Heather McGhee is an author and policy advocate with a focus on reducing inequality. She is Board Chair for the organization Color Of Change and trustee emeritus of the think tank Demos. McGhee is also the author of The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together.
In this week’s conversation, Yascha Mounk and Heather McGhee discuss why progress for one ethnic group does not come at the expense of another; how racial animus has been used in the past to divide Americans who share fundamental interests; and what the stories of those who bridge racial divides teach us about building a better America.
The transcript has been condensed and lightly edited for clarity.
Yascha Mounk: I really enjoyed your book, and I've really been enjoying your new podcast. The core of your work seems to me to be the idea that we can only prosper together, and that we should think of the world in more positive terms. It’s also about how much we lose when racial competition—and other forms of competition—damages the social fabric.
How is your framework different from the ways in which we tend to talk about this topic in America today?
Heather McGhee: I spent nearly 20 years working at a think tank and in public policy advocacy, squarely focused on economic inequality, and the political inequality that feeds and creates it. I’ve made a couple of shifts in that time. The dominant way of seeing the relationship between class and race in my field of center-left economics was that inequality is driven by policies: tax, trade, etc. That was one bit of conventional wisdom. But it really blinded us from seeing the way in which racism itself, in our politics and our policymaking, is actually the driver of inequality in many instances. And it makes inequality worse for everyone, not just people of color.
The other shift is, in some ways, a more challenging one. Oftentimes, we talk about racial competition—about the story of race and who you are to one another—in such a way that even those of us who want to see racial equality end up invoking a sort of zero-sum paradigm. This has its most offensive articulation in the idea that there are winners and losers; that progress for people of color must come at white folks’ expense; that we can't share the good things in life; and that we are in a sort of competition for dominance.
I think that sometimes, when those of us who want to see a fairer and more just world are trying desperately to pull the wool up from over the eyes of so many people who want to ignore the existence of systemic racism, we insist on talking about white privilege and all of the different advantages that come from being white and the disadvantages that come from being a person of color. And in some ways, we're setting up the same paradigm: that what's good for one group is bad for the other. And because the voices with the ugliest zero-sum story are so loud right now, not just in the US but across the globe, I think that, as communicators, it's incumbent upon us to finish the sentence: “Yes, there are all of these advantages to being white, and to being a descendent of people who were on the upper end of a strict racial caste system. And yet, the world that we are seeking to create is not one where white people have less health care, worse-funded schools, more contact with the police, and more polluted water and air. We want a world where we all prosper.”
Mounk: I think those are two very helpful frames. So let's delve a little bit more deeply into each. What does it mean to say that racism has really made inequality worse? And how is it that in the course of American history, racism has been an obstacle to economic equality, and an obstacle to building public goods that could have sustained a more equal and flourishing society?
McGhee: I grew up professionally trying to figure out what had shifted in our economic policy paradigm between the era of the New Deal—the Great Compression, the era of shared prosperity—and what came after. There are a lot of ways that economists and advocates describe the period roughly between the 1930s and the early 1970s, when economic and income growth was fast and relatively evenly distributed. In fact, that period of time saw the lowest paid households’ incomes grow faster than the highest paid households’. It was the period of the American Dream, of the greatest middle class the world had ever seen. It was brought about by a policy regime of higher marginal tax rates, massive public investment, a lot more regulation, high levels of unionization, a minimum wage that was roughly half the median wage, lots of benefits with work, etc. We really had a very dramatic break from that policy regime in the 1970s, accelerating in the 1980s, and 90s. And it ushered in what I call the “inequality era” of today, where 1% of the population owns more wealth than the entire middle class, and half of adult workers are paid too little to meet their basic needs.
In order to put an end to the era of inequality, you first need to figure out what happened: what were the policy shifts? You can write an economic history of what changed in our regulatory policy, or tax and trade policy or labor policy. But what I didn't understand—and this often made me feel like I was sort of crazy—was why the country that invented this thing called the American Dream decided to just shut the lights out on it and tolerate galloping inequality?
So I quit my job running a think tank in 2017, and I set out on a series of trips that took me across the country multiple times. I started reading and talking to scholars of different disciplines. And I found a better answer to the question of why it is that we can't seem to have nice things anymore—things like universal childcare, paid family leave, universal health care, or a well funded school in every neighborhood.
