Black capitalism facts for kids

Black capitalism is a movement among Black people that aims to build wealth. It does this by encouraging the ownership and growth of businesses. This idea mainly focuses on businesses owned by African Americans. However, some people also want to see more Black people in leadership roles in big companies.

A Look Back: How Black Capitalism Started

The idea of Black capitalism has deep roots. It goes back to the time of American slavery, with "Free Black people". Many records show that these free individuals developed their own wealth.

One of the earliest writings about Black people improving their economic situation came from Lewis Woodson. He wrote under the name "Augustine" in a newspaper called Coloured American. Woodson helped start Wilberforce University. He also helped create the first seminary for the AME Church, called Payne Theological Seminary. He was an early teacher and mentor to Martin Delany.

Many successful Black business leaders have shaped this history. For example, A. G. Gaston was a rich Black man from the South. He played a big part in the Civil Rights Movement. Gaston was inspired by Booker T. Washington, an early leader at the Tuskegee Institute. Another wealthy African American was Robert Reed Church. He started the nation's first Black-owned bank, Solvent Savings, in 1906.

There are also many neighborhoods known for having successful and wealthy Black residents. Some historical examples include Highland Beach, Maryland. More recent examples are Mount Airy in Philadelphia, Pennsylvania, Prince George's County, Maryland, and DeKalb County, Georgia. The magazine Black Enterprise has also helped promote Black capitalism.

Different Ways to Think About Black Capitalism

There are two main ways people think about Black capitalism. One way focuses on success for the entire group. The other focuses on success for individuals.

Success for the Group

One idea of Black capitalism is about African Americans building wealth together. This is similar to the Kwanzaa value of "ujamaa," which means 'cooperative economics'. A good example of this is Russell Simmons. He supports building not just individual Black businesses, but whole communities of Black businesses. Simmons has said that Black MBA students want to own their own businesses, not just work for someone else.

Dr Claud Anderson has written two books, Black Labor: White Wealth and Powernomics. In these books, he suggests a plan for how Black wealth can be organized and grown.

Some people see this group success idea as a form of Social entrepreneurship. This means creating businesses that help the community where they are built. Others think it comes from the traditional African idea of working together as a community.

Sometimes, people question if focusing on individual Black celebrities helps the whole community. For example, an article on Huffington Post by Antonio Moore, "The Decadent Veil: Black America's Wealth Illusion," asked if a limited approach is truly helpful. It suggested that seeing very rich Black celebrities like Kobe Bryant or Oprah Winfrey might make people think there isn't a big wealth gap for most Black Americans.

Success for the Individual

Another idea of Black capitalism is about individuals building their own wealth. Famous examples include Oprah Winfrey and Robert L. Johnson. Some people who support group success criticize this individual approach. They say that even if some African Americans become very rich, it doesn't always help the struggles of Black people in general.

Sometimes, when wealthy Black people move out of mostly Black neighborhoods into wealthier white neighborhoods, it's called "black flight" or "selling out." The book Our Kind of People: Inside America's Black Upper Class by Otis Graham talks about this history.

Challenges Facing Black Capitalism

Different from Racial Integration

Racial integration is about Black people being able to live and work safely in a mostly white society. This usually focuses on public places and fair hiring practices. The goal of racial integration is often for Black people to fit into existing white institutions.

Black capitalism, however, is about Black people owning land, factories, and businesses. The goal is to build self-reliance, both for individuals and for the community.

Views Against Capitalism

Some people in the Black community, especially those who support Black Nationalism, are against capitalism. One reason is the historical treatment of Africans and the African Diaspora, including slavery and colonization. Another reason is based on political ideas like socialism. Many critics combine these two views. A well-known Black critic was C. L. R. James. Two popular books against capitalism are How Europe Underdeveloped Africa by Walter Rodney and How Capitalism Underdeveloped Black America by Manning Marable. These books argue that capitalism has not improved the quality of living for Black people.

Violence Against Black Businesses

In the past, there were violent attacks against successful African American communities. These attacks have become less common since the Civil Rights Movement. However, before that time, there were notable violent events. These include the Tulsa Race Riot and the Rosewood massacre. These events showed clear opposition to Black economic success.

Differences in Wealth

On average, Black people in America have less wealth than white people. This makes it harder to start new businesses. One common way to get a loan for a business is to use the value of your home as collateral. Because of historical and current differences in how loans are given to Black and white people, it can be harder for Black people to use their home equity to start a business.

An article called "America's Financial Divide" explained this wealth gap. It said that nearly 96% of the richest 1% of households in America were white. These families had a median net worth of about $8.3 million. In contrast, only about 1.4% of the richest 1% were Black households. Their median net worth was about $1.2 million. This means only a small number of Black households have more than $1.2 million in assets.

Another study from the Harvard Business Review showed that if a white family has a net worth of about $356,000, they are richer than 72% of white families. But if a Black family has $356,000, they are richer than 95% of Black families. This shows a big difference in wealth between the two groups.