Black Business – Success or Failure? — August 2016

Articles | Posted by Jim Clingman August 27th, 2016

In 2001, I spoke at the National Black Expo, in Chicago. The theme was centered on one of most troubling factors related to the economic survival of Black people in the United States: The Low Success Rate of African American Businesses. But as Jazzman, Les McCann, so pertinently asked thirty years ago, “Compared to what?” Other questions are, “Compared to whom?” and “Compared to when?” “Compared to how?” Compared to why?”

We need only to look at the history of this country, vis-à-vis Black entrepreneurship initiatives, to see the resistance Black people faced from white society while doing business or when attempting to open a business. There were laws of the land that prevented Black people from participating in the economy on an equal footing with all groups, what John Sibley Butler calls, an Economic Detour. (Butler, 1991, Page 143)
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Paradoxically, history also gives us glowing accounts of African American ingenuity that led to business ownership from the 1600’s through the mid-1960’s, despite meager resources, the threat of bodily harm, Jim Crow laws, and the usurping or utter destruction of Black owned businesses by Whites.

During the 1960’s we saw yet another phenomenon: a virtual boycott of successful Black owned businesses by Black consumers who interpreted civil “rights” to mean civil “privileges.” It was (and still is) a right to shop, eat, and spend our money where we wanted, but it certainly should not have been considered a privilege to do so. Because some of us deemed it a privilege, many Black people walked away from Black businesses and beat a path to White owned businesses. Thus, from that point we see a decline in the number of successful Black owned businesses in this country.

“Successful” in this context means businesses that have grown and are able to hire more employees than the 110,786 they employ as of the last economic census. Of the 2.6 million Black owned firms, 95.5 % of them are sole proprietorships and have no employees. That’s not necessarily a negative reflection on those businesses; much of it has to do with lack of relative support from Black consumers as well as all other consumers.

The reason most often given for the failure of Black owned businesses is lack of access to capital. While that is certainly true, there are several other reasons, including the absence of social networks, (mentors and primary investors) lack of management expertise, lack of the commitment necessary to be a successful entrepreneur, lack of support by consumers, business owners’ reluctance to put earnings back into the business, and the instant gratification syndrome that causes some business owners to go on a shopping spree the first time they get that first big check.

More important than failure, however, is the fact that Black people have already done exactly what many of us are trying to do today. Our ancestors, grandparents, and parents started and operated highly successful businesses against inconceivable odds. The blueprints of their success were left for us to follow. We need to learn from our past and build upon what our forebears did, by emulating their tenacity, their willingness to sacrifice, their resolve to assist one another, work together, support one another, and their commitment to the entrepreneurial spirit that has burned within African people for thousands of years.

In Thomas Boston’s book, Affirmative Action and Black Entrepreneurship, he suggests that instead of failure (low success rates) of Black businesses, we should also look at Black business start-ups. Boston cites a study that points out the difference between access to capital for Whites and Blacks which states, “…non-minority men borrow 16 percent of their initial capital from commercial banks while Black business owners get 9.5 % of their initial capital through such channels.” He goes on to say, “The differences in the rate of entrepreneurship between Blacks and other ethnic groups have been found to be attributable mainly to the lower business start-up rate for Blacks, and not to a higher failure rate.” The low start-up rate can thus be attributed to the inequities faced by Blacks when it comes to access to capital.

To keep things on a positive note, consider Juliet E.K. Walker’s advice in her seminal work, The History of Black Business In America. She writes, “What Black Americans need now, after almost four centuries of existence in this nation, are theoretical constructs that factor in the strength and success that have distinguished [Black businesses] in their attempts to survive racism in America; what they do not need are theories that emphasize failure.”

Anecdotally and relatively, Black business has seen much more success than failure considering our history of being discriminated against in the credit markets. It is vital that we build on that legacy by creating, once again, a solid economic foundation upon which our children can stand.

 

 

Get what’s right, not what’s left. — August 2016

Articles | Posted by Jim Clingman August 21st, 2016

If you are serious about economic empowerment, you must dismiss the empty rhetoric of pandering politicians, the transparent ramblings of self-righteous religious pretenders, the oratory of warmongering money-grubbing government officials, and the unbounded pronouncements and musings of speechifying intellectuals. If your leaders are only talking about the problems and have nothing to show for their monologue, such as a genuine plan of action, an institution they have established to deal with the problems they decry, or a movement that will help you economically, you must not follow them. If you are serious, be a leader not a lemming.
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Being stuck in a morass of political clap-trap is definitely not conducive to Black people making headway to being truly empowered. Unfortunately, we are swamped with the daily cacophony of political experts who cannot wait to make their points before another panelist is finished speaking, which ends up in a rhetorical free-for-all that results in no one’s point being heard. Why such emotion when it comes to an individual’s support, or lack thereof, for a particular candidate? I guess it makes for good ratings.
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Unless we change our political ways, it really won’t matter who wins because Black people will continue to get nothing specific from any one of the candidates. Instead of us getting what is right, we will always get what is left; we will get leftovers, scraps, crumbs, from the tables of political aristocrats whom we created by putting them in office. The relative few oligarchies that rule over us will maintain their positions regardless of who the President is, and we will be the latest group that, having no bread to eat, is told to eat cake instead.

