Buying Freedom or Buying In? The Rise of Black Capitalism in America

Overview:

Black Capitalism has increasingly been recognized as a potential economic growth and empowerment strategy in African American communities. However, its ability to fully address systemic racial economic disparities remains questionable. This essay explores the complex relationship between Black Capitalism and racial justice by analyzing two key historical eras: the Freedmen's Bureau period following the Civil War and the transformative Nixon years between 1969 and 1974. While acknowledging Black Capitalism's role in uplifting marginalized groups, this analysis challenges its efficacy as the sole vehicle for overcoming systemic barriers and achieving economic equity.

Tracing the evolution of Black business development from slavery to enduring discrimination, it probes cultural resilience while unveiling the limitations of capitalist participation alone in closing racial wealth gaps arising from structural discrimination. It concludes that despite enabling mobility and affluence for some, Black engagement with America’s economic system cannot sufficiently “get over” to ensure collective liberation until underlying inequalities are addressed.

Keywords: Black Capitalism, Racial economic disparities, Richard Nixon, Freedmen’s Bureau

“Because you can't just get by no more, word up, you gotta get over, straight up and down (Wu-Tang Clan, 1993).” An ad-lib by rapper Inspectah Deck was presented near the end of the 1993 song “Cash Rules Everything Around Me” (C.R.E.A.M), highlighting the pervasive influence of money in society and the relentless struggle to overcome financial hardship. As a Black artist eluding to the message of the song, Deck’s adlib echoes the sentiment of those who view overcoming economic hardship, or “getting over,” as a pathway out in a society where cash essentially rules. In the broader discourse, Deck’s lyrics highlight the critical need for financial empowerment within Black communities. In this context, “getting over” is defined by resilience; it means navigating and overcoming the systemic barriers within capitalism to achieve independence. These lyrics have transcended its musical origins, becoming a resonant symbol of the broader societal conversation about Blackness, wealth, and inequality. Moreover, they play a crucial role in shaping and defining the concept of Black Capitalism. 

Today, Black Capitalism is increasingly recognized not just as a strategy for economic growth but as a vital tool for achieving power and access in a society that has historically marginalized African Americans. Yet through resilience and resistance, many Black Americans have found ways to gain economic mobility and become a part of the engine of the capitalist system, though grave disparities remain. The journey has been arduous - from historical challenges within the U.S., from slavery and sharecropping to redlining and ongoing discrimination. 

As Eric Williams presents through Capitalism and Slavery, the relationship between Black people in capitalism is based on the backs of Black bodies and the vicious institution of slavery that cemented the growth of global impact and the formation of modern-day capitalism. “The commercial capitalism of the eighteenth century developed Europe's wealth through slavery and monopoly. But in so doing, it helped to create the industrial capitalism of the nineteenth century, which turned round and destroyed the power of commercial capitalism, slavery, and all its works (Williams 2021, p.167-168).” This historical interplay between capitalism and the exploitation of Black individuals underlines the long-term implications of such a system, where the foundational injustices continue to resonate in contemporary economic and social landscapes of our time.

Today, the modern economic advancement of Black people highlights that despite the challenges of capitalism, there exist avenues of affluence and access within the Black community. In the U.S., thousands of Black millionaires are growing, but there are fewer than 10 Black billionaires (LaFranco And Chase Peterson-Withorn, 2023, n.p.). The narrative of the state of Black people and our relationship to capital is evolving, and conversations increasingly focus on the intricate relationship between African Americans and capitalist participation and how this interplay shapes Black Capitalism.

This essay delves into Black Americans’ history and economic realities during two pivotal periods: the Freedmen's Bureau era, immediately following the Civil War, and the transformative years of the late 1969-1974, overviewing Richard Nixon’s leadership in America.  By examining these distinct epochs, the paper aims to provide a comparative analysis of “Black Capitalism,” exploring how the narratives today have evolved and impacted the lives of African Americans during these critical stages in American history. The Freedmen's Bureau era and the transformative years of the 1960s-1970s represent crucial junctures in the history of Black Capitalism, marking the transition from post-Civil War efforts at economic reconstruction to the civil rights era’s push for systemic economic empowerment within African American communities.

