When I think of such phrases as “support black business” or “buy black“, I often wonder what is our expectation of doing this. For years when I would discuss this with fellow black Americans, it appears that the expectation is to create an economic network that is similar to other close knit ethnic groups (Asians, Jews, Mexicans, Italians, etc.). Although this is something that I certainly want to see, I also believe that there are some very important issues that are keeping this from becoming a relality. One of those issues has to do with family & communtiy structure.

Anyone that does at least a brisk reading on the history of Ellis Island and its role in population growth here in the US will find numerous stories of immigrants from all over the world who came to this country with little or no money but with plenty of skills. With these skills coupled with the freedom and determination to use them, these immigrants were able to create for themselves an economic network that not only knitted their particular ethnic group closer together, but established economic pipelines that oftentimes stretched all the way back to their country of origin.

Family: The glue that held it all together.

The whole concept of business during those days is rooted in the security of family structure. In addition to good ol’ fashioned hard work, oftentimes start-up capital and stock came from the economic network of family and friends. Employees were usually made up of friends and family members who oftentimes (if business was slow) would work for little or no pay simply because the security of the “network” took care of their basic needs (food, clothing, shelter, etc.). In fact, you will see this same practice in action in many ethnic communities with strong connections to their country of origin today.

Black Americans on the other hand have a different story to tell.

Many of us who are black can trace our roots to African ancestors who did not have the luxury of choice to come to this nation. These ancestors were ripped from their own land (in many cases by the hand of fellow Africans) and thrown into new environments where both culture and family ties had to be abandoned. During the days of slavery, our economic pipeline never made it to Africa. Instead it went straight into the coffers of white slave owners. The skill sets that were nurtured and developed back in Africa were watered down to doing house and field chores here in America.

After these very dark days in American history, blacks began to migrate from the old south to much greener pastures full of promise up north as well as across the Mississippi river and all points west. Although racism still existed in those days, numbers of blacks who left the south were somehow able to build a new life for themselves that was more reliant on their own ingenuity and less on the “handout” of a plantation owner. In many areas in the west, small towns were established and ran by blacks.

Below is an excerpt that talks about what was describes as “Black Wall street”…

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The population rapidly increased from an estimated 1,390 residents in 1900 to approximately 18,182 by 1910. By 1907 Oklahoma had firmly established itself as the nation’s leader in oil production and Tulsa, a young oil boom town, was considered one of the wealthiest in the nation. Many of the new Tulsa residents had migrated from Mississippi, Georgia and Missouri. By 1919, the population in Tulsa had exploded to 98,874 people. The local government in Tulsa was not equipped to deal with this unexpected influx of residents. There was little interest in local elections and very little law enforcement in Tulsa. With an increase in crime - prostitution, gambling, robbery, lynchings and thefts - the city was considered a criminal’s paradise. In the early 1900’s, Oklahoma was ranked 11th in nation for lynchings of Blacks and women. In 1921, just two weeks before the destruction of Negro Wall Street, the Tulsa courts had over 6,000 cases waiting arraignment and 6% of the society was under some sort of indictment for criminal activity. The state ordered 2 additional judges sent in to clear all criminal court dockets. In sharp contrast to the greater Tulsa area was North Tulsa, a predominantly black district located in Greenwood where they boasted one of the lowest crime rates in the area. The first black residents moved in to the Greenwood District area in 1905. Both wealthy and working class inhabited the 40 block radius from Greenwood, Archer and Pine streets, located north of the downtown Tulsa area. Greenwood grew to be the most economically stable and prosperous areas of the state housing over 600 businesses and maintained the lowest illiteracy rate in the state with 75% of its school aged children attending schools.

Black residents started businesses within their community out of necessity. Although they were able to find work in many white-owned Tulsa businesses, they were not allowed to patronize them. One of the first residents was the Williams family who opened an auto shop and movie theater. The Williams were representative of the 15,000 residents who worked to provide for their communities needs. They were attorneys, farmers, accountants, beauticians, locksmiths, chemists and doctors. Blacks owned a medical school, 21 churches, 21 restaurants, 30 grocery stores, 2 large movie theaters, 2 hospitals, a bank, a post office, private and public libraries, schools, pawn shops, brothels, auto shops, jewelry stores, candy shops, pharmacies, shoe shines and numerous boutiques. Six of the airplanes at Oklahoma’s two airports were owned and flown by Greenwood residents. The district also had two bus systems, the owner of one was said to have done $500 a day in revenues in 1910.

