Wall St. Journal and Business Wednesdays: E- Letter To Daniel Altman And The New York Times Re: Young Blacks Try Entrepreneurship

Your article, "Young Blacks Try Entrepreneurship" appearing in yesterday's edition, is yet more evidence supporting the widely-held view that The New York Times is this country's "paper of record". As you probably know, the story goes that if somehow, someway, if the world ended tomorrow and other intelligent life in the universe were to live on the Earth, centuries from now, they could, supposedly, read what was written in the archives of The New York Times to find the best record of what happened in our time.

You deserve a tremendous amount of credit and attention for tackling this subject of emerging Black entrepreneurship, even though, admittedly, empirical or "official" evidence supporting your thesis may not have been readily available at your fingertips. Congratulations, you are demonstrating the fact that sometimes the best evidence is anecdotal and not "empirical" in nature, as many argue. Of course, if the United States government, economists and journalists, in particular, paid better attention to Black America you would have all of the empirical, even official evidence you could possibly handle.

While I was pleased to see your article and am happy to know that our website, BlackElectorate.com, by linking prominently to it, helped to make the article a subject of conversation yesterday, on Black talk-radio, and in circles inside of the global Black community - in the Americas and Africa - I just wanted to send you a note to help you think more deeply about the subject of Black entrepreneurship, the next time you consider taking it up.

What made your article so timely, at its core, was the clear inference, contained within it, that essentially it is only the law of "self-preservation" - activated by dissatisfaction, ambition and the desire for fulfillment that forces human beings to do what is best for themselves. Indeed, social conditions, in many cases, have the effect of compelling human beings to do what they were naturally created or "born to do". In the most difficult of situations human beings find their purpose; heed their calling; accept their mission; find themselves - whatever one may call it. The journey outward ultimately encounters a moment of decision and perceived opportunity or necessity that causes one to drive inward and bring out the best (and sometimes worst) of themselves. Black professionals in corporate America are experiencing this, as your article clearly shows. They are thinking more about themselves. And in light of the Black experience in America and the complex of Black inferiority (and its twin White supremacy), this is a positive development.

According to information that we received last week from the office of Congressional Black Caucus Chairman Elijah Cummings (D-Md.), Blacks have lost 433,000 since President Bush took office. The corporate layoffs and rising unemployment in Black America, that are in the backdrop of your article, are certainly one of the factors absolutely forcing Black people, not just professionals, to bet on ideas and take risks in business - for themselves.

But there are other factors that your article does not address that are essential to providing the clearest picture on the subject, in my view. I lay a few out briefly, below, knowing that volumes have, and still can be written about each of them.