What I came upon was a real thing that I actually walked across, physically, but which was also a powerful metaphor for the political and social dynamics that shifted the economy from the golden age of shared prosperity to the inequality era. It was in Montgomery, Alabama, in their central park called Oak Park: a wide, flat expanse of grass, ten feet beneath which was the carcass of a swimming pool. It used to hold over a thousand swimmers, a lavish public swimming pool that was built as part of a boom in the 1930s and ‘40s of building public goods: roads, bridges, schools, libraries, parks. These swimming pools were sort of this glittering reflection of a deeper ethos that said, “The government is going to ensure an ever increasing standard of life for its citizens.” They were New Deal, WPA creations in many of these places. But of course, the public goods that I cared more about were things like: social security for the elderly, massive investment in housing that workers could afford, mass homeownership (an unprecedented commitment to the idea that working-class people could own something that would be an intergenerational bedrock of wealth, and would appreciate over time), the GI Bill, the labor standards and collective bargaining rules in the New Deal. These were all public goods; but they were all, in one way or another, racially exclusionary.
But then the Civil Rights Movement empowered black families, who got the courts to agree with them that it was their tax dollars that funded those public goods all along. And so in the case of the swimming pools, they want their kids to swim. But many towns and cities across the country did what Montgomery, Alabama did. They drained their public swimming pools rather than integrate them—they literally drained out the water and backed up truckloads of dirt and gravel.
This image of the drained pool means so much, because it happened all over the country, not just in Alabama, but Ohio, West Virginia, New Jersey, California, Washington state—it reveals what a white population that has been taught to disdain and distrust their fellow Americans will do as a result of a zero-sum mentality. They feel that there has to be someone on top, and they'd rather destroy a public good than share it. This was mirrored in a really radical and sudden shift of public opinion among the majority of white voters away from public goods of all kinds. This was popular with 70% of white American voters in 1960. But by 1964—the height of the Civil Rights Movement—the share of white voters who wanted a muscular government guarantee of economic security had halved. And so for me, the drained pool phenomenon became a better answer to why the American majority would turn their backs on a formula that had created such middle-class prosperity, and instead say, “We're willing to go it alone.”
Mounk: As you were saying these last few sentences, I was reminded of an old joke, which I think originates in Polish socialism. A fairy turns up and promises a man that he can have one wish fulfilled, no questions asked, but whatever he gets, his neighbor will get twice as much. He thinks for a long while (he’s really tortured by this), and finally, he says, “Kill half of my cows.”
There is this deep human psychology of competition, such that you would rather be poor yourself as long as the people with whom you're in competition are kept down at a lower rung of the social ladder. Your argument is that this kind of psychological mechanism, in the context of American racism, helps to explain not just racial disparities between white and black Americans, but also the turn away from the public goods-oriented policies of the 1950s and 1960s, which had sustained Social Security and investment in local public schools and libraries and all of those kinds of things. Your point is that when black Americans gained access to those facilities, people started to say, “Well, actually, I'm hoping for some of my cows to die as long as all of their cows die, too.” Is that roughly the causal story here?
McGhee: Sociologists would call it “last-place aversion.” In my book The Sum of Us, I really try to underscore that this isn't only human nature. This is also a reflection of the fact that everything we believe comes from a story we've been told. And there are power dynamics. There are political actors, there are self-interested elites who are setting up a system where being on the bottom of the social hierarchy is so miserable, that anybody worth his salt would try to climb over his neighbor to get away from that bottom rung. As well as the economic history of all this, there was also a political movement that was thrilled to capture white voters away from the Democrats—the party of the New Deal—and move them over to the political right, to a politics of racial grievance, especially once the party of the new New Deal also became the party of civil rights.
When Lyndon Johnson (the last Democrat, by the way, to win a majority of white voters when running for president) signed the Civil Rights and Voting Rights Act, and at that moment lost the South, he said: “If you can convince the lowest white man that he’s better than the best colored man, he won’t notice that you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.” That means voting for cuts to government services, destruction of union power, shipping jobs overseas, tax cuts for the wealthy. That economic program was something that the majority of white voters gladly voted for, even though many of them suffered under that economic system. They emptied out their pockets, in some ways, in order to preserve what they believed was the core of American identity, which was reflected in the power structures of mostly white men.
Mounk: I have a question about this line of argument, which is sort of parallel to a debate that's been happening in political science about Europe. Some articles have claimed that support for generous welfare state policies go down in various European countries when there's high levels of immigration, and it seems to me that the logic here is very similar to what you were just talking about. Meaning, people essentially think, “Sure, we're in favor of general programs to provide public goods and so on, as long as ‘people like you and me’ benefit. Suddenly, people whom I don’t trust and to whom I feel superior are getting some of the benefits. In that case, perhaps we better abolish it.”
What's strange is that that is treated like a conservative argument—even though the political scientists who have published those papers tend to be, like most political scientists, on the left—because it would seem to imply that if we want a strong welfare state, we shouldn't have immigrants. Obviously, the political scientists don't want that conclusion.
How should we think about this tension, where it feels like there is a liberatory potential in what you're saying, but where people also draw the conclusion of, “Well, things just don't work when you have more immigrants. Perhaps it's just too hard to make this multiracial democracy in America work in the kind of way we would want.”