While acknowledging its historical role in uplifting marginalized communities, the analysis will highlight Black Capitalism’s inadequacies in fully addressing the systemic racial disparities that persist in today’s world. By exploring the evolution of Black Capitalism and its impact over time, this paper will challenge its effectiveness as a sole vehicle for “getting over” economic barriers and achieving true economic liberation in contemporary society.

Part 1: Unveiling the Rough Beginnings of Black Capitalism

In anticipation of the Civil War’s conclusion, the United States Congress, recognizing the imminent need for support and assistance for newly emancipated individuals, in a narrow vote in 1863 to establish the Bureau of Refugees, Freedmen, and Abandoned Lands (Freedmen’s Bureau). Commencing operations in 1865, this Bureau was a pivotal post-war institution whose operations ended in 1872. Its primary mission was to facilitate a thorough transition for the integration of nearly 4 million formerly enslaved people into society while also providing support to impoverished whites. The transition from being enslaved to attaining freedom was a profoundly challenging and complex process for African Americans.

This shift required navigating a host of new social, economic, and legal landscapes that were unwelcoming and outright hostile to new citizens. For Black bodies who endured the brutalities of enslavement, adapting to a life of freedom while liberating in concept was fraught with significant obstacles and uncertainties. Firstly, they were constrained to limited employment opportunities across industries, forcing them to remain in the cotton business (Baradaran 2017, p. 19). For freed people, the dawn of freedom scarcely felt different from the shackles of enslavement as the persistent vestiges of bondage continued to impose constraints on their newfound liberties. Secondly, the guidelines set forth for the freed individuals, as noted by Paul Skeels Peirce, anticipated a degree of subservience from them, reflecting an expectation of compliance and deference that was reminiscent of their past conditions. “All able-bodied negroes and refugees should be compelled to work and every effort made to render the people self-supporting. But negroes must be free to choose employers, the old system of overseers and all substitutes for slavery was prohibited, and contracts between employers and laborers were to be approved and enforced by bureau officers. General and uniform regulations were laid down concerning free transportation and the amount and issuance of free rations (Peirce 1904, p.51) .” Once considered as capital themselves without owning any, freed people were now expected to be self-sufficient, navigating an economy where capital was essential for success yet remained out of their reach they additionally were a community functioning without the proper reparations to assist them in their transition. They additionally were a community functioning without the proper reparations to assist them in their transition within America.

The concept of freedom for the emancipated individuals was not solely about becoming capitalists. It encompassed a broader context of economic self-determination and autonomy within the capitalist system, which was the rhetoric used to define the kind of help the government was willing to provide Black people. African Americans wanted to be in control of their financial freedoms, and white capitalists were interested in limiting them (Baradaran 2017, p. 19). Though establishing the Freedmen’s Bureau was a significant step, it proved inadequate for the comprehensive needs of freed individuals. The Bureau was underfunded and understaffed, with only 900 agents for a massive task to serve millions of emancipated people. “According to Smith et al. (2019), ‘By 1871, 37 branches had opened in 17 states. The bank hired local Black leaders as cashiers and solicited depositors among the formerly enslaved’ (0:50-1:00). They further note, ‘Some people invested only a few pennies, but still, they invested; the majority of accounts were less than $50 (0:50-1:00) .”

While the leadership of the Freedmen’s Bureau asserted that its financial operations were fully supported by the U.S. government, in reality, this support was not as robust as proclaimed. “Within ten years, it handled more than $75 million of deposits made by more than 75,000 depositors, an amount that would be approximately $1.5 billion today (Reid in Baradaran 2017, p. 25).” The substantial savings amassed by predominantly Black depositors highlighted their conviction in the power of financial autonomy and the effectiveness of participating as emancipated people within the market. Despite the pervasive poverty and limited opportunities for wealth creation facing many newly emancipated individuals, the collective deposits made reflect a significant and proactive engagement with the capitalist economy, even if it would be short-lived.