Population Size And Politics. Many people wonder why it has taken Blacks so long, en masse, to begin or accelerate this pronounced movement toward entrepreneurship. A credible answer can be found in the study of population and politics. Demographics show that throughout history, whenever there exists an oppressed population, that population usually selects between two choices for relief and empowerment - entrepreneurship and politics. And the selection of either of the two options is usually determined by the size of the discriminated group. The larger the size of the population the more they tend to see politics and the power of the ballot as the best option. The smaller the size of the group, the more likely they are to bet on entrepreneurship as the avenue to take in order to improve their relative position in power and wealth (please allow the various ways that people define these two terms). Blacks, because of their relatively large population size, as a minority group, to no surprise, bet on political activity late in the 19th century and were persuaded (many believe "tricked") into an embrace of full social and economic integration in the 20th century. You should read economist Reuven Brenner's classic, History - the Human Gamble to see an excellent study of this phenomenon as it relates to minority groups who have been discriminated against throughout history. He provides evidence of an inverse relationship between politics and entrepreneurship among discriminated populations and concludes: "...when members of an oppressed group perceive that they can choose between gambling on the redistribution of wealth through the political process and gambling on individual effort, then the greater the size of the minority and its potential political power, the greater the probability that the first strategy will be chosen. In other words, expectations for redistributing wealth through the political process lower the supply of other entrepreneurial acts." In an opinion that dovetails with this, Steven Silbiger, author of The Jewish Phenomenon in conversations with me, has repeatedly linked a draining of the spirit of Black entrepreneurship, as taught and embodied by Marcus Garvey, with what he refers to as Black America's "embrace of government activism". It is only now that Blacks are beginning to unwind their "bet" on politics and government to redistribute wealth in this country. (The call for reparations from the government may be the last phase of this "political-oriented bet"). The pendulum is beginning to now to swing in the direction of entrepreneurship. It really is appropriate to view the presence of Blacks in corporate America as a political event - as that result was one of the stated aims of the civil rights era and the integration movement. I have mentioned to several of my closest Black political professional friends that they should liken the exodus from corporate America by Blacks that you note in your article, as a precursor, sign, or prototype of an upcoming exodus from the Democratic Party that I have predicted (for 3 years) will begin (to be led) in 2004. Of course nothing happens in a vacuum so any "beginning" has to be considered in context. But it is my view that by the end of next year, the political leader, whom I believe has already appeared among us, will have begun to definitively lead Blacks out of the Democratic Party. I have my own private thoughts on who that individual (and the group that accompanies he or she) will be. But I do not for one moment believe that it must to be a Democrat. Nor do I believe that this person, even at this late hour, confidently holds a determined idea to "lead Blacks out of the Democratic Party". Rather, I believe a chain reaction is at work and a confluence of forces will emerge that will compel, persuade, or inspire this individual to "bet" on political realignment. This is another subject for another day but my point is that the shift toward entrepreneurship will eventually be considered as connected with a shift away from partisan politics as the estimated 35-40 million Blacks would have realized by the outcome of the 2004 elections that their bet on politics (as characterized by a disproportionate support of one political party over the other at the local, state, and federal level) has reached the point of diminishing returns and entrepreneurship and economics are worth more much more attention than they have received from the community's leadership. The premise of this argument is that Blacks have moved significantly awayfrom their most urgent self-preservation need as defined by the desire to be free of bodily harm from Whites, and the deprivation of civil rights; and toward a broader meaning which includes the desire for access to capital. The Black electorate's relationship with the Democratic Party today, like that with the Republican Party in the late 1800s is responsive to the former self-preservation definition while lacking in its relevance to the latter one, which takes one into fiscal policy, monetary policy, regulations, capital markets, banking, and entrepreneurship. The Republicans may be more responsive in terms of the latter but are still perceived as racist in many respects or at least less concerned with civil rights. The likely result is that Blacks will move toward the pooling of their financial capital in civil society and matching more of their talent and ideas with financial capital in America's equity markets, and then vote or engage the political process according to the enlightened self-interest represented by entrepreneurship.

Crime. The point that I am making about population size and politics is buttressed by the factor of crime. In fact, one peculiar aspect of Black America's relationship with the criminal justice system is an excellent microcosm of the aforementioned pendulum swing at work in Black America. That aspect is the peculiarity of felon disenfranchisement. Those who think that Florida is one of only a few places where felony disenfranchisement is a serious reality for Black should consider a recent article about the issue as it affects Blacks and Latinos in Nevada (one of 13 states where such laws are on the books). The following excerpt is from an article, "Nevada: Where voting is a crime" in the May 1, 2003 edition of The Las Vegas Mercury:

Nevada's ex-felon voting laws shaft people of color. One in four African-Americans in Nevada older than 25 is a former felon. Many became felons with a little help from Nevada's systemic racial profiling, which was documented by the Legislature's recent study of traffic stop data. The study showed that African-Americans are stopped at twice their percentage of the general population and are more likely to be handcuffed, searched and arrested than whites (despite data showing whites are more likely to be carrying illegal items). The study also showed that Latinos are targets of racial profiling.

Since Nevada goes out of its way to jail people of color, communities of color are being systematically silenced at the ballot box. Jim Crow would be proud.

When Blacks and any oppressed and discriminated minority group undertake entrepreneurial acts, these gambles take place not just in business, but in science, the arts, politics, and yes, in criminal activities. This fact should qualify or refine how Blacks are viewed, even stereotyped, relative to criminal activity. Much of the crimes that Blacks have committed in response to poverty and the economic contraction and decline in relative wealth that slavery and discrimination represent, are non-violent in nature and no different than those committed by many other ethnic groups that were discriminated against. The Italians, Irish and Jewish community, provide fine examples of this reality in America. But the fact that felons are stripped of their right to vote in many states only encourages or accelerates the exodus from politics (or corporate America which frowns on arrests and past criminal convictions) for Blacks, who are disproportionately represented in arrest and sentencing statistics. If a Black, particularly male, but increasingly female, can't vote or get a "good job in corporate America", as the political/civil rights paradigm advocates, then these individuals and the family members that love and care about them must then find or encourage an alternative. That alternative, in this scenario, is likely to be an entrepreneurial act. And, of course, there is the possibility, like with the previously mentioned ethnic groups, that criminal activities will finance legal entrepreneurial acts in the inner city by Blacks.

