I'm late to this but I hope that it doesn't get too buried.

White supremacy causes a drag on the economy that is difficult to quantify but my intuition is that the elimination of oppressive social structures would be pareto-improving. I'm going to limit my discussion here to racism, and specifically black-white relations in the US. Because, honestly, that's the easiest to demonstrate. But it's not difficult to imagine how the same principals apply to other oppressive social structures. This post will be largely unsourced, and I apologize, but spending an hour writing a carefully sourced post isn't worth it to me. If you would like more reading and information on anything I say I would love to pull some articles for you.

This post is written to appeal to a completely self interested person who harbors no ill feelings to others but is wondering whether or not to "rock the boat" of oppression. I will try to demonstrate that racism transfers wealth from non-racists to racists. For the purposes of this argument I will ignore the inherent injustice of oppression.

First, the concept of dead-weight loss (DWL). DWL is when there is some kind of friction in a market which prevents a market from acting optimally. In ECON 101 you will learn that monopolies cause dead weight loss, and maybe you'll learn that some taxes cause it as well as externalities. In the short run the dead weight loss might benefit some at the expense of the others but in the long run the misallocation of resources has ripple effects.

I'll use the example of slavery. Slavery as an institution transferred wealth not only from slaves to slave owners (as the slave owners were able to extract productivity from the slaves below market value) but also a transfer of wealth from non-slave owners to slave owners. This is because of all of the government resources dedicated to suppressing slave rebellions, tracking and returning escaped slaves, and enforcing the fugitive slave laws across borders. Even if you thought slavery was a fine institution, you might object that you are paying taxes to support a system of slavery which enriches the already wealthy.

Jim Crowe presented similar challenges. Have you ever considered why there were Jim Crowe laws? If people are racist, why not just let them be racist on their own property whenever they would like? The Jim Crowe Laws imposed costs on non-racists (for instance, a diner owner that wanted to serve an integrated clientele) and gave benefits to racists (they could be assured that they would not have to share facilities with other races). Jim Crowe laws were effectively transferring wealth from non-racists to racists while creating dead weight loss.

The legacy continues today. Some of the low hanging fruit in repairing racist institutions has been taken but there is lots of work to be done. For instance, the disparities in access to credit, incarceration, high school graduations, law enforcement, etc. almost certainly cause a certain amount of dead weight loss. The mis-allocation of resources depresses GDP which is indirectly a cost on everyone. The benefit is concentrated to people who benefit from being born white and also to people who delight in seeing other races struggle. That delight represents wealth that was transferred from the non-racist population to the racist population. It's impossible to quantify but it exists and it makes me mad. Because I hate racists.