The collapse of the Freedmen’s Bank was precipitated by a mix of poor management practices, reckless financial speculation by those in charge, and insufficient regulatory scrutiny. The trustees of the bank wielded expansive powers without adequate checks and balances, which drove the institution away from its foundational purpose as a savings bank towards those impacted by the end of chattel slavery to risky and ultimately detrimental investment strategies. One example of this is how Henry Cooke leveraged the funds of the bureau to invest in west road railroad expansion alongside his brother (Baradaran 2017, p. 25). Cooke held a position on the board of the Freedmen’s Bank, concurrently managing his family's banking business, utilizing the resources of the former to advantage the latter. As the financial crisis of 1873 unfolded, the ill-fated investments of the Freedmen’s Bank crumbled, triggering multiple bank runs that resulted in the bank's financial collapse. Despite the appointment of Frederick Douglass as the bank's president in a bid to salvage its reputation and stability, the situation had deteriorated beyond repair by his arrival (Baradaran 2017, p. 25). By the conclusion of the Freedmen’s Bank saga, the outcomes for depositors were divided: half of the account holders managed to recover only about three-quarters of the funds they had deposited, while the remaining half were left empty-handed, receiving none of their hard-earned money back (Smith et al. 2019, 1:29-2:45).

The Freedman’s mismanagement and collapse represented a devastating missed opportunity to cultivate the financial security and wealth creation deserved among the newly emancipated Black community. In seeking to serve a population transitioning straight from enslavement to freedom, the Freedman’s Bank had a visionary purpose - to foster economic empowerment and prosperity for those long denied the chance to chart their own financial futures. The Bureau simply was not just about the Freedmen’s Bank it was a precursor step towards the development of more comprehensive social welfare policies within the U.S. It was a blooming start to build the foundation of Black literacy within America and to meet the economic advancement of African Americans. However, the lack of prudent oversight and absence of clarity around the fiscal component of bank-alone lending proved the undoing of the history it had the opportunity to rewrite. The catastrophic failure of the Freedmen’s Savings Bank stands as a poignant moment in the nascent stages of Black capitalism, marking a profound and instructive obstacle in its historical journey.

The devastating collapse of the Freedmen’s Savings Bank severely curtailed the ability of freed individuals to engage with and benefit from the full breadth of opportunities that capitalism purportedly promised, effectively stunting their economic progression and participation in a system that was heralded as a path to prosperity and self-sufficiency. This significant setback extended beyond the immediate impact on freedmen, casting a long shadow over subsequent generations of Black individuals to come.

The Brewing of Term Black Capitalism

According to the Oxford English Dictionary, the first use of the term Capitalism was in 1833 (“Capitalism,” 2023). In 1833, it was defined as a noun at the height of industrialization. In 1774, the word capitalist was “a person of wealth, a person who is invested in business or representing an adjective.” 1845 represented “a person owning capitalism practicing or advocating capitalism.” In the 1833 time period in America, slavery was prevalent. The attachment of Blacks to capitalism seeks to define the relationship of Black people within Capitalism as Black Capitalists. Though not explicitly defined by dictionaries or tracked as thoroughly as capitalism, the peak of Black Capitalism arose through the 1960s-1970s following political interests and conversations to push Blacks to access capital and experience self-sufficient economic empowerment. Despite a lack of universal agreement on any singular definition, multiple and distinct characterizations of Black Capitalism have proliferated over the years.

In 1975, Arthur Tolson, in his review of Black Capitalism, highlighted the ambiguous nature of Black Capitalism. This concept had yet to be clearly understood (Tolson 1975, p. 8). Tolson noted the absence of a concrete concept of Black Capitalism in political economy and economics. He outlined how academic scholars have defined capitalism and resisted a distinct characterization of Black Capitalism, viewing it as a misleading term that suggests an inexorable linkage between capitalism and racial identity. Considering the concept as a misleading term, a juxtaposition where Capitalism cannot exist without Black people. Claude Lightfoot in Tolson was noted sayin supposed that Black Capitalism does not exist at all. Capitalism is not based on color at all. Instead, it is simply Capitalism and impacts everyone who is not a capitalist (Lightfoot in Tolson 1975, p.8).  

