Black Capitalism Won’t Save Us

Wednesday, May 22, 2019
The Nation

Last month, Jay-Z fumbled his tribute to the slain rapper and entrepreneur Nipsey Hussle. Performing a eulogy freestyle in New York City’s Webster Hall, he told his audience they could best honor Nipsey Hussle’s legacy by claiming eminent domain over their neighborhoods and gentrifying their community. The performance drew shock and condemnation; being told to gentrify your neighborhood by someone accused of gentrifying their own is predictably infuriating.

Yet Jay Z wasn’t the only public figure mining the rapper’s death for free-market talking points. Senator Cory Booker resurrected Nipsey’s mission to “buy back the block.” Issa Rae emphasized the importance to “own in our communities.” Blavity touted the need to “bank black.”

Celebrities and well-wishers surely have good intentions when they make plans to revitalize black areas like Nipsey’s South Los Angeles. But entrepreneurship and consumerism can only do so much, because the reasons black neighborhoods are troubled—mass eviction, mass incarceration, double-digit unemployment, redlining—can hardly be blamed on the dearth of black ownership. Changing them will require political and artistic narratives that extend far beyond the scope of black commerce.

Long before Nipsey’s death, the mythical prowess of black-owned businesses loomed as epic folklore. From Malcolm X’s speeches calling black communities to build companies larger than General Motors to Jay-Z’s “The Story of O.J.,” in which the rapper tells dealers to “take your drug money and buy the neighborhood,” tales of entrepreneurial liberation have been on heavy rotation in the culture for generations.

The narrative of emancipatory commercialism runs deeper still. Documentaries like The Green Book: Guide to Freedom show elders recounting how black-owned businesses created unprecedented wealth in the community. High Flying Bird, a film written by Tarell Alvin McCraney, imagines an NBA revolt where black athletes create a co-op league of their own. Netflix’s Trigger Warning urges viewers to invest in black businesses. The vision behind these works sees entrepreneurial black folks as free—free from exploitation, faux-integration, and racism.

While the politics of transformative black ownership animate the world of entertainment, it can be poisonous for public policy.

No show better illuminates this than Killer Mike’s Trigger Warning. Like Nipsey Hussle, Killer Mike is a successful entrepreneur, activist, and rapper. Where much of Nipsey’s rhetoric focused on empowering people as entrepreneurs, Mike’s politics preach the power of consumerism.

“I think that the black community can do a better job of keeping the dollar in our ecosystem longer,” Mike said on his reality show. White and Asian people, Mike notes, recirculate money in their communities for weeks, while black communities only retain theirs for hours. After citing this fuzzy math, he then praised Jim Crow, of all things, saying that during segregation “from top to bottom, the ecosystem from a dollar perspective stayed black. Hence, we had a true black working class, a true black middle class, [and] we could send kids off to college.” Here, Mike’s logic points toward a type a economic segregation that would supposedly generate wealth through the ownership of black businesses.

Politicking with a group of black barbers, Mike concluded that “because we aren’t focused on our dollar, our whole community seems to be suffering.” The first episode follows Mike attempting to ameliorate this suffering by “living black.” He commits to only consuming goods from black-owned businesses, with black supply chains—which leads him to face the limits of racial autarky.

When he wants to smoke, he can’t; his dealer sources from white marijuana farms. When he’s hungry, there’s only one sparsely stocked black grocer. When he travels outside of Atlanta for a show, he can’t find a black hotel. Even when he wants to drive, he can’t because all his cars “are made by white companies.” The show chronicles the painful one-man boycott that by the creator’s own account leaves Mike “hungry,” and “wandering the streets in the dead of night.”

However theatrical, the episode broadcasts how years of compounded divestment have made the politics of black capitalism useless.

In America, at every stage of the business life cycle, the economy beats black businesses like a piñata. Battered by higher insurance priceshammered by stingy investorspummeled by exclusive supply chainsassaulted by recessionsthrashed by exclusionary regulatorspounded by a intergenerational wealth gap, a hobbled community of marginal black worker-entrepreneurs must compete with American monopolies and oligopolies flushed with cash and bolstered by lobbyist like Amazon and Walmart. The upshot is predictable. Because they are so wounded by the financial pressures discrimination exerts, black businesses often can only offer fewer locations, higher prices, and fewer choices. Killer Mike’s consumerism flounders under the racialized reality that black communities have been pushed down for too long to pull themselves up by their bootstraps.

