COMMENTARY: The American Economic System Works Just Fine—for White People

By Jerome Love, Special to the Houston Forward Times

For the past four hundred years, and most recently after the brutal killings of George Floyd, Breonna Taylor, Rayshard Brooks, and other Black citizens by police forces in America, Black people and progressive Whites in America have protested that “the system” is racist, broken, and needs to be fixed.

By the system, I mean the machinery of daily life that we as individuals use to work, play, raise our families, worship in our churches, educate ourselves, and stay healthy. The police are part of the system. The schools are part of the system, as is health care, and politics.

As President of the Texas Black Expo (TBE), my primary interest is the economic part of the system—the creation and growth of Black-owned business enterprises. You’d think that such an effort would be greeted with universal approval from everybody, regardless of ethnicity. What could possibly be wrong with strengthening the economic position of Black businesses—and therefore Black families? Don’t we believe in capitalism, free markets, and the positive power of entrepreneurship, regardless of the color of the entrepreneur?

By building businesses, you create jobs; and with jobs comes greater community stability, lower crime rates, better health, and overall prosperity.

We believe in taking action. During the COVID-19 pandemic, TBE had the goal to support 100 businesses by providing 1,000 grants to help them. To announce the program, we put out a press release. You would think this would have been celebrated—and it was, but not universally. Immediately we were bombarded with complaints from various White people who called us racist. They said, “What if there was a White Expo? Wouldn’t that be terrible? So why is there a Black Expo?”

I found myself wondering, what’s the problem?

The “problem” is that every Black entrepreneur is bucking the system. Over the past four hundred years, our economic system has been deliberately designed to perpetuate the material interests of White Americans by subjugating Blacks—first when we were slaves, and then after we became citizens. The police are simply one piece of the apparatus designed to enforce the economic system and interests of Whites. According to Dr. Gary Potter, professor at the Eastern Kentucky University School of Justice, the first centralized police departments were formed in the 1830s as a direct response to “disorder” as defined by commercial elites. In other words, wealthy White Americans formed police departments to protect their economic interests, and anything they deemed a threat was considered “disorderly” or criminal. Today, as far as many white people are concerned—not all of them, but many—the current economic system works just fine. It accomplishes what it’s been designed to do, which is to ensure the protection of the economic interests of White Americans and the long-term suppression of Black wealth.

Welcome to the Casino

Here’s a story that illustrates how the system works.

A busload of people from a Black organization take a day trip to the local casino. They are eager to enjoy themselves playing the slots. They walk into the casino, filled with the whirring of slot machines and the bright flashing lights and sirens from the jackpot payouts. The group members sit at the slot machines and play. Sure enough, as the hours pass, a few of them win jackpots—a few dollars here and there. One or two might even win enough money to come out ahead. When their friends see they’ve won, it makes them think they could win too, so they pump more tokens into the machines. But as a group they’re losing money. At the end of the day, while a few of them will walk out of the casino with more money than when they came in, the overall result is that the wealth of the group has been diminished and transferred to the owner of the casino.

A few members of the group complain to the owner. They knock on his door and demand the system be changed. He listens and smiles politely.

“I appreciate how you feel,” he might tell them. “We will take action to adjust our machines to be more generous. Thank you, and please come again.”

The group, poorer but wiser, has no choice but to go home.

Of course, the owner does nothing. The casino stays the same. From the owner’s perspective—the person who has the power to enact change—the system is working fine! It is perpetuating his interests. The system was designed for the casino to make money. He will promote the fact that you can win big, and encourage you to participate; but ultimately, the owner will not change a thing, as he created the system to build his wealth. He knows that while a few individual players will make money, the group as a whole will lose money.

If you were a member of that group, appealing to the owner would be ludicrous. In your mind the system is broken because you lost. In his mind, the system is functioning properly. He won’t tell you that the system is designed to take your money; he’ll just smile and be polite as he shows you the door.

For Many, the System Works Perfectly

In this same respect, our economic system is not broken at all. It is operating quite well. It is only broken and in need of repair in the minds of those who are taking a loss.

All the components of the system—the police, the schools, the healthcare system, the government—continue to play an integral role in ensuring that this overall mission is accomplished. The numbers prove it.

In America, more than half a century after the passage of the Civil Rights Act of 1964, Black households have far less wealth than their White counterparts. As the Brookings Institute reported, in 2016 the net worth of a typical White family was $171,000, while the average Black family’s wealth was $17,150—roughly one-tenth as much. This figure includes wealth in the form of home ownership; in 2016 only 41.7 percent of Black families owned their own homes, as opposed to 72.2 percent of non-Hispanic Whites.

So, what’s the problem? Why do we see this disparity?

The truth is that for generations, the system has either violently or subtly suppressed Black wealth. From 1619 until 1865, we were in bondage. After the Civil War and emancipation, Reconstruction became nothing more than “reconstruction of oppression.”

