toward a black radical critique of political economy

8/6/2019 Toward a Black Radical Critique of Political Economy

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TOWARD A BLACK RADICALCRITIQUE OF POLITICAL

ECONOMY

T HE YEAR 1967 m ark ed a sea ch an ge inblack consciousness, beginning withblack labor. The long hot summer of '67 sawunprecedented black mass revolt, first inNew ark, New Jersey, followed by De troit,Michigan where the white working classjoined in. Not only tension-filled black innercities, but rural Black Belts were in a state ofmass uprising and organization. Tent citiesin Lowndes County, Alabama, Greenville,Mississippi, and other battle fronts of theCivil Rights Movement across the Southspontaneously sprang up. They provided theoriginal impetus behind Martin Luther King,Jr.'s Poor People's Campaign.

King had com e to a Ju ne 1966 rally atDetroit's Cobo Hall to help organize massworking-class support for displaced Alabamafarmers and their families, raising funds forfood, clothing, shelter, and importantly,land. He returned again to Cobo Hall in1967, this time from his and SCLC's (South-e rn Chr i s t i an Leade r sh ip Confe rence )Chicago campaign. Chicago was King's ini-tial foray into the urban North. UnlikeChicago, which was riven with conflictingpolitical agendas of the city's black leader-ship and run by an intransigent and wilymayoral boss, Richard J. Daley, the powerand political savvy of black organized laborin Detroit gave King a new appreciation ofthe importance of unionization for blackworking people. It would influence his deci-sion to participate in his last freedom strug-gle with striking sanitation workers in Mem-

by Lou Turner

segregated schools and housing, the strugglesof the black working poor to organize for bet-ter wages and working conditions, and thepower of black organized labor to form a newkind of solidarity and leadership for all ofthese struggles, began to emerge as a compre-hensive whole in King's social vision towardthe end of his life. Charles Denby, a native ofLowndes County and the worker principallyresponsible for bringing King to Cobo Hall in1966 and 1967, wrote at the end of 1967'ssummer of revolt, after returning from a tripto Lowndes County:

One would be amazed to see how those Negroes[in Lowndes County] have raised their conscious-ness along political lines in the past two yearsthrough their own self-activities and holdingmass meetings every Sunday night for the pasttwo years.'

T HE MILITANCY of '67 an d th e nati onalinsurrection sparked by the assassinationof King in 1968 would by the end of '68 con-front a new ruling-class challenge with theelection of Richard M. Nixon to the WhiteHouse, as well as the racist climate the elec-tion campaign that year brought in its wakewith the presidential candidacy of Alabamagovernor George Wallace. Because of theUAW (United Auto Workers) leadership'slong history of do-nothingness when it cameto fighting racism and upg rading black work-ers both in the plant and on the unionstaff,Wallace gained a foothold among some sec-tors of the white working class. This greatly


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As soon as I entered the building, I could feeland sense the tension. You felt like you were sit-ting among a jung le ofwild beasts and that ifyoudid not quickly transform yourself into a fero-cious beast or escape from this meeting, that youwould be caught and destroyed as soon as thisman got in the position to do it. You could seethese beasts putting fear or trying to put fear intoanyone who opposed Wallace Th en I felt,"This is fascism."^

As the vitality of the 1960s Civil RightsMo vement waned, its watershed reac hedwith King's assassination and the ensuinguprisings that swept the U.S. in 1968, a newstage of black labor militancy arose at thepoint of capitalist production relations. Alto-gether new forms of organization appearedin 1969 with the spontaneous creation ofblack caucuses in the industrial trade u nions,especially in the UAW. Am ong the signifi-cant labor actions these new workers' organi-zations initiated was a 1969 walkout to com-memorate King's birthday, one year after hisassassination. N ot only was this the first cele-bration of King's birthday as a working-classholiday, but the absence of black workersactually shut down production. At Denby's

Chrysler Mack Avenue plant, black workersstaged a walkout on the fourth anniversaryof the 1965 assassination of Malcolm X.Eight months earlier, black and white work-ers had walked out at Denby's plant over theassassination of Sen. Robert F. Kennedy,which came two months after a similar walk-out in response to the assassination of King.

IN MAY 1968, a month after the King assassi-

nation, the first black caucus, DRUM(Dodge Revolutionary Union Movement)was formed in response to the summary fir-ing of seven workers (five black and twowhite) at Chrysler's Dodge Main plant in theDetroit enclave of Hamtramck. The forma-tion of DRUM a month after King's assassi-nation demonstrated a notion that Denbyhad long held about the integrality of thelabor and civil rights movements in the con-sciousness of black workers. Militancy amongblack workers fighting discrimination in pro-

historian William F. Harris:After DRUM'S success, several other groups ofrevolutionary black workers sprung up in auto-mobile plants, among them FRUM at Ford andGRUM at General Motors. Later in 1968 thesegroups, whose leaders shared a pseudo Marxist-Leninist [i.e., Maoist] view of the world, cametogether to form the League of RevolutionaryBlack Workers.''

