Written, compiled and curated by Jared Ball for imixwhatilike.org

The $1 Trillion Black Buying Power Myth Exposed! Click to Tweet
myth
miTH/
a widely held but false belief or idea.

Myth Basics:

  1. The claim that African America has roughly $1 trillion in “buying power” is popularly repeated mythology with no basis in sound economic logic or data.  While the myth has a longer history it is today largely propelled by misreadings and poor (false) interpretations of Nielsen surveys and marketing reports produced by the Selig Center for Economic Growth at the Terry College of Business housed in the Bank of America Financial Center in Athens, GA.
  2. “Buying Power” is a marketing phrase that refers only to the “power” of consumers to purchase what are strictly available goods and is used as a measurement for corporations to better market their products.  “Power” here has nothing to do with actual economic strength and there is no collective $1+ trillion that Black people have and just foolishly spend ignorantly to their economic detriment.
  3. The myth of “buying power” functions as propaganda working to deny the reality of structural, intentional and necessary economic inequality required to maintain society as it is, one that benefits an increasingly decreasing number of people.  To do this the myth functions to falsely blame the poor for being poor.  Poverty, the myth encourages, is the result of the poor having little to no “financial literacy,” or as resulting from their bad spending habits, when in reality poverty is an intended result of an economic and social system.

Introduction

This, my first attempt at addressing this mythology, has since been the basis of what has become my compiled attempts to disrupt the wide-spread mythology of Black (and by extension all others) “buying power.” HERE is where a persistently updated blog has been kept where i’ve over time looked to track some of the relevant information as it comes out and to at times intervene in some of the national dialogue on the subject. Media coverage of this issue, as is often the case, does little to improve our general understanding of capitalism, wealth accumulation and disparity or the ongoing forms of poverty faced by so many – who often themselves become the target of blame associated with that poverty.  i welcome others’ input and encourage much more discussion of this myth especially when so many left-leaning spokespeople routinely incorporate this very conservative (reactionary) myth into their own analyses and too end up chastising the poor for being so.


The Myth of Black “Buying Power”

by Jared Ball, March 2008 (originally for Black Agenda Report)

 Myths of Black America’s “buying power” continue to confuse just how bad things really are or how this “permanent recession” is an economic and social necessity.  This myth is meant to shift the blame of poverty onto the poor and suggests that economic inequality is more an issue of pathological behavior than a scientific inevitability.  In a speech delivered on Black Power (see below) Kwame Ture accurately cut through the morass of madness known as “economics.”  He stated simply and clearly, “a man is poor because he does not have money.  Period. If you want to get rid of poverty you give people money.  Period.”

Kwame Ture on Black Power (Berkley 1966)

Achieving economic clarity is a bit more difficult than it would appear.  The myth of Black “buying power” resurfaced yet again in February as more “news” was released from African American/Black Market Profile (AABMP).  The myth, now updated,  projects that this “spending power” will reach $1 trillion by 2011.  This mythology of an African America whose national economic strength rivals that of most countries is consistently misunderstood, improperly quoted and ultimately used to deny the outrageous inequality and exploitation this country still requires to maintain itself as the single superpower/empire.

First and foremost the initial report cited needs to be understood for what it is and its purpose which, as is as they say atop their report, “The Market Profiles gather and synthesize the most recent findings from dozens of sources in order to help marketers communicate more effectively with these important consumer segments” (emphasis added).  So these numbers are floated not for their accuracy regarding Black people’s economic standing but for their ability to tell which corporations should more aggressively target their marketing (psychological warfare) towards African America to get what little money actually is held there.

Part of their projections (as opposed to actual in-hand figures) are based on the percentage (30.2) of African American households whose income is more than $50,000 per year.  Somehow this is meant to convey a sense of economic progress or sustainability.  Not considered in this report is that if the poverty line in the U.S. (a number already itself designed to hide poverty) is set so as to only count those in poverty who live in households of 4 earning less that $20,000 annually then, of course, a $50,000 would appear stronger than it actually is.

The AABMP report, however, references for its numbers a study from the Selig Center for Economic Growth whose numbers also must be held in question.  Their justification for suggesting in 2006 that that year would be one in which African America, as the “nation’s largest minority market,” would use their “economic clout” to “energize the U.S. consumer market as never before.”  They cite as evidence such misleading statistics as:

1.  Black population growth

2.  Increased job opportunities

3.  More education for Black America

4.  Only 8.1% of Black America is over 65 years of age or at “career pinnacles” at which point wage increases “decelerate,” whereas, whites are 13.5% over 65.

5.  Black people spend more than “non-blacks” on natural gas, electricity, telephone services and footwear and a higher proportion of their money on groceries, housing and women’s and girl’s clothing.

6.  And this author’s personal favorite, that despite “a substantial gap in homeownership rates” this “suggests a possible opportunity for market expansion in the years ahead.”