McGhee: Well, as you say in your book, multiracial democracy is a “great experiment.” We haven't figured it out yet. How do you create a democracy that is equal and where everyone thrives? It’s hard.
My intervention in the field of progressive economics has been to examine why so many of my peers—who are mostly white, and class-focused—didn't have a language for why their great ideas about making everybody's lives better were falling on deaf ears among white voters. Many of them didn't know that the majority of white voters had rejected the Democratic Party, at the presidential level, since LBJ. There was sort of an ignorance about the correlation between racial resentment and the Democrats’ weakened support. Liberals riding on their pro-government horse didn't have a language for what was going on.
But like you, I'm a hopeful person. I think it's worth fighting for this “great experiment.”
Mounk: What made you more hopeful? What empowers some people to see the positive-sum potential and what, conversely, drives other people into that zero-sum mentality?
McGhee: I'm reminded right now of a podcast episode that we did, where I went to a small town in rural Maine. We're losing tremendous amounts of farmland, and huge numbers of farmers are aging and selling their land. And it's a massive problem for local food systems, and for our rural economies in particular. In that podcast episode, we focused on a group of Somali, ethnic Bantu refugees and immigrants who came to Maine after the Somali Civil War, and who were met with a grassroots-level welcome of charity and immigrant integration at the local level—but also with fire and brimstone, with anti-immigrant politics at the state and municipal levels. It was sort of a proto-Trump demonization of immigrants, by tying them to welfare, etc.
And yet, amidst all of that is this group of Somali Bantu people who were farmers in their homeland. They had community associations led by an amazing man. Everyone's working in bakeries, factories, and retail stores—but what they really want to do is farm, and so this man looks around and sees all of the green land and wonders, “How does one go about getting some of this land to put to productive use?” As you can imagine, a refugee Muslim, a black man, looking to buy land in Maine—what could go wrong, right?
In the summer of 2020, in the wake of George Floyd's murder, comes a mass consciousness-raising, the largest social demonstration movement in American history. Many people across the country who are white begin to ask questions of themselves, their lives, their communities. And so the small, organic, family farmer community in Maine (the whitest state in the country), begins to ask why there is nary a black farmer in Maine. It's at that same time that the Somali association is fundraising to buy land in a community land trust, and they're looking to buy the land of a third-generation dairy farmer who is a white conservative, probably a little bit libertarian. The fundraiser ends up taking off like wildfire because of the mass consciousness-raising that was happening at the time. And the farmer ends up becoming, I think, more willing to sell his land to a group of two hundred African refugees, Muslim farmers, because of the popular conversation at the time. The mass demonstration moment of the summer of 2020 played an outsized and pivotal role in each of the stories that I ended up finding over the course of 2022.
Mounk: It's interesting to think about how the impact of 2020 was very different in already liberal, progressive contexts than it was in more conservative parts of the country, where people were perhaps not as aware of some of these injustices, or hadn't asked those questions of themselves before.
I have a question about one of the shifts you've seen in the last few years, which is the embrace of race-sensitive policy—or more broadly, the embrace of the goal of “equity.” Now, there are different interpretations of each of those terms, and they mean very different things in different contexts. But I wondered, as I was reading your book, how you felt about some of those policies. I think you clearly share the goal of overcoming the deep inequality that continues to exist in this country for historical reasons. I also wondered whether you think there is a risk of moving back towards talking about racial competition and zero sum games. One example would be the relief fund for small businesses and restaurants during the pandemic. Originally, under the Trump administration, there was an order of priority, which was simply based on the amount of revenue you'd lost: if you'd lost 70% of your revenue, you were first in line; if you lost 50%, you were second, and so on. But the Biden administration tried—though it was contested in the courts—to shift it such that the order of priority was based on who owned the business, so that people of color and women were first in line. And that mattered because it wasn't just about when you'd get the money. There were limited funds available.
Do you worry that the embrace of these kinds of race-sensitive public policies, which actually distinguish how the state should treat individual people on the basis of their race, primes people to think in zero-sum terms?
McGhee: If you start the story with, “For some reason, the government is playing favorites and picking black people and brown people and women over white men,” then it does seem unfair, if I'm a white man. But you can start the story differently—for example, in the case of the PPP loans, with the data of how many times over, even controlling for other factors, white-owned businesses and larger businesses received PPP loans than black and minority-owned small businesses, and how much under the Trump administration's rules, minority and women-owned businesses were the last in line. If you start the story like this, it makes more sense to say that it's necessary to fix the rules.
Part of the challenge is that there's been such willful blindness about existing inequalities, and about how policies that appear to be race neutral ended up creating wildly unfair advantages for white people. The sum result was that white businesses were overrepresented among PPP loan beneficiaries. Then, when there's any tweak that “names” race—as if the “neutral” thing that still had these wildly unfair impacts wasn't racialized—the critique ends up focusing on the racial redress, and not on the original unjust system. Only .1% of black farmers, for example, received any of the $26 billion of economic aid provided to farmers during the Trump administration’s trade war.
