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The Myth of Black Buying Power Discussed

In this edition of imixwhatilike! we spend a day in the life of explaining, discussing and debating what i call The Myth of Black Buying Power.  The myth claims Black America has more than $1 trillion in annual spending power which confuses many about the nature of capitalism, economic inequality or the meaning of “power” itself.

The Myth of Black Buying Power Discussed

 

With increased protests in the streets and exploration of solutions for continuing police violence and persistent inequality has come renewed calls for the deployment of collective economic strength, particularly in the form of boycotts and reinvestment in Black banks.  This has also brought about some renewed focus on the notion of “Black buying power.”  In this edition of imixwhatilike! we spend a day in the life of explaining, discussing and debating what i call The Myth of Black Buying Power.  The myth claims Black America has more than $1 trillion in annual spending power which confuses many about the nature of capitalism, economic inequality or the meaning of “power” itself.  With the help of radio hosts Jennifer Bryant, Netfa Freeman, Garrett Harris (WPFW 89.3 FM) and Eugene Puryear (Sputnik Radio) – and even an on-air debate with B. Doyle Mitchell Jr., president and CEO, Industrial Bank – i attempted to explain my conclusion.

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24 Comments

  1. Listening to Mr. Mitchell recommend Ms. Anderson’s book, My Black Year. I actually followed her shortly after her book came out and Mr. Mitchell kind of skipped over the question. You can’t buy black if you have no money. Ms. Anderson and her husband were well-off professionals who had the ability to jump through the hoops required to buy exclusively black.

    1. This is most certainly true. It generally costs more, and requires a commitment that may be, in principle, adverse to your family’s needs. While it will benefit the merchant, and, perhaps, the community, the cost is often high on the family, with nothing in particular being reciprocated by the business that you could not have gained less expensively by patronizing the local Big Box store.

      1. This is not to say that we shouldn’t try to buy black whenever possible. But I am going to put it out there that maybe the black middle and upper-class are going to have to do the heavy lifting in the beginning. A kind of “from each according to ability” type situation.

        The problem with that is that there’s no real compulsion for black upper-classes to buy black. They are already being rewarded by the status quo. While they may face the daily annoyances of structural racism, it’s no longer the life or death matter in a real sense it is for those of us living broke. So we face the Catch-22 that the very people who have the means to lift us up are the least likely to do it.

  2. Reblogged this on Habari Gani, America! and commented:
    The campaign to future economic reciprocity among African American banks, businesses and communities sparks another debate – is it worth the effort. Do we have the power to build a Black economic power base? Some say yes, — others suggest not.

  3. Wow…this is a messy ass comment section…

    Welp…I may as well put my two cents in lol:
    -Black capitalism (even the “enlightened” type) alone will not save us. If you learned from your history, Booker T. Washington and Marcus Garvey would have taught you that.
    -Black socialism/communism alone will not save us. Black folks looking to some dead white men’s books instead of their own material reality and historical solutions is pure foolery (it is a shame that Africans was given a choice between ancient Egypt/Kush/Mali and Marx and then acted as if there was competition).
    -If you see an economy as simply the exchanging and manipulation of pieces paper and metal circles, then you are severely lacking in imagination…and in options for the African world since we statistically have the least of these papers and circles. Instead of shaming a people for not making the choices that you wanted them to make, how about you find a common ground? May be they can’t or won’t give money, but how about time? How about physical/intellectual/emotional labor? If some person came up to me asking for money for some great pie-in-the-sky Afrotopia dream, you can trust and believe that I will laugh you off my porch. But if you ask me to volunteer at a teach-in or even clean, I would be much more likely to be part of your ‘movement’.
    -Find your own damn answers…stop looking for a Jesus, Buddha, Malcolm X, Martin Luther King Jr, and/or Obama in this world of 1s and 0s. If you want results and solutions, I suggest that you think hard and get to work.

