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THE BIG DIVIDE

By Phillip Jackson

Wednesday, June 30, 2010.

The lack of response to globalization by Black America is frightening and troubling. While much of the world has adapted to the new-world economy and new-world standards of existence, most of Black America is still operating much the same way it did in the 1950s and 1960s. But now, throughout Black communities in America, there is a whisper campaign by Black people who don’t know each other and Black people who live in different parts of the country, saying to each other, “We are in trouble!” We know it and the rest of the world knows it! Black America, as we know it, is in danger of not surviving globalization.

In the 21st century, there are only two kinds of people. Not Black or White, or rich or poor, or foreign or national. The two kinds of people in the world today are those who are educated and those who are not. Although education has become the new currency of exchange in the 21st century, the old American educational paradigm stopped working decades ago for Black Americans. Simply sending Black children to American schools without a clear purpose or goal has contributed to the demise of the Black community. Black America watched formerly third-world countries catapult over America to become educational super powers while America rested on its old, stale educational laurels and fell way behind much of the world in educational performance. And because Black America unthinkingly depended on the American education system to educate its children, we have fallen way behind.

The horrific educational, social, health, economic and criminal justice indicators in much of Black America predict a meltdown of gargantuan proportions in the near future for the Black community. But still, the thing that is most remarkable and unbelievable is the lack of response by Black Americans to this impending doom! Without numerous positive changes, practical well-thought-out ideas, massive mobilization and immediate action, the fate of many Black Americans is sealed. We will not be able to prosper in the cities of America or possibly in any city in the world where the new currency for existence is access to global information, higher-order critical thinking and advanced technological skills. There used to be a time when it was better to be poor in America than rich in other countries. Now it might be better to be poor in some other countries than to be poor in America.

Black people in America must immediately disengage from the diversions of mind-deadening entertainment, useless sports, hyper-sexuality, excessive social celebrations, pointless conversations and debates, meaningless media and the civil rights issue de jour approach to managing our problems. We must focus on the most important issue in our communities — making education the highest priority. We must create a culture of literacy and learning that replaces intellectual apathy and resistance to educational progress. Somehow, we must re-inspire our children to want to learn and to love to learn. But having educated children is not enough. We must have educated families and educated communities. Every Black man, woman and child must become part of this new community of learners.
Black America must take education out of the schools and universities and root it in our homes, our workplaces, our communities, our churches and even in our streets and prisons. The purpose of education as defined by the Equipped for the Future initiative, a federally sponsored effort to develop a framework for accountability in adult education, is to help people actualize their roles in society as parent/family members, citizen/community members and workers in the economy. If the education system that serves us is not meeting these objectives, it is a disservice to our children and our communities.
The ability of a people to survive in changing times is not magic, nor is it by chance. Success depends on that people being able to change to survive in a new environment! And new environments demand new skills for survival. Equipped for the Future tells us that without certain basic skills, survival will be extremely difficult for Black people, or any people, in the 21st century. These essential skills are the ability to read with understanding; convey ideas in writing; speak so that others can understand; observe critically; listen actively; solve problems and make decisions appropriately; plan and put those plans into action effectively; use math to solve problems and to communicate; cooperate with others; guide others; advocate and influence; resolve conflict and negotiate; take responsibility for life-long learning; learn through research; reflect and evaluate; and use information and communication technology. These are the skills necessary to survive in the 21st century.

Black people in America must immediately disengage from the diversions of mind-deadening entertainment, useless sports, hyper-sexuality, excessive social celebrations, pointless conversations and debates, meaningless media and the civil rights issue de jour approach to managing our problems.”

The solution to the issue of Black America’s poor response to globalization is to 1) Deconstruct value systems that have caused Black people to arrive at the precipice of non-existence; 2) Construct value systems that will rebuild the Black family as a purveyor of positive values, cultures, mores and education, and re-establish the Black family as the primary and most important social unit of our culture and society; 3) Embrace education as the highest value in the Black community; 4) Effectively manage the negative cultural influences that hugely impact the thinking and actions of Black boys; and 5) Understand that for the rest of existence, change is a required part of the living process. The faster Black America is able to put this plan into action, adopt these new principles and manage change, the more likely we will survive.

Today, many Black people seem to be having “cosmic flashbacks” to our time in slavery, which was the first crude effort at globalization that helped to set the stage for today’s globalization. For years, Black America was buffered from modern globalization by political boundaries and economic barriers. Now globalization has come to our country, our cities, our communities, onto our blocks and into our homes, schools and workplaces. Globalization has happened, whether Black America is ready for it or not. We still have time to make the necessary changes that will guarantee that Black people will survive into the 21st century and that we will thrive in this global economy. But there is not much time. With globalization, Black America has entered into the “Educate or Die” era. In this era, there are only two questions worth answering: “Will we change? Can we survive?” How we emerge from this era is up to us.

Phillip Jackson is the executive director of The Black Star Project

REPRINTED from The New Black  Magazine.com

 

 

 

 

The Challenges of Globalization for Africa

Address by Alassane D. Ouattara
Deputy Managing Director of the International Monetary Fund
at the Southern Africa Economic Summit
sponsored by the World Economic Forum
Harare, May 21, 1997


Introduction
Globalization has become a major topic of discussion and concern in economic circles since the mid-1990s. It is clear that the trend toward more integrated world markets has opened a wide potential for greater growth, and presents an unparalleled opportunity for developing countries to raise their living standards. At the same time, however, the Mexican crisis has focussed attention on the downside risks of this trend, and concerns have arisen about the risks of marginalization of countries. All of this has given rise to a sense of misgiving, particularly among developing countries.
So what is “globalization”? What are its implications for the conduct of economic policy, particularly in Africa? What are its potential benefits and risks? What will developing countries have to do to benefit from it, to avoid its downside risks? Is there any good reason to fear globalization? To answer these and other questions, it would be useful first to explain what globalization is, and what it is not, what has caused it, and what effects it has had. Situating the discussion in this context will make it easier to identify the benefits and the true risks of the trend to global integration and, in turn, to determine the correct policy response.

