Black Economics - Black Economics and Business News

What is Black Economics?

A working definition

Black Economics is a field of study and discussion in social science blending elements of economics, social science, Black history, Black culture and politics. The goal of Black economics is to support the prospering, achieving, flourishing, and living up to the full achievement of the potential of Black people while maximizing Black happiness in society. The field covers Black wealth, jobs, income, and wages but also policy and politics. But it also includes labor economics, discrimination theory, and government intervention in markets.

Black Economics is most of all, positive, and affirmative ideal. It emphasizes Black unity, cooperation and Black culture. Black economics is built on top of basic economic ideas but with a heavy focus on issues affecting Black people in the real world. The closest embodiment of the guiding princioples of Black Economics is the principles of Kwanzaa.

Classical Economics

Black economics is built on top of classical economics. Classical economics is the study of scarcity, resource allocation, and the mechanisms of economic systems. Basic economic theory was developed during 1770’s with the publication of Adam Smith‘s “Wealth of Nations” and others. Many other economists and philosophers contributed, such as Mill, Say, Pigou, Ricardo, and Hume.

It is important to remember that when basic economic theory was developed, the field of “Economics” did not exist. Instead many of the concepts were theories created by philosophers trying to figure out how the world worked. Education was a privilege of the rich. Education was limited and self-taught by educated White men of means.

During the 1880’s industrialization spread thought the UK, Europe and the United States. “Robber-Barons” dominated US industry as they built railroads, steel plants, oil companies and the auto industry. Enter Karl Marx (and Engels) who said that labor create wealth not financiers. “Workers should own the means of production.”

Marx’s political ideas which were translated into government control of the economy for “the benefit of the people.” It led to authoritarianism, corruption and economic stagnation. Except China, helped by the US, did not get stagnation.

Modern Economic Theory

In 1936, John Maynard Keyes‘ published the “General Theory.” Keynes said that markets were political creations and government should intervene when times were bad, like during the Great Depression. The government should create demand when needed.

In 1980, Milton Freidman published “Free to Choose,” the seminal work of free market (libertarian) economics arguing that governments role in a market economy should be limited. His ideas were to later be called neo-liberal (conservative) or “hands-off” economics. His basic ideas have dominated US economic policy since 1980 (Reagan).

The last era of political economy is neo-liberalism or “free-market” economics. Also known as “US Style Capitalism”. In US capitalism, you get a market economy, democracy, guaranteed rights and personal freedoms, but also inequality and a weak social safety net.

The world has embraced US capitalism as the best way to deliver material prosperity and basic human rights.

This is the environment Black Economics confronts today.

Black Economics Today

Black Economics takes few departures from classical economic theory, but instead applies them to the situation of Blacks in the US and around the world. It uses many different fields such as labor economics, finance, and cooperative economics. Black economics applies mainstream economic theory to the situation of Black people in the real world. The Major emphasis of Black Economics is on changing public policy and private consumer behavior to benefit Black people.

Economics and Race

When you discuss Black Economics you must also discuss race. “Race,” is a social construct and does not biologically exist. We can all procreate with each other since we are the same species. Throughout history, “Tribe” not race was the social marker. The Romans knew tribe but not race. Race was invented in the 1700s to justify colonialism and slavery. And worse developed into the theory of eugenics and White supremacy that we all live with today.

Race is also rarely featured idea in mainstream academic economics. It simply does not exist. The field of economics is one of the Whitest and malest of all academic fields. Worse, many of the most important economic ideas were developed during the time of colonialism and “scientific racism.” It was during this period of colonialism that many of our current racial theories were developed that continue to permeate society. Large-scale racism did not have a large impact on the economies of nations until the 1700s. After which, race and ethnicity became one of the defining features of a modern economy in the US and later the world.

So what is Black Economics in practice?

Black economics is a collection of social science ideas and concepts linking the fortunes of the Black Diaspora with economic success and happiness. Many of the ideas are similar to Kwanzaa: Elevating black culture, supporting community, practicing cooperatives economics and long term thinking

The central, unifying idea of Black Economics is: What would society and the economy of a society look like if we wanted to maximize Black happiness? What might be different? What would change? How would we get there?

Black Economic Topics

There are many varied and interesting sub-topics included in Black Economics

There is one area of pure economic research that Black Economists focus on called “Stratification Economics.” It is similar to the legal concept of Critical Race Theory. Stratification Economics says that racism is baked into economic and political institutions in society which structurally limit Black success and prosperity. And then how do people behave under such a system? And what are the outcomes?