  4. Good reply. Part of what Jared says is true except as you point out Jared offers no solution.
    Facts
    1. We don’t have 1.4 Trillion in capital to harness this part is a damaging myth
    2. 40% to 50% of Black males or unemployed
    3. Net Wealth of Single Black Woman is around $100 https://www.youtube.com/watch?v=Z2pO_sOdlR8 Study: Median Wealth for Single Black Women: $100, Single Hispanic Women: $120, Single White Women: $41,000
    4. & according to the Census median net worth for all black households was about $6,000 in total.
    5. http://www.huffingtonpost.com/antonio-moore/the-decadent-veil-black-income-inequality_b_5646472.html
    6. The majority of African Americans have no assets (mortgage and car not debt liabilities) so at least we should be truthful as it concerns the facts & the actual hole that we find ourselves in.
    7. Next we must remember that the Richest Black Folk won’t help us finance this revolution we will have to do it ourselves. The average African American must find people of like mind and build tangible resources from there.
    8. Jared Ball fails to mention that money in a community is suppose to ( cycle via a continuous loop of spending internally through a variety of business. So if a place like Detroit has 10 Billion of economic activity Our goal of capturing half of that at 5billion and the 5billion bouncing /cycling internally( just 7Times would equal 35billion) would do tremendous good to employing our own and lifting us out of poverty.
    9. Indeed for Black Dollars to truly make sense Black Folks must take control of the cities and counties where we reside or migrate to strategically based on demographics which favor our ethnic group.
    10. Again city councils, school boards, county commission, police departments, fire departments, court houses and jails, city finance manager, water departments, public planning commission, parks and recreations etc must be controlled by Revolutionary Righteous Black leadership.
    11. This will allow us to give out contracts and jobs to the larger Black community
    All business activity must be based in Collectively Pooling dollars together and building Co-op /cooperative business enterprises
    12. Black Folks must remember that after the Civil war we built thousands of business with very limited resources. Indeed our economic endeavors require us to form a new model that rejects many tenets that come from capitalism. In fact we Pooled our resources together & established Whole Socialist/Cooperatives/ Black Business Towns to lift ourselves out of poverty.

  5. Good analysis except you must go deeper.
    Critical analysis and deconstruction is good but Jared does not pose a solution, not even a step forward. There is much to be said about making an economic infrastructure in the black community owned and operated therein and by them. Black Marxists/Socialists have never posed a solution aside from a Marxist Revolution which is the only solution ever proffered by Marx and which has no traction in the United States. The economic problem faced by Black people is complex but there must be a start line and it can be a black people’s central bank. To accomplish that end all black banks should merge to concentrate capital. A black bank for example can invest in or buy strip malls throughout black communities…and generate small black businesses.

    1. 1. Totally false to say that i offer no solutions, i did join in and suggest cooperative economic plans be developed and supported akin to the Jackson plan. But even if i didn’t, that changes nothing about the correctness of my argument. No one person, least of all me, should be expected to have all the answers.
      2. Totally false to say Black Marxists never have offered solutions. The BPP, for one, had a bunch of suggested plans, some of which were stolen by the state – blood testing, school lunches, etc.
      3. I am not a Marxist, i just know his critique of capitalism is correct.
      4. Those who offer “solutions” are often offering none at all or plans that ignore the critiques needed to make them work to develop new plans.

  6. Critical analysis and deconstruction is good but Jared does not pose a solution, not even a step forward. There is much to be said about making an economic infrastructure in the black community owned and operated therein and by them. Black Marxists/Socialists have never posed a solution aside from a Marxist Revolution which is the only solution ever proffered by Marx and which has no traction in the United States. The economic problem faced by Black people is complex but there must be a start line and it can be a black people’s central bank. To accomplish that end all black banks should merge to concentrate capital. A black bank for example can invest in or buy strip malls throughout black communities…and generate small black businesses.

  7. Your “response” to my logic and research is “man is sinful?” Ok, now i am clear. This is not the space for you. We do science and mostly materially-applied African spirituality here. In fact, this post is about myth-busting, so there is no room for euro-centric, patriarchal, twisted mythology that encourages we stop advancing thought and humanity because this is kind of the best we can do given the fallibility of “man.” But, and really lastly (unless you want the final word here which you are welcome to have), i only want now to point out to you and anyone else reading this far down the page, that regarding the specific issue of “buying power” you – and still no one – has refuted my actual research with facts based in research of their own. Peace.

    1. Actually, I agree with you regarding your critique of “buying power” that is divorced from the ownership of the means of production. If you don’t item the product maker, it doesn’t matter how many “brokers” you money supports. It still ends up outside of black hands, possibly or probably in support of interests that many be indifferent or hostile to black interests in the U.S. Your diagnosis that there is a problem is not my concern. “MONEY” as an object of worship- the spiritual component of Capitalism – is something that I oppose, for it is a violation of the 1st Commandment. As I stated at first, your solution has the same point of weakness; it depends upon the myth of human perfectibility, AKA “sinless perfection.” Whether argued by Wesley or Marx, it is still out of reach.
      It is your site; please, take the honor of summing things up.
      P.S. Christianity is not “eurocentric” – the history of the African fathers of the Church catholic is as lengthy and distinguished as that of the Latin or Greek fathers. As a historian, you should know that as well.

  8. The APPLICATION of the above answer is also the same. The 3rd Use of the Law – as a guide in how we are to love our neighbor- gives us a clear, manageable blueprint, while repentance and forgiveness deal with our human weakness. Since you know history, you soils be familiar with the Reformation, and the writings of the Book of Concord, which address these issues.

