Opinion Editorial | |
| Wednesday, February 12, 1997 | |
Laws, Taxes Hinder Black AdvancementBruce Bartlett
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February is Black History Month, when school children learn about the contributions blacks have made to society and culture. One of the more neglected areas of black history is the black contribution to business. Recent research, however, is filling this gap.
In the Autumn 1986 issue of the Business History Review, Professor Juliet Walker of the University of Illinois detailed the significant economic achievements of blacks even in pre-Civil War America. "Antebellum blacks," she wrote, "developed enterprises in virtually every area important to the pre-Civil War business community, including merchandising, manufacturing, real estate speculation and development, the construction trade, transportation, and the extractive industries."
According to Walker, the greatest black entrepreneur of this period was William Leidesdorff. Born in the Danish West Indies, Leidesdorff moved to San Francisco in 1841. There he built a hotel, opened an import-export business and established both a lumberyard and a shipyard. When he died in 1848, he left an estate valued at $1.5 million, making him then one of the richest men in America.
Other black entrepreneurs included Stephen Smith of Philadelphia, who accumulated a $500,000 estate in the lumber and real estate businesses; and Albin and Bernard Soulie, brothers who left a half-million-dollar fortune made as brokers and investors in New Orleans.
Walker goes on to list 21 blacks with wealth of at least $100,000 before the Civil War. To put these numbers into perspective, remember that the price level has risen more than 18 times since 1850, so $100,000 then would be worth about $2 million today.
The history of black entrepreneurship since the Civil War has been examined by Professor John Sibley Butler of the University of Texas in his book, Entrepreneurship and Self-Help Among Black Americans (State University of New York Press, 1991). Butler notes that many black entrepreneurs based their businesses on inventions that they made themselves. He lists several pages of known 19th-century black patent holders, including inventors of the lawn mower, golf tee, locomotive smoke stack, railway signal, street sprinkling apparatus and even ice cream.
Among the greatest black inventors were Elijah McCoy, who invented critically important lubricating devices for machinery; and Granville Woods, who made great improvements to steam boiler technology and the telegraph, as well as invented a device that made the trolley car possible. Woods has often been called the "Black Edison" for his many inventions.
Butler makes the important observation that the reason why 19th-century blacks were so adept at inventing is because slaves were the ones who actually worked as laborers, engineers and builders. Hence, Butler writes, "they were more likely than anyone else to come up with ideas of how to improve an object or develop an invention."
Unfortunately, the vibrancy of black entrepreneurship of the 19th century was largely snuffed out in the 20th. Precisely because blacks were such successful competitors, less talented whites contrived to pass "Jim Crow" laws that constrained blacks' ability to compete. Labor unions also organized to exclude blacks and prevent skilled black carpenters, masons and machinists from plying their trades.
It is important to understand that the black businessman was not primarily oppressed by the market or even racism, but by government. Without the power of government to enforce and institutionalize racism, the market does not discriminate. Money and profits are the great equalizers. That is why modern-day barriers to entrepreneurship, such as licensing laws and taxes, do far more to restrain black economic advancement than lingering racism.
Bruce Bartlett is a senior fellow with the National Center for Policy Analysis.
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