Another scholar of black labor historPhilip Foner, described the socioeconombasis of this militancy of the young urbapoor who entered Detroit's auto shops at thend of the 1960s:

The UAW itself estimated in 1969 that nearly 30percent of its members at Chrysler were tinder30, at General Motors 33 percent, and at Fordnearly 30 percent; the percentages of workerswith less than five years' seniority were 51 atChrysler, 41 at Ford, and 40 at General Motors.Late in 1967 and in 1968, a new element wasadded to these young workersthe hard-coreunemployed, dropouts from the ghetto schools.The New York Times of August 13, 1967, reportedthat the heads of the big three auto companiesand Walter Reuther were working with militantblack nationalists and that the "ptirpose of thealliance is coo per atio n in the preven tion ofanother riot." One result of the Detroit power

structure's sudden interest in the ghetto was theannouncement by the auto companies that theywould drop all "educational" qualifications foremployment, train ghetto people with govern-ment financing, and bring them into the plants.Several thousand young blacks actually werehired. They moved into the h ardest jobs, thefoundries, assembly-line work, and press work.None went into the skilled trades.*

The 1969-70 downturn in auto sales that trigered a series of layoffs of this very sam

cohort of young black workers was evidenof more powerful effects to come. Thdow nturn was one of several objective factothat conditioned the demise of the blaccaucuses movement.

The Ideological Turn & Industrial Purge ofBlack Labor, 1975-1983

THE SUBJECTIVE in ner contradic tion thspelled the end of the most revolutio

ary in-plant movement since the formatio


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production workers to the debate thenunderway in The Black Scholar on national-ism, separatism and Marxism.^ He reportedthat the black workers he spoke to about thedebate dismissed it as remo te from the irstruggles against the new onslaught that cor-

porate capitalism was then commencing tounleash upon labor through a thoroughgo-ing restructuring of industrial productionrelations. Denby tied this to the demise ofthe black caucuses, whose leaders ' confiationof a Maoist brand of Marxism with national-ism the Reutherite union leadership thor-oughly exploited (red-baited) to discreditthem in the eyes of black workers and sympa-thetic white workers.

D ENBY UNDERSTOOD, painfully, from wit-nessing the UAW's method of destroy-ing earlier radical caucuses, the conse-quences of the ideological pitfalls that led tothe demise of the black caucus movement onthe threshold of the most far-reachingrestructuring of capitalist production rela-tions in the twentieth century. In Marxiandialectics, the economic and the ideologicalare inseparable. Hence, the radical chal-lenge by labor to capital, spearheaded byyoung black workers calling themselves revo-lutionaries and the potential that it had toelicit support of rank-and-file white labor,had so threatened significant sectors ofindustrial capitalism that capital could notpossibly have regained its equilibrium with-out the aid of the union bureaucracy. Oncethe ideological battle waged by the unionleadership against this new worker militancysucceeded in discrediting and defeating theblack caucuses, capitalist restructuring com-menced its great industrial purge of blacklabor in the decade from the mid-1970s tothe mid-1980s.

By th e 1975 re ce ss ion , the fifth an dlongest post-World War II recession, industri-al capitalism understood that its gravestthreat lay in the revolutionary character ofthe black working class. Mass unemploymentof the black workforce and the alienation of

were, they were in actuality a refiection ofthe material realities of the period, if only asa mirror opposite of the preoccupation ofblack and white workers seeking to forge anew solidarity to fight the industrial purge oflabor and the union concessions that paved

the way for capitalist restructuring.The problem of growing black unemploy-

ment had also not been comprehended ade-quately by black intellectuals, even as it wasfomenting a new disaffected spirit amongyounger and deeper strata of the black work-ing class. It was a deeply alienated spirit. Nei-ther this new black militancy nor its intensealienation had developed to the point whereeither the youth themselves or radical intel-lectuals recognized the need to work outnew philosophic ground for the organiza-tional growth and direction of the post-civilrights black liberation movement. What grewinstead was the desire for more militantactivism and the idea that it alone wouldfoment revolutionary change.

T HE IDEOLOCICAL IN-FICHTING among vari-ous tendencies of the black liberationmovement was merely another manifestationof this new condition of black life and labor.Denby recollected that when such conditionsexisted back in the Depression and War yearsof the 1930s and '40s, and workers, blackand white, talked of revolution, it was thenon-revolutionary character of the Commu-nist Party that prevented one from actuallyoccurring. The turbulence of thel970s wasquite different because when the revolution-ary aspirations of the unemployed gotblocked, they became deeply disillusioned.Inside the factory, solidarity among blackand white workers became indispensable tofighting capitalist restructuring and theunion bureaucracy's concessions that pavedits way. What made the intellectual discus-sion about nationalist separatism the mostalienating of abstractions was that it came atprecisely the moment that solidarity among

black and white workers was needed to fightthe onslaught of restructuring.


