The Economic Viability of Black America PT III

[Inaubryn]

By the time the 1970's rolled around it had become popular to stress a strategy of “black capitalism” as a means to stimulate economic development for blacks. The fact was that this so-called strategy offered very little by way of economic advancement for the majority of the black population. Referred to as “the ghetto economy” it did not make for profitable opportunities on a larger scale and advancements by this minority of the business sector was marginal at best and “in all likelihood will not materially alter the investment prospects.”1 In other words, these ventures never went much beyond the black proprietors that began them. In addition to that, those who did profit from such proprietorships spent their money outside of their communities thus leaving a gaping whole in the monetary circulation and doing nothing to benefit the community as a whole.

The study also states that black capitalism fails on a more fundamental level because it is founded on the premise of self-employment. Simply put, the financial benefits of salaried employment far outweigh those of self-employment for all but a select few. Not to mention the fact that these ventures are high risk being waded into by people who usually cannot afford to take such risks and failure is an ever looming prospect. So, it is usually by far the better road to travel for most blacks to obtain salaried positions at already established businesses.

However, this brings us back to blacks in the workplace and the disparity of blacks’ income in relation to the income of all other races has already been pointed out. What has not been pointed out is the accumulation of wealth and the asset choices amongst blacks and how it differs from their non-black counterparts. In 1984 it was recorded that blacks’ savings in accordance with their income has risen to 9.6 percent, only slightly behind the 10.91 percent of whites. The greater margin of savings has allowed blacks to enlarge their accumulation of assets. However, blacks' share of wealth is much smaller than their share of income.1 Blacks, as a whole, have very little knowledge of the stock market, or equity securities, IRAs, and many do not so much as invest in a 401k plan through their employers. These conclusions were documented in a comprehensive study done by Andrew F. Brimmer. (“The Negro in the National Economy,”) in John P. Davis (ed.), The American Negro Reference Book, Prentice Hall, 1966, ch. 5, pp. 251-336.

In 1963 a study was performed to assess the burden of racial discrimination on interstate commerce. The research showed that, in the past, the pattern of expenditures among blacks had diverged sharply from the rest of the populace. The divergence had resulted from a number of circumstances but low income and racial discrimination were principally responsible. Because of low income, the typical black family had to allocate a proportionately larger amount of its paycheck on necessary expenditures, such as food clothing and housing, more so than whites. It also showed that blacks tended to be specifically brand conscious; and (when they could afford them) they tend to lean toward higher priced items in any specific line. In addition to that, items expenses for personal care such as, cosmetics and the costs of going to beauty and barber shops, ran much higher for blacks than for whites in the same income category at that time.1 It also showed that blacks spent, on average, the same amount as whites on big ticket items such as cars. This very thing holds true today. We are a country full of people who live beyond our means, (i.e. Credit). If blacks make significantly less than whites, but spend, on average, the same amount of money, for necessities, entertainment, food away from home, cars, and other extravagances, one could conclude that this leaves very little surplus cash with which to invest.

This in turn creates a culture that is either, unfamiliar with investing, unwilling to invest, or simply unable to invest what little money they are able to retain. The term culture can also be defined as a mindset. If the culture can be changed that means the mindset itself can be changed. But as we can see the mindset is deeply ingrained from centuries of slavery, and decades of further oppression and discrimination.

And allow me to proffer an opinion. It would seem that blacks have no knowledge of, or interest in combining their efforts and/or assisting each other in climbing out of this grave economic quagmire we find ourselves in. It would seem, through several decades of observation, that blacks as a whole have been down so long that we do not know how to be up. And rather than put in the work it takes to climb, we would rather stay put and drag those who do climb back down to where the rest of us are. As I lamented in a poem, “Black people all start out in the same hole. Some of us claw our way to the top and get out, some step on others to reach the top, but don't none of us ever come back and throw down a rope.” If this is indeed the case, what then can be done to alter this line of thinking? How can blacks be brought out of the economic second class? How can we become an economically viable group in America? Well, I believe I have a solution. Allow me to make a modest proposal.

[Inaubryn]

Bump for order.