What is globalization?
In most basic terms, the globalization of the world economy is the integration of economies throughout the world through trade, financial flows, the exchange of technology and information, and the movement of people. The extent of the trend toward integration is clearly reflected in the rising importance of world trade and capital flows in the world economy. An increasingly large share of world GDP is generated in activities linked directly or indirectly to international trade. And there has been a phenomenal growth in cross-border financial flows, particularly in the form of private equity and portfolio investment, compared with the past. In addition, the revolution in communication and transportation technology and the much improved availability of information have allowed individuals and firms to base their economic choices more on the quality of the economic environment in different countries. As a result, economic success in today’s world is less a question of relative resource endowments or geographical location than it used to be in the past. Now, it is more a question of the market perception of the orientation and predictability of economic policy.

Globalization is first and foremost a result of the expansion, diversification and deepening of trade and financial links between countries, especially over the last ten years. This reflects above all the success of multilateral tariff reduction and trade liberalization efforts. The Fund has played a key role in encouraging current account convertibility as a basis for the expansion of world trade, and more than two-thirds of the Fund’s member countries have committed themselves to this principle by accepting the obligations of Article VIII. Also, economic thought itself has evolved over time, toward the general acceptance of the fact that outward- oriented and open economies are more successful than closed, inward-looking ones. Consequently, more than at any time previously, individual countries in all parts of the world are liberalizing their exchange and trade regimes in the conviction that this is indeed the best approach for growth and development. Moreover, there is a deeper commitment of national authorities throughout the world to sound macroeconomic policies, and to creating a more stable environment for investment and the expansion of economic activity. Finally, with the increasing liberalization of financial markets, and their growing sophistication, capital markets have become integrated, and capital flows are now largely driven primarily by considerations of risk and return.

The benefits of these developments are easily recognizable–increasing trade has given consumers and producers a wider choice of low-cost goods, often incorporating more advanced technologies, and facilitated a more efficient use of global resources. Greater access to world markets has allowed countries to exploit their comparative advantages more intensively, while opening their economies to the benefits of increased international competition. The rapid increase in capital and private investment flows has raised the resources available to countries able to attract them, and accelerated the pace of their development beyond what they could otherwise have achieved.

Moreover, greater openness and participation in competitive international trade have increased employment, primarily of skilled labor, in tradable goods sectors. With the expansion of these sectors, unskilled labor has found increased employment opportunities in the nontradable sectors, such as construction and transportation. The expansion of merchandise trade may also have lessened migrationary pressures. On the other hand, the movement of labor across national boundaries has in many cases lessened production bottlenecks, raising the supply response of recipient economies, and increasing income in the supplying countries through worker remittances. Openness to foreign expertise and management techniques has also greatly improved production efficiency in many developing countries.

But there are also risks to globalization. The ability of investment capital to seek out the most efficient markets, and for producers and consumers to access the most competitive source, exposes and intensifies existing structural weaknesses in individual economies. Also, with the speedy flow of information, the margin of maneuver for domestic policy is much reduced, and policy mistakes are quickly punished. Indeed, increased capital mobility carries the risk of destabilizing flows and heightened exchange rate volatility, in cases where domestic macroeconomic policies are inappropriate. And finally, it is clear that countries that fail to participate in this trend toward integration run the risk of being left behind.

Who benefits and who loses?
It is important to recognize that globalization is not a zero-sum game–it is not necessary for some countries to lose in order that others may gain. But to take advantage of this trend, countries will have to position themselves properly through the right policies. Clearly, those economies that open themselves to trade and capital flows on a free and fair basis and are able to attract international capital will benefit the most from globalization. Open and integrated markets place a premium on good macroeconomic policies, and on the ability to respond quickly and appropriately to changes in the international environment.

Success in open markets, and in attracting new investment and advanced technology, also means that the structure of economies is changing more rapidly than ever before. As with any structural change, there will be some segments of society that are at a disadvantage in the short term, even while other segments, and the economy as a whole, are benefiting. This does not mean, however, that countries should seek to isolate themselves from globalization. Rather, governments must fully embrace globalization in awareness of its potential risks, and seek to provide adequate protection for the vulnerable segments of society during the process of change.

While globalization raises the rewards of good policy, it also accentuates the costs of poor policy. Credibility of economic policy, once lost, has become more difficult to regain. What is now critical is the perception of markets that economic policy formulation and implementation is consistent and predictable. This underscores the importance of flexible and well-informed policy-making, of solid, well-governed institutions, and of transparency in governance. Countries with a poor or inconsistent policy record will inevitably find themselves passed by, both from expanding trade and from private capital flows for development. These are the countries that run the risk of marginalization.

