Our Black Year (14 page)

A total of thirty-five square blocks was destroyed in about fourteen hours of rioting. That event was “the worst civil disturbance since the Civil War,” according to an Oklahoma state commission's 2001 report on the riot. Historian John Sibley Butler set the number of dead at more than fifty, and “over 1,000 homes and businesses lay in ruins. Thousands of occupations were lost.”

There is so much to mourn about these catastrophes. Think of the enduring value those businesses would have provided for countless families as well as all the dreams that nurtured those businesses that were lost to subsequent generations.

When the Great Depression arrived in 1929, Blacks suffered more than other groups did. About one-quarter of African Americans were on relief in 1935, a figure that looks comparable to the overall unemployment rate of 25 percent, although the percentage of Blacks receiving assistance was much higher in certain cities—up to 81 percent in Norfolk, Virginia, and nearly 66 percent in Atlanta. At the same time, from 1929 to 1939, retail sales among Black businesses declined nearly 30 percent, while the national aggregate retail sales drop was only 13 percent.

In the aftermath of the Depression and, later, with Black soldiers returning home from World War II, a growing, politically active Black middle class emerged. Occasional waves of discontent over economic mistreatment and human rights violations flared, like the 1955–56 Montgomery Bus Boycott, organized after Blacks suffered humiliating treatment in the city's public bus system. That protest gave Blacks an increasing sense of power, leading them to patronize local, Black-owned businesses. In 1955–57 Blacks in Mississippi boycotted a chain of stores that the families of the murderers of African American Emmett Till operated, a move that led to the demise of the family's business.

Throughout this period, as in others, African American leaders were trying to rally the people to use the power of their dollars. In a 1957 book by Black economic empowerment advocate William K. Bell,
15 Million Negroes and 15 Billion Dollars
, he states, “15 MILLION NEGROES cannot be kept from gaining economic power if they determine to keep within the race a certain portion of that 15 BILLION DOLLARS that is running daily through their fingers, as water does over a dam. . . . There is GREAT POWER in 15 BILLION DOLLARS!”

Other boycotts occurred. In Nashville, starting in late 1959, Black leaders and students waged sit-ins at diners across the city. About six months later, stung by a drop of about 20 percent in business, six department
stores began serving African Americans, who then broke racial barriers in movie theaters, workplaces, hotels, and other public services.

That kind of action was the backbone of the civil rights movement, of course, as it was used in Tallahassee, Savannah, New Orleans, and elsewhere. One of the most successful boycotts was the Southern Christian Leadership Conference's Operation Breadbasket in Atlanta and Chicago in 1966 and 1967. Employing a strategy known as “selective patronage,” Breadbasket called on Black ministers and their churches to pressure companies to employ a reasonable percentage of Blacks in businesses that sold primarily to the Black community. Armed with employment figures for those companies, the ministers would attempt to “negotiate a more equitable employment practice.” If they couldn't reach a solution, the ministers would encourage their parishioners to boycott certain products. In Atlanta Operation Breadbasket created jobs for African Americans that accounted for an additional $25 million a year going to Black neighborhoods. In Chicago, in just fifteen months, Breadbasket brought about two thousand jobs, worth about $15 million.

In fact, it was economics, or at least the unacceptable treatment of Black consumers, that “sparked the civil rights protests of the mid-twentieth century,” writes Professor Robert E. Weems Jr. in
Desegregating the Dollar.
In his view the Civil Rights Act of 1964, “in large part, appeared to be the culmination of years of sustained black consumer economic retribution.”

But not everything that emerged from that historic struggle was positive; it's a little more complicated than the black-and-white newsreels we see on the History Channel. As previously mentioned, the civil rights movement clearly had a deteriorative effect on Black-owned businesses. We traded progress in politics and human rights for economic stability, which is where the Black Power movement comes into play—a well-meaning concept of the 1960s that fizzled. From my perch, Black Power is not much more than a catchy, ambiguous phrase rooted in those secret societies that emerged soon after slavery was established on this continent in the 1600s.

Black Power leaders did agree on a few general tenets, such as Blacks should be included in national political and economic decision making and should work to help all Blacks achieve success. They stressed business ownership and set the goal of pushing their agenda until Blacks obtained “a stake in the American capitalist system commensurate with their 12 percent of the American population,” writes John T. McCartney, professor of comparative politics and Black political thought at Lafayette College, in the
Encyclopedia of African American Business History
. These admirable concepts were distilled from the work of Booker T. Washington and Marcus Garvey.

The problem is that the leaders could never agree on how to generate that economic growth. Some contended that skills training and equal opportunity for jobs were key. Others favored the accumulation of Black capital to spark African American industrialization. A third argument was that Black capital, even if amassed, wasn't enough to lift up African Americans economically. That thinking was widely accepted among political leaders, including President Richard Nixon, who established efforts to direct capital toward African American business ventures. But the federal government and the business establishment failed to fund the initiatives, so they faded.

In 1969 the total number of Black-owned businesses in the United States was 163,000, which accounted for 0.25 percent of all businesses in the country. By the late 1990s that number had grown to 620,912, or 3.5 percent of all businesses—a figure hardly commensurate with the nearly 13 percent of Americans who were Black.

More conventional forms of Black Power that were products of the civil rights movement included Affirmative Action and its cousin, minority business set-aside programs. Established by the federal government in 1972, Affirmative Action, via the Equal Employment Opportunity Act, created a system by which employers were strongly encouraged to hire and promote minorities. Affirmative Action has been successful to a point, but it remains a divisive effort that's been challenged no fewer than five times in the US Supreme Court, which has sometimes contradicted earlier rulings.