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which was certainly not due to any lack ofmilitancy, was proof enough of that. AsDenby concluded of the period, "You can'thave a movement in the street that you canhave in the plant and [it's] nowhere in theplant now."' Something new appeared withthe capitalist restructuring that began in1974-75, throwing masses of black workersinto the unemployment lines, many of themper manen dy. The alienation of the workingclass had a new facepermanent unemploy-ment. By the end of the decade it also had anew nam ethe "underclass."

Capital & Race I:Poverty of the Theories of Poverty

T HE THEORY of th e black "u nd er cl as s"gained currency at the end of the 1970swhen at one and the same time the U.S.economy hit the depth ofits longest post-warrecession and when the economic disloca-tions of black inner cities disclosed a newsocial phenomenon, namely, recurrent blackmass revolt in a single locale, the black com-munities of Miami, Dade County, Florida.Two black social scientists attempted to for-mulate theoretical responses to explain theblack inner-city phenomena of permanentunemployment and social revolt. William J.Wilson's 1978 work The Declining SignificanceofRacev/SLS one of the first attempts to ratio-nalize the phenomenon of permanent job-lessness among African Americans in termsof a so-called new class formation he dubbedthe "underclass." Marvin Dunn, a Miami-based community psychologist, was soughtafter, at the time of the 1980 Miami rebel-lion, by the news media and policy-makersfor his sociopsychological knowledge ofblack Miami and the urban conditions thatbred the revolt. He later summarized hisf indings, in col laborat ion with formerNewsweek urban affairs editor, Bruce Porter,in a book titled. The Miami Riot ofthe 1980s:Crossing the Bounds (1984).

Despite tbe analytical differences betweenWilson's and Dunn's work, each shared the

Spli t labor market theory, in which aemployer seeks to pay one class (or race) workers less than another for the same woralso provided one of the logical presuppotions of a variant of "human capital" theoemployed by black neoconservative ThomSowell. The convergence of the "underclasthesis, split labor market theory, and thhuman capital concept formed the analyticbasis of Wilson's "declining significance race" hypothesis.

Bonacich's split labor market theory orignates in what she perceives as a need develop a theory "for variations in ethnantagonism."* Ethnic antagonisms, in hview, originate in the capitalist labor markeThe theory of a split labor market also arisfrom another need, according to Bonacicthe need for a "materialist" framework fsociological theories of racial and ethnconflict"one based on the assumption thmaterial interests frequently take precedenover ideas and ideals."^ Bonacich's theohas "two additional features." The first wdeveloped by Wilson, the second provideideological ground for Sowell in his deploment of the concept of human capital. Thfirst feature "proposes that class conflict witin ethnic groups may be critical to relatiobetween them Second, the theory prdicts that the class most overtly antagonistto blacks is white labor, not white capital.With capitalist production relations abstraced away, we are left with supply-side conceplike "underclass " and hu m an capital explain "What causes the disappearance work" and "the complex and changing reaties that have led to economic distress fmany A mericans. "' '

S O PERVASIVE is this supply-side bias theven a social democrat like Wilson insisthat there is noth ing p roductive to be gainby seeking "to assign blame" to a system rapacious capitalist accumulation tbat bproduced the greatest economic disparibetween wealth and poverty in U.S. historOn the other hand, so rooted in the assum


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facile adherence to his methodological as-sumptions. For instance, while NormanFainstein takes Wilson to task for exaggerat-ing "the economic differences among blacksand [minimizing] those between the races,"he nonetheless assumes the same standpointas Wilson. He cites a 1976American Sodologi-cal Review article by Bonacich'^ in defense ofhis critique of Wilson, apparently unawarethat Bonacich's split labor market theory wasthe basis of Wilson's Declining Significance ofRace, and that in both that article and herearlier 1975 article for the American Journalof Sociology she thanks Wilson for his "usefulsuggestions."

Bonacich's "central hypothesis...that eth-nic antagonism first germinates in a labormarket split along ethnic lines" fundamen-tally distances her from capitalist productionrelations and their inherent crises of accu-mulat ion. Her methodological locat ionmade it improbable that she would graspthat instability and crises in production rela-tions determine the variation in the charac-ter of labor markets, whether or not ethnicantagonisms are inherent in them.

Capital & Race II:The ory of the Wage Minimum

T HE IDEOLOGICAL RETROGRESSION o f t h eReagan era was one in which neo-Marx-ism and neo-conservatism became, in someinstances, barely distinguishable when itcame to theoretical attitudes toward raceand class. In the case of Sowell, the retrogres-sion was from neo-Marxist to neo-conserva-tive, reflecting the dual phenomenon of adeveloping black middle class and a deepen-ing black "underclass." What Sowell, then ayoung left economist, referred to in a 1960art icle for the American Economic Reviewas"Marx's 'increasing misery' doctrine"" cor-responds to the absolute general law of capi-talist accumulation that Marx reaches at theclimax of volume one ofCapital. The pauper-ization of the working class is not only theresult but the prevailing determinant of capi-