What policy response to globalization?
The question of what policies are needed to benefit from globalization has preoccupied economic thinking in recent years. In fact, this topic is a central theme of the most recent edition of the IMF’s World Economic Outlook. We studied those economies that have made the most economic progress in recent years, and have profited the most from recent trends. We found that success is closely linked to an appropriate combination of policies with three main objectives: (i) achieving and preserving macroeconomic stability; (ii) promoting openness to trade and capital flows; (iii) and limiting government intervention to areas of genuine market failure and to the provision of the necessary social and economic infrastructure.

More importantly, no one set of policies is a sufficient condition for success–indeed, experience shows that poor policies in one area can obstruct progress, even if policies in other areas are good. The three objectives of policies complement and reinforce each other:

 

  • macroeconomic stability, embodied in low inflation, appropriate real exchange rates and a prudent fiscal stance, is essential for expanding domestic activity, and is a precondition for benefiting from and sustaining private capital flows;
  • openness, in the resolute pursuit of policies to rationalize and liberalize the exchange and trade regimes, is vital in international competition. This forces the economy to fully exploit its comparative advantage through trade;
  • and finally, the primary role of the government should be the creation of an enabling environment that encourages foreign and domestic investment, and of a solid infrastructure to support an expanding economy. The government must also implement policies that eliminate the structural weaknesses that would be exposed by the heightened international competition. Not surprisingly, these elements are generally central to the policy dialogue between the International Monetary Fund and its members.

The Challenges of globalization for Africa
Globalization will continue to reinforce the interdependencies between different countries and regions. It can also deepen the partnership between the advanced countries and the rest of the world. And to support this partnership in a mutually beneficial way, the advanced countries could help to further open their markets to the products and services in which the developing world has a comparative advantage. In addition, the reform efforts of the African countries will need to continue to be supported by adequate financing on concessional terms. In this regard, I am pleased to note that the Fund has put the ESAF, our concessional lending facility, on a permanent footing, so that it can continue to support reform efforts of the poorer countries, especially in Africa. Moreover, the Fund and the World Bank have recently begun implementing the framework for action to resolve the external debt problems of heavily indebted low-income countries (HIPC), including their large multilateral debt. Three African countries–Burkino Faso, Côte d’Ivoire, and Uganda–are among the first countries to be considered under the Initiative.

The challenge facing the developing world, and African countries in particular, is to design public policies so as to maximize the potential benefits from globalization, and to minimize the downside risks of destabilization and/or marginalization. None of these policies is new, and most African countries have been implementing them for some time. In particular, sub-Saharan Africa has made substantial progress toward macroeconomic stability:

 

  • there has been continued improvement in overall growth performance. Average real growth has increased from less than 1 percent in 1992 to over 5 1/2 percent in 1996, and this positive trend is expected to continue;
  • there has been some success in bringing down inflation–many countries have already achieved single digit inflation rates, and for the region as a whole, average inflation is expected to fall from the peak of 60 percent in 1994 to 17 percent in 1997;
  • countries have also reduced their internal and external imbalances. The external current account deficit has fallen from an average of 15 1/2 percent of GDP in 1992 to about 9 percent projected for this year, while the overall fiscal deficit has been cut from almost 12 percent of GDP to 6 percent over the same period.

African governments have also made considerable strides in opening their economies to world trade. A good indicator of this is the fact that 31 Sub-Saharan African countries have accepted the obligations of Article VIII of the Fund’s Articles of Agreement, almost all of them since 1993. Most countries have moved ahead with trade and exchange liberalization, eliminating multiple exchange rates and nontariff barriers, and also lowering the degree of tariff protection. A recent qualitative study by the African Department of the Fund indicates that the number of countries in Sub-Saharan Africa with a “restrictive” exchange regime declined from 26 in 1990 to only 2 in 1995, while the number of countries with a “substantially liberal” trade regime rose from 26 to 38 over the same period.

Finally, the restructuring of many African economies is gaining momentum. Throughout the continent, government intervention in economic activity is on the wane. Administrative price controls are being reduced and agricultural marketing has been widely liberalized. The process of restructuring and privatizing state enterprises has been underway for some time in most countries, though with varying speed and degrees of success. And finally, fiscal reform is gaining ground–African countries are taking firm steps to rationalize their tax systems, to reduce exemptions, and to enhance administrative efficiency. At the same time, they are also reorienting expenditures away from wasteful outlays towards improved public investment and spending on key social services, particularly health and basic education.

But, as I pointed out earlier, it is essential to achieve the right combination of policies. While Africa is clearly on the right track, there is still some way to go. I see five main areas where African countries need to achieve greater progress in order to speed up their participation in globalization:

  • maintaining macroeconomic stability and accelerating structural reform
    As the continent enters the “second phase of adjustment”, the emphasis must be to maintain economic stability and to reinforce the implementation of structural policies that will make the economies more flexible, encourage diversification, and reduce their vulnerability to exogenous shocks. These include further reforms in the areas of public enterprise activity, the labor markets, and the trade regime. Governments must also ensure that public services–including transportation networks, electricity, water, and telecommunications, but also health services and education–are provided in a reliable and cost-efficient fashion.
  • ensuring economic security
    Establishing the right framework for economic activity addresses the second requirement of policy–removing the sense of uncertainty that still plagues economic decision-making in most of Africa. The direction and orientation of future policy must be beyond question. This requires the creation of a strong national capacity for policy formulation, implementation and monitoring. Moreover, the transparency, predictability and impartiality of the regulatory and legal systems must be guaranteed. This goes well beyond the respect of private property rights and the enforcement of commercial contracts. It also involves the elimination of arbitrariness, special privileges, and ad-hoc exemptions, even where these are intended to encourage investment.
  • reforming financial sectors
    As the Interim Committee observed during its April meetings in Washington, an open and liberal system of capital movements is beneficial to the world economy. However, rising capital flows place additional burdens on banking regulation and supervision, and require more flexible financial structures. This aspect of globalization thus confronts developing countries with a new challenge–to accelerate the development and liberalization of their financial markets, and to enhance the ability of their financial institutions to respond to the changing international environment. Much remains to be done to reform and strengthen Africa’s financial systems, many of which are weak and poorly managed.
  • achieving good governance
    National authorities should spare no efforts to tackle corruption and inefficiency, and to enhance accountability in government. This means reducing the scope of distortionary rent-seeking activities; eliminating wasteful or unproductive uses of public funds; and providing the necessary domestic security. Many African countries will also have to undertake a comprehensive reform of the civil service, aimed at reducing its size while enhancing its efficiency. In short, governments must create confidence in their role as a valued and trusted partner of private economic agents.
  • a partnership with civil society
    Finally, African governments will need to actively encourage the participation of civil society in the debate on economic policy, and to seek the broad support of the population for the adjustment efforts. To this end, governments will need to pursue a more active information policy, explaining the objectives of policies and soliciting the input of those whom the policies are intended to benefit.

Globalization and regional integration
With closer economic integration, each country has an interest in ensuring that appropriate policies are followed in its partner countries. This could be achieved by coordination the relevant national policies within a regional context. Throughout the continent, African governments are coming together to coordinate components of their policies, and virtually all countries are now members of regional organizations. Efficient regional cooperation allows the economies of Africa to overcome the disadvantages of their relatively small size and, by opening access to larger markets, to realize economies of scale. The obligations of membership in some of these organizations also make it easier for each individual country to achieve further progress in regulatory and judicial reform (as is the case in the CFA franc zone); to rationalize payments facilities and to relax restrictions on capital transactions and investment flows (as in the Cross-Border Initiative); and to develop the mutual economic infrastructure (as in the SADC). Enhancing the trade links among themselves naturally also strengthens their ability to participate in trade on a global scale, and could lead toward further progress in the direction of nondiscriminatory multilateral trade liberalization. The challenge for the future will be to ensure that these regional organizations are perceived as effective vehicles for the integration of African countries into the world economy, providing mutual support to their members in their reform efforts. They should not be considered as defensive mechanisms, intended to ward off the “negative” aspects of globalization. Common regional objectives should be set in terms of international best practices. And the regional organizations should seek to push through reforms in the areas of the legal and regulatory frameworks, financial sector restructuring, labor and investment code reform, and exchange and trade liberalization that seek to reach international standards as quickly as possible. The pace of progress should be what is feasible, not what is comfortable for the slowest member.

REPRINTED from the IMF website

 

Even as U.S. society struggles to move beyond its confining binary view of race — white versus black with nothing in between — Brazil, a country where the celebration of racial mixture has long been a central part of the national self-image, may be heading in the opposite direction.

Between the 16th and 19th centuries, this South American nation received more African slaves than any country in the Americas. But the shortage of white women, and a less rigid view of racial differences, led Portuguese settlers to mix more readily with nonwhite women than did their English counterparts in North America. The result was the creation of a large, racially mixed population. And unlike the Anglo Americans in the United States, who generally saw society in stark, bipolar racial terms and chose to deny the mixture that did occur, the Portuguese learned to view race on a continuum — white and black with many shades in between.

This doesn’t mean that there was no racism. Indeed, the array of terms used in Brazil to describe different shades of skin color speaks to the existence of a long-standing racial hierarchy in which whites were deemed to be on top and unmixed blacks on the bottom. But despite that, the recognition of gradations of mixture made the idea of race more fluid than it is in the U.S., where social convention has held that anyone with one drop of “African blood” is black. In Brazil, degrees of whiteness — and social acceptance — could be achieved through selective mating.

Indeed, in the late 19th and early 20th century, Brazil’s immigration policy was largely based on an effort to “whiten” the population by adding more European immigrants to the mix. In 1912, Brazilian scientist João Batista de Lacerda predicted that by 2012, the ongoing process of mixture would produce a Brazilian population that was 80% white, 3% mixed race and 17% Indian.

In the 1930s, Brazil shifted direction slightly. It didn’t so much reject the practice of “whitening” as superimpose a companion national ideology that boasted of the benefits of racial and cultural mixture. Thanks largely to the work of Brazilian anthropologist Gilberto Freyre, Brazilians came to view widespread mixture as a sign of their cultural superiority and their society’s lack of racism.

Both at home and abroad, Brazil came to be seen a model of racial tolerance. In 1942, prominent African American sociologist E. Franklin Frazier argued that Brazil could teach the U.S. a thing or two about race relations.

But by the 1960s, a small but savvy Brazilian “black movement,” inspired in part by the U.S. civil rights movement, began to challenge the national consensus on race. For the next generation, activists called for more research on racial inequality in Brazil, and though they were ultimately incapable of creating an effective mass movement, they successfully influenced the debate. By 2001, their controversial demand for affirmative action in public universities became a reality.

For the last five years, a growing number of universities have adopted and experimented with different types of affirmative action quotas designed primarily to aid blacks and the poor. On the one hand, the fractious debate over affirmative action has helped convince more Brazilians that their history of racial mixture did not erase color-based discrimination. On the other, the establishment of a quota system is obliging a society that has always had a fluid notion of race to begin to standardize, collapse and solidify racial categories in order to determine who exactly should benefit from this race-based entitlement.