Clara Banks, a black resident at the time, remembers her town with pride. “When you went outside you saw nothing but colored folks, everybody from the milkman to the bus drivers and shop owners were colored. Quite a few of the businesses were owned by women,” explained Mrs. Banks, adding that her mother started a candy shop outside her own home.

“When the city started putting pipelines in our neighborhood, the workmen labored right outside our home and along our block. Momma began to feed them at lunch everyday. They would always leave her some pocket change for their meals, Banks recalled. She would never ask they just did it because they were appreciative. She saved up and we were eventually able to build a store front, Momma had them put in a pay toilet and we had the only one in the neighborhood with flowing water.” Because of it’s economic focus and success, Greenwood became known as “Negro Wall Street” or “Little Africa.” It was rumored that the Greenwood elite had over $100,000 in assets. The dollar circulated 36 to 100 times before leaving the community, this means that a dollar earned was a dollar spent in the district at many different businesses before the consumer traveled outside to buy a good, product or service. (more…)

“Black residents started businesses within their community out of necessity“

In recent years, the black community has failed to make the connection between community-based entrepreneurship and the survival of the community itself. As the excerpt points out, although blacks were permitted to work in white-owned establishments, they were not allowed to purchase goods or services from them. This created an environment whose economic existence was TOTALLY dependent on the white economic system (the prevailing system of that time and still to this day). By making a conscious effort to not only create their own businesses, but to hire from amongst their number, these early black Americans were able to build key buildings/institutions (churches, schools, city hall, roads, hospitals, banks, public transportation, etc.) without the aid of the prevailing system.

Today, like many other Americans, we have taken the burden of having to provide these “necessities” for ourselves and placed them on the shoulders of government. For black Americans who had the unfortunate disadvantage of having to rebuild community bonds, this move has proven to be very detrimental to black self-sufficiency.

There are those that will read this posting and will make the point that other ethnic groups have faired well under the US economy while blacks have not been as fortunate–drawing the conclusion that the US economy has always been unfair and particularly racist towards blacks. Although there is some merit to this claim, what should not be ignored is the fact that under a much harsher environment for blacks (threat of lynchings and other obvious racial threats), black Americans were still able to create for themselves a thriving working economy whose existence was not externally dependent. Granted, the downfall of these early economic “experiments” can be blamed on the prevalent racist environment of that time, but overlooking the historical fact that these determined black Americans were able to operate such an inspiring economy for 91 years under such conditions would be the greatest crime we could make today. Black Americans of that time along with immigrants who came to this country on their own accord had one belief in common: It was not the government’s role to create self-sufficient communities, only to protect their right to exist.

While writing this post, I was fortunate enough to come across a report that was done on this very same topic: Why Are Black-Owned Businesses Less Successful than White-Owned Businesses? The Role of Families, Inheritances, and Business Human Capital by Robert W. Fairlie and Alicia M. Robb. This 48 page report can be accessed by clicking here (this is a .pdf file).

As I been pointing out in this piece, entrepreneurship in early America was largely supported by family and community ties. Children in those days did not have aspirations to work for a large company with great benefits. Instead, the dream in many cases was to be knowledgeable and skillful enough to one day take over the family business. Despite the negative effects on small business by the industrial revolution, the family structure of many ethnic groups with ties to their country of origin remained considerably strong. Unfortunately, the same cannot be said for the black family structure. As I have mentioned on this site previously, US Census data shows that 80 percent of black families were headed by married couples in 1950 in comparison to only 34% of today.

Just recently, the US Census Bureau released this information regarding black business growth:

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With this huge boom of small businesses in the black community, we must now focus our attention on two important points: #1. Rebuilding of family structure. Our children and other family members must be become active participants in the successes and failures of our entrepreneurial endeavors. And #2, A greater commitment to the poor and disadvantaged in our own community. In addition to job creation, successful black entrepreneurs must be the key driving force behind things like community design/layout (read “Black-owned construction company revitalizes historic black community”), adequate after school programs, and most importantly engaged in existing local programs whose purpose is to improve the climate of the community. By dealing with these two issues head on, we will in fact be ensuring the economic longevity and social stability of our future generations.

Question worth pondering: With only a small percentage of black business with paid employees, is it fair to consider these businesses as “elitist” for not sharing opportunity with others in the black community?