This year marks the fifty first year anniversary of LBJ's "War on Poverty," a flurry of "Great Society programs designed to pull up millions of poor folks which, prior to 1965, accounted for no less than one fifth of the country's population at any given time. At the time, the poor, much as now, came from all walks of life. They were Black and white, rural and urban, Spanish speaking and English speaking, male and female. In 1964, Congress passed the Economic Opportunities Act which created the Office of Economic Opportunity. Some of the major programs funded during Johnson's Administration were Medicare, Medicaid, Food Stamps, Head Start, VISTA and Community Action Programs, as well as the Elementary and Secondary Education Act (ESEA) which provides federal funding for state and local school budgets. It is commonly known that before the Civil Rights Act of 1964, the US Black Community, comprising about ten percent of the entire US population, had a poverty rate of about 55%, more than twice that of the national average. The legacy of the War on Poverty is to have permanently reduced that number while leading to a series of further legislation that ultimately created a Black middle class in the US even as the overall middle class was in decline. Judged this way, Johnson's efforts were a stunning success in many ways.
The poverty rate has fluctuated significantly since the mid-1960s when Johnson's anti-poverty programs were passed. By 1965, the poverty rate was already in decline from its peak in the late fifties of nearly a quarter of all Americans to just above 15% when the War on Poverty got under way in earnest. Part of the reason was the economic recovery from the steep recession in the late 1950s. The national poverty rate bottomed out at roughly 11% in the late 1990s with the booming economy and the creation of nearly 23 million jobs during the later half of the Clinton Administration than rose again with the Bush recession of 2001 and later the crash and recession of 2008. The poverty rate rose to its highest levels since the early 1980s recession in 2011 before starting back down again with the job market recovery which by now has added over ten million jobs since the first quarter of 2010 when non-farm payroll employment bottomed out at well under 130 million workers. The Great Society reforms, along with the Civil Rights Act of 1964 were instrumental in creating today's Black middle class in the US. They not only tore down the color bar in employment and other economic opportunities but provided various types of assistance to the Black Community in educational, job training, financial and occupational opportunities which helped to lift the community out of poverty, particularly in American cities.
In the years immediately leading up to the Civil Rights era (roughly 1954 to 1975) Black poverty in America was stood out as a glaring social problem. According to one 1949 US Census Report cited by sociologist E. Franklin Frazier in his famous book Black Bourgeiosie (New York: The Free Press, 1957) nearly 52% of all Black households had an annual income that fell below $500. (Frazier, 51) The US Commerce Department reported the median income for all US households that year as $2,700! Before Johnson era reforms median annual black incomes were commonly understood to be roughly half of white incomes. But much changed over the course the last fifty years. In 2011, just as the US job market recovery began to take off in earnest, the US Census Bureau came out with this report; From 2002 to 2007, the number of black-owned businesses increased by 60.5 percent to 1.9 million, more than triple the national rate of 18.0 percent, according to the U.S. Census Bureau's Survey of Business Owners. Over the same period, receipts generated by black-owned businesses increased 55.1 percent to $137.5 billion. Remarkably, the Census Bureau report concluded that though only around five percent of the nearly two million Black owned business had paid employees, still those that did employed more than 920,000 workers with a payrolls of nearly $24 billion and earned total receipts of nearly $99 million.
All this represented phenomenal growth over the course of the Bush era business cycle expansion, a cyclical upturn that economists of the Washington DC based think tank, the Center for Budget and Policy Priorities has judged to be "...with respect to GDP, consumption, investment, wage and salary, and employment growth, the 2001-2007 expansion was either the weakest or among the weakest since World War II." Most interestingly, the distribution of employer run firms by employment size of firm didn't much differ between the Black owned firms and the national average; for example firms with four or fewer employees were accounted for by 69% of all Black owned firms while the national average for this category was 61%. Firms of fifty employees or more accounted for 2% of all Black owned firms while the national average was 4%. Though gaps still exist, they are closing for significant parts of the Black business community which is growing more and more. But even this success doesn't tell the whole story.
According to a more updated report by Black Enterprise, a journal of Black Business in the US, business growth is quite concentrated but overall as robust as the US Census Bureau report implies. Here is a report on the commanding heights of the American Black Business Community; "...[in] our most recent BE 100s report...you'll find that the 100 largest industrial/service companies generated combined annual revenues of $19.1 billion. This does not include an additional $7.2 billion in annual revenues generated by a separate list of the 60 largest auto dealerships, nor does it include the revenues of companies on additional rankings of the largest black-owned advertising agencies, banks, asset management companies, private-equity firms and investment banks. The nation’s largest black-owned company, World Wide Technology Inc., led by CEO David L. Steward, reported $5 billion in revenues—more than 10 times that of the companies on the original “Top 100” list combined."