As it happens, Batista de Lacerda’s prediction that “blacks” would “disappear” wasn’t that far off. What he did not foresee, however, was the persistence of the large intermediate category between black and white. According to the 2000 census, 53% of Brazilians consider themselves white, 39% pardo — a broad, generic mixed-race category — less than 1% indigenous and Asian and only 6% black.

Because the Brazilian black movement has traditionally had a dual mission — the first to combat color discrimination, the second to forge a black consciousness — it has long championed the adoption of a binary racial classification system in which there are only two choices: black and white. For the purposes of enforcing affirmative action, some universities have begun to do just that. Quotas are not limited to those who are preto (black) but also to mixed-race pardos. Hence, a new de facto black category has emerged, and it represents no less than 45% of the population.

But given the fluidity of race here, it isn’t always clear who is or is not black. Although most university affirmative action programs simply allow for self-classification, two of them require the submission of photos and have formed committees to verify the veracity of racial claims.

Civil rights attorney Humberto Adami told me that he thinks all this is a good thing. Now that blackness confers a benefit, he says, the whitening process will be reversed and more pardos will come to consider themselves fully black. “People are already bringing their [black] grandmothers out of the closets,” he said.

Adami, who helped defend quota students against legal challenges, says universities are just the beginning. He supports the controversial Racial Equality Statute, which is stalled in Congress and is expected to remain there during this presidential election year. If passed, the seemingly innocuous yet far-reaching bill would require all employers to collect racial data from workers and establish quotas in a variety of economic sectors, both public and private. Critics fear that the law would divide society along “pseudo-racial” lines and foster the kind of overt racial tension with which Brazil is not familiar. Proponents argue that those divisions already exist.

Still others, such as Graziella Silva, a Harvard doctoral candidate and Rio native, believe that affirmative action will go through an assimilation process of its own and that it ultimately will be Brazilianized to recognize mixture. “We need to model our public policy on the reality of mixed people,” she told me.

Perhaps because I come from a nation that is at long last beginning to acknowledge racial mixture and to move beyond dangerously rigid notions of race, I hope she’s right.

Gregory Rodriguez has written widely on issues of national identity, social cohesion, assimilation, race relations, religion, immigration, ethnicity, demographics, and social and political trends in such leading publications as The New York Times, The Wall Street Journal, The Economist, The Washington Post, and the Los Angeles Times, where he is an op-ed columnist.

REPRINTED from MyAfricandisporia.com

The historical injustices against black Americans have been numerous and prolonged. But despite slavery, racism and Jim Crow laws, many blacks have achieved an exceptionally high level of accomplishment in the United States. It is yet another injustice that the stories of these great black achievers are unknown to most Americans of any race or ethnicity. This is unjust because it ignores the accomplishments of those who have achieved in the face of such adversity, and because it deprives the rest of us of the lessons to be learned from studying their lives. Many current intellectuals claim that the success of blacks requires an antecedent elimination of racism. The success of these black innovators disproves such a claim, and raises the question of the actual conditions necessary for the rise of a despised ethnic minority. A second question needing an answer involves the reasons for such widespread contemporary ignorance regarding the accomplishments of these great black thinkers. Finally, the stories are inspirational in themselves, apart from any educational benefits to be derived from them.

The great black creators and entrepreneurs both historically and currently are too numerous to mention. For example, Garrett Morgan was an innovator and manufacturer who invented both an efficient gas mask and the automatic traffic signal. During a long business career, Morgan manufactured clothing, hair products and his gas mask. In the 1920s, he was a key founder of the Cleveland Call, one of the most successful black newspapers in the Midwest. Dr. Percy Julian, an organic chemist, developed a new method of synthetically producing cortisone and, in the 1950s, established Julian Laboratories in Oak Park, Illinois. In a few years Julian’s company grew to be a widely successful pharmaceutical company, which he sold in 1961 for well over two million dollars. Dr. Charles Drew pioneered new techniques in the preservation of blood plasma that were instrumental in saving the lives of countless soldiers during World War Two.

In terms of purely business success, the list is equally impressive. Arthur G. Gaston started his business career in 1923 by founding a burial service in Alabama to guarantee blacks a decent funeral. By 1932 it had grown large enough to be incorporated. Gaston started the Booker T. Washington Business College in 1939 and the Brown Belle Bottling Company in 1946, offering Joe Louis Punch. He followed these successes with a motel in 1954, an investment firm in 1955, a savings and loan association in 1957, a senior citizens home in 1963 and two radio stations in 1975. In 1986, at the age of 94, he opened the A. G. Gaston Construction Company. Gaston was a consummate self-made man, who overcame Jim Crow laws among other obstacles to eventually bring in more than $20 million in annual revenue. Named Black Enterprise magazine’s “Entrepreneur of the Century,” Gaston’s lifelong principle can serve as the credo of American entrepreneurship: “Money has no color. If you can build a better mousetrap, it won’t matter whether you’re black or white. People will buy it.”

