, they could not make a prosperous living
- All the black slaves and their labor, various murders and crimes
- Every member of the European-descendant underclasses, including but not limited to coloreds, exploited urban factory workers, gays, Catholics
The first issue here is that there are multiple overlapping thefts. Of these, the largest magnitude in current terms is that of the women and the theft of the lands. If you include additionals, this is dominated by interest and opportunity cost payments. At the time, most of them were atrocities, so financial weighing is not very helpful, since any assessment would be on the order of blood money, i.e. millions of current US dollars.
The matter of the women’s labor is fundamental to every life that continued; hence some portion of the overall population in the future must be attributed to the theft of their labor, and of course the profits made by not paying the women at their market rate. Hence the reparations would be on the order of the magnitude of a tenth or more of total wealth.
Likewise, the theft of all the lands, and all the resources of the lands, enabled the creation of American Empire industry, in addition to its agricultural productivity. Although much value also is created by labor, by the ordinary standards of appraised land today, and taking some portion according to royalties for resource exploitation (e.g. oil, coal, uranium), again we would be looking at reparations of a tenth or more of total wealth. Particularly, all the land, mineral rights, etc. would be returned to the descendants, so that they would become the landowning class.
For all atrocities, the blood money must be paid according to the number of individuals involved. The exact number is unclear but we are talking about millions in the end, so trillions to settle with the dead.
For the slaves’, expelled natives’, and others’ lower wages, the sums likely aren’t much, but adding up into trillions just based on mass of people and inflation to today’s currency.
Now with some sense of the scope in hand, we can proceed to the matter of assessing where those funds and assets may lie. For the land, the current disposition is easy to determine, however to determine the flow of stolen assets vs. labor invested is not. You could seize all the land, however consider the following example:
- Say a thief robs you of a diamond ring and then sells it on the open market. If you take the diamond ring from its new owner, the thief still retains the profits of the theft and hence suffers no penalty; justice has not been done. It does incentivize the buyer of items to assess the provenance of them (this is a benefit).
So returning to the matter of the land, all the land was stolen, yet someone has to hold and buy it in order to use it to survive. It would be an even greater waste not to put the stolen land to use. Hence, seizing the land makes the original owners whole, but robs the current owners, while the thieves retain whatever profits were not invested in the land. If you assess the fruits of the land/profits as well, then you rob the current owners of their labor and other invested capital, which never was the original claimants’.
In order to avoid this situation, you have to know where the profits from the sales went. This requires extensive financial recordkeeping, and also requires that the profits still exist. This is not an easy determination. Consider the following:
- Are the descendants of the rich/those with wealth, from the time of each theft, still the rich/with wealth?
- If they aren’t, either they spent the money, or never received it.
- If they spent the money, you have to deal with them in bankruptcy, or else go after their counterparties.
- If they never received it (e.g. because their parents spent it), that line has no profit in it, except by blood guilt, if that is what you want.
As in the 48 states, there is a significant amount of social mobility/movement between different economic classes, this has to be kept in mind when trying to go after the flow of stolen assets. For the earlier thefts, many of the descendants no longer have significant amounts of land, or really any significant assets at all.
Let’s say you recover the land. However the land often has been improved. For example, the Mississippi River has been repeatedly dredged, levees erected, docking stations built, etc. If you return the Mississippi River to its rightful owner, now you are in a situation where the owner owns the land, and therefore has complete leverage over all improvements and industry on the land. That leverage is more even than accounts for the profits or interest of said improvements; it can be used effectively to seize the principal value of capital improvements, which came from some other activity. The only practical way to correct for this is to arrange a buyout of all assets. However because the land itself customarily is appraised at a much lower value than the assets on it, and of course no buyout in this situation could be based on anything other than a net present value/future returns equivalence to bonds or similar, this often will create a situation of highly indebted private enterprises, prone to failure at the first downturn, hence in bankruptcy, many of the recovered assets would be lost anyway.
As for the atrocities, often there are no “gifts” or other inheritances; indeed, such atrocities reduced overall economic assets. Consequently, only a blood guilt or other taint can sustain claims against descendants for the value.
For exploited labor, the sale of goods and provision of services constitutes the carried liability to the counterparties. So if the exploiter no longer has assets and you wish to compensate, you will have to reconstruct the entire economic flow of money for all goods and services, to understand what amounts may have become wealth (or where you would wish to assess liability). Especially for low-skilled labor, reconstruction of this chain likely is economically ineffective vs. just writing a straight check for the amount – you would have to guess and make a payout based on your guess.
Given the flow of money in business networks, to assess for the lost value of social status, educational opportunities, and networking posits a pre-eminent position for all aggrieved parties, given the cumulative value of what was taken. That more or less means you lay claim to a swath of venture capital networks, C-suite positions, and boards, which more or less means you claim all the wealth in the country.
If we consider only matters usually held under “reparations”, they tend to be one-time only items, so people will argue there is no effective change in long-term incentives, since they are beyond the business planning horizon. It does enhance fears within businesspeople whenever someone starts talking about liabilities and new laws, because they will now have another historical instance in which property was expropriated, for whatever purpose. The more interesting case is the matter of more frequent crimes. If you choose to obtain the reparations by assessing current asset holders, any significant business transaction then requires complete vetting of the counterparty. However, at the time you buy the assets, you won’t find the crimes on a background check, since the thief has not yet been brought to justice. Hence you are demanding of the counterparty, to investigate their business client, buyer, sales lead, etc. that they find any crimes they possibly could have committed which would have resulted in profit or other advantage that could incur them liability. As this is financially infeasible for most transactions, all buyers have no economically efficient choice but to carry the risk, and pay insurance against it. If everyone (correctly) pays insurance against this, then the costs become socialized and it would be more economically efficient to pay compensation out of tax revenues.
As for broad blood guilts, obviously they are flawed, for individuals covered by the blood guilt may not even have been alive, let alone in a position to know or stop the criminal behavior. Consequently, you are assessing punishment against a innocent person. The exception would be if the crime had benefit for the associates and descendants, but if the benefits included improved social status and other such items, the only redress could be reducing the descendants to poverty. Reducing an individual to poverty destroys all incentives to work; hence you must then reduce them to slavery in order to maintain economic output. As far as incentives before the fact, the associates must prevent crimes; the only practical means to do so is a prison state. A surveillance state is insufficient as it still leaves the means for an individual to commit the crimes; but a prison state will make it impossible to offend.
Finally there is the matter of “how do you know it is settled”. You don’t, if people continue to harbor hostility and demands for more. Only in a case where compensation is spelled out in advance by law, and people are convinced that it correctly-enough balances compensation, profit to third parties, punishment, and incentives, can people let things go. Previous settlements for such massive crimes always will seem inadequate unless they make the descendants rich. Since there usually are too many descendants to make that economically feasible without giving them half of the country’s wealth or even more, people come out with far smaller payments, and then the claims always get resurrected.
None of the above disqualifies claims within generations, where such accounting properly can be made; nor does it disqualify very coarse, limited reparations, from clear profiteers where the accounting is evident e.g. in large land estates. Such reparations or confiscation may not be good ideas for other reasons, but it would not be due to the impossibility of assessing such in a fashion that functionally differs from theft.