In accounting for success, the author of the above piece makes some interesting observations which seem to imply that the struggle for racial equality has somewhat transitioned in recent times to one of class rather than purely of race, especially when one considers not just the concentrated nature of Black business success in America but the manner in which a large section of the Black entrepreneurial class has melded into the US capitalist class in general.
Alfred Edmond Jr. makes some quite stunning observations that deserve to be quoted at length;
It’s clear that over the past 40 years, black businesses have grown more rapidly and into a wider array of industries, from tech and food services to engineering and financial services, than at any previous time in American history. This is due in part to barriers to capital, corporate contracts and government contracts being lowered or eliminated by anti-discrimination legislation and equal opportunity efforts as a result of the triumphs of the 1960s Civil Rights Movement, and the subsequent election of African-American mayors in major cities in the 1970 and 1980s (most notably, Mayor Maynard H. Jackson, Jr. in Atlanta). Concurrently, and perhaps more significantly, was the ability of African-American entrepreneurs to move beyond marketing to only black consumers, as a result of legal and de facto segregation, to eventually compete in national and even international markets. Through the 1980s, the nation’s largest black-owned businesses were led by companies such as Berry Gordy’s Motown record company in Detroit and John H. Johnson’s Johnson Publishing Company (best known for Ebony and Jet magazines) in Chicago, which catered primarily to black Americans. Today, none of the 10 largest BE 100s companies target African-Americans or any specific ethnic market. The watershed event in this transition: the landmark $985 million acquisition of Beatrice International Foods by Reginald F. Lewis in 1987. The deal created America’s first black-owned company with more than $1 billion in revenues, while serving customers who were not only not African-American, but not American at all—nearly all of its businesses operated in Europe.
Beginning in the midst of the '90s era boom and gradually accelerating until the present moment, the Black business community broke through the various racial barriers that were the legacy of years of discrimination and segregation into the mainstream of the US capitalist class itself. Class is increasingly a more salient feature of social conflict in the US, even those that have an unmistakable racial component. The intensified police brutality and crisis in America's blighted inner city communities as well as the above average incarceration rate of young Black males is more a class issue than race. They remain poor and without opportunity as growing numbers of successful business people of all backgrounds cater to the affluent as the poor, Black, white and brown are left behind. This also appears to be a symptom of globalization when all barriers between countries, communities and peoples are breaking down to form a more basic global class divide between rich and poor.
Philosophy professor, Herbert Marcuse, a member of the Frankfurt School and intellectual mentor of activist and writer Angela Davis presciently noted that the American Civil Rights Movement would create a "Black Bourgeoisie" that would break off from the main portion of the US Black Community and join the general US capitalist class. In an interview with PBS, Frontline, Davis makes these remarks; "In a sense the quest for the emancipation of black people in the US has always been a quest for economic liberation which means to a certain extent that the rise of black middle class would be inevitable. What I think is different today is the lack of political connection between the black middle class and the increasing numbers of black people who are more impoverished than ever before."
The interview with Davis is fascinating because it transcends the usual discussion about whether we have a racial or class problem by looking at the overall economic context for the historic shift in race relations in America and the way in which globalization has divided the present era from that of the early Civil Rights movement. Davis notes that "transnational capitalism" has had a major differential impact on different parts of the Black Community in the US brought about by the structural changes caused by the gradual globalization of capital since the 1980s. Her observations seem to have be presaged by the transnationalization of some of the business capital originating in the US Black Community referred to above in the quote from BE Magazine. Davis notes that, "...it is extremely important to look at the predicament of black people within the context of the globalization of capital."
The socioeconomic polarization of the US Black Community we see today, more pronounced than in the US in general, is a result of the disappearance of higher paying jobs in the auto and steel industries in northern cities that destroyed the viability of the growing Black middle class in the 1960s and '70s as well as the collapse of the overall tax base necessary to sustain the spending so essential to effective consumer demand and well being in many US cities. As federal income taxes for the rich and corporations were radically cut back, many US urban communities were left vulnerable causing a sharp resurgence of poverty and unemployment. Fiscal crisis was the result along with crime and higher incarceration rates for inner city youth. This further polarized the Black Community giving what was essentially a result of the new class war the appearance of a growing overall racial gap.
Davis sees this as the result of the special impact on the US Black Community of late capitalism which, in her view, cannot save the Black Community or anyone for that matter. Her assessment of the current crisis and the racial and class components is summed up with these remarks;
"The de industrialization of the US. economy based on the migration of corporations into third world areas where labor is very cheap and thus more profitable for these companies creates on the one hand conditions in those countries that encourage people to emigrate to the US. in search of a better life. On the other hand, it creates conditions here that send more black people into the alternative economies, the drug economies, women into economies in sexual services, and sends them into the prison industrial complex...I think this is the real challenge for this era, which means we have to get away from a narrow conception of blackness. We can't talk about the black community. It's no longer a homogeneous community; it was never a homogeneous community. At one point, it did make sense to talk about the black community because we were struggling against the profound impact of racism on people's lives in various ways. We still have to struggle against the impact of racism, but it doesn't happen in the same way. I think it is much more complicated today than it ever was."
