A Note from Black Germany: Buying Power and Black Capitalism Are Myths There Too

From the original (published in German): Concepts such as black owned business or black purchasing power create connections between personal consumption decisions and the empowerment of a socially oppressed group. But does it work? Collage: Kerstin Davies

At the latest with the last wave of attention for Black Lives Matter and a briefly increased awareness of the racism that black people experience, the myth of Black Capitalism has also arrived in Germany. In the fight against racism, the magazine Beige recommends : “You can donate or start to specifically support Black Owned Businesses.” Even TikTok’s PR department encouraged users to give their personal Share this story with the community and generate more attention for black entrepreneurs «, and Google wants to enable maps to specifically find black owned businesses .

The origins

Behind such ideas is a tradition that began over a hundred years ago in the United States and has spread more and more in black communities around the world. She is often associated with the black nationalist Marcus Garvey, one of the most important precursors of the later Black Power Movement. Garvey’s Universal Negro Improvement Association (UNIA) was the first mass-based black organization in the United States and the Caribbean. However, their political views were ambivalent. Garvey, himself a trade union activist in his youth, welcomed the October Revolution in Russia and wrote an obituary for Lenin after his death, but viewed communism as a white system that would not end exploitation and oppression. Instead, his organization relied on black capitalism. UNIA founded a number of companies, best known among them the Black Star Line. This was intended to implement the plans to return to Africa propagated by Garvey. The shipping line was on the stock exchange and sold shares, but could not last long, among other things because of sabotage by agents of the FBI under J. Edgar Hoover.

The ideas were still able to hold their own. The German website blackwallstreet.de quotes Garvey as saying »Never donate your money outside of the race«. This is based on the assumed connection between personal consumption decisions and the political and economic empowerment of a socially oppressed group. The name of the website alludes to another myth. Black Wall Street, as the affluent Greenwood neighborhood in Tulsa, Oklahoma was called, was destroyed by a racist mob in 1921. The name remains a reference point for the ideology of black capitalism to this day.

The concept of a parallel black market was developed before Garvey. In 1897, for example, the first black law professor, Lutie A. Lytle, first mentioned the term black buying power. As communications researcher Jared Ball writes in his book The Myth and Propaganda of Black Buying Power, “They explicitly operated within the logic that black companies are the key to collectively improving the situation of blacks.”

In his work, Ball traces the origin of the myth of black buying power. In contrast to the German term Kaufkraft, power in its popular use is associated with power on a political level, but emerges from a similar concept. The US economy developed the term buying power to stimulate consumption in times of crisis. Wages should be measured precisely enough to be low enough to permit a high rate of profit but high enough to buy the goods produced. This does not measure the prosperity of the workers, but only their ability to choose between a calculated selection of products.

In the 1970s, Black Power became Black Buying Power.

The concept was later adopted by black entrepreneurs who wanted to open up new areas of business. The owners of black newspapers and media companies in particular made the myth famous. By narrative construction of a potentially wealthy black market, these companies wanted to convince advertising companies to invest in advertising in their media that targeted black people. In the post-war period, black media entrepreneur John H. Johnson produced the video The Secret of Selling the Negrowho further popularized this idea. Through his media empire, he was able to present the message of a rising middle class Black Pride that was attractive to many within Black America and within white business circles. In the 1970s, in connection with economic policy, Nixon’s Black Power was reinterpreted as Black Buying Power in the sense of black capitalism, the development of which was intended to cushion the political radicalization in the ghettos. This reinterpretation was particularly successful because, because of the counterinsurgency strategy, some of the most radical voices in the Civil Rights Movement and more militant organizations like the Black Panther Party were either murdered, in prison or in exile at the time.

How long does the dollar circulate?

Across the political spectrum of Black Resistance movements – from Garvey to Malcolm X to Killer Mike on his Netflix show Trigger Warning – the myth that a dollar only circulates in the black community for a certain amount of time has run its course. Only by keeping the money in the community for the long term could prosperity be created in the long term.

The German Rosa-Mag also refers to black buying power. In an article about Afro-German founders it says: “Although the purchasing power of black people is increasing globally, they spend less money on black-owned businesses than any other ethnic group in the world.” In the USA, for example, one dollar circulates for 28 days in the Asian community, 17 days in the WASP (White Anglo-Saxon Protestant) communities; in the black community, on the other hand, only six hours. “That means 99 percent of the $ 1.3 trillion purchasing power of black people in the US is spent outside the community,” the magazine said. The source for the alleged $ 1.3 trillion is studies by the Selig Center for Economic Growth at Terry College of Business in Georgia. Ball writes that the claim that African America has around a trillion “purchasing power”, is popular mythology with no economic basis. While the myth has a longer history, it would be spread today through misinterpretations of market research by the Selig Center.

Afrodeutschegründer.de tries its hand at an » appeal to purchasing power«On a similar calculation for Germany. The magazine calculates the total gross income of the Afro-German community from the percentage of black people (1.25 percent), the number of people of working age and the average German income and comes to 1,863,456,000 euros per month. The average income of a German serves as the basis – it can, however, be doubted that the effects of educational injustice and racism on the labor market leave black people with a similar amount of financial resources. After all, income is not freely available either; more and more of it is claimed by rising rents, then generally rising costs of living come into play and financial support from relatives in African countries.

Black people simply do not have the capital that other corporations and banks have accumulated over centuries of colonial and imperial exploitation. Therefore, for example, the black fashion fair CURLCON has to be supported by the white company Cantu, which, like so many others that are on the hunt for black purchasing power, belongs to another white company. In 2017, PDC Brands, whose portfolio includes Cantu, was bought by Luxembourg-based CVC Capital Partners, one of the ten largest private equity companies in the world.

A question of the relations of production

The conclusion of the circulation arguments: Instead of demanding a social economic policy, better working conditions, higher taxes for the rich and the socialization of large companies, the poor are made responsible for their own poverty, since from this perspective poverty is not the result of structurally unequal property relations, but poor individual decisions is.

In principle, wealth or prosperity does not arise from the fact that money circulates in communities, but rather from the conditions of production. It is the added value of human work that is realized as profit that companies reinvest in their expansion. Because workers get less wages than they produce in value through their work, there is poverty on the one hand and excessive wealth on the other. No consumption decision can influence this social relationship between the bourgeoisie and the wage earners.

Kofi Shakur

lives in Berlin, where he studies social sciences.

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