There is a class action suit being brought by around 30 million descendants of American slaves against companies that benefited from the sweat and blood of their forefathers before slavery was abolished in 1850 so this is actually going even beyond the Bible, where the iniquity is to be visited up to just the third and fourth generation of children. The companies that face action include Aetna, that insured the lives of the slaves for their white masters, Lehman Brothers, New York Life and even Lloyds of London. The lawyer, Edward Fagan, who is fighting the suit against 60 companies believes the settlement could run into tens of billion dollars.
The Economist reports Fagans argument as essentially this: each dollar that the slaves got (less than the market wage) should be paid back with interest, and thats an interest which is based on the profits these firms earned in the last 150 years. In which case, each dollar of back pay is worth between $6,250 and $400,000 today. The Economist then uses a calculation made by Robert Fogel of the University of Chicago who estimated that the slaves back pay is around $24 billion according to Fogel, things werent so bad since the slaves were paid just around 10 per cent less than what the free workers got, in terms of getting food, shelter and so on. Using an interest rate of 6 per cent which Fogel estimated was the long-term rate, the amount that will have to be paid today could work out to as high at $97 trillion which is more than nine times the size of the US economy today. Of course, if the applied rate of interest is halved, this cuts the amount to $1.6 trillion.
(Ironically, The Economist argues, the owners of the slaves may not have benefited by all that much as this benefit was really passed on to consumers in Europe in the form of cheaper cotton and tobacco. Besides, as the venerable newspaper argues, is the modern African-American in the US really worse off than the descendants of those left behind in Africa)
By the way, in case you think this lawsuit is so ridiculous its going nowhere, there are several precedents. The German government, it appears, paid the state of Israel damages for utilising the services of 10 million Jews as slave labour in the World War and, after a fresh campaign in the 1990s, German companies set up a $5.2 bn fund to pay the living victims and the descendants of the rest. And, in 1988, the US Congress authorised the payment of $1.6 bn to the 80,000 Japanese-Americans who had been interned during World War II.
Think of the possibilities of a successful conclusion of this court battle, or shall we say out-of-court battle, since thats really where its going to be fought, and won or lost We could sue the descendants of the East India Company for the immiseration they caused of our country. For rough estimates of the damages, in terms of what the British took away from India, Id recommend Dadabhai Naorojis famous treatise on the subject not being a very keen student of economic history, Im not sure if this calculation was ever revisited.
And if a serious link can be traced to show active support of oil-rich Arab nations like Saudi Arabia and the terrorism in India, the rapidly rising oil bill could well become a worry of the past. Of course, given the dogged efficiency of the Americans, and their ability to carry out such (one darent use the word ridiculous) exercises, it may be best to wait and see if someone there establishes the link between Saudi Arabia and Osama bin Laden, and then sues on the basis of this in legal parlance, this is called establishing of precedent and that, any lawyer will tell you, is very important in all matters legal.
Needless to say, other potential firms that can be sued include the infamous Enron, though Im not too sure how beneficial it is to sue a firm thats gone bankrupt if only Dynegy had taken it over, at least there would be someone to go against. In fact, its a good thing Arthur Andersen isnt just going to die unsung, and is trying to merge its practice with firms like KPMG and PriceWaterhouse Coopers. Under the circumstances, the risk of potential Andersen-related lawsuits is something that these firms will do well to keep in mind it was only recently that the Swedish firm ABB took a huge beating on the asbestos-related lawsuits of a US firm it had bought.
While the lawyers will continue to battle this out, both in and out of courts, theres a very clear lesson out there. If you see your father committing what could be regarded, somewhere and sometime in the future, as a sin, stop him. For you dont know just when it could be visited upon you. The worlds second-least godly profession may just have helped us return to the path of God. Amen.