You start at a very recent example (PPP), which comes on top of the decades and decades of discrimination that has been well-documented and litigated. And then the Biden administration comes in and says, “Given all of the debt relief that farmers of color have not gotten, while white farmers have, we're going to have a program that’s specifically for farmers of color, who were sort of the original people who made up the agricultural system in this country.” And that was immediately litigated and frozen, so it never happened.
I think a mature society that had a real understanding of where the starting line began, would be willing to say that one size doesn't fit all, and would be willing to attribute some of the current higher economic and social position that white Americans have to an unjust system that needs to be corrected. And it would say that a world that includes those slightly race-conscious policies, those well-targeted forms of redress, is not a world in which white people are at the back of the line. It is a world where people are equal. There's the old saying that when you're used to privilege, equality feels like oppression.
Mounk: I believe much of what you just said, and I find your framing of the race-class narrative quite compelling. Racial disparities in wealth and income are a very real concern that I'm not trying to minimize or dismiss. And I agree with what I think is basically the narrative of your book, that it's really important that we're able to fight for our common interests, and that certain people do try to exploit racial divisions between us in order to make us incapable of having wonderful public goods and overcoming larger inequalities.
Let's also say for the sake of argument that normatively, all of these programs of redress are 100% right and justifiable. You think that if we're going to build this hopeful future, we have to overcome the pitfall that progress for one group is viewed as subtracting from another. In that case, shouldn't we nevertheless abstain from many of these kinds of policies, which are going to be framed in this way? Where many people in the country are going to say, “Hang on a second, why are you giving this grant to a restaurant because they filled out a form and ticked one race rather than another? Doesn't this put us in direct competition, and if we're going to be in direct competition, shouldn't I fight for the interest of my group?” Shouldn't we be nervous about that, in terms of our ability to achieve the future that you're hoping for?
McGhee: I think the Biden administration has been pretty consistent in trying to make the case, whenever the president speaks about racial equity, that it's in our best interests as a country. I talk about the “zero-sum framing.” Biden’s folksy version of it is, “For too long, we believed that $1 more in my pocket must mean $1 less in yours.” He does his own riff on the zero-sum framing, by naming it and calling it out. I think the president, or at least his speechwriters, have understood that it's important for him to make the case for racial equity in a way that explicitly names and rejects the zero-sum framing, and that says: you can't be a successful team if you have so many of your players on the sidelines because of debt and discrimination and disadvantage. And I think it's a really important story for him to keep telling.
What gives me hope? In the first episode of my podcast, I traveled to Memphis to see how black Memphis and white Memphis (neighborhoods in Memphis are 99% black and 99% white to this day) came together because an oil pipeline was threatening the black neighborhood. People were threatening to sue little black ladies for an eminent domain to get their land to run this pipeline through. And that's a story as old as time right? Black people are twice as likely to live near toxins as white people. That was going to be an open-and-shut case of environmental injustice, and only black people and bleeding-heart liberals would have cared.
But ultimately, the pipeline was also going to threaten the whole of Memphis’s aquifer—the source of their drinking water, some of the cleanest, best-tasting drinking water in the United States. And parts of white Memphis woke up, realizing (this is again in the wake of the summer of 2020) that they did need to defend the little old black ladies. Because, ultimately, the injustices that target one community make systems more dysfunctional and put everybody else at risk, too—just not as much, because the burden is always borne disproportionately by the targeted community. But the story of the Memphis aquifer and the pipeline, which black and white Memphis came together to stop, is a really great example of how environmental justice is actually good for white people. If we don't let there be sacrificed zones, where polluters can dump their poisons, then our water and our air will be cleaner for everyone. I do believe that a type of equality (and in fact, equity) that is eyes-open, and not willfully blind to the data that shows where the problems are concentrated, is the way to make systems fair and better for everyone.
Black-white economic inequality has cost the US’s GDP $16 trillion dollars over the last 20 years. The world in which a black college graduate has enough cash in the bank and home equity to start a great small business, is a better world for our economy and society. We've got to know that when students who are predominantly of color have $23 billion less of public funding in their school districts than majority-white school districts, that means we’re losing out on a heck of a lot of heart surgeons and neuroscientists and poets and lawyers and judges and future presidents. And that's not a zero-sum game. It’s really about recognizing that we need each other, and we are interdependent. And frankly, if a multiracial democracy can't work here, and can't work on the energy of this, the most diverse generation in American history, then I don't know where or with whom it will work.
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Podcast production by John T. Williams and Brendan Ruberry. Podcast cover image by Joe O’Shea.
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