Hip-Hop. The previous point about the American tradition of criminal activities among discriminated minority groups financing entrepreneurial activities in business and the initial point about the pendulum swinging from politics to entrepreneurship in Black America can be seen very clearly in the microcosm of Hip-Hip culture. Please listen to the Boogie Down Productions classic, "Drug Dealer" (you can read the words here) rapped by KRS-One for a vivid and articulate expression of a grasp of this interesting American tradition as it may relate to Black entrepreneurship. In fact, it can be argued that Hip-Hop music was a gamble on the arts made possible by a community that had given up on politics and which bet on a criminal or "illegal" idea, if you will, in "sampling" pre-recorded music (that was copyrighted) in order to compose musical creativity that was again, copyrighted; and on rhythmic verbal communication over music as a means to inform and educate (Hip-Hop as "Edutainment", perhaps, as KRS-One stated; or "Black America's CNN as Public Enemy's Chuck D. opined?). Sampling largely grew out of the fact that Blacks had been stripped, denied or could not afford or effectively organize and distribute the intellectual capital of music lessons and training, nor instruments. Also, it is a reality that individuals who had earned financial capital through criminal acts - drug dealing, robbery, hustling, racketeering - had directly or indirectly funneled the proceeds into Hip-Hop music labels started by young Black entrepreneurs. It is very interesting to note that at a time that Hip-Hop culture has finally been accepted by corporate America and multi-nationals, the FBI and IRS and urban police departments are establishing task force groups to investigate the alleged criminal activity that is said to be a source of capital for entrepreneurs in Hip-Hop. Of course you can learn about this by looking into the recent controversy surrounding Murder Inc. records. You can also see it years prior in what BlackElectorate.com has written about the DEA-IRS-Houston Police Department investigation of Rap-A-Lot Records which eventually became the subject of Congressional hearings. Interestingly, it is Hip-Hop entrepreneurs like P.Diddy, RZA, Damon Dash, Suge Knight, Master P., Jermaine Dupri, and Jay-Z that young Black professionals have increasingly admired, not Black corporate leaders like Richard Parsons, head of AOL-Time Warner or Ken Chenault of American Express. One of the most interesting figures in Hip-Hop history and one of the most important, potentially, for the future of Hip-Hop is Russell Simmons, who is actually trying to lead Black entrepreneurs into politics. This is especially interesting as Russell Simmons is arguably the quintessential Hip-Hop entrepreneur. He is going against the trend and doesn't realize it, I think, but he is so sensitive to the power of culture that I believe he will eventually serve as a viable intermediary to the political exodus once he (and those who follow him) prove that a disproportionate focus on politics doesn't have the power to change the wealth distribution of the United States Of America. The result of Russell Simmons' efforts, with the help of Dr. Benjamin Chavis, as chairman and CEO of the Hip-Hop Summit Action Network (HSAN) respectively, in the short-term, is a more enlightened interest expressed through politics for all youth in this country. Perhaps it is helpful to consider that if the Hip-Hop community is a microcosm of an "entrepreneurial" society, then Russell Simmons is actually responding to the possible state of diminishing returns of a disproportionate focus on entrepreneurial activity (in business and crime) taking place within the community. If the community and industry developing within the Hip-Hop genre is an excessively risk-taking population, then Russell Simmons' efforts toward politics can be viewed as a moderating or stabilizing force on this tendency and a maintaing of the wealth distribution that enables less arrests and criminal activity but perhaps, also permits less entrepreneurial activity in business. One could argue that his establishment-leaning position on such issues as music file-sharing and his close relationship with the RIAA and multi-national corporations deprives Hip-Hop entrepreneurs of the voice and agent that allows their commercial activities to remain respected and protected as business customs and not redefined as criminal activities.