Mike’s troubles draw a striking comparison to one of the final scenes from James Baldwin’s book of essays indicting American racism, The Fire Next Time. After a lengthy interview at the Chicago estate of Elijah Muhammad, Baldwin debates his chauffeur, a young member of the Nation of Islam who tells Baldwin how the black dollar could support a self-sufficient economy free from the ills of the country’s bigotry.

“He spoke to me first of the Muslim temples that were being built,” Baldwin wrote, “or were about to be built, in various parts of the United States, of the strength of the Muslim following, and of the amount of money that is annually at the disposal of Negroes—something like twenty billion dollars. ‘That alone shows you how strong we are,’ he said.”

Baldwin, a well-read and well-traveled debater, quickly gives the young nationalist a two piece. He pokes, asserting that additional segregation would shrink black spending power; he prods, inquiring about the political ramifications of a less-productive economy. As he goes on, the man’s face soon contorts looking at the writer. Sensing that the driver is out of his depth and conscious enough not to break his spirit, Baldwin pulls back, and speaks directly to the reader instead:

I was thinking, in order for this to happen, your entire frame of reference will have to change, and you will be forced to surrender many things that you now scarcely know you have. I didn’t feel that the things I had in mind, such as the pseudo-elegant heap of tin in which we were riding, had any very great value. But life would be very different without them, and I wondered if he had thought of this.

The shortcomings Baldwin saw in the driver’s politics in 1962 still undermine Killer Mike’s today. Baldwin wrote that a massive black boycott would cost the driver his car—just as it claimed the Atlanta rapper’s on Trigger Warning—not to mention his cell phone and his diet too. In this century, just as in the last, black business offers mere Band-Aids to cover the gun wound of racial inequality.

As a rule of thumb for evaluating the efficacy of a policy designed to impact black neighborhoods in 2019, it’s always smart to double check the merits of any proposal endorsed by Donald J. Trump. Last December, Trump endorsed black capitalism in the form of “Opportunity Zones.”

In an uncharacteristically diverse White House ceremony, Tim Scott, Ben Carson, and a cadre of bald black men in dark suits flanked Trump as he introduced his Opportunity Zones executive order. On its face, it looks benign. The program promises to leverage tax breaks and lean on investors, entrepreneurs, and historically black colleges and universities “to revitalize urban and economically distressed communities.” But as with many of Trump’s policies aimed at communities of color, Opportunity Zones flow from what legal scholars like Mehrsa Baradaran describe as “cynical and racist origins.”

In her book The Color of Money: Black Banks and the Racial Wealth Gap, Baradaran explained how the program was innovated in the Nixon administration. As Nixon took office in 1968, black Americans reeled from generations discrimination. But instead of mobilizing the large federal government response needed to quell racial inequality through reparations or targeted anti-poverty programs, the president nimbly “co-opted the black power movement’s rhetoric of economic self-determination to push a segregated black economy, thereby justifying his neglect of other proposals for meaningful reform.”

This program was black capitalism—a series of meager tax breaks and incentives professed to enable a black entrepreneurship that would supposedly redress generations of racialized American plunder. It was a farce—a decoy made of Styrofoam and plastic. But it’s minuscule price tag and rhetorical appeal made it a political masterstroke that grew into the go-to policy for American presidents.

“Carter did it, Regan did it, Clinton did it, Obama did it, [and] Trump is doing it now with Opportunity Zones,” Baradaran told me. “Opportunity Zones is black capitalism. It’s been denuded of the word black, but it’s essentially the same idea.”

“We’re pretending like we’re helping ‘distressed’ communities through capital, but it’s actually not capital for the communities themselves. It is development incentives. It is rich private equity firms and hedge funds getting tax incentives to do stuff, build stuff, and to create stuff in these distressed communities. They get the upside, and they’re protected from the downside because they are going to get tax credits. That is an extension of Nixon’s brilliant decoy.”

“It looks like we’re helping, but we’re actually not,” says Baradaran. “All it does is prop up a few black businesses to sort of allow for the segregated market to continue breeding inequality.”

While Nixon played off the self-determination rhetoric during the Black Power movement, Trump taps into the language of uplift favored by rappers today. Drawing from the entrepreneurial spirit that flows through the genre, Trump’s Opportunity Zones has found strange bedfellows in business-minded rappers like Nipsey Hussle.

In February, Forbes ran an article on Nipsey Hussle titled “Inside Nipsey Hussle’s Blueprint To Become A Real Estate Mogul.” The piece plotted out Nipsey’s entrepreneurship in an Opportunity Zone in Crenshaw and discussed his plans to expand “a broader Opportunity Zone-based fund” in 10 cities with his business partner David Gross, a Los Angeles–based real-estate developer. The expansion plan centered on collaborating with local celebrities—like rapper TI in Atlanta, for instance—to build a network of “tax advantaged” businesses in low-income neighborhoods.