The complexity to which Davis refers in the interview is the class divide in the Black Community; one part has become more entrenched in poverty by the impact of late capitalism's hyper-mobility of capital across borders while the upper class of the Black community increasingly defines their interests with the mainstream part of the capitalist class from which it benefits through investment and marketing linkages. Sociologist E. Franklin Frazier, whose study of the "Black Bourgeoisie" spoke of the "social isolation" of the Black business class of the early post-WWII era, portrayed a highly ghettoized business class whose fortunes were tied to the rest of the segregated American Black Community. This was a class which, due to racism and the color bar, was thoroughly tied to the Black majority upon whom they relied for their economic success but from whom they were increasingly socially and culturally isolated as a consequence of their rising class position within the Black community. The Black Bourgeoisie therefore increasingly failed to identify with the majority of the Black working poor from whom they suffered a social and cultural estrangement. Thus, this class divide within the Black Community alienated the Black Bourgeoisie from many of those with whom they did business even though they were never able to link up with the white bourgeoisie with whom they aspired to assimilate.
Franklin's study portrayed a relatively impoverished, economically constrained and highly marginalized business community.
When the latest study of Negro businesses was made in 1944, it was revealed that the average volume of business of the 3,866 Negro businesses in twelve cities was only $3,260. The vast majority (90.5%) of these businesses were retail stores (42.5%) and service establishments (48%). Although Negro businesses are operated primarily for Negroes, the total volume of sales of food stores, according to the US Census of Business in 1939, was only $24,037,000 or less than two dollars for each Negro in the United States. (Frazier, 53-54)
Frazier would not recognize the Black Bourgeoisie today. As suggested above, many Black businesses form part of the overall capital stock of the American capitalist class. The divide today is not only a class divide within the Black Community but one that is more and more between the Black and white bourgeoisie on the one hand and the poor and working class on the other. Globalization has promoted a growing fusion of Black and white capital at the apex of the system much as it has created a transnational capitalist class out of the bourgeoisies from both the developed and developing economies that as a result now share a common political interest. The Black poor, suffering a legacy of racism, have it worse than the white poor in many ways but there is today nonetheless a class convergence at both levels of the American social hierarchy as there is in the global economy in general.
Writer Eugene Robinson, author of Disintegration: The Splintering of Black America, sees the contemporary US Black Community as bifurcating into two extreme categories he refers to as "the mainstream" and "the abandoned" or roughly speaking quite affluent and deep poverty. And though Robinson acknowledged that since the early days of the Johnson Administration reforms Black households with the equivalent of six figure incomes has gone from two percent to about nine percent (well above the national average) Black poverty is growing even faster. This is because as time goes on, more and more of the "rungs on the ladder of upward mobility" as Robinson puts it are missing. In the context of today's global economy, the War on Poverty, as Marcuse presciently expressed it, has created an unprecedented divide within the Black Community rather than allowing more and more African-Americans to ascend out of deep poverty. Climbing the ladder to success is harder and harder. This is "because so many rungs of that ladder are now missing", as Robinson puts it. Those missing rungs, such as an abundance of high paying, unskilled or semi-skilled jobs, affordable education and housing, a fast growing domestic economy and a large financially solvent middle class to ensure high levels of consumer demand, have all been taken down by the effects of globalization which has, among other things, bifurcated the Black community into polar opposite rich and poor classes with less and less in the middle. The more affluent merge into the general capitalist class while the poor become increasingly sidelined and vulnerable to the ravages of poverty.
In the view of America's elite the War on Poverty wasn't a failure at all. It succeeded at creating a sufficiently large Black upper and upper middle class to join with mainstream society and stabilize the system by removing, for a time, the vexing racial issue that threatened to make American capitalism increasingly untenable. Yet, the effects that late capitalism has had on growing numbers of working and jobless poor, both Black and white, is once again making US society untenable as a stable democracy. The War on Poverty removed the old style of US Apartheid by creating a new "Black Bourgeoisie" which is far more politically and economically functional for US capitalism than the Black Bourgeoisie of which Franklin Frazier spoke. This is especially true of the way in which the emergence of this class has helped legitimate a system still plagued by inequality, poverty and racial injustice that is increasingly of a class nature. It is therefore a good time for the poor of all communities to fight for a new War on Poverty; one that contains a socially just political agenda that rebuilds a multiracial, multicultural middle class. As we go into an election year in 2016 and witness the end of the administration of America's first Black president, we are reminded of the increasingly class nature of the American, and global, political divide. The time is now to build a new multicultural political coalition for an economic agenda to fight and win the class war for the ninety nine percent!