Minister Farrakhan Every paradigm has an individual who shifts it. Of course there are those who are significant supporters and helpers. They, are referred to, in Joel Arthur Barker's classic, Paradigms: The Business Of Discovering the Future as "paradigm pioneers". In order to fully appreciate the Minister's impact I think you really have to think of him in unorthodox ways. For example, with the possible exception of his teacher, what other Black person in America, has inspired so many entrepreneurial acts in business while limiting so many in crime? Or, perhaps better yet, who else has been as influential in guiding "criminals" away from risk-taking (and in the process ending recidivism) on illegal activity, while channeling that same energy into bets on family life and responsible behavior? Perhaps, such an effort is one of the best working definitions of redemption. If one considers, or better yet, scientifically studies the public ministry of Minister Louis Farrakhan, from 1977 to the present, you will see the primary agent of this pendulum shift from politics to entrepreneurship in Black America. If you look at his speeches on economics from the late 1970s to the present and if you look at the words of entertainers in Hollywood and entrepreneurs in business (whether failed or successful) who have admitted that Minister Farrakhan’s words have been a source of inspiration for their innovations and a "do for self" mentality you will see an obvious calculation on a new paradigm - a bet on what Minister Farrakhan teaches that comes from deliberation, spiritual reflection and dissatisfaction with the status quo or a decrease in one's relative wealth. Interview his supporters, sympathizers, or followers for the best anecdotal evidence. Just like any paradigm shifter, the Minister has attracted intense hatred and love. I always look with interest at the hardened reactions or strident opinions that many have regarding the Minister that miss the point of what it is that inspires or generates these intense reactions in the first place - all toward one human being. In short, it is the enormous implications of whether or not the Minister fails or succeeds in his mission that is close to the root of why he is so loved and hated, admired and feared. But if one can calmly look at his relationship with the Jewish political establishment, his relationship with the Black political establishment, the magnitude of the Million Man March, and his popularity among leading Hip-Hop artists, just for starters, it should not be too difficult for any reasonable person to conclude this one man's position is certainly in between two paradigms, at least. More broadly, however, Minister Farrakhan's message that Blacks should "do for themselves" and pool their collective resources and start businesses - delivered over six different decades; that they should "hold their vote" and not give it to a political party unless they respond to an expressed black self-enlightened interest; that faith in God and the exercise of Black unity, and not politics (or government) or a "good job" represent salvation and success; that Black criminals can be redeemed and become tangible factors of power after convictions and serving sentences; and that the broken Black family (think of how historically important families have been as the first source of capital for an entrepreneur) must be repaired are all significant elements contributing to the seemingly accelerating rate of Black entrepreneurship. In keeping with my view expressed here, it is not insignificant that this influential man was/is a musician (an artist rather than a politician) and in a sense, left the religion of custom for his people (Christianity) and "took a chance", so to speak, on Islam. But for historical context, and a clue to the implications of the enormous paradigm shift at work, elements of what Minister Farrakhan teaches, and the time in which he delivers them, mean that he is ultimately "finishing" what Marcus Garvey, Booker T. Washington, W.E.B. DuBois, the Honorable Elijah Muhammad and Malcolm X are credited by historians as "beginning", in the context of the evolving Black decision to choose entrepreneurship over politics (as I have outlined it here).

Certainly the role of institutions like Black Enterprise magazine and the models provided by Oprah Winfrey, Robert Johnson, and even Johnnie Cochran and Willie Gary cannot be underestimated but I think most mainstream publications have considered this already. I think that if you looked at these four factors: population and politics, crime, Hip-Hop and Minister Farrakhan you would have the key to many ground-breaking insights for your continued coverage of the rise of Black entrepreneurship. It may not be politically-correct or orthodox but why would you let those pressures get in the way of good reporting and accurate witness-bearing? The New York Times is America's the paper of record, right?

Keep up the good work.

Sincerely,

Cedric Muhammad
Publisher
BlackElectorate.com
http://www.blackelectorate.com/

Wednesday, May 7, 2003

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The views and opinions expressed herein by the author do not necessarily represent the opinions or position of BlackElectorate.com or Black Electorate Communications.