Rhythm & Business: Black Economics 37 Years After MLK
By Norman Kelley, AOL BlackVoices Columnist
In the immediate aftermath of the 1965 Watts riots, Martin Luther King Jr. said to March on Washington organizer Bayard Rustin: "I worked to get these people the right to eat hamburgers [at segregated restaurants], and now I’ve got to do something…to help them to get the money to buy it."
King never lived long enough to deal with that problem, but it has been a sticking issue, the problem of black economic development in a competitive market society.
In 2005, it remains a fact that 25 to 33 percent of black Americans are still mired in poverty, yet roughly 60 percent are middle-class (with 10 percent in the elite). It’s questionable, however, if the black middle class, which has historically been the leadership class, can socially and economically reproduce itself without programs such as affirmative action and minority set-asides, which have aided them in procuring the wealth that they have so far.
Melvin Oliver and Thomas Shapiro have pointed out in ‘Black Wealth/White Wealth’ that while middle-class blacks now enjoy higher incomes, they "earn seventy cents for every dollar earned by middle-class whites but they possess only fifteen cents for every dollar of wealth held by middle-class whites."
Despite a growing black middle class over the last 40 years, African Americans tend to lag in business development, a major source of wealth, as opposed to mere income. According to a 2000 Milken Institute minority business report (prepared for the U.S. Commerce Department), blacks, while comprising 12.5 percent of the U.S. population, accounted for only 3.6 percent of businesses. Hispanics (who have become the largest minority since 2000) were 11 percent of the population, but accounted for 4.5 percent of businesses. Asian Americans, 4 percent of the U.S. population -- a third of the black population figure -- held 3.5 percent of businesses in the United States. Also, according to the report, there were 1.4 million Latino-owned business, 1.1 million Asian and Native American businesses, but only 880,000 black-owned enterprises.
Annual revenue per business for Asian/Native American was $225,000; Hispanic, $130,000; and blacks: $70,000. African Americans spend $600 to $700 billion as consumers, but take in $91 billion in sales receipts as producers of products and services.
When noticing that immigrant and minority firms were making inroads into "breakthrough industries," African Americans were noticeably absent in the report: "Someone of Indian or Chinese origin starts one in four of every new business endeavors." In other words, blacks are behind in the moneymaking technologies that have fueled economic activities in the last decade.
Most Africans Americans have achieved virtual equality, meaning they are no longer, by dint of law or custom, held in a permanent caste position and subjected to rank discrimination. Conversely, the black poor are virtually segregated not by law or custom but by circumstances (a combination of personal habits and structural inequities).
Perhaps Booker T. Washington’s observation that "No race that has anything to offer to the markets of the world is long in any degree ostracized" ought to be reexamined. The Washington-(W.E.B.) Du Bois debate was essentially over what sort of social/public policies or avenue of engagement would best benefit blacks. Washington advocated an industrial one, eschewing "social equality" as an "extreme folly."
Once Washington passed from the scene, DuBois and the NAACP’s agitation for integration became the dominant mode of social interaction — at the expense of establishing a set of ideas or policies regarding economic self-sufficiency. DuBois, however, began to rethink his position on economic and segregation in light of the Great Depression. He began to advocate segregation as a means to defend black dignity and to argue for an economic agenda ("Cooperative Commonwealth"). However, the dominant mode of political mobilization was based on integration but no important discussion about black economic development ever occurred -- except for under the rubric of the catch phrase "economic justice."
But "economic justice" is a naïve concept in an aggressive capitalist society like America. As Harold Cruse once pointed out," Negro intellectuals produce…no original economic theorists who can cope realistically with either capitalism or socialism from a Negro point of view."
The recent election underscores that the black political agenda of the last 40 years, trying to use politics to influence the machinery of the federal government, has failed. This failure, however, does not mean that blacks ought to totally abandon politics. Instead, blacks should also focus on developing ideas, policies, programs, and business models that will help themselves engage an internal process of economic development, aka wealth creation. Or put another way: Black America needs to produce generations of nerds who’ll invent products and applications more so than future generations of 0”bling-blinging” hip-hop artists and brawling athletes.
About the Author
Author Norman Kelley is the editor of Rhythm & Business: The Political Economy of Black Music (Akashic Books). His latest book is The 'Head Negro in Charge Syndrome: The Dead End of Black Politics' (Nation Books)
Jan. 10,2005