ell's theoretical affinity with him.Sowell begins with the difference between

classical political economists Adam Smithand David Ricardo on the question of whatconstitutes wages. What Smith called "real"and " nom inal " wages is the differenc ebetween the money workers receive in wagesand what they will actually buy in goods andservices. For Ricardo, real wages meant theamount of what Marx later called labor-power contained in the commodities work-ers received. Sowell distinguishes Marx'sconcept from his contemporary, the socialistpolitician, Ferdinand Lassalle's notion of the"iron law of wages," and follows by drawing afurther distinction between Marx and hisclose collaborator Frederick Engels withrespect to Marx's treatment of the "wageminimum" in Marx's 1847 critique of FrenchUtopian socialist Pierre Proudhon,Poverty ofPhilosophy. Where Marx observed that "thnatural price of labor is no other than thewage minimum," in a footnote to the posthu-mously published 1885 edition ofPoverty ofPhilosophy, Engels added the "corrective" tha"the fact that labor is regularly and on theaverage paid below its value cannot alter itsvalue."'''

I N DISTINGUISHING Marx's view from those ofSmith, Ricardo, Lassalle and Engels, Sow-ell nonetheless attributes a price determina-tion to wages that Marx had not, in order torationalize the tendency of the wage rate togravitate toward the wage minimum. Heargues that one of Marx's assumptions "is afalling price level with increased productivity,so that it is meaningful for [Marx] to speakof a fall in wages in money terms, as well as invalue terms, and to speak of a 'cheapening'of commodities."'^ According to Marx's gen-eral law of capitalist accumulation, greaterproductivity, through an increase in the pro-duction of relative surplus value, means lowerwages when generalized over the workingclass as a whole. It is the operat ion of this lawof motion of capitalist society that is responsi-ble for the creation of an unemployed sur-


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working-class income inequality subsists, it isthe direction toward which the wages of allAmerican workers tends.

Engels' revision of Marx's concept of thewage minimum gave the impressiononewhich apparently attracted Sowellthat therelative factors that Marx adduces could con-travene this direction, if not abrogate the gen-eral law itself. As previously noted, on Sowell'sreading, the absolute general law of capitalistaccumulation was conceived by Marx as a"misery index" to measure the rise and fall ofwages. The tendency of wages to gravitatetoward the minimum was however conceivedby Marx as the result, not as the cause behindthe formation of the reserve army of theunemployed and the expansion of the surpluspopulation ina the concentration and central-ization of capital. According to the absolutegeneral law of capitalist accumulation, anincrease in the surplus population is indepen-dent of the natural growth of the population.Marx found that "modern industry's wholeform of motion...depends on the constanttransformation of a par t of the working popu-lation into unemployed or semi-employed

hands. "'^ Each stage of capitalist productionhas its own law of population, making thesuperficiality of theorists of the "underclass"apparent when they fail to analyze criticallycapitalist production, and simply measureunemployment against census data. In con-trast to the insufficiency of demographicaccounts to explain the growing pauperizationof the working class, Marx argued that "Capi-talist production can by no means content

itself with the quantity of disposable labor-power which the natural increase of popula-tion yields. It requires for its unrestricted activ-ity an industrial reserve army which isindependent ofthese natural limits.""

Capital & Race III:The State and the Rise of Neoliberalism

EVEN A CURSORY EXAMINATIONof the Struc-

tural crisis in black economic reality inthe 1970s and '80s reveals evidence of a long

Over the long downturn, race has opera tedas a fundamenta l de terminat ion of the politica l economy of private and state capitalisrestructuring. Writ ing for the A. Philip Ran-dolph Inst i tute, Bernard Anderson providethe fo l lowing index of the i m p a c t of ther e s t r u c t u r e d U.S. e c o n o m y on the blackwor king class:

The accumulated residue of past unemployment: "The black unemployment ratewas 1.89 times higher than that of othersat the depth of the 1981-82 recession,but was 2.14 times higher in early1986four years after continuous eco-nomic growth!"'^

Displacement: "Fully 5.1 million adultworkers were displaced by plant closingsor employment cutbacks during 1979through 1984. Black workers accountedfor 600,000 of the displaced workers,and Hispanics accounted for 300,000."''-'

Educational imperative: "Between 1970and 1984, New York lost 492,000 jobspreviously filled by workers with lessthan a high school edu ca tio n, a nd

gained 239,000 jobs requiring some col-lege. Philadelphia lost 172,000 jobs forthe less educated and gained 39,000 col-lege jobs; similarly, Baltimore lost 73,000jobs for the less educated, and gained15,000 requiring one or more years ofcollege.''^"

Growth of contingent work: "Nearly 3 ofevery 4 part-time jobs created between1979 and 1985 were filled by people

wanting full-time work."^' Aggregate result. "In summary, the dimen-

sions and pace of structural change inthe American economy have produced aloss of good jobs, falling incomes, andrising inequality. " ^

The A. Philip Randolph Insitute's reportdata provide further evidence that the over-whelmingly racial character of the economicdisloca tions from 1975 to 1985 is undeni-able. That the disproportion of black disloca-tions was accompanied by equally historic


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structural crisis in non-racial class terms."Neoliberalism" was, by the early 1990s, itspolicy designation, even as it assumed thebroad ideological form of a "colorblindracism." Disaggregating the particularities ofthe structural dislocations suffered by theblack working class from the broad generaldislocations experienced by white workingand middle classes allows us to draw morethe explicit conclusions that:

1. Because African Americans have high rates ofunemployment at all levels of education, edu-cation has not proven to be a panacea forblack income inequality.