Herman J. Russell similarly refused to permit the South’s Jim Crow laws to retard his business career. He started as a shoeshine boy and a newspaper delivery boy, later worked as a plasterer, then founded the Herman J. Russell Construction Company in 1952 in Atlanta and built it gradually into a $170 million business. Albert Murray grew up the son of a sharecropper in 1920s Georgia, and at sixteen – to support himself through high school – worked a 4 PM to midnight shift pushing wheelbarrows of burnt clay at a local asbestos factory for $14 a week. After serving time in the military during World War Two, he finished college and then law school, eventually becoming a judge in New York City. But he and his wife, Odetta, wanted to own a resort and, despite the racially-segregated policies of the 1950s, bought and operated Hillside Inn in the Pocono Mountains of Pennsylvania. Odetta ran the resort, while Albert drove in from his legal duties on Friday, did all the heavy work over the weekend, then drove back to New York on Sunday. Now 79 years old, the Murrays still run the day-to-day operations of the resort. They have subdivided tens of acres of their 109 acre plot and sold one-acre plots to black professional prospective homeowners, in additon to generating nearly $1,000,000 in annual revenue from the hotel.

Recently, Robert L. Johnson, founder of Black Entertainment Television, sold his company to Viacom for $2.7 billion, making Johnson the first black billionaire and placing him among the Forbes list of wealthiest Americans. Today, David Steward’s World Wide Technology, a St. Louis based distributor of information technology, generates over $800 million annually in business. William Mays, a scientist/entrepreneur, founded the Mays Chemical Company as a one-man operation in 1980, and since built it into a giant chemical distributor that generated $172 million in revenue in 2000. Barbara Manzi founded Manzi Metals in 1993 with her own savings, now has contracts with Lockheed-Martin, Boeing and the U.S. Defense Department, and netted $4.3 million in revenue in 2000. Black Enterprise magazine and books are a source of information regarding the many successful contemporary black entrepreneurs.

Benjamin Banneker was born in 1731 in Maryland, the child of a free mulatto mother and an African father, who had purchased his own freedom. Banneker excelled in mathematics as a student and, when taking over his parents farm, at agriculture. When a traveling salesman named Josef Levi showed Banneker a pocket watch, the young man was so fascinated by it that Levi gave it to him. In 1753, using the watch as a model, Banneker carved a wooden clock that kept perfect time, striking every hour for forty years. It was the first wooden clock ever produced in the United States.

As a freedman, Banneker had the opportunities provided by American liberty but denied to most blacks, and he took full advantage of them. When neighbors introduced him to astronomy, he mastered the science so thoroughly that he predicted the solar eclipse of April 14, 1789 and used his knowledge to publish an almanac that became the main reference for farmers of the Mid-Atlantic states. President Washington, aware of Banneker’s intellect, appointed him to the six man team that designed the blueprints for Washington, D.C. When the team’s leader, Major L’Enfant, suddenly resigned and took the plans with him to France, Banneker’s photographic memory enabled him to reproduce them in full. A lengthy letter of his to Thomas Jefferson was so filled with insight that it caused Jefferson to change his mind regarding the alleged intellectual inferiority of blacks. In tribute, Jefferson sent a copy of Banneker’s almanac to the French Academy of Sciences in Paris. “The color of the skin is in no way connected to the strength of the mind or intellectual powers,” wrote Banneker, in a statement far ahead of its time.1

Andrew Jackson Beard is another little known innovative black thinker. Born into slavery in Alabama in 1849, Beard became a flourishing entrepreneur and inventor after emancipation. He designed new plows and with the profits made on his innovations developed a thriving real estate business. Beard was responsible for several inventions, but his greatest advance was the automatic railroad car (or “Jenny”) coupler, enabling railroad cars to be coupled automatically, thereby greatly reducing risk to the workers. Beard received a patent for the Jenny coupler in 1897, and it was the forerunner of today’s automatic coupler. His story reminds us that despite often bitter racial hatred in the South, some black Americans possessed the extraordinary talent and initiative to succeed there.2

The one black genius of that era to achieve enduring recognition, and whose groundbreaking advances were also achieved in the Jim Crow South, was George Washington Carver, who was born a slave in Missouri in 1860. After earning a Master’s Degree from Iowa State in 1896, he received a letter from Booker T. Washington, Head of Tuskegee Institute in Alabama, requesting his instructional services. He spent the rest of his life at Tuskegee as an agricultural scientist. He is famous for developing peanuts and sweet potatoes as leading crops, but additionally created a new type of cotton, Carver’s Hybrid, and dozens of other agricultural innovations. His early identification of the need for crop rotation enabled southern farmers to keep their soil productive. At his death, Carver, a lifelong bachelor, left his entire savings to establish a research fund for scientists. For his accomplishments, he is generally recognized as the greatest agricultural innovator of history.

Evidence regarding the causes of black American achievement is provided by the examples of such Michigan innovators as Elijah McCoy and Fred Pelham. In The Empire Builders, American historian, Burton Folsom, reminds us that in 1850 Michigan created a state constitution that restricted the government’s powers, leaving economic development in private hands. Based on its greater degree of economic freedom, Michigan developed into one of the world’s leading industrial centers, not surprisingly presenting opportunities for black entrepreneurs. Elijah McCoy, for example, was a mechanical engineer who initially worked for the Michigan Central Railroad as a locomotive fireman. He invented a revolutionary device to lubricate a machine’s moving parts. His product, the lubricator cup, made it possible to oil machinery while in operation, and to distinguish it from cheaper imitations became known as “the real McCoy,” the origin of that phrase. He obtained 51 additional patents, including an early version of the ironing board and a cup for imbibing medicine. McCoy patented fifty different automatic lubricators and, at age 77, started the Elijah McCoy Manufacturing Company in Detroit to manufacture his various products.3