Getting what’s right from the political system and those who write public policies requires action, work, sacrifice, and resolve. It will not happen simply because it ought to; it will only happen if we make it so. It will only happen if there is a price to pay by those in charge for not giving us what’s right. The original Tea Partiers knew that when they tossed British tea into the Boston Harbor.
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If we fail to organize a critical mass of Black consumers and voters, about one million or so, and leverage the collective power within such a group, we will never see the reality of reciprocity in the marketplace and quid pro quo in the public policy arena. This is something that can and must be done, not by “all” Black people, which will never happen anyway, but by a relative committed few of us, in order to get what’s right rather than what’s left.

Settling for leftovers will keep us in a subservient position, begging for what we need but continuing to buy what we want, buying more than we sell and consuming much more than we produce. We will never build the leverage we must have in order to make a positive difference for our people.

So as we fight for what’s right for Black people, as we seek reciprocity, fairness, justice, and empowerment, we must focus on us first, and make sure we do what we must for ourselves first. As we seek the largess of corporations with which we do business every day, and as we petition politicians for redress and repair in return for the centuries of mistreatment to which we have been subjected, we cannot afford to be reticent and complacent.

You may ask, “How do we achieve those things, Jim?” Well, as a friend of mine, Peter Block, titled one of his books, “The answer to ‘how’ is YES.” We must agree to say yes. Not “yes we can” but “yes we will.” We must be resolute in our demands and back up those demands with the power to reward and punish.

Our fight for reparations, for instance, gets diverted by the “How?” Let’s make the answer “Yes.” In the past 200 years Blacks and Whites have advocated for “reparatory justice” for people of African descent; we must take up the gauntlet and make it a reality.

“For the first time in the history of relations between people, a precedent has been created by which a great State, as a result of ‘moral pressure alone,’ takes it upon itself to pay compensation to the victims of the government that preceded it. For the first time in the history of a people that has been persecuted, oppressed, plundered and despoiled for hundreds of years in the countries of Europe, a persecutor and despoiler has been obliged to return part of his spoils and has even undertaken to make collective reparation as partial compensation for material losses.” David Ben-Gurion comments on German reparations for Jewish people.

“Moral pressure alone” is not enough for us to get what’s right rather than what’s left.

 

 

Elevation vs. Revelation — August 2016

Articles | Posted by Jim Clingman August 15th, 2016

Yet another “shocking” report, “The Ever Growing Gap,” came out last week. It was featured in mainstream newspapers, small hometown newspapers, and online newspapers. The ominous headline stated, “It will take Black families 228 years to earn the same amount of wealth White families have today.” Well here’s another newsflash, “We already know that.” While we have not counted the years it would take, we know that working for wealth equality is futile and merely serves as a deflection that causes Black people to spend our precious time on a quixotic mission. E. Franklin Raines and Willie Herenton, Mayor of Memphis, Tennessee (2002) noted similar stats more than a decade ago.

Every so often revelations like this latest one come out to keep Black people mired in our current situation. The more drastic and terrible the information the more apathetic and pathetic we become. “What’s the use in trying?” The man ain’t gonna let us do anything anyway.” Thus, we sit back and allow our “pleadership” A term coined by my friend, Kenneth Price) to continue to beg for protection from political candidates, such as the national NAACP recently called on them to “Pledge to protect and preserve our lives.” Say what? Is that the best we can get from our supposedly powerful civil rights organization? Oh yes, I forgot. They also tell us to register and vote our way out of our misery.

We don’t need “pleaders” we need authentic, fearless, unapologetic, honest leaders, who will not succumb to foreboding statistical “revelation” but will provide the “elevation” Black people must have in order to take care of ourselves with the resources we already have. While we are wringing our hands about being 228 years behind in wealth, and some of us truly believing that politicians can and will turn that trend around, other groups are running right past us, not worrying about meeting the elusive goal of equality. The proof of that is also in the same report that speaks to our financial demise.

It says, “Over the last thirty years, the racial wealth divide has grown. If average Black wealth grows at the same rate it has over the last thirty years, it will be 228 years before it equals the amount of wealth possessed by White households today” This is only 17 years shorter than the institution of slavery in the U.S., which lasted 245 years. For Latinos, it will take 84 years.”

Notice the last sentence in the above paragraph, Black folks. Compare 228 years to 84 years and ask yourself, “How is that possible?” No, they did not suffer 245 years of enslavement as we did, but that same truth can and should be used by our people today, with our tremendous cache of intellectual and financial resources, as an incentive to work even harder on elevation and not be sidelined by the latest revelation about how bad things are for our people.

Our POTUS says the income gap, not the wealth gap, is, “the defining challenge of our time…” Of course he was not just speaking about Black income, but his words continue to ring true years after he made that statement; but where is the change? He blamed much of that on the politicians, and we fell for it once again, thinking they would eventually do the right thing and help us rise to financial utopia. They would have done it a long time ago, if that were so.