2. Because the greatest class disparity exists with-in the black community, the gap widenedbetween the black poor and black middle classto the point where the income of the vastmajority of African Americans (85 percent)continued to decline while that of the top 15percent increased significantly in the Reagan-Bush-Clinton years.

3. Because blacks, especially black women, wereconcentrated in the low-wage service sector,where wage levels are close to the minimum,black wage rates were coupled to the decliningconstant dollar value of the minimum wage.

4. Black youth unemployment has assumed the

proportions of urban unemployment charac-teristic of the Third World.

W ITH THIS LEGACY of S tr u ct u ra l cri sis inblack economic reality inherited fromthe Reagan era, and its corresponding ideo-logical retrogression, political economicdebates among the two ruling-class partiesthe Democrats and the Republicanshasreally been a discourse about how best tomanage Reaganomics. The politicization ofwelfare reform that got underway in the Rea-gan era and that found its most draconianrealization a decade later in the Clintonadministration conceals an insidious state-capitalist logic, one tightly tied to the logic ofthe structural crises of capital and race.

The state was no less complicit than pri-vate sector capitalism in its policy interven-tions to meet the low-wage labor demands ofcapitalist restructuring. Since 1973, the num-ber of people who were on AFDC (Aid toFamilies with Dependent Children) stayed

under the impact of the structural disloca-tions from the mid-1970s through the 1980s,the caseload levels remained constant. So,whereas those families living below thepoverty line increased by 41 percent, i.e.,from 18.3 to 25.7 million, between 1973 and1985, the tightening of eligibility require-ments made it so that only half of the poorcould qualify. Moreover, benefits failed tokeep pace with the price increases of goodsand services. So, al th ou gh the R eaganadministration boasted of low inflation, thereality was that it was sky-rocketing amongthe out-of-work and working poor. The realpurchasing power of welfare benefits fell byone-th ird, an d in some states like New Jerseyand Illinois by over 50 percent.

Tightened eligibility requirements coupledwith the Depression-level purchasing power ofbenefits were the administrative vise that com-pelled poor women to seek outside work tosurvive.^'' Arguably, the many policy twistsadministered to the welfare system is evidenceof the system operating punitively as a regula-tor of what Marx called the reserve army ofthe unemployed, supplying capitalism with

workers for low-wage employment:When there is a shortage of workers willing totake low-paying work, government historicallytightens eligibility requirements to force morerecipients into the work force. The Work Incen-tive Program (WIN), which created workfare andtraining programs that compelled welfare recipi-ents to find jobs, was established in the fullemployment years of the late 1960s. ''

One reason that the Clinton administrationand the Republican-controlled Congresswould later find common cause in abolishingwelfare "as we know it" is due to the fact thatthe constant dollar value of welfare benefits,in the 1980s, had risen relative to the mini-mum wage, which had remained stagnantfor two ge ne ra tio ns . No do ub t "welfarereform" was the political mechanism bywhich liberals intended to demonstrate theextent to which they were capable of manag-ing Reaganomics.

Capital & R ace FV: Crisis of Accu mu lation


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CAPITALISTS measure the impact of techno-logical innovation on wages in terms ofproductivity and profitability. Fundamentalfor Marxist, on the other hand, was theimpact of technological change on the lot ofthe working class, whether in terms of dis-p lacement and unemployment , o r theimpact of these on the earnings and stan-dard of living of the working class. Capitalistsand Marxists each try to explain the causesof unemployment brought on by technologi-cal changes and economic crises in two ways.The first, or cyclical explanation, describes thesum-total of unemployment shocks as a con-sequence of the temporary or cycl icaldecrease in the demand for labor whichinduces capitalists to lay off workers tem-porari ly. The second, or structuralexplanation, describes these shocks as relatedto shifts in entire industries, regions, orurban areas which have changed the patternor structure of their demand for labor, forexample, deindustrialization in the Midwest,or the national expansion of the serviceindustry. Although displaced workers may be

retrained, or may migrate from one sector ofthe economy to another, working classunemployment rises.

While distinct, these explanations actuallycomplement each other, insofar as eachtakes account of the structural causes ofunemployment, only in different periods,durations, and to various but shared degrees.For example, while cyclical unemploymentaccounts for only a moderate share of the

fluctuation in un em plo ym ent, struc tura lunemployment:[A]ccounted for a particularly high share of theincreases in unemployment during particularepisodes, such as the mid-1970s and late 1960s.[I]t accounted for very little of the increases inunemployment in the late 1950s and the early

So volatile is capitalist restructuring that itsimultaneously creates unemployment insome sectors while increasing employmentin others. Thus the pattern and structure ofune m ploy me nt across var ious sec tors

faces a "no-win" situation under the impaof these structural shocks. Unemploymennot only increases in vulnerable industrieand sectors, but in so-called strong sectorCapital investment grows in those sectoand indus t r ies , even as unemploymenincreases in them. Over time the systemreturns to its equilibrium, the inequality oreturns on investment and productivi tbetween sectors having narrowed, and captal and labor having migrated to more "prductive" sectors.