Fred Pelham is another black innovator who thrived in Michigan. Pelham was president of his class at the University of Michigan in 1887, worked as a civil engineer with the Michigan Central Railroad and built numerous bridges that remain standing today. He created the innovative skew arch bridge design. “The obstacles facing minority entrepreneurs were substantial, but many did overcome them and used their freedom to excel in Michigan’s economic life.”4

Freedom, of course, is the condition required by all men to flourish, especially the great innovative thinkers who carry mankind forward. Slavery is both a moral abomination and a thoroughly impractical system, for in stifling the minds of those enslaved it prevents the most creative thinkers from developing the advances that benefit all mankind. Late-19th- century America, following the 13th Amendment ending slavery in 1865, was a historically unsurpassed era of freedom. “The intellectual, cultural and political climate of the country upheld freedom, limited government, and property rights in this era. The economic results are not surprising. The most innovative and creative minds were free to develop new products and methods, to start their own companies, to bring their innovations to the marketplace, to convince consumers that the new products were superior to the old and, in time, to earn fortunes.”5

Black entrepreneurs took immediate advantage of their new freedom. Sarah Breedlove, for example, was born a free African-American in 1867, but was orphaned at age seven, married at fourteen and widowed shortly thereafter. She supported herself and her young daughter on the paltry income of a washerwoman. But interested in beauty and hair care, she developed cosmetic products for black women. When she married Charles Walker, she changed her name to Madame C. J. Walker and opened a beauty school that became hugely successful. She invented a hot comb, developed new shampoos and cosmetics and became the first woman of any race to become a millionaire.6

C. J. Walker’s is one of the most inspiring and (unfortunately) little known American rags-to-riches stories. But hers is not the only example of black entrepreneurs taking advantage of America’s late-19th-century freedom to prosper. Some black businesses established in that era have been successfully run by the same family for generations. In 1883, 19 year old C.H. James started a business in West Virginia by bartering household goods for vegetables and then selling the produce for cash. His business gradually grew from one wagon to a department store on wheels that sold cotton, threads, pots, sugar and other goods. Supplying predominantly white coal miners, James built his business on the explicitly-held principles of dependability, integrity and a warm personality. By 1918, his company had become the largest wholesale food distributor in the state, with sales in excess of $350,000 a year. James was a determined individualist who claimed that no one should permit bigotry to deter him from relentless pursuit of business success. In 1918, Theodore Roosevelt wrote to him: “[I have pointed] to you as a man who actually is by his actions and not merely by his words solving the race problem in this country.” James’s son, E.L., rebuilt the company after the Depression bludgeoned it into bankruptcy and the business has continued to move forward. Today, the founder’s great grandson, Charles H. James III, has, by means of spin-offs, acquisitions, mergers and a lucrative McDonald’s contract built the company into a $31 million business.7

Further, entire towns and business districts of entrepreneurial blacks flourished in that era of U.S. history. Early in the 20th century, black Americans established such new towns as Mound Bayou, Mississippi, Nicodemus, Kansas, Langston, Oklahoma and others. Boley, Oklahoma had a population of 4,000 at the turn of the century. The town was governed and run by blacks, and boasted, among other establishments, a bank, twenty-five grocery stores, five hotels, seven restaurants, a water works, an electric plant, four cotton gins, a bottling works, a telephone exchange and a lumberyard.8

Tulsa, Oklahoma and Durham, North Carolina both had thriving black business communities. In turn-of-the-20th-century Tulsa, bigotry denied blacks access to the main business district even as customers, so enterprising blacks turned the Greenwood section of the city into a bustling commercial center. Numerous service industries thrived, black doctors, lawyers and other professionals maintained offices there and the neat homes of the middle class “lined Detroit Avenue, reflecting their business or professional success.” In Durham, black entrepreneurs succeeded in manufacturing as well as in service industries, including one of the city’s largest brick producing companies. Here, the white community was not hostile to black success, and white capitalists such as Washington Duke (the tobacco magnate for whom Duke University is named) and Julian Carr were helpful in the establishment of black businesses. In 1898, John Merrick and Dr. Aaron McDuffie Moore established the North Carolina Mutual Life Insurance Company, one of the largest and most successful black enterprises in the history of American capitalism, a firm that 100 years later would employ over 1,000 individuals and boast assets exceeding $200 million. In addition to 150 thriving businesses, Durham’s black commercial district was home to an area internationally known as the “Negro Wall Street,” a collection of banks and insurance companies that represented “one of the most dramatic examples of concentrated African American financial might this country has ever produced.” These financial institutions were so sound that they helped virtually every black business in Durham survive the Depression.9

The fates of these black business strongholds is both shocking and revealing. The Greenwood district of Tulsa was burned to the ground by a mob of racist thugs in 1923 in a spree of destruction unrestrained by the legal system. Durham’s magnificent black business district was wiped out by the federal and state governments’ urban renewal program in the mid-1960s. Although Durham’s black entrepreneurs revitalized in the 1980s with the opening of two shopping malls and several manufacturing companies, perhaps the greatest value is the lesson to be learned from these examples.10

A despised racial minority needs political/economic freedom, with its concomitant legal protection of individual rights, even more than do members of the majority, for they are potentially subject to vicious physical attack by racists. Even if all whites in the country were so irrational as to fear, hate and shun blacks, such bigotry would be insufficient to halt black economic progress, if the rights of black individuals were legally protected. Under capitalism, the purpose of the government is to protect individual rights, including property rights. Tragically, the Tulsa government failed to operate on this fundamental capitalist principle. The black producers of Tulsa did not need paternalistic government or even its good will; nor did they require an end to bigoted attitudes among white people. They required only the protection of their legal rights as U.S. citizens; their own enterprise did and would take care of the rest. Similarly, in Durham, the government itself violated the rights of these black property owners. The absence of capitalism, of a government exclusively and scrupulously devoted to the protection of individual rights, was responsible for the destruction of these black business centers. When the government fails to protect, or itself violates individual rights, there is no hope of economic advance, especially for members of a persecuted ethnic minority. Statism is necessary to keep a racial minority oppressed. Under capitalism, there are no obstacles that the most enterprising members of the minority group cannot overcome.