We must be clear.  Income is not wealth.  “Buying power” as a phrase and one measured in these ways offers so many illusions that contradict the previous point.  Population growth and increased jobs (increased from what?) do not, in and of themselves, say anything about economic power.  More education means little as well when advanced degrees are considered an absolute necessity for economic advancement (certainly still no guarantee) and even their own report (p. 9) shows that in 2005 only 19% of African America earned a Bachelor’s degree or higher and the percentage of that population who earned a graduate professional degree was so low as to only warrant an “N/A.”

It is also important to note that “buying power” is a confused phrase in that it, again, says nothing of a wealth Black people have little of but also suggests that this “power” is or can be for community uplift.  The fact, again, that this is target marketing material means that by “power” they mean the ability to generate money for corporations to whom this spending will be geared.  It does not mean that Black America has some un-tapped economic strength that can be marshaled to buy that which increases wealth (land, stocks, etc.) and speaks to the basics of colonial exploitation.  That is, that the colonized are left only to purchase trifling gadgets and trinkets “footwear” and “clothes,” as opposed to land, stock and other capital most of which is sequestered among the tiniest elite minority.

And finally, it is sadly laughable that too many of us are fooled into thinking our power is squandered by poor purchasing habits, again, since this is all to which we have access anyway.  The idea that land and stock is there waiting but we’d rather go to the mall for trinkets results from mass capitalist, white supremacist propaganda which too many of us have imbibed.  So, in fact, the suggestion in 2006 that homeownership represents “a possible opportunity for market expansion” was a precursor to the damage and pain most are seeing only now; predatory lending, sub-prime scandals, mortgage and home foreclosure and what United for a Fair Economy (UFE) recently reported as “the greatest loss of wealth for people of color in U.S. history… {upwards of} $200 billion.”

Black people, like most others, are an exploited, colonized population whose wealth-generating capabilities are, just as these reports really say, for an elite who have nothing to do with Black people.  Black wealth resides in elite white enclaves here and abroad while African America devolves economically, politically and in terms of healthcare, education (quality of and access to), police brutality and mass incarceration.  And even within Black (and Latin) America 25% of the households have 90% of the wealth demonstrating a great divide within communities where Black median net worth is already a pathetic and dangerously low $5,988 and $7,932 for Latin America compared to $88, 651 for whites.  Black people have no money.  We spend on credit and loans (none of which is considered for either of these studies) so as to project a “power” that we in fact are far from having.  Rarely does anyone have in their pocket or account the $20,000 for a car or $30,000 (and way up) for one year of college.  We take loans for these and other purchases which then count towards our “spending power.”  The debt we fall into this way and others (i.e. credit cards) is counted as a “positive” by those to whom our pockets are perpetually emptied.  But this is not and can never be “power.”

Anyone, including Black “leaders,” who parade fanciful numbers before their unsuspecting audiences so as to, again, suggest that irresponsibility is the cause of Black poverty need to be checked, vigorously.  We need to get back to an increased intelligent and honest discussion of economics so we can be where Ture was when he left, as he and his comrades always said when answering a phone and saying goodbye, “ready for the revolution.”

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10 Comments

  1. Dear Br. Jareed,
    Thank you for your research and reasoning supporting exposure of the myth. I have included excerpts of email responses I made some months ago regarding this topic found on Black Agenda Report.

    The poverty I see present, especially within the United Fakes American mindset is the dearth of constructive creative imagination. Unfortunately those victims of “White Racism Supremacy, typically are trying to be accepted through a never ending cycle(s) of Conditioned Ridiculous Blind Conformity that go nowhere fast.

    I am an Instructional Designer whose interest is in facilitating ways in which the Humans take creative constructive responsibility for their interconnected destiny. I send this comment because I believe that you are one of these Humans who want to actually look at the facts, distill them, apply what works, evaluate results and rework application where mine, necessary. Those of us who are not too poor to pay attention and know that we cannot talk our problems away, take the patience to observe, examine, compare, contrast and analyze to arrive at solutions.

    If you have not already done so I have recommended Haki Makabuti’s book, “Black Men, Young, Dangerous Obsolete” and a link to the “Port Royal Project” for your consideration.

    Wealth has more to do with controlling the “means of production” and “production itself” than consumption.

    No matter how many times the dollar is spent in its own community, it is only a very small measure of wealth. The value of that dollar is manipulated to be worth less at any given time.

    To produce something increases the measure of wealth within its own community. To control the means of production increases the measure of wealth more than production. To do control the means of production that support that which is produced within a community, for its consumption is best. It allows financial/economic/commercial access to the consumers not only within its own communities, but also consumers of other communities as well.

    The agreement of trading of goods and services among interdependent communities strengthens communities and the individuals within those communities.

    The exchange of ideas regarding efficient processes of production is is profitable for all involved and makes every individual prosperous. This is working smarter and not harder.

    “… it is a guide for turning Black income in to White corporate wealth. So, again, it makes no sense at all to reference these studies as part of a critique of Black people’s complicity in their own poverty. Black people are not poor because they are poor consumers. Poor people are poor so that there can be rich people. Poor people, as this report shows, are targeted to spend their income which becomes the unearned income (or wealth) of the rich who own the companies and products being bought. This is how the wealthy stay wealthy, by assuring that the poor stay poor….”

