[This is the text of a presentation on black capitalism sent in late 1980 to over a hundred black leaders in New York City.  They did nothing with it then.  Perhaps someone will now.]

December 11, 1980 

To: Black Community Leaders, Organizations, and Press

Re: "Harlem, Inc."/"Black America, Inc."

Gentlemen:

For years various currents of political, social and economic thought have been mixing and interacting in my mind, stewing for an answer to the grave problems of the black poor in the United States, and after much delay they have come together in a synthesis I think may be of value.

Problem

How to lift poor blacks out of hopeless, dehumanizing poverty and into the socioeconomic mainstream.

Considerations Qualifying Any Answer

 — Decades of public-assistance programs prove that you can't give people much of anything: they have to work for it to feel that they deserve it, for having earned it.

— Revolutionary solutions, like simply seizing white-controlled businesses in the black community, are impossible, and are rendered pointless by the attitudinal block above, anyway.

— Blacks with managerial and entrepreneurial skills and work habits too often feel alienated from blacks stuck in slums, partly from embarrassment and disgust, partly in fear of falling back, and partly out of concern for losing everything they have to arson, theft, or riot.

— The private fortunes of even the richest blacks individually could make little impact on a problem the size of the Nation's slums.

— Black capitalism alone in its traditional manifestations runs up against the same resentments as white capitalism: the feeling that those who have, get; those who haven't, don't; and anybody with money is the enemy of anybody without.

Countervailing Hopeful Considerations

— The size of the potential economy is huge.

— The number of people potentially to be drawn into any scheme is also huge.

— A program that could reduce any one investor's exposure to reasonable dimensions and could draw large numbers of well-to-do blacks into an ultimately profitable venture might well find adequate backing.

Essential Elements for a Solution

— It must appeal to racial pride and sense of self of those to be helped.

— For those who might help, it must offer a "hardheaded business consideration" as to permit superficially callous and cynical "street-wise" types a "cover" for throwing themselves into a socially useful activity.

— It must assuage the guilts of middle- and upper-class blacks who have done little for poor blacks.

The Solution

Establish a for-profit corporation with a social conscience, the goals of which are to buy up businesses both within and outside black communities and channel their profits into only-marginally-profitable ventures such as housing in slums, job-training programs, etc. Provide over-the-counter stock offerings in the most literal sense: sell shares of stock for 25 cents or 50 cents, $1 or $5 apiece at candy stores, supermarkets, banks, etc., as well as the more traditional outlets. Introduce profit-sharing, stock-ownership plans, labor representation on the management committee, and similar motivational programs in all the black-staffed businesses bought or opened, and work to give everyone affected a stake in the success of the Corporation.

At first, Harlem, Inc. — and it would be fitting to start with this Nation's shining black jewel, the black capital of the United States — should solicit funding from the black rich and middle class. Sports millionaires and show-business millionaires would on investing be both able and, by virtue of self-interest, most decidedly willing to lend their fame and prestige to all subsequent offerings. And a large portion of the black middle class can afford to put a few thousand dollars apiece into such a venture because they would be spared the huge personal risk that opening their own individual business in Harlem might entail. But black community organizations and churches should also buy in, thus to gain a voice in the direction of the Corporation and ensure that it cannot be perverted into just another means of exploiting blacks, even if this time by blacks. All the pillars of the black community, from the churches and newspapers to the banks and radio stations, should be solicited to come up with venture capital. And always the message should be hammered away: it may be true that each of us has little, but together, 25 cents or $25 apiece, one day at a time, day after day, year after year, we have enormous resources, and with those resources, enormous power over our own lives.

Since it is probably not lawful to restrict stock ownership to blacks alone, and since nonblacks also have money that could be used for black purposes, solicitation for initial venture capital should also be sent to notorious white "do-gooders". You should be willing to take anybody's money if it will help your people. But you should endeavor to make sure the largest chunk of your stock is NONvoting and that most of the nonblack money goes into nonvoting securities.

It might be possible to take a lesson from the Indians and seek from federal and state governments a new status for black slums: URBAN RESERVATIONS, with community councils parallel in structure and purpose to the Indians' tribal councils. This would be a further step in maximizing community participation and community control over the resources of black neighborhoods. Though this may seem far-fetched, if one looks at the very considerable wealth which some Amerind tribes have fallen heir to and the way they have been able to assure even distribution to all members of the tribe, something like it might well be worth the trouble. After all, there is some validity to the comparison of black slums to "colonies", and "anticolonial autonomy" for such "colonies" may well make considerable political hay.

As visualized, Harlem, Inc. would fit in perfectly well with the Reagan Administration's idea of urban enterprise zones. Harlem, Inc. (or Jamaica or Watts or The Hough, Inc.) could turn a liability, geographic concentration by virtue of discrimination elsewhere, into an asset: an economic power base. In some cases, Harlem, Inc. may choose to recondition housing and help present tenants establish affordable cooperatives or condominiums. In other cases, that will be unworkable by virtue of current tenants' inability to pay, and long-term ownership by the Corporation will seem the best thing.