Contrarily, Theodore Cross, “Black Capitalism Strategy for Business in The Ghetto” (1971), saw Black Capitalism as a viable means to foster economic opportunities within America’s ghettos (Cross 1971, p. xvii). Cross proposed that true racial equality in America would remain elusive until tens of thousands of Black individuals became millionaires, earned substantial incomes, and amassed considerable wealth (Cross 1971, p. xv). Cross depicted the ghetto as a separate entity within the U.S., with a population double that of Canada and marked by meager incomes. He attributed this economic disparity to systemic issues like redlining, white flight, and exploitation of Black individuals (Cross 1971, p. 31). Cross advocated for Black Capitalism to alleviate these financial hardships, focusing on community self-sufficiency and empowerment.

The term “Black Capitalism” emerged to define the unique relationship that Black people have with the broader capitalist system. While not as thoroughly documented or described as capitalism itself, the prominence of Black Capitalism became notable during the 1960s-1970s. This existed as a way to characterize the distinct economic experience of African Americans within the framework of capitalism. While capitalism as an overarching theory and structure was formalized in the 19th century, Black capitalism lacked a rigid definition. Yet it reflected the reality that Black people’s relationship to the capitalist system historically differed from that of white Americans. The integral definitions of Black Capitalism did not heavily center barriers such as unequal access to education, capital, and markets, which makes external assistance and systemic change necessary to achieve true economic empowerment and parity.

The term’s popularization in the 1960s-1970s was tied to civil rights gains and deliberate efforts to economically empower African Americans by directing them to be more self-sufficient and access opportunities. Following civil rights legislative victories that formally outlawed discrimination, attention shifted to addressing the economic disparities between Black and white Americans. Policymakers and activists pushed for reforms to actively direct more capital, resources, and economic opportunities toward Black communities as a form of reparation and advancement. This included initiatives to increase access to credit, business development, home ownership, and education within the Black population. Here, the term evolves with one figure, Richard Nixon in particular, setting the tone for what Black Capitalism is supposed to represent. 

Part 2: Richard Nixon and The Black Capitalism Agenda

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Almost a century after the Freedmen’s Bureau, the Civil Rights movement was in full swing, with young African Americans spearheading a new era of leadership and activism. Giving rise to the Black Panther Party in the late 1960s. Amidst this backdrop, President Richard Nixon emerged as a complex figure. While he engaged with Black capitalism and civil rights issues, his commitment to the cause of African Americans was often viewed as strategic rather than deeply rooted in the fight for racial equality. This was because Nixon's engagement with issues affecting the African American community was largely strategic rather than a reflection of a genuine concern for their political well-being.  As Robert Weem and Lewis Randolph (2001, p. 66) unequivocally stated in their work, Nixon was deeply concerned about the Black Power movement, perceiving it as a substantial threat to the nation’s internal security in the late 1960s and early 1970s. This concern heavily influenced his domestic policy decisions. In a strategic response mirroring his international approach of détente, Nixon launched the Black Capitalism initiative (Weem and Randolph 2001, p. 66). This program was designed to engage with and strategically manage the rising influence and dynamics of the Black Power movement within the United States.

Nixon’s actions during this period played a significant part in the larger story of the struggle for authentic liberation and equality among African Americans. The administration of President Richard Nixon in the early 1970s notably embraced the concept of “Black capitalism” as they launched programs aligned with this approach. Nixon and his cabinet endorsed policies intended to cultivate Black entrepreneurship, business ownership, and wealth as a “piece of the action” within America's capitalist system (Tolon 1975, p. 9).  

When President Nixon and his camp began leaning into the concept of “Black capitalism,” it brought the term into the mainstream public conversation. The foundation of Nixon’s relationship with Black Capitalism started in his campaign run. Although there were various discourses and different views about whether Black capitalism policies would work, the terminology gained support for those who accepted the bait of Black capitalism as a solution to and address racial and economic imbalances with African Americans and, shockingly, our community medium servicing the Black community Jet Magazine, especially in the 1960s, played a pivotal role in promoting Nixon’s concept. 

The discussion of Black Capitalism in Jet Magazine during the 1960s centered around the concept of achieving economic independence and empowerment for the Black community. This narrative was particularly significant during a time when civil rights movements were actively challenging systemic racial barriers in every sphere of American life. Black Capitalism was positioned as a strategy for African Americans to establish their own businesses, control economic resources, and ultimately achieve financial autonomy.