Let’s get this straight, brothers and sisters. A redistribution of wealth, which is what it would take, is not going to happen. MLK called for that more than fifty years ago, yet over the past fifty years we have gone down rather than up. White folks may give up the political wheel of this ship of state, but they will never acquiesce, agree, or willingly participate in any effort to cut that 228 year period even in half, much less make it even. Most of their wealth, while earned from the free labor their ancestors enjoyed when we were brought here, is locked down in generational inheritances. Do you really think they will all of a sudden get religion and give that up? Puleeezze!

I say enough with “Black Pleadership” that is only concerned about their own elevation as they bow down before their masters and plead to be protected and preserved. I say, no more revelations in reports that provide huge income to those who write them, reports that end up on the trash heap of time that was wasted by Black folks complaining about their contents.

If wealth and income gaps are the “defining challenges of our time” then let’s get busy behind real leaders who are willing and able to work with us toward elevation rather than getting stuck reading the voluminous pages of repeated revelation.

 

 

Can we rebuild Black Wall Street? — August 2016

Articles | Posted by Jim Clingman August 8th, 2016

“There are [Blacks] who are willing to worship the pyramids of 4,000 years ago but will not build pyramids in the present so their children may see what they left behind as well. We have a leadership who rallies the people to look at past glories but leave their children neglected; who will make great analytical and oratorical dissertations on the inadequacies of Eurocentric education and yet will not contribute one penny of their money or their time to the construction of their own schools.” Dr. Amos Wilson, Afrikan Centered Consciousness versus the New World Order.Wilson book

montoya Montoya Smith,host of the Atlanta talk show, Mental Dialogue, asked: Can we rebuild Black Wall Street? “No, really,” he added, recognizing the depth of his question and assuring folks he was not kidding or just being rhetorical.

So, what was Black Wall Street? BW2 Most of what I have learned about it was obtained from a book by John Sibley Butler titled, Entrepreneurship and Self-Help Among Black Americans, A Reconsideration of Race and Economics, which contains an exhaustive section on Tulsa, Oklahoma’s history and a detailed account of what took place in its Greenwood District. Some of the information below comes from Dr. Butler’s book. I also learned from face to face conversations with six of the survivors of the Tulsa Riot. Bro. Clingman & Survivors 009

Black Wall Street was burned to the ground in 1921 by a White mob. BW3The Greenwood District, located in the northern section of Tulsa, Oklahoma, was once called “Negro Wall Street,” and “Little Africa.” It was home to hundreds of Black owned businesses and sat on valuable land desired by White oil speculators, who even tried to buy parcels of that land from Blacks for ten cents on the dollar immediately following the Tulsa riot. Fortunately and wisely, Blacks refused to sell.

Despite hundreds of Black lives lost in the riot and all of Greenwood’s businesses destroyed, the story of that economic enclave during the ensuing seventeen years was one of triumph over tragedy. By 1923, as a result of Blacks pooling their money to capitalize new enterprises, the Black business district was even larger than before, and Greenwood was completely restored by Black people by 1938. Ultimately, urban renewal and integration, which allowed Blacks to shop at non-Black stores, led to the demise of “Black Wall Street.”BW4

To Amos Wilson’s point, Greenwood was a pyramid built by Blacks in the early 1900’s. Instead of looking back and merely reveling in the successes if Mound Bayou, Mississippi, and other enclaves that came before them, Black people in Greenwood built upon those legacies. Thus, my answer to the question posed by Montoya Smith, “Can we rebuild Black Wall Street?” was and is an emphatic and unequivocal, “YES!”

My answer to that question is based on the fact that we have done it before under far worse circumstances than we are under today. But as I listened to the other guest on Montoya’s show, Mr. Jay West, entrepreneur and President of the Lithonia Small Business and Merchants Association located on the outskirts of Atlanta, Georgia, I became even more convinced.
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Immediately impressed by Mr. West and the work his group is doing in a city that is approximately 85% Black, I sought him out to learn more. Jay West understands and promotes local business support. “I do 95% of my shopping right here in Lithonia,” West said, “because I know that one dollar spent here has the multiplier effect of three dollars, as our businesses support one another.”

West is absolutely correct, and the Lithonia merchants association will benefit collectively and individually from circulating their dollars; they will grow their businesses and create more jobs. This nascent organization can be the model from which new Black Wall Streets can be rebuilt across this nation; it is on track to encourage more entrepreneurship and demonstrate the power of a cohesive, mutually supportive, self-directed, and economically empowered network of conscious business owners and consumers who are committed to growth and sustainability.

True partnerships between educated consumers and business professionals in Black economic enclaves comprise the basis for real power in the marketplace, i.e. collective purchasing programs and affinity groups, revolving loan funds, business equity funds, and financial leverage to stimulate future growth. Lithonia is in that space right now, and there is plenty of room for more cities and segments within those cities to do the same.

To draw the discussion closer to home in Atlanta, “Can Sweet Auburn be sweet again?” BW5John Wesley Dobbs called it the “richest Negro street in the world.” Suffering its own riot in 1906 that left 25 Black men dead, Sweet Auburn can also be rebuilt, and with leaders like Jay West and others in Atlanta, I am confident that pyramid will be built. BW7