    Contrary to popular belief, the dollar is not “all mighty”. In a closed system it seems to be. That is why the con artist designed the closed system and the dollar/currency to be the means of manipulation to provide the illusion of access to the ” 9 areas of activity” often discussed by Neely Fuller Jr.

    The video merely made the production/marketing segment of society, aware of an untapped consumer segment/market of society. It is a playbook for manipulation or hooking new marks. Remember when you hunt for duck, you don’t say. “Hey Duck”, you use a duck call.

    Unfortunately, “A fool and his money makes a good customer”!

    Information is transmitted in basically the same ways. Remember Edward Bernays won the bet the he could have women smoking and United Fakes Americans eating pork bellies. Bacon and eggs still remains a breakfast favorite in the United Fakes.

    In a capitalist system all capital matters, i.e., All Dollars Matter. I do not see a back handed slap in the face to which you refer. I see opportunity being introduced, that opens doors for those who can /will capitalize on potential consumers.

    Ironically a capitalistic system the emphasis is on consumerism. Capitalism is not emphasized from the perspective of productivity. Look at the interest of the commenters on various channels. How many of them show evidence of the interest of learning topics which are productively engaging? There are many YouTube that are a wealth of information for anyone who desires to learn something tangibly productive.

    Insofar as dollars are concerned, those who control the value of money matter more than the dollars. In the short term, how one spends ones currency matters to the extent that currency has worth. Currency is an agreed upon convention that represents the exchange of goods and services. The value of currency changes these days at any give second. Ask a day trader.

    Economic viability to some degree depends upon how, where, why, and when a dollar is circulated. Like water, it is the flow or current that makes the money currency. This part describes the actions of the consumer. The support to which you refer which includes spending in ones own community, so that the dollar turns over several times rings true on the surface. However it lacks the most important component, on which it is dependent… That component is PRODUCTION.

    The importance of production cannot be understated. Without it, one only has a “bill of goods” to show for that which has been consumed. It makes little sense if the consumer buys from a store where there is no sustainable means of production to support that store.

    For example, if you by from a community clothing store which is not supported by community tailor and seamstress, who are not supported by those who process the fabric, who are not supported by those who produce the raw materials, then the spending done at the community store is limited to only how many times the currency is circulated within that community.

    However, if the community controls those aforementioned means of production, not only does it enjoy the wealth generated by circulation at the micro economic level, but also at a macro economic level because it allows the community to trade with other communities whose goods and services are different, thereby enriching the independent wealth of the communities involved.

    It also entices the communities to improve their independent commercial values through research and development of processes and materials, resulting in new better quality products, intellectual capital and collective wealth. In brief, it makes the quality of individuals of the community and the community itself better because of the actions required to be more productive. Otherwise we are all working for what the system lords allow, an allowance and nothing more!

    The better quality of production makes the members worthy of trust and support the community and to other communities.

    While I agree with you in part that “Consumerism is a disease in the modern day society,” I disagree with you that “it’s this consumerism that cause more hardship on others worldwide as they toil away in sweatshops, gold and diamond mines, saturate the earth in the toxic by products of oil production etc.”

    I believe that it has more to do with the unstable emotional and mental mindset, composed of greed, egoism, and lack of empathy that causes the oppression along with the manipulative inventions of racism,(which includes the misnomer of “so called whiteness” to describe some Humans and encourages the designation of other “so called races”), royalty, (which includes the invention of the concept that a group is better by virtue of which vagina they exited at birth or which seminal canal their ‘XY’ chromosomes exited to fertilize the ovum), and exceptionalism which allows such collectives of individuals to declare lies regarding scarcity of resources so that those resources can be hoarded and dispensed at their whim while de-Humanizing the remaining population with oppressively authoritarian measures which endanger not only life and limb, but also breaks the spirits and confuses the minds of its victims.

    I highly suggest reading the article supplied in the initial email along with the “Port Royal Experiment”. (see link below)

    The experiment was designed to be doomed for failure from the start. Other than the fact I find it ludicrous that very few question the validity of why the offender should determine the recompense for the offended party, the “forty acres and a mule” experiment failed by design. I find it interesting that fewer question the failure of the experiment.

    I also highly recommend “Black Men, Young Dangerous and Obsolete” by Haki Makkabuti.
    His renders some invaluable observations, analysis and advice concerning productivity and the means which individuals can become productive.

    Port Royal Experiment (1862-1865) | The Black Past: Remembered and Reclaimed
    http://www.blackpast.org/aah/port-royal-experiment-1862-1865

  2. I am really happy to have read and listened to some of this work…really liked the Ball and Bismarck-cobham (?) interviews. The Economics of transformation is what i am most interested in…am always amazed of the lack of discussion by our so-called bright lights on production, of our literacy minus a numeracy…people don’t seem to know who Arthur Lewis is, what he theorized, why he was awarded a Nobel, why he was wrong to say that the plantations were ‘modern’, etc., I better stop….

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