However, this promotion of Black Capitalism was juxtaposed against a prevailing societal perception that the Black community was overly dependent on government assistance for survival. Here are two examples of how those conversations were fostered. In the November 7, 1968 issue of  Jet Magazine, Black Capitalism, in reference to Nixon’s initiative, is looked at as a tool to remove Black people from a state of dependence on government to independence. “‘Black Capitalism’ was intended not only as a more effective means of economic development, but also as a means of raising the ceiling for Black aspiration, and moving from dependence to independence (Jet Magazine November 7, 1968, p. 24).” The language here to explain the narrative and importance of Black Capitalism relies on the perceived dependency on government aid, inadvertently reinforcing harmful stereotypes. It risks creating a dichotomy where success through capitalism is seen as the “correct” way for the Black community to achieve progress. At the same time, reliance on government assistance is viewed negatively as a result of ignoring the legitimate need of the Black community to receive support for systemic inequalities. The same one builds on the afterlives of the Freedmen Bureurs' failure. Another excerpt from Jet Magazine on October 21, 1968, highlights Nixon’s advocacy for Black capitalism, overviewing its prominence in his political platform. Jet Magazine (October 1968, p. 49.). In an excerpt titled “Nixon Wants Black Capitalism, Conference Told,” Addressing Nixon’s interest in Black Capitalism stated: 

Addressing a Conference on Black Capitalism at the Illinois Institute of Technology in Chicago, William H. Rentschler said Richard M. Nixon does not “expect to reverse on Nov. 5 the Black voting patterns of three long decades. He hopes and expects to discover then that at least one Negro in every four or five supports him and understands what he is trying to do.” Rentschler, who is state chairman of Illinois Citizens for Nixon and Spiro T. Agnew, said Nixon is trying “to enlist private funds, private energies and private talents in order to develop (economic) opportunities that lie untapped.” He quoted Nixon as saying, “The new approaches ... ought to be oriented toward more Black ownership, for from this can flow the rest—Black pride, Black jobs, Black opportunity and yes, Black power (Jet Magazine October 21, 1968, p. 49).” 

These proclamations seemed to be mere campaign promises; they reflected a strategic component of Nixon’s political agenda. As already noted, Nixon was not interested in the investment of Black Power his agenda was to eradicate and challenge the interests of Black activists. Pandering to Black Capitalism was his tactic. When Nixon transitioned from a Presidential candidate to commander-in-chief, his administration sought to operationalize Black Capitalism ideals by initiating economic policies aimed at fostering Black entrepreneurial endeavors. The Black Capital Initiative represented a tangible extension of his campaign rhetoric into the policy-making that defined his presidency. Nixon's championing of Black Capitalism indelibly shaped the conceptual trajectory and present-day understanding of the term. 

In 1969, Nixon signed Executive Order 11458 to establish the Office of Minority Business Enterprise (OMBE), which lacked direct funding and was tasked with vague objectives like advising and coordinating without a clear mandate or budget. The Small Business Administration was also authorized to allocate government contracts to minority small businesses. Still, these contracts represented only a tiny fraction of total federal contracts, underscoring these initiatives' limited scope and impact (Baradaran 2017, n.p). ​His administration aimed policies and rhetoric at directing capital into Black communities through business incentives, tax credits, and partnerships with banks and corporations. However, these approaches made little sense as vehicles for uplifting a community long excluded from capital access and wealth building. Nixon prioritized free market mechanisms that inherently favored those with existing advantages (Baradaran 2017, n.p). The implementation needed to match the scale of promised investments or oversight needed to ensure accountability. Not only is this kind of overly superficial and mismatched approach to economic and racial inequities damaging to the Black community but it is being promoted as the disparity in income inequality between Black and white Americans begins to be cemented as a problem in the 1970s. As Pew Research revealed in 2020, the income gap between Black and white Americans in the U.S. has remained remarkably stable since 1970. “The difference in median household incomes between white and black Americans has grown from about $23,800 in 1970 to roughly $33,000 in 2018 (as measured in 2018 dollars). Median black household income was 61% of the median white household income in 2018, up modestly from 56% in 1970 – but down slightly from 63% in 2007, before the Great Recession, according to Current Population Survey data (Schaeffer 2020, n.p.).”  