Discriminatory policies throughout the 20th century included the New Deal’s Fair Labor Standards Act’s exemption of domestic agricultural and service occupations, allowing Black workers to be paid low wages. The G.I. Bill of 1944 was designed to accommodate Jim Crow laws and benefited few Black veterans. Redlining ensured that Black families could not get mortgages. The net result is that 150 years after emancipation, Blacks are still denied full access to the tools for building wealth.

Know the Author

Once we come to the realization that the system is not broken and is working to perfection to perpetuate wealth inequality, we can begin to ask more critical questions, such as, “Who designed the system? Why was it designed?”

As hip-hop legend KRS One once said, “If you don’t know the history of the author, then you don’t know what you have read.”

In America, too many of us don’t know the history of the author—the owners of the casino, or wealthy White men. We’ve been taught false narratives of peaceful men who believed in liberty and justice for all. The history has been intentionally distorted, and thus we assume that something is wrong when we see blatant inequality. From our perspective the system is broken, but from the perspective of the wealthy elites, who are disproportionately White, the system is working just fine.

Thus, it is understandable how New Orleans Saints quarterback Drew Brees could say, in regard to Colin Kaepernick and many others taking a knee during the national anthem, “I will never agree with anybody disrespecting the flag of the United States of America or our country.”

He’s on the side for whom the system works well.

Economic Empowerment is the Only Cure for Wealth Inequality

In 2004, I started the Texas Black Expo, Inc. Then and today, the goal is to create wealth within the Black community. Our methodology is to build strong businesses. And yet we encounter opposition from people who believe that economics is a zero-sum game. They believe the economic pie is of a finite size and cannot be increased.

Therefore, if Black people earn a larger slice of the pie, then the portion received by White people will be reduced. This has long been the argument for the continued suppression of Black wealth. The ruling class says that if “they” get more, then “we” get less. This argument is absurd.

Wealth can be created, and the size of the pie can increase. Over the long term, our national economy steadily grows, creating more wealth. But since the 1980s, the biggest share of new wealth has gone to the people who are already wealthy. The top one percent—almost exclusively White—has gobbled up a bigger slice of the growing pie. And yet people object to efforts by African American entrepreneurs to build Black wealth.

What they say reminds me of the story of the two houses.

Once there were two homes next to each other. One was a beautiful two-story red brick home with a three-car garage and a pretty flowerbed out front. The other was a modest one-story home with a white picket fence and an old garage. One day, the one-story home caught fire. The firefighters arrived, pulled out their hoses, and began to spray water on the one-story house to contain the fire. As the firefighters were spraying water, the owner of the big two-story house came out of his front door and yelled, “That’s not fair! Why are you pouring water on their home and not on mine? I pay taxes, and I should get some of that water!”

Sounds ludicrous, right?

But that’s exactly what it’s like when White Americans complain about programs such as Affirmative Action, or organizations like Texas Black Expo that are focused on solving an existing problem. It is the epitome of selfishness to ask a firefighter to douse your home with water when your home is perfectly fine. With the understanding that the economic system was created to benefit wealthy, White Americans while oppressing minorities, including African Americans, by locking them out, then expecting those who benefit from the system to change it would be as silly as asking the casino owner to change the rules so that you have a better chance at winning. It’s not going to happen, which leads to two conclusions.

1. Protest is good, but it’s no substitute for political action. I strongly applaud the millions of peaceful protestors who have raised their voices in support of change. Thanks to them, we have seen some positive results. Minneapolis banned use of choke holds; Dallas adopted a “duty to intervene” rule that requires officers to stop other cops who are engaging in inappropriate use of force; in Maryland, a bipartisan work group of state lawmakers announced a police reform work group. All of this is wonderful and is to be commended, but while the overt brutality may be reduced you still have a system that is not functioning on behalf of all people. Many entrenched white politicians are immune to protests. They simply don’t care how many people take to the streets, because demonstrations eventually fade. We need to use the power of the ballot—from the local city councils up to the presidency of the United States—to remove regressive politicians and elect people who understand, and want to fix, the inequalities that deprive Black families of wealth.
2. African Americans need to take action and build our own economic base. We know it is unlikely that those who benefit from our oppression will do anything to help unless it benefits them economically. So, while Black people can lobby and do our best to work the system in our favor, it’s an uphill battle, and ultimately we are not in control.

What do we control?

We control how we spend our money. We need to be strategic in supporting our own businesses and building our own communities independent of the current system. This will allow us to create and control our own economic destinies, as well as provide resources needed to influence the overarching racist system that still exists.

Let us remember the words of Dr. Martin Luther King, Jr., who in 1965, at the Sermon at Temple Israel of Hollywood, said, “We’ve been in the mountain of hatred long enough. It is necessary to move on now, but only by moving out of this mountain can we move to the promised land of justice and brotherhood and the Kingdom of God. It all boils down to the fact that we must never allow ourselves to become satisfied with unattained goals. We must always maintain a kind of divine discontent.”

As a nation, we have many unattained goals, but by keeping a spirit of divine discontent and working together, we can create prosperity and justice for all.