At the Washington Post, Megan McArdle, of whom I am a sincere fan, has a post about the puzzle of race and wealth: why, in 2016, “the net worth of the median white family was almost 10 times higher than that of the median black family.”
“Causal explanations come in two flavors,” she goes on to say, “structural or cultural. What ‘nature or nurture’ is to biology, ‘structure or culture’ is to public policy: Is the problem caused by forces external to the community or by its internal behavior?”
She notes a piece by Coleman Hughes, who argues for the cultural explanation. He cited a 2015 study by the Federal Reserve bank of St. Louis, who “followed over 40,000 families from 1989 to 2013, tracking their wealth accumulation and financial decisions. They developed a financial health scale, ranging from 0 to 5, that measured the degree to which families made “routine financial health choices that contribute to wealth accumulation”—e.g., saving any amount of money, paying credit card bills on time, having a low debt-to-income ratio, etc. At 3.12, Asian families scored the highest, followed by whites at 3.11, Hispanics at 2.71, and blacks at 2.63.” Education and wealth made no difference: “the racial gap in financial health-scores didn’t shrink; it widened” between educated, middle-class families of different races.
So far, so good. But then McArdle then swings to her own parsing of this situation. What if, she says, structure and behavior are actually “just two sides of the same coin”? In essence, with neologisms like “frictional racism in everyday life” and unsupported statements like “casual discrimination against black Americans adds up”, she makes an argument that amounts to “discrimination steers culture,” or that how you think about money and spend it depends upon how people treat you. In effect, that black people are being mistreated so widely that they’re spending all their extra cash on external luxuries to comfort themselves.
With all due respect to Megan McArdle, I must nevertheless say that I consider that to be a weak theory.