In unveiling this stat, several questions arise about the effectiveness of Black Capitalism. Could Nixon's promotion of Black capitalism have disrupted the income gap between Black and white Americans? Despite being advocated as a solution, the income disparity between these groups has remained remarkably stable since 1970. According to Pew Research’s 2020 data, the median Black household income was a modest increase from 1970 but down from 2007. Did the focus on Black capitalism adequately address income inequality, or were other systemic factors at play that limited its impact? While this paper cannot provide exhaustive answers to these questions, it can assert that Black Capitalism did not significantly contribute to narrowing the income gap between Black and white Americans. The persistent income disparities, as revealed by Pew Research’s 2020 data, alone suggest that the focus on Black capitalism may not have been impactful enough to address the deeply rooted systemic factors that perpetuated inequality within the Black community. Indeed, this outcome appears deliberate, as Nixon’s initiatives were not designed to tackle the underlying root causes of disparities within the Black community. Instead, Black Capitalism served as a bandaid and Nixon’s personal mask for his targeted interests. 

Nixon cemented “‘Black capitalism” as a distinct idea amongst the public, whether people saw it as economically empowering for African Americans or just a symbolic gesture unable to address ongoing systemic discrimination within the Black community fully. For example, Nixon strategically courted the endorsement of Black activists, whom he saw as pivotal figures capable of galvanizing the movement for Black Capitalism and thereby transforming it into a powerful force for economic empowerment within the African American community. Leaders of the Black Panther Party, whom Nixon opposed, staunchly resisted the notion of Black Capitalism, viewing it as an inadequate solution that diverged from their revolutionary objectives and would not precipitate the deep-seated change they deemed essential for the African American community. Though this perspective was not homogenous among leadership, for example: 

“The Black Panther Party often denounced capitalism, and Bobby Seale, who helped found the group, wrote in 1970 that Black capitalism was part of the problem. “We do not fight exploitative capitalism with black capitalism,” he declared. “We fight capitalism with basic socialism.” But the next year, another founding Panther, Huey P. Newton, wrote that Black capitalism could contribute to liberation and that rejecting it was “a counterrevolutionary position.” To many Black people, “Black capitalism” had come to mean “Black control” of local neighborhoods and local industry. How could any Black Panther be opposed to that (Sanneh 2021, n.p.)?”

The language of “Black capitalism” suggested through the Nixon administration viewed business development and entrepreneurship as vehicles for Black economic advancement within the structures of capitalism. This aligns with Crosses’ definitions of capitalism and economic power for Black people, believing that fostering Black entrepreneurship and market access within the existing capitalist framework relies on targeted government incentives and corporate participation. Nixon’s idea of Black capitalism was not focused on restructuring capitalism or deconstructing the system to address racial justice; instead, it was focused on the buy-in of the possibility of elevating the livelihoods of Black Americans. As a critic of Nixon’s approach, it was a “farce—a decoy made of Styrofoam and plastic. But its minuscule price tag and rhetorical appeal made it a political masterstroke that grew into the go-to policy for American presidents (Baradaran, 2017, p. 10).”

According to Baradaran, government programs like Nixon’s example of Black capitalism provided more significant benefits to wealthy corporations rather than empowering distressed Black communities. She argues that policies advertised as directing capital to minority neighborhoods frequently involve lucrative tax credits and incentives for private equity firms, hedge funds, and developers. However, the communities themselves gain little ownership or wealth. Baradaran contends this mirrors Nixon’s strategy of offering symbolic support for Black capitalism that helped significant corporate interests far more than vulnerable populations. She maintains that many current initiatives follow this model of claiming to assist disadvantaged areas while structurally reinforcing the advantages held by the financially powerful. In essence, Baradaran suggests modern policies perpetuate Nixon's “brilliant decoy” of rhetorical concern that ultimately changes little in the inequitable distribution of capital and wealth along racial lines.

Examining the history of Black Capitalism and its introduction into the political space of government administrations shows that Black capitalism was often seen as a pragmatic policy approach to promote economic advancement in the African American community with a heavy focus on business development and entrepreneurship, but without providing systematic influence to challenge the racialized capitalism of broader society. Positioned as a tool to resolve economic inequality, Black capitalism was viewed as though the issues facing the African American community ultimately could be resolved through business development and market-based approaches alone. However, the reality was that even with the economic equality purportedly achieved through Black capitalism, Black Americans overall were still not progressing well economically.