T HE LOGIC of U.S. capital accumulation the 1980s and 90s, indeed, the motivtion and plan behind capitalist restructurinhas been the equalization of profit ratewhose tendency to fall got its historic imptus from the unprecedented "technologicrevolution" of the last two decades. Accoring to the late radical political economisRhonda M. Williams:

Marx's argument (and extension thereof) isstraightforward: capital flows from sectors withlow profit rates (capital-intensive sectors) toward

sectors with high rates (labor-intensive sectors).Market prices rise in the former and decline inthe latter, generating a tendency for profit equal-ization.^'

The current restructuring of capital accumlation structures the mix of capital- anlabor-intensive sectors, setting small but priileged high-tech sectors and elite strata witin broad-based labor-intensive service setors. The problem is that profit rates tend t

equalize over extended durations of time, snewly acquired capital mobility allows for thrapid entry and exit of capital in and out ohigh profit labor-intensive sectors of thworld economy, making the low-wage worforce the most vulnerable sector of the woring class.

The ghet to, for that reason, must bviewed as more than the excrescence of captalist accumulation. It is also the historicmaterial condition of capitalist accumulatioand therefore a powerful link between thsouthern plantation economy and norther


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velopment. Owing to the ghetto's historicallink to capitalist industrialization, by virtueof it being the location of the latter's blackproletarian workforce, the cycle of blackunderdevelopment rooted in southern agri-cu l ture began to breakdown. The mass

migration of black labor out of the repressiveregime of the southern plantation economywas the subjective motive force that tele-scoped northern capi tal ism's dominanceover the southern economy.

Capital & Race: "Black Capitalism"and the Circulation C risis

THE BLACK COMMUNITY, however, is no tmerely a vast, underd evelo ped labor

market it is a multi-billion dollar consumermarket. By way of this market, the wages andincomes of the black working class flow outof the ghetto at an even greater rate than itslabor-power. The economic underdevelop-ment of the ghetto is a result of capitaldrains and disinvestment, that is, capitalsiphoned off by financial institutions, bous-ing markets, social service reductions, and

infrastructure decline.^' Tbe flow of blackincome into the ghetto is only temporarybefore f lowing out again, thus neverstrengthening or providing an adequatefoundation for other sectors of the ghettoeconomy. The grea tes t dra in on theresources of the ghetto is the brain and tal-ent drain that departs via the educationalsystem and the careerism of high-wage pro-fessionalsironically, the very pursuits often

extolled as the salvation of the black commu-nity. As analyst Timothy Bates tells it, "Pro-grams that enable some to escape the ghettoserve to preserve and reinforce ghettoizationfor many more. The best and the brigbtestare drawn out of tbe gbetto to serve them-selves and contribute to the further advance-ment of the dominant society."^*

For their part, the so-called black capital-ist enterprises that remain tied to the ghetto

are of one of two varieties: either they caterexclusively to residents and clientele insideh h h l k

otal to any understanding of the unsustain-abi l i ty of b lack economic developmentthrough "black capitalism." With capitalistdevelopment, the internal market of theblack community is thought either to be tooweak to sustain black-owned businesses that

cater to black consumers, or tbat it repre-sents too robust an outflow of consumer dol-lars to other metropolitan markets. In fact,this duality merely reflects the interactionbetween the weakening of the internal mar-ket of the black community and tbe drain ofblack consumer revenues to powerful metro-politan markets.

THE DESTRUCTION of tb e in te rn al marketof the ghetto is a result of that form of

capital accumulation that has over the lastthirty-five years telescoped the phenomenalgrowth of the service sector and the bur-geoning metropolitan consumer markets. Inthe ensuing crisis, other forces appear to beat work, hastening the demise of the ghettomarket, such as high rates of crime andunem ploy men t , and gen t r if i cat ion andincreasing black homeownership. Not onlyhave consumer markets become extremelycompetitive over the last three decades, redi-recting the flow of black consumer dollars,but capitalist expansion has made the sub-urbs and metropolitan-area consumer out-lets (e.g., malls and big box outlets) power-ful magnets for black dollars. In tbemeantime, emergency services like hospitalsabandon the ghetto. These developmentspromote the format ion of b lack-owned

enterprises devoted to serving greater metro-politan-areas, and in some cases, regionalmarkets, to the exclusion of the internalmarket of the black comm unity.

