Black Economic Empowerment: Private vs. State Initiatives | Print Version
by Harry Valentine*
Le Québécois Libre, October 15, 2013, No 315

Much of the history of slavery between the years 1500 and 1900 involved blacks being drafted into forced servitude, many of them having been captured and sold into slavery by rival black African tribes. While slavery prevailed, the ongoing development of tools steadily increased the productive output of slave labor.

While slaves were often brutally treated, some slave owners maintained the health of their slaves to enhance resale value. Technical developments such as the hand-crank operated cotton gin allowed two slaves to deliver the daily output of 50 slaves working by hand. The foot-treadle driven mechanical sewing machine allowed a single slave to sew the same amount of maritime sail as 100 slaves who sewed by hand. As slave owners invested in technology that raised the productivity of manual labor, they began to sell slaves.

As a glut of slaves appeared in some regions, the price of slaves went down. Granting slaves freedom and allowing them to work as free people became a viable option compared to the cost of housing and feeding redundant slaves. One notable American former slave named Booker T. Washington taught himself how to read and write and opened the Tuskegee school where he taught other freed slaves reading, writing and numerical skills. Prior to the end of the 19th century, a percentage of former slaves and their descendants had become entrepreneurs and business owners, an example of private, self-initiated black economic empowerment.

However, the economic advancement of even a small percentage of American blacks elicited a response from a certain percentage of the white population, who chose to attack black-owned businesses and black people. Perhaps the spectacle of black people becoming much like white people in terms of achievement and income provoked envy among some southern US whites. In his treatise entitled Theory of Envy, author Dr. Helmut Schoeck defines envy as an insidious emotion intended to inflict harm on people so as to prevent them from being able to achieve, or benefit from the fruits of their achievement.

There was a period in American history where a percentage of the black population achieved advancement based on their willingness to acquire an education and apply that education along with personal initiative toward some productive end. Similarly, in pre-apartheid South Africa, a percentage of the black population who had worked as laborers on white-owned farms acquired land of their own and began to operate their own farms. But the insanity of South African apartheid robbed them of their farms, which were turned over to new white owners.

Government Empowerment Programs in the USA

The first government program aimed at black economic empowerment began in the USA when President Lyndon Johnson instigated his great war on poverty. Government bureaucrats were under pressure to show results that Johnson’s program was achieving its intended objectives. Academically successful high school students from challenged economic backgrounds who attended schools in poorer neighbourhoods became eligible for scholarships to attend colleges and universities. Within five years of the program’s introduction, political agitation made unwed mothers eligible for government welfare assistance.

Prior to Johnson’s great war on poverty, fewer unwed black American women became mothers than unwed white American women. During that same period, most adult black American men were gainfully employed. Some 50% of black America made the transition into the middle class between 1960 and 1980 (Peter Drucker – Innovation and Entrepreneurship). However, within a decade of the introduction of easy welfare, birthrates among unwed black American women had increased drastically, as did the crime rate in inner city black American neighborhoods.

The African Experience

During the colonial era, native Africans served as a workforce and a portion of the population gained access to the British and/or European style of formal schooling. As African nations gained independence, educated African leaders who were well versed in Marxist economics came to power and administered centrally-planned economies. In his treatise entitled Africa Betrayed, Ghanaian born professor George Ayittey details how post-colonial African leaders actually destroyed viable African economies. As a result, Africa has practically nothing to show in terms of original technical invention.

A very obscene form of black economic empowerment occurred in Zimbabwe when political agitation compelled white farm owners to surrender their farms to black supporters of the government. Many farm owners and their families, along with black farm workers, were killed as supporters of the government forcibly seized the farms that were then turned over to government friends. Productivity on Zimbabwean farms subsequently plunged as a result of new black farm owners having little knowledge about agriculture or the treatment of farm workers.

Lesson from History

The early black American entrepreneurs achieved their success independently of assistance from a nanny state seeking to nurse them and change their diapers. At the time, such assistance was nonexistent and trade was part of the cultural history of African people. Successful black-owned businesses that began on private initiative and free from state assistance operated across the pre-civil rights USA and across much of post-colonial Africa. These businesses included retail, transportation, trade, repair services, grooming services along with communications and media.

Despite post-apartheid South Africa having introduced a policy of compulsory black economic empowerment that requires business owners to hire black employees, a system of private black economic empowerment also prevails in South Africa. In several large South African cities, cosmopolitan women’s business networks mentor women who have an interest in becoming future business owners. There are numerous success stories of South African women having started businesses on their own initiative, duplicating the initiative and success of the early post-slavery black American entrepreneurs who started businesses.

Various forms of failed black economic empowerment include the American welfare state, state socialism across sub-Saharan Africa and the Zimbabwean farm confiscation program that has yielded the same result as nationalization. The result has been a high rate of unemployment and underemployment among Africans and also African-Americans. Almost all of the manufacturing industries that operate across Africa are foreign-owned. While legislation that requires companies to hire based on a racial quota may win votes, it may also discourage foreign industrial investment and the new jobs that may otherwise have become available.

* Harry Valentine is a free-marketeer living in Eastern Ontario.