The irony of Nixon’s contradictions:

• Nixon considered Black people a political enemy.*

• His administration's efforts to dismantle affirmative action and social welfare programs through a racist, law-and-order coded agenda designed to appeal to white Southern voters.

• Nixon’s FBI led extensive surveillance and crackdowns on Black activist groups like the Black Panthers.

• Nixon’s administration was the start of the War on Drugs, which disproportionately harmed Black communities.

• Nixon had an alliance with Southern segregationists.

Part 3. The Data Says Black Capitalism is Not Saving Us

For generations, Black Americans faced pervasive discrimination and systemic exclusion from global economic systems. This exclusion was deeply rooted in a history of slavery, segregation, and racial prejudice. Despite the promise of equality with the formulation of institutions like the Freedmen’s Bureau during the Reconstruction era, these efforts often fell short, leaving African Americans with limited access to capital, entrepreneurship opportunities, and the accumulation of wealth. The systemic barriers they encountered denied them full participation in capitalist markets. The bridges that were meant to establish the gaps were never given a solid foundation for Black Americans to cross over to the path of economic empowerment and stability.  Ironically, some of the assistance meant to uplift the Black community created more gaps than their ability to operate as capitalists in the real world. The lack of access to financial resources, education, and fair employment opportunities exacerbated these gaps. More glaring inequalities remained. As a result of this situation, there became an urgent need for alternative approaches. In response to these formidable challenges, the concept of Black Capitalism emerged. It became a descriptor of Black people’s strategies to navigate and overcome the systemic obstacles within capitalist societies. The notion of Black Capitalism encapsulates a complex historical narrative, one rooted in the bootstrap theory that forces change required the Black community to self-determination for African Americans to achieve economic empowerment and equality rather than the institution of white supremacy that created the disruptions in their lives.

 Today, statistics reveal that even in communities where  “Black household heads with a college or university degree have about $10,000 less in median net worth than white household heads who never completed high school. Blacks who are working full-time have a lower median net worth than whites who are unemployed. Blacks in the third quintile of the income distribution have similar levels of median wealth as whites in the lowest quintile (Darity, W. and Mullen, K. 2020, p. 33).  Data overtime presented from 1860-2020 by Ellora Derenoncourt, Chi Hyun Kim, Moritz Kuhn, and Moritz Schularick note that “after a period of initial rapid convergence during the first 50 years after the abolition of slavery, racial wealth convergence slowed substantially in the mid-20th century to the point where the wealth gap in 2020 is effectively the same value as it was in 1950 (Derenoncourt et al. 2022, p. 25).”  

Capitalism has historically functioned as a mechanism of control and gatekeeping, perpetuating systemic inequities. The very same Black individuals, descendants of those forcibly brought to America and exploited for their labor, are now navigating a system that has consistently denied them access to power and equitable economic opportunities. This enduring legacy shows the deep-rooted challenges that Black Capitalism seeks to address, highlighting the complex interplay between historical exploitation and contemporary efforts toward economic empowerment. 

On one hand, participating in capitalism may provide potential pathways for Black communities to gain economic stability, accumulate generational wealth, and achieve greater influence in society. However, the capitalist system was built on the dehumanization and disenfranchisement of Black Americans over centuries through slavery, segregation, and enduring discrimination. The remnants of these oppressive structures are baked into America's financial, legal, political, and social systems, stacking the odds against equitable access to resources and mobility.

Consequently, Black engagement with capitalism inches towards complicity with the machinery behind historical injustices while seeking survival within an economy that continues to benefit white Americans disproportionately. It calls into question whether uplift through entrepreneurship and free-market competition alone can dismantle systemic barriers arising from centuries of intentionally disadvantaging policies and practices. Can the seeds of an oppressive structure bear fruit towards collective liberation? Or does capitalism by design consolidate resources in patterns that sustain racial hierarchies absent regulatory interventions? Getting over requires a bit more than playing into exploitative capitalism with Black capitalism that has shown years after Nixon’s reign it’s just not enough to buy freedom. 

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