  9. I’m more of a “results” oriented person. You cited the economic work of Marx/Engels, known by most as Communism. Can you name any countries where Communism has worked the way that Karl Marx theorized? Can you point out where the so-called “workers’ paradise” is currently in operation. I know of several nations that tried it.

    1. If you are a “results” oriented person, try seeing what happens as a result of you actually addressing my arguments in the video or in the linked post which fully details my research? As a result you may gain more clarity yourself, including the absurd dismissal of both my actual point in referencing Marx or in what Marx actually wrote or said himself. He didnt just mythologize a workers paradise he explained what would happen – and largely has happened – to working people as a result of capitalism. What do you say of those global results of capitalism? And in referencing Fanon as i did (which you apparently missed or are ignoring) i was also signalling what i see a shortcomings resulting from a strict adherence to Marx. And as always, your style of criticism ignores the results of history and the results of, for instance, the capitalist world violently and repeatedly attacking and destroying countries and people who adopt socialist tendencies (never mind actual socialism and the necessary differences that result between that and actual communism). So i am left – as always – underwhelmed as a result of such a trite and narrow response or criticism.

      1. Marxism, like all humanist utopian world-views, has great results in theory. Each of these world-views fail, because they are controlled by humans, and humans are not essentially good. We are, at our core, unjust, selfish, proud, lustful…sinners.
        In short, Dr., no matter what socio-economic system you true to put humans in, the human element will corrupt it. You criticize capitalism for its inequalities, yet the sitcom of those inequalities also impact any replacement system you use. Shallow, yes, because in my initial post I left out the moral/spiritual elephant in the room. Since you asked and mocked, hear is my response. Man is sinful, a and, thus, sins. Man will inevitably violate the Law of its Creator. The solution is outside of man. It is not economic, political, but divine. It is Christ alone, by grace alone, through faith alone. That always was always is, and always will be, the only answer to world condition.

  10. In this segment Dr. Ball is causing much confusion over the topics of Black Buying Power and Black Wealth. His singular reference source from the Selig Center seems poorly chosen and furthermore he seemed quite dismissive of the expertise of a Black Bank owner, owned and operated for and within black communities for more than three generations. Sounds like Mr. Mitchell has much more first hand experience and expertise that Dr. Ball or his references on this matter.

    Using figures provided by Dr. Ball during the interview we learn that 40 million Blacks have per capita income of $35000. There’s the source for the 1.4 trillion dollar figure that Ball disparages. Ball is right to suggest that this INCOME figure does not correlate to buying power, money available to purchase stuff. (Typically buying power has to do with a representative “market basket” of goods that a person would spend money on during a time period.) So where is the disconnect? Ball should have listened to the banking expert, Mr. Mitchell, more closely. Blacks are notorious for not strategically spending money within their own community. Mitchell suggested that by just increasing community reinvestment and spending up to 10% Black economic power would increase, and he is absolutely right! Imagine if that trillion dollars circulated within the community 6 times over (buy black, save black, invest black), the black community would now increase their income to more than $7 trillion. Those of us in the market making world (ie- business owners) know that this would lead to increases in diversity and number of providers of goods and services. We’ll all gladly follow the yellow (i.e. golden) brick road. After all that’s what blacks continually do, but it leads out of their own community.

    Mark E. Baker, MBA
    Financial and Wealth Managment Professional

    1. Mr. Baker, please review the video and/or read my linked research. You have grossly misrepresented my argument. The expertise on this issue is not found in your answer nor was it found in the argument of Mr. Mitchell. For instance, 1) my “singular” reference to the Selig Center is due to that center’s report being the singular source for nearly all the discussion of “buying power.” it is the source cited for nearly every story on the issue that references any source (and most in fact reference nothing but someone else’s recitation of the myth). So my point is to debunk that source since it is the singular font of so much of this un-wisdom and 2), you misquote me terribly. i never said 40 million Black people have an income of $35k. i said the average annual salary for all working people in the U.S. is about $35k and that on average Black people would have a lower income and then even less wealth. It isnt me who wasnt/isnt listening, in fact, Mr. Mitchell interrupted my explanation which i dont think he ever heard. But this again is my point, very few people know what this phrase means or where it comes from and most have an underwhelming poor understanding of capitalism or how the U.S. economy actually works.

      1. Thanks for your reply. I think what will help you is to discuss the concept of “Buying Power” with any of your colleagues teaching undergraduate level economics or business (and some sociologist will know the topic as well). It is not more difficult than I have explained in my post – How much stuff can you buy? = Buying Power.

