Free Enterprise

Written by Angela Harris

When I was in college, there was a button that some of us took to wearing.  It was green (I seem to remember) and the message it bore was “59¢.”  It recorded the fact that, on average, for every dollar a man made a woman made fifty-nine cents.

I was reminded of that button after attending the AALS Mid-Year Workshop on “‘Post-Racial’ Civil Rights Law, Politics, and Legal Education: New and Old Colorlines in the Age of Obama,” last week in New York City.  There, Professor Florence Roisman called our attention to a report released in May by the Institute on Assets and Social Policy (IASP) at Brandeis University. According to this report, between 1984 and 2007 the racial wealth gap between black households and white households increased fourfold: from $20,000 in 1984 to $95,000.

As Thomas Shapiro (who leads IASP) and Melvin Oliver explained in their important book, Black Wealth/White Wealth, this wealth gap is different from the income gap my friends and I protested in college. Income is, for most people, their paycheck; it pays the mortgage or the rent, buys groceries, goes toward the car payment, and disappears by the end of the month. Wealth — or “assets” in the IASP parlance — is money that sticks around, gaining in value; it allows people not just to get by but to invest in the future: to “pursue an education, buy a home, start a business, live securely in retirement, and weather economic challenges of unemployment, illness, or disaster.”

Shapiro and Oliver told us in 1996 that despite the good news that African American households were slowly catching up to white households in terms of income — there was, finally, a growing black middle class — this apparent move toward parity masked a dramatic disparity in wealth. That disparity, they argued, was due to “sedimented” inequality. Through the generations since slavery, while black people were being systematically excluded from the professions, from white markets for their services, from the most prestigious educations, from bank loans and venture capital, from federally-backed mortgage loans, and from homes in affluent white neighborhoods, white people were building wealth through all these means and passing it on to their children, who in turn used their inherited wealth to build more wealth.

That gap, it now appears, increased in the last twenty years rather than decreasing as one might expect. According to the IASP, middle-income white households had greater gains in financial assets than high-income black households: by 2007, the former had accumulated $74,000, while the average high-income African American household owned only $18,000. At least 25% of all African American families in 2007 had no assets to turn to in times of economic hardship. And this study, please note, ended before the collapse of the housing bubble in 2008. Why is this important? Because  the primary financial asset in most American households is the family home.

I want someone to start making buttons that read “95,000.”

But whereas in my college years we confidently expected that enforcement of Title VII and statutes like the Family Leave Act would put a stop to income inequality between men and women (and to some extent we were right, although the gap between “mothers and others” remains), closing the racial wealth gap is a much more difficult task. The IASP report asserts that race-neutral policies cannot close it; instead, it urges, “wealth-building opportunities must be targeted to families of color.” Those of you who think that the Obama Administration is going to lead that charge, wave your “HOPE” posters.

In the past, we African Americans put our faith in “black capitalism” and “black enterprise.” Essence and Ebony magazines continue to profile black vice presidents of large corporations and solo entrepreneurs for our admiration and edification. But income is not wealth and the next wave of foreclosures is still to come. Our “95,000” button needs to provoke a much deeper conversation among black people. If we can neither look to the market for parity nor to the state for reparations, where does economic security lie? Is it time to start asking what our faith in capitalism has done for us?

Perhaps, at the very least, it is time to remember what capitalism has done to us. Anthony Farley argues that capitalism as we know it was born on a slave ship. That is, the moment of “primitive accumulation,” from which exploded mercantile and industrial and managerial capitalisms, was the moment when one group of humans successfully reduced another to commodities. Is it a fools’ game to imagine that we can become masters of the game that nearly destroyed us? Is it foolish to aspire to such a bitter mastery? And what might black people accomplish if we stopped playing by the rules?

I’m just asking.