The 3 C’s of Economic Development
My initial blog posts here have been attempting to identify problems and lay the foundation for my thinking about what comes next, while the big solutions are in my book (available on this website). However, even if you don't read my book, I'll begin to bring all of these ideas together in more specific solutions-oriented strategies as we go along. So if you're at all interested in Black economic development, please follow along and sign up for our email list on the homepage of this site to stay updated and see how you can help.
First, let's talk about what economic development really means at a high level, and how this relates to the global African Diaspora in general, and the African American community specifically. The general definition of economic development is the process by which the economic well-being and quality of life of a nation, region or local community are improved. In essence, the goal of economic development is self determination. Many people lose sight of this but when you hear it, it is immediately self evident.
Why do most people want to be "rich?" At the core, most people want to be financially free to pursue their interests and desires and take care of their family rather than work a meaningless job just to get by. They want self-determination. However, beyond individual freedom, people who consider themselves part of a community and/or culture want to see the entire community prosper as well. After all, only a supreme asshole wants to be living lavish on a luxury yacht while the majority of his/her people suffer needlessly. We would at least want our friends and family to be free from financial stress. This is why a lot of Black people who "make it" end up going broke, trying to take care of too many people without a sustainable financial plan to do so.
Economic development deals with individual and collective economic outcomes. My view is that there are 3 core principles that drive a successful economic development strategy, which requires a COORDINATED and COOPERATIVE effort driven by a strong CULTURE.
We have to learn how to trust each other and create a web of small, medium, and large economic links in our communities. As I’ve stated many times before, wealth inequality is even worse in the Black community than the general population. It is clear that we can’t count on wealthy Black individuals to lead the charge on this, considering that they have historically been very conservative when it comes to taking risks and giving back in meaningful, impactful ways. Equally difficult is organizing the masses, but it must be done. Cooperation is key.
This means a lot of people pooling small contributions together, which will help us tackle wealth inequality. Whereas Jay Z could do a $100M deal on his own, we would need to organize 100,000 people to put up $1,000 each to reach that level. This is not easy to do, but with the latest advances in fintech, it is much easier than it was even 10 years ago. The Tulsa Real Estate Fund proved this at a very small level, but that's just the start.
If we stop at one tiny $10M fund, we will go nowhere fast. The world moves in billions and trillions. The problems we face require billions and trillions to solve. Even a billion-dollar fund isn't enough. We have to start mobilizing tens and hundreds of billions if we want to tackle these issues this century.
This cooperation would be accomplished primarily through investment clubs, cooperative businesses, buying clubs, equity and debt crowdfunding, and non-profit foundations funded by many small donors instead of large corporate donors and high net-worth individuals. I'm actually working with a company now developing a solution for investment clubs, which will be ready to launch this year, so stay tuned by signing up for the email list here.
A decentralized, informal network of cooperative organizations is critical for creating economic resilience in our communities, but, as we've seen over the past century, simply making investments and building wealth isn't enough. Sure, it helps individuals and small groups, or even neighborhoods and communities, but it doesn't advance the culture or the African Diaspora community as a whole because there is no overall guiding strategy or goal outside of pure financial motives and conspicuous consumption. Building wealth is not the goal, just a means to an end.
Without coordination, you see individuals, firms, and organizations making a bunch of random moves that make sense for them based on their individual investment strategy, but not in the overall grand scheme of things. This is Adam Smith's famous invisible hand at work. For example, a hip hop artist starting yet another premium liquor brand without partnering with the plenty of other Black-owned brands that already exist or thinking about vertical integration throughout the supply chain. That artist may make money in the short term, but what good will that do anyone but him and his immediate family? How will he deal with getting squeezed by suppliers and distributors without a coordinated network of other Black-owned companies in the industry cooperating at every level from the farm growing the barley or grapes all the way to the bars pouring the drinks?
Or what about a Black private equity company that focuses on companies in the logistics or IT industries? Many white-owned PE funds have done this and have been successful. Black funds can copy these strategies and also be somewhat successful, but they will be limited by access to capital and may find themselves pigeon holed chasing after "minority" business opportunities or smaller niche markets. Why? Because they have to be twice as good to go half as far as their white-owned peers without the backing of major financial institutions and consumer markets. They have no competitive or comparative advantage simply mimicking their white-owned peers.
If you get backed into a corner as an individual, you have no backup and nowhere to run.
Now imagine that same PE fund still focusing on logistics. But due to a coordinated global effort throughout the Africa and the Diaspora, they now have access to 10 times more capital through networks of Black investment clubs, endowments, and sovereign wealth funds in Africa, as well as public private partnerships with several West African governments that need to upgrade their logistics networks to meet increasing consumer demand due to the growing middle class in their countries. Furthermore, they've also partnered with Black-owned trucking and bio-fuel companies in Africa and the Caribbean, providing them with logistics software and services. And when competing for these contracts, they don't have any competition from "traditional" PE funds because of coordinated efforts between Black leaders and heads of state throughout the Caribbean and Africa providing first priority to Black-owned companies and funds.
We need leaders with INTEGRITY at national, regional, and community levels to coordinate various cooperative economic development initiatives towards a specific set of outcomes guided by a vision for African people around the world. We have to imagine the world we want to live in, design solutions to achieve that vision, and then develop strategies and tactics to implement those solutions.
Last, but most important, these directives must all be guided by a common culture, and this is where we lose a lot of people. Because even though I use the term Black and African American, it's deeper than that, and most of our skinfolk have been thoroughly indoctrinated with European culture and values. There are plenty of "Black" people and "African Americans" that will have no parts of any of what we're talking about here. As the saying goes, "skinship ain't kinship." This is ultimately about advancing African culture and values. Too many of us are too far removed from Africa in our minds, and a great re-awakening will need to occur for them before they can be useful.
Some people might say, "well Africa is a big continent with a lot of different cultures." At first glance, maybe, but when you dig deeper you find a core set of values/beliefs that are pretty consistent across the continent (not including some parts of Northern Africa). Most people reading this won't know the difference between European and African culture, which is a problem, yet understandable. For more on this read pretty much anything by Chancellor Williams, Marimba Ani, or Mwalimu Baruti and go down the rabbit hole to determine your own conclusions.
I'm not going to get into a debate about which cultures are superior, as I am not an idealist and my argument is more pragmatic. Strong cultures generally drive strong economies, and European culture evidently does not serve the interests of African people, and therefore, cannot be the basis of a strong economic development strategy. There are good examples already within the Diaspora community of strong cultures driving economic development, namely Jamaicans and Ethiopians.
Just look at virtually all immigrant communities who are able to survive and often thrive in hostile environments because of cooperation, coordination, and a shared cultural values. Virtually every immigrant community in the United States has been able to do this. So-called African Americans are unique in that our culture was literally beat out of us, so we've pieced together some semblance of a cultural identity within the confines of America without fully committing to it; metaphorically standing half in and half out of America...truly African Americans.
If you do not have a strong cultural identity, it is much harder to think about the collective good ahead of your own, which is necessary to even begin to overcome the divide-and-conquer strategy that Europeans have been using against Africans for centuries. Without culture and a proper African-centered re-education, nothing we do will solve the underlying problems we face as people who've allowed ourselves to be oppressed and marginalized for so long.
What do you think about the 3 C's of economic development? Did I miss anything? Post your comments on twitter, fb, or instagram and tag @intheblack2050