        What becomes challenging for the members of the community is poorly positioned discussions that confuse wealth and income. Buying power is a great economic measure when used for broader analysis – say on a state or national level. It doesn’t mean a lot for individual persons or families because people will determine what is most important to them and when or where to make a purchase. No matter what is the race or ethnicity of the purchaser $1 will buy the same amount of toothpaste or toilet paper or cell phone ownership. It’s the personal choice issue that is most indicative of wealth building trends for people.

        As for what you said or did not say: I’ll leave that to your listeners. But at least you admit that you did mention the 40 million people and the income level, and hopefully blacks were included in the average that you referenced. But my question for you is – Why must Black people “…have a lower income and then even less wealth”?

        1. Let me invite you again to actually read my research or hear the claims im making in the video. As ive explained in great detail “buying power” is not real and is a marketing phrase. I remain amazed (sort of) by the amount of people who work in banking or some form of financial field who exhibit almost no understanding of how this phrase comes to be or what it means. So your points about who buys what and choices is both irrelevant to my point and also wrong as explained in my work (odd too how that can be!). So yes, i mention the average income of working people, but if you notice, i do that to remind your banker friend of how wrong he and others are to then chastise black people for not doing more with their truly minimal incomes and almost total lack of access to methods of increasing wealth. This, to answer your last question, i also answered already by saying its really a problem of capitalism which by definition creates massive poverty to generate enormous wealth for a very tiny few.

      2. Good analysis but lets go deeper
        Critical analysis and deconstruction is good but Jared does not pose a solution, not even a step forward. There is much to be said about making an economic infrastructure in the black community owned and operated therein and by them. Black Marxists/Socialists have never posed a solution aside from a Marxist Revolution which is the only solution ever proffered by Marx and which has no traction in the United States. The economic problem faced by Black people is complex but there must be a start line and it can be a black people’s central bank. To accomplish that end all black banks should merge to concentrate capital. A black bank for example can invest in or buy strip malls throughout black communities…and generate small black businesses.

    2. Good reply. Part of what Jared says is true except as you point out Jared offers no solution.
      Facts
      1. We don’t have 1.4 Trillion in capital to harness this part is a damaging myth
      2. 40% to 50% of Black males or unemployed
      3. Net Wealth of Single Black Woman is around $100 https://www.youtube.com/watch?v=Z2pO_sOdlR8 Study: Median Wealth for Single Black Women: $100, Single Hispanic Women: $120, Single White Women: $41,000
      4. & according to the Census median net worth for all black households was about $6,000 in total.
      5. http://www.huffingtonpost.com/antonio-moore/the-decadent-veil-black-income-inequality_b_5646472.html
      6. The majority of African Americans have no assets (mortgage and car not debt liabilities) so at least we should be truthful as it concerns the facts & the actual hole that we find ourselves in.
      7. Next we must remember that the Richest Black Folk won’t help us finance this revolution we will have to do it ourselves. The average African American must find people of like mind and build tangible resources from there.
      8. Jared Ball fails to mention that money in a community is suppose to ( cycle via a continuous loop of spending internally through a variety of business. So if a place like Detroit has 10 Billion of economic activity Our goal of capturing half of that at 5billion and the 5billion bouncing /cycling internally( just 7Times would equal 35billion) would do tremendous good to employing our own and lifting us out of poverty.
      9. Indeed for Black Dollars to truly make sense Black Folks must take control of the cities and counties where we reside or migrate to strategically based on demographics which favor our ethnic group.
      10. Again city councils, school boards, county commission, police departments, fire departments, court houses and jails, city finance manager, water departments, public planning commission, parks and recreations etc must be controlled by Revolutionary Righteous Black leadership.
      11. This will allow us to give out contracts and jobs to the larger Black community
      All business activity must be based in Collectively Pooling dollars together and building Co-op /cooperative business enterprises
      12. Black Folks must remember that after the Civil war we built thousands of business with very limited resources. Indeed our economic endeavors require us to form a new model that rejects many tenets that come from capitalism. In fact we Pooled our resources together & established Whole Socialist/Cooperatives/ Black Business Towns to lift ourselves out of poverty.

  11. Great show, and thanks for keeping alive and deepening the answer to this mythology over the years to come.

    The black banker sounds like a nice enough dude, an enlightened capitalist. If he only foreclosed on 3 homes in the meltdown he is to be congratulated. But there are also black banks who DO invest in gentrifying projects. But this guy’s relative enlightenment is his own personal decision, not something we can project on every black business owner, or even every black banker.

    No doubt patronizing black businesses would empower a certain number of other principled and highly motivated souls. But counting on every or even most black business you patronize to re-invest the bucks in creating jobs in the hood instead of buying summer homes, boats, Bentleys and stock portfolios is not a viable strategy for liberation.

    The notion that increased earnings for business owners ultimately results in more jobs for the working class is a fairy tale, whether we’re talking about black or white businesses.

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