The Corporation should be prepared always to lose money here while making money there, as long as the overall financials provide enough profit to maintain Corporation projects and expand the Corporation's scope. The Corporation may want to use some of its money to buy significant blocks of stock of companies impacting on black employment in the larger economy, to use that stock ownership to pressure such companies for more hiring, promotions, and job-training programs for blacks, be it thru quiet, behind-the-scenes discussions, installation of blacks on the boards of directors, or noisy, publicity-seeking agitation at annual meetings.

Activities

The Corporation should hold as its ultimate goal the ownership by blacks of every building, store, vacant lot, and local business in Harlem not already owned by blacks. It should also, as a broad-based, publicly owned enterprise, encourage voluntary mergers of capital-poor small businesses — and even major enterprises — that are black owned, into Harlem, Inc. Further, it should endeavor to create new businesses to serve the special needs of the black community.

But what to buy first? Certain types of businesses spring immediately to mind: security services (guards), sanitation (private carting), pawn shops and loan offices, insurance agencies and an insurance company, savings and loan associations for urban mortgages, talent agencies, private and technical schools, housing, to name a few. Each enterprise should contribute to certain programs open to employees of all Corporation businesses, for instance, a mental-health clinic, group insurance plans, bowling and softball leagues, an employees' newsletter, etc.

The Corporation should both buy going concerns and start up businesses or housing. It should try many approaches to each field it seeks to enter, and evaluate the results and problems of each against each other.

The Corporation should be pragmatic and open to multiple ideologies, not dogmatic and narrow. For instance, if one faction in management thinks the prime difficulty in housing is exclusion from white neighborhoods, buy an apartment house in a white neighborhood and open it to blacks. If another faction wants greater integration in currently black neighborhoods, buy an apartment house in a black area and set aside 25% of apartments for whites, balanced by 25% set-asides for blacks in buildings in white neighborhoods. If another faction thinks it imperative to prove that an all-black neighborhood can be just as good a place to live as a white or integrated neighborhood, buy or build good housing in the heart of Harlem. If yet another faction thinks the real solution to the ills of black housing is to give tenants a financial stake in their apartments, create cooperatives or condominiums and arrange financing that will allow poor people to buy in; or undertake aggressive urban homesteading with Corporation loans.

Similarly, there are many ways to approach the problem of motivating people to succeed in their jobs and lives. Exclude no approach that seems to offer any real hope. Employ industrial psychologists, provide mental-health services, offer stock ownership or profit-sharing, organize staff associations, recreational programs and substance-abuse self-help groups, pipe in music to work areas, establish awards banquets or cash/travel incentives — and try different combinations of motivational programs in different businesses. Then watch the results and try to replicate elsewhere success achieved anywhere.

There are many approaches to every problem, and no one solution will work in all places, with all people. Experiment.

If you can draw in the rich and famous early on, they will have a substantial motivation to lend their ability to attract media attention to publicizing Corporation projects and gaining the confidence of potential investors in all segments of society.

What's in a Name

A name like "Harlem, Inc." has a number of advantages: it's a headline-size title for newspapers, magazines, posters and other forms of publicity; it calls attention to itself and pretty much tells what its intentions are; it appeals to the conservative rich in corporate circles because it rings of "Japan, Inc.", sounds solid and corporate, and impresses one with the admirable working-with-the-system approach of "black capitalism"; it impresses militants as forthright and unashamed; and it's neither cumbersome (e.g., "Corporation for Amelioration of the Black Condition in Disadvantaged Neighborhoods") nor cutesy, with some contrived many-worded title to fit some predetermined acronym (e.g., WORK, JOBS, SELF, etc.). Should the Corporation wish to extend its work beyond Harlem, it could possibly continue to use the overall name "Harlem, Inc." without offending local people or could establish subsidiaries bearing local names. This approach could work either with or apart from the nationwide corporate parent, e.g., "Black America, Inc." ("Watts, Inc. — A Black America Company").

Summary

Whatever its name, the Corporation should choose sufficiently broad purposes in its incorporation papers as to enable it to act in fields as diverse as banking, housing, and education. If some of these should require separate corporate entities (e.g., a bank holding company), they should be identified in unambiguous ways as to show the tie to Harlem, Inc. (e.g., "Harlem Group Bankshares Corporation").

That pretty much concludes my presentation. I give this idea to you to do with as you will. You can run with it or throw it into the nearest wastebasket. I hope you'll run with it.

Money is power, and if blacks can establish a corporate structure whereby small amounts of money from great numbers of people can be gathered together, the economic power they could thereby create would be enormous. That, after all, is the idea behind capitalism: "I don't have enough money alone, but if you and I and some other people pool assets, we can accomplish something." Make the most of greed and altruism both, by creating a black-owned and black-dedicated multipurpose corporation. I think it can work. Call it "people's capitalism", "social capitalism", "black capitalism" or something else. But do it.

Cordially, L. Craig Schoonmaker, Chairman

P.S. I'm not black, but I do have a (very) few bucks to invest in such a venture if you should decide to try. Keep me in mind.  [Top] [XP home page]

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