It is no mystery that the ruin of the lessdeveloped sectors of the capitalist economyforms the basis for expanding the capitalisthome market. This phenomenon is almostalways unintel l igible to pet ty-bourgeoisnationalists, simply because for them this ruinsignifies the decay of the indigenous econo-my, "and not...the transformation of patriar-h l i i li "^ h i i


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and economic dislocations of the black com-munity, particularly the ruin of its internalmarket, signify its final integration into thenational economy. The ruin of the underde-veloped commercial structures of the blackcommunity signals the expansion of blackconsumerism and the further integration ofthe black workforce into sectors of the labormarket formerly closed to it. It has signaled aswell the appearance of a black "underclass"subsisting on the lowest rungs of capitalistsociety. In sum, the destruction of the under-developed social and economic structures ofthe black community represents its final trans-formation into an expanded home market fora new stage of capitalist accumulation.

As a consequence of this ruin, "The prob-lems of markets and capital, in combinationwith...other ghetto attributes, are sufficientto minimize the economic developmentpotential of a black business community thatis oriented toward servicing a ghetto clien-tele."'" To this the bourgeoisie proposes theabstraction of a so-called "competitive edge"of the ghetto based on "(1) developing linesof business that can utilize the ghetto's sup-ply of abundant labor and (2) relying heavilyupon non-ghetto sources for both capitaland markets."" Abstract or not, it expressesthe prevailing relations of the African-Ameri-can community to capitalism. The attemptsto humanize these exploitative relations isonly somewhat less opportunistic than thenaked self-interest of black entrepreneurialel i tes concerned witb generat ing r is ingincomes for ghet to residents ( includingfrom the underground economy) whose lim-ited consumer options are the exclusivesource of their enrichment.

EACH of these entrepreneurial sectorsthetraditional one that services the blackcommunity exclusively, and the new cross-oversector that relies on capital and markets out-side the black communityare linked to dif-ferent, and at t imes, opposing economictrends. Traditional sectors have historicallybeen linked to those areas ofU.S. capitalism

has established to the economy may be to thdominant capital and market sources whicmay or may not be part of those branches othe economy to which old-line ghetto busnesses are historically linked.^^

This only defines the linkage of black capitalism to the broader U.S. capitalist economy. The other, more crucial, linkage involvethat of black labor. The difference betweethe two represents an important shift iblack economic and political developmenone whose material basis has been instrumental in changing the black communityideological understanding of itself. Heretofore, black entrepreneurial sectors werrestricted to the parasitic role of serving ghetto clientele whose income from thdominant capitalist economy constituted thlife-blood of the black business communitReliance on, and loyalty to, this traditionabusiness sector on the part of the black working class has becom e marginal over time.

This petty-capitalist sector only indirectlshares in the exploitation of the black laboforce. Moreover, the nationalist politics othis business sector are determined by thnarrow commercial interests of competinwith other ethnic commercial interests thalso serve consum ers inside th e g hetto . BlacNationalist politics display little ambition ogoing beyond the narrow horizon set by thpetty, competing, comm ercial interests of thghetto economy. The larger capitalist systemwhose markets extract the lion's share oblack consumer dollars and whose produtive forces exploit the labor-power of thblack com munity is left u nscathed by natioalist criticism. Indeed, tbere is little criticismheard , only undisguised idolatry of what "thwhite man" has achieved, accumulated ancontrols. On the other hand, the new blacentrepreneurial sectors have as a conditioof their existence the direct exploitation oblack labor power. The ideological shiaccompanying the new production impertive of so-called black capitalism to exploblack labor-power directly has assumed thmost fantastic forms of expression amon


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thing from the resurrection of the self-helpeconomics of Booker T. Washington to anAfrocentric return to pharaonic Egyptiansociety, updated, no less, with informationage technology.

A s IN THE CASE of black residential segre-gation, black businesses experienceredlining and capital disinvestment. Lack ofcapital and a shrunken ghetto market arethe dominant features that condition theweak com mercial dynamics of black business-es. Retail, personal service, and small con-tracting enterprises constitute three tradi-tional lines of black business. Disinvestmentrestricts the size and availability of businessloans, limiting the size of black businesses.Despite the supply-side economics of theReagan era, access to capital was more diffi-cult for black businesses than for that stra-tum of small white businesses that fueled theservice sector explosion that bolstered thepolitical fortunes of Republican fiscal conser-vatism. Indeed, the small business set-asideaspects of affirmative action were met bylegal efforts to overturn or curtail such poli-cies by small white business interests, spear-head ed by the Ch am ber of Co mm erce ,reflecting the cut-throat competitiveness ofthe service sector economy.

Black entrepreneurial interests fought thiswhite business backlash, and looked to theState to remove the last vestiges of racialinequality, in order to save themselves fromextinction as a fraction of the middle class.This flght took on the ideological form ofDemocratic Party and Black Nationalist poli-tics. The former is associated with traditionalblack business elites (tha t is, wh ere theydon't enjoy token status within the Republi-can Party), whereas the politics of the latteroften assumed the ideological expression of"Black-upwardly-mobile-professional" (bup-pie), though often failed, entrepreneurs. AsMarx n oted in his critique of French Utopiansocialist Pierre Proudhon for privileging thesmall producer and shopkeeper over theworker in his politics, "retarded industrial

Democratic and Republican party politicsand in the self-help politics of petty-bour-geois Black Nationalism.

