How is it that so many foreigners -- Asians, West Indians and others -- can come to this country and quickly join the capitalist mainstream while black Americans languish on the outside?
It is a question that has launched countless cocktail party arguments and produced countless explanations that don't quite explain: the U.S. government helps those foreigners into business, or they get off the boat with trunks full of money, or they are ruthless exploiters . . .
Charles E. Tate, who has given the matter a lot of thought, offers a simpler explanation. "Outsiders look at the American system as an almost unimaginable opportunity, while black Americans have almost an aversion to capitalism."
There may be good historical explanations for that aversion, says Tate, the newly named president and chief executive officer of the Booker T. Washington Foundation, a nonprofit agency devoted to improving the economic position of minorities. "From economic exploitation to red-lining to our kids selling dope, we see so many examples of how capitalism has hurt us, and that may be part of the explanation."
Another part may be that blacks have been inclined to think of economics in the same distributional terms in which we think of legal rights. "Economic justice," we call it, evoking an image of blacks at the bar, petitioning for their fair share of economic success.
"But that isn't how it works," says Tate. "We have effectively used the combination of education and protest as the linchpin for achieving social and economic status in America. Yet, the major driving force of the American system is enterprise, and we don't use that tool. We don't even consider it as a tool for our economic development."
As a remedy for that flaw, Tate and BTW have launched Enterprise America, a combination economic education and economic development approach for spreading the gospel -- and the techniques -- of free enterprise.
Two problems in particular must be overcome, Tate believes: the governmental approach to minority enterprise and mutual mistrust that prevents blacks from pooling their resources in economic ventures.
"The enterprise process has to involve more than just the entrepreneur," Tate said in an interview at his Washington headquarters. "It must also include investors, backers and a lot of other folk. The government's minority business approach doesn't leave room for that. Its emphasis is on the individual entrepreneur and -- again, the distributional mode -- on delivering a 'fair share' of government contracts to minorities.
"But it does not solve our problem to allow a few cronies of public officials to make half a million dollars, or even a million. Think of all the cities that are being rebuilt. How much of that redevelopment includes blacks in an equity position, as opposed to just getting a few small contracts? That's not economic development; that's only getting a little bit of the action after the deals have already been shaped by white people."
The other key problem, he says, is that blacks have so little experience in joint economic undertakings that they tend to mistrust each other. "I tell you about a business opportunity that could work if we could get 10 guys to put up $10,000 apiece for a 20 percent equity stake, and you want to know what I'm trying to pull, or what white people I'm fronting for."
What BTW hopes to do, he said, is to create a "deal-making system, both to educate our people about shaping deals and to work against that mistrust-distrust barrier. We hope to become a surrogate for a number of small investors, holding an equity position and representing and protecting the interest of other people who would never be in the deal otherwise. We would line up the financing, the lawyers or whatever, and by working through local councils in the cities where the deals are being done, make it attractive for people to come in for maybe $1,000 each.
"We would find the opportunities and then make it possible for doctors, teachers, postal workers to come in. Unlike the government approach, you wouldn't have to run the business in order to make money out of it."
A few successful deals produced by such an approach -- particularly with a trusted institution like BTW as the accountable agent -- could serve the dual purpose of encouraging other deals and also increasing the knowledge of how deals are put together.
As Tate observes, the problem isn't the absence of resources in the black community, but a reluctance to participate in the capitalist system.
If he is right, Enterprise America could be an important part of the solution.