Further proof of this principle is provided by the case of black Caribbean immigrants. The United States received a sizable Caribbean immigration in the early 20th century and by 1930 Caribbeans constituted roughly one percent of the U.S. black population. The Caribbean immigrants, as with virtually all American immigrants, tended to be hard-working, entrepreneurial and frugal. Based on the still significant element of freedom in the American mixed economy of that era, many Caribbeans opened and operated successful businesses. “As early as 1901, [Caribbeans] owned 20 percent of all black businesses in Manhattan, although they were only 10 percent of the black population there.” Despite the existence of anti-black prejudice, Caribbeans have an average income roughly equal to whites, and second generation Caribbeans have a standard of living greater than the average white American.11

Because racists recognize that the ethnic minorities they oppose will flourish under the political/economic freedom of capitalism, they conduct a relentless war against the free market system. The antebellum South not only created and supported a legal system that sanctioned the enslavement of blacks, but also mandated that blacks be kept illiterate. Indeed, “many Southern states not only refused to educate free Negroes but made it a crime for them even to attend private schools at their own expense.” In the postbellum South, Jim Crow legislation made it illegal for blacks to attend the better schools, be hired for the best jobs or live in white neighborhoods, no matter how qualified the individual.12

In South Africa, apartheid legislation was necessary to prevent white-owned companies from hiring the black workers they would otherwise have employed, and laws were passed against racially-mixed marriages and romantic relationships more broadly. Nor is the bigots’ necessary relapse into statism limited to relationships between whites and blacks. Anti-Semitic Eastern European regimes herded Jews into walled-off ghettoes and sanctioned periodic bloody pogroms. In the Western United States, laws were passed attempting to curb the success of Chinese and Japanese immigrants. In several Southeastern Asian countries, the ethnic Chinese minorities have been legally persecuted due to envy of their success. Bigots know that without the coercive power of the state to enforce their prejudices, they are powerless to prevent the advance of the ethnic minorities they fear. Capitalism is the bigot’s worst enemy – and nightmare.13

Additional evidence is shown by the varying rates of black economic progress over the past sixty years. Black Americans moved heavily into the northern cities during World War Two and the following post-war years. The years between 1940 and 1970 were a relatively freer period of America’s mixed economy. Because the majority of blacks had lived in the Jim Crow era South, where legal restrictions impeded their advance, the percentage of black families subsisting below the official poverty line was 87 percent in 1940. In the freer North, with better schools and jobs open to blacks, their rise into middle class prosperity began. By 1960, the number of poor black families had dropped to 47 percent; by 1970, to 30 percent. This represents an enormous and too-little known achievement on the part of black Americans. Then came massive government intervention in the form of the welfare state, which Marxist intellectuals and politicians directed heavily toward blacks because of their still-disproportionate poverty. Proliferating government programs and huge spending were a post-1970 phenomenon. With increasing number of poor urban blacks being seduced onto the dole by Washington’s welfare pimps, the result was predictable: black economic progress slowed drastically. Black families below the poverty line stood at 29 percent in 1980 and at 26 percent in 1995. In the era of massive welfare programs, black families still moved upward out of poverty but at a significantly reduced rate. Today, roughly 50 percent of black Americans are middle class, greater than 40 percent live in homes that they own and more than 30 percent live in the suburbs. Given the rise of government intervention and the decline of freedom over the past thirty years, one can only wonder how much higher these figures would be if the freedom of the earlier period had been allowed to continue or be expanded.14

There is a prevalent belief today that the success of blacks and other minorities requires an antecedent elimination of racism. This is false. Though the end of all forms of bigotry is an undiluted good toward which all rational men should strive, it is not a necessary condition of an ethnic or racial minority’s success. What is necessary is the legal protection of individual rights, including the right to property, provided by the capitalist system.

In the past, the fears of white racists regarding black preeminence explained the absence of credit accorded to these great black innovators and entrepreneurs. But today the liberal media and intellectuals claim to support “black empowerment.” What then is the current cause of the bizarre public silence regarding the entrepreneurial success achieved by numerous black Americans? Anti-Western, ostensibly pro-black intellectuals have promulgated the myth that Western Civilization is a stolen legacy of African culture. In the name of “black pride,” they relentlessly push this fantasy while ignoring magnificent black achievers right under their noses. Why? Because their anti-Western, anti-capitalist prejudices prevent them from acknowledging the existence of successful black capitalists. In the mythical universe they inhabit, white Western capitalists are exploitative of the poor, the minorities, the Third World, etc. An entire class of successful black American entrepreneurs is worse than impossible on their view. It shatters the Marxist delusions they cling to and brings them face-to-face with the enormous benevolence of capitalism. In the name of justice, the prejudices of both white racists and Marxist intellectuals must be swept aside. The achievements of great black American inventors and entrepreneurs must be honored along side those of all of their countrymen.

Authored by Andrew Bernstein

REPRINTED from Black Entrepreneurs Hall of Fame