In addition, research in 1979 showed that an inordinately high percentage of Black executives were placed in personnel positions responsible for implementing Affirmative Action, jobs that are typically outside of the strategic power centers in corporations and are traditionally the hardest hit in economic declines.

Minority business set-asides, the program that originated in the 1977 Public Works Employment Act and calls for awarding a portion of government contracts to minority firms, is nearly as contentious. Research suggests that “efforts to assist minority businesses in obtaining contracts with state, local, and government bodies often help to increase minority employment,” according to University of Minnesota professor Samuel L. Myers Jr., who studies racial inequality and public policy. But other data show that there are less expensive ways to help minority businesses, including subsidizing start-up capital—a huge issue for Black businesses—by waiving bonding and insurance requirements and reaching out “
to local enterprises in communities with large minority populations.
” Isn't buying Black a way to do just that—
without
spending taxpayers' money? Another problem with minority set-aside programs is that a large chunk of the business they offer is based on federal procurement or sales to minority communities, both of which can be very unstable.

Any discussion of the civil rights era must include the heroic, iconic Dr. King. It seems that virtually every civil rights action from the late 1950s through the 1960s—even after his death—emerged from or was connected to his work in some way. To properly characterize King's efforts in a few sentences is impossible, but his legacy in the arena of Black economic empowerment is unclear.

In short, Dr. King saw Black businesses as very limited in their power to change the economic plight of African Americans, and he held a slightly conflicting view of how Blacks could get ahead economically. On the one hand, he believed that creating more jobs for Blacks and growing a larger consumer bloc of African Americans would help them make economic gains. At the same time, he saw capitalism as exploitive and “denounced American capitalism and the futility of utilizing black businesses as the base for black economic empowerment . . . for anything beyond
serving as icons of resourcefulness,” according to Professor Juliet E. K. Walker, a member of our Executive Advisory team and the author of several books on African American business. “Rather than pushing for the expansion of black business,” she writes, “it appears that King preferred that blacks march to the doors of white corporate America and demand employment.”

Dr. Walker believes that Dr. King's view of human rights was changing as conditions evolved. At the time of his death he thought that Blacks would achieve economic empowerment by gaining jobs and using their consumer muscle.

The main goals of the civil rights movement, in Dr. Walker's words, “were to secure civil and political rights,” which were accomplished—technically, at least—by 1965. But African Americans were still disproportionately poor, and when government and Black American rights organizations began looking at ways to solve that complex problem, Dr. King “was seeing the Black American economic picture within the context of the negative aspects of global capitalism.”

Dr. Walker points to this excerpt from Dr. King's speech to the Southern Christian Leadership Conference in August 1967: “We must ask the question, ‘Why are there forty million poor people in America?' And, when you begin to ask that question, you are raising questions about the economic system, about a broader distribution of wealth. When you ask that question, you begin to question the capitalistic economy.”

“Here was a man,” Dr. Walker says, “moving from denouncing segregation, racism and discrimination on a national level to [denouncing] segregation, racism and discrimination in the economic system on a global level. It's not that Dr. King didn't believe black business was important to the black community. It was that black business would not be enough to salvage the economic plight of blacks. Had he lived longer, he would have formulated more specific goals to achieve black economic parity.”

I certainly can appreciate Dr. King's perspective, though I do wonder what he'd say now. Yes, Blacks made gains in the 1970s, '80s and '90s. We can vote. We go to the same schools as Whites, eat in the same restaurants,
shop in the same stores. Yet it feels like Blacks are still stuck so far behind Whites and other races—in some ways we've lost ground. Why?

I think it comes down to economic strength, the kind that comes not from a government program—we've had plenty of those—but from creating it ourselves through discipline, smarts, and resourcefulness. And by building and patronizing our own businesses.

After Affirmative Action, minority business set-asides, and the failure of what Professor Walker calls a “communal economic effort” known as “black capitalism” of the 1960s and '70s, efforts to “buy Black” seemed to make a comeback in 1985, when Tony Brown, television producer, author, and Black business promoter, launched the “Buy Freedom” campaign that called for African Americans to spend half their money on Black businesses. His national public affairs TV show,
Tony Brown's Journal
, also pushes Black economic nationalism.

Efforts to “buy Black”—many of which are profit-oriented—are ongoing. Apart from the various Black business directories—some of which you can find through organizations listed in the back of this book—a handful of successful ventures promoting Black-owned businesses exist. These include Black Business Network, a mostly online community of nearly thirty thousand Black consumers who want to support African American–owned businesses, and iZania, started by a former IBM executive, whose goal is to enable members “to leverage Internet connectivity to achieve positive outcomes for the Virtual Black Community.” Another is Recycling Black Dollars, a community-based nonprofit that has done a great deal to help the Watts and Compton communities in Los Angeles. The Black Shopping Channel is a for-profit company founded by Cleveland Gary, former Los Angeles Rams and Miami Dolphins running back, with the goal of marketing small-and medium-sized Black-owned businesses on TV, among other places. Additionally, there are a number of national organizations focused on directing business to minority—but not solely Black-owned—companies. Among the most noteworthy is the National Minority Supplier Development Council, which in 2010 coordinated $100.5 billion in purchases from minority-owned businesses.

There are organizations that promote the creation and support of our own products and industries, without outside assistance and instead of supporting businesses owned by other groups. The Harvest Institute, created by famed activist and author Dr. Claud Anderson, is based on the principle “that Blacks must aggregate, pool their resources, and build independent communities before allying with competing groups,” and promotes this strategy as a way to build a community that is self-sustaining.