G ONE are the class antag onisms betweencapital and labor, between the Stateand the communities of resistance of theblack working class. Instead, the black bour-geoisie seeks the amelioration of class antag-onisms at the expense of the black workingclass. No other purpose is served save that ofweakening, and thus muting, the growingclass contradictions of the black community.This is motivated by no other class interestthan the one Marx noted:

However different the means proposed for theattainment of this end may be, however mtich itmay be embellished with more or less revolution-ary notions, the content remains the same. Thisconte nt is the reformation of society in a democ-ratic way, but a reformation within the bounds ofthe petty bourgeoisie. Only one must not formthe narrow-minded notion that the petty bour-geoisie, on principle, wishes to enforce an egois-tic class interest. Rather, it believes that thespe-cial condit ions of i ts emancipation are thegeneral conditions within which alone modern

society can be saved and class strtiggle avoided.'''

T HE BLACK PETTY-BOURGEOISIE a c c o m p l i s h e sthis by compromising the very means bywhich the struggle against the enemies ofthe black working class is prosecuted. This isbecause it is "a transition class, in which thinterests of two classes are simultaneouslymutually blunted"; which is why its democra-tic representatives also "imagine [them-

selves] elevated above class antagonism gen-erally."'^ W hile these de m oc rat icrepresentatives:

. . .con cede that a privileged class con frontsthem...they, along with all the rest of the nation,form the people. What they represent is thepeople'srights; what interests them is the people's interests.Accordingly, when a struggle is impending, theydo not need to examine the interests and posi-tions of the different classes.'"

Instead, by identifying their interests andrights with those of the people, the petty-bourgeois democratic representatives and


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Works Cited

Bernard Anderson, The Chan^ng Workplace and Unions:Implications for Black Workers (A. Philip RandolphInstitute, n.d.).

Timothy Bates, "Circular Causation in Social Processes;

The Relationship of the Ghetto and Black-OwnedBusinesses." in Richard R. Cornwall and PhanindraV. Wunnava, eds. New Approaches to Economic andSocial Analyses of Disc rim ina tio n. (New York;Praeger, 1991).

Ted Benton and Ian Craib, Philosophy of Social Science:The Philosophical Foundations of Social Thought (NewYork; Palgrave, 2001).

Edna Bonacich, "A Theory of Ethnic Antagonism; TheSplit Labor Market," American Sociological Review,(October 1972).

. "Abolition, the Extension of Slavery, and the Posi-

tion of Free Blacks: A Study of Split Labor Marketsin the United States, 1830-1863," American foumal ofSoology (November 1975)._. "Advanced Capitalism and Black/White Race

Relations in the United States: A Split Labor MarketInterpretation," American Sociological Review (Febru-ary 1976).

Robert Brenner, The Economics of Global Turbulence: A Spe-cial Report on the World Economy, 1950-98. London;New Left Review 229 (May/June 1998).

S. Lael Brainard and David M. Cutter, "Sectoral Shifts

and Cyclical Unemployment Reconsidered," Quarter-ly Journal of Economic \08 (Feb. 1993).

Sundiata Cha-Jua, Ted Koditshek and Helen Neville,eds.. Race Struggles (Urbana; University of IllinoisPress, 2009).

Sundiata Cha-Jua and Clarence Lang, 'The 'Long Move-ment' as Vampire; Temporal and Spatial Fallacies inRecent Black Freedom Studies."/ourna/ of AfricanAmerican History'it (2007).

Oliver Cromwell Cox, Caste, Class and Race: A Study of

Sodal Dynamics (NewYork; Modern Reader, 1970).

Charles Denby, Indignant Heart: A Black Worker's Journal

(Detroit; Wayne State University Press, 1989).. "Lowndes County Shows Revolt Gains," News (sf

Utters (August-September 1967).

_. "Black intellectuals probe role of Marxism andAmerican workers," News &f Letters (August-Septem-ber 1975).

Raya Dunayevskaya, Marxism and Freedom (Amherst, NY:Humanity Press, 2000).

The Raya Dunayevskaya Collection: Marxist-Humanism, Its Ori-

gn and Development in the U.S., 1941 to Today. Detroit:Wayne State University Labor History Archives, 1981.

Frantz Fanon, "Racism and Culture," in Toward theAfrican Revolution (Political Essays), trans. HaakonChevalier (NewYork: Grove Press, 1969).

William H. Harris, The Harder We Run: Black Workers since

the Civil War (New York; Oxford University Press,

1982).

V.l. Lenin, The Development of Capitalism in Russia: The

Process of the Formation of a Home Market for Large-Scale

Industry, in Collected Works, Volume 3. (Moscow;

Progress Publishers, 1972).

Herbert Marcuse, Reason and Revolution: Hegel and the

Rise of Social Theory (Boston; Beacon Press, 1960).

Karl Marx, The