In his wake, many publications recounted how Nipsey’s businesses touched the lives of Los Angeles residents and provided a lasting sense of community and ownership. And yet, it’s difficult to separate programs like Opportunity Zones that assist high-profile black entrepreneurs like Nipsey “to buy back the block” from the cynical policies of politicians like Donald Trump who ruthlessly undermine plans promoting systemic racial justice.

For decades, programs providing tax breaks and incentives to a few high-profile black entrepreneurs have sucked all the air out of policy conversations addressing racial economic inequality. These dialogues focused on upper-middle-class black entrepreneurs obscure the plight of everyday black folks living in segregated areas. They ignore poor and working-class people, who need direct investment the most. For example, when publications like Complexrun stories describing Nipsey’s Opportunity Zone funds as the ‘Economic Version of Black Lives Matter’, they miss the point. Black Lives Matter—a movement focused on radical redistributive policy for all black peopleis the economic version of Black Lives Matter.

And if history serves as our guide, it can be profoundly counterproductive to support economic-justice agenda premised on the altruism of black entrepreneurs. Because as NDB Connolly, a Johns Hopkins historian, notes, black entrepreneurs are capable of inflicting the same racialized inequality seen in the broader American economy as anyone else.

“It’s always very funny to me, to hear people celebrate black capitalism, as if somehow the ‘black’ part is supposed to erase the ‘capitalism’ part of it,” says Connolly.

Connolly notes that black business trailblazers like the 1940s Chicago real-estate developer Carl Hansberry, was also a slumlord. Black poets detested his tiny “kitchenette” units. Gwendolyn Brooks depicted them as “grayed in, and gray.” Richard Wright decried them as “the funnel through which our pulverized lives flow to ruin and death on the city pavements, at a profit.” Yet in the eyes of many policymakers and historians, Hansberry, “King of the Kitchenette,” epitomizes a civil-rights and black-capitalism success story.

In Connolly’s book, A World More Concrete: Real Estate and the Remaking of Jim Crow South Florida, the author traces several civil-rights activists who also profiteer off of black customers in a segregated housing market in the South. And Connolly also notes that even renowned activists like W.E.B. Du Bois and Madam CJ Walker owned black slums and busted black unions.

Both in the past and present, the rub of black capitalism is evident—it measures success in a few black entrepreneurs, while the everyday black people living, working, and shopping in the segregated economies still face existential financial threats. They’re still plagued by the wealth gap, squeezed by discrimination, and targeted by predatory businesses. For these people moving their dollars from a white firm to a black one can provide cosmetic change, but rarely does it fix the fundamental underpinnings of racial inequality.

If we needed any evidence of the futility of black capitalism, last spring, the nation’s leading stratification economists at the Samuel DuBois Cook Center on Social Equity published a hefty report rebutting the “harmful narratives” that, buying black, banking black, or black entrepreneurship will close the racial wealth gap, concluding that “it is time to move beyond these fallacies and confront the root causes of the racial wealth gap. Otherwise we will whistle in the wind, and the racial wealth gap will remain unchallenged.”

None of this is to undermine the vitality of black economic solidarity and institutions. Boycotts, whether of buses in Montgomery or Starbucks in Philadelphia, can serve as excellent organizing tools and often command crucial media attention. Moreover scholars like Eddie Glaude Jr. explains that for generations, “Black churches, social clubs, schools and colleges, newspapers, masonic orders, and fraternal and sororal organizations—this broad associational life of Black America—served as the life force of communities under continuous racial assault.” But even today, while black institutions and businesses continue to provide communities with many essential social and political services, they simply aren’t capable of generating the resources address racial economic inequality.

Actually closing the gulf requires dealing with inequities in housing, employment, investment, and assets. This task requires recognizing black people not as consumers or entrepreneurs but as citizens—as members of a society with a national debt to which black people have claim. To access their citizenship, black people need not spend more money at certain stores. They need not start more businesses. They need not settle for tax breaks. The price of black Americans’ citizenship has been paid many times over, and the bill is past due.

It’s now up to the United States to pay the tab it ran up. Calling this a debt is only the path to equality. It’s daunting. It isn’t a simple political slogan. It costs much more than banking black or buying black. The chore demands more than meager government lip service; the mission lacks the liberating autonomy and agency captured in so many songs and movies that imagine freedom through a black business.

But if we are to ever create economic justice, we must change the way our art to conceptualize that justice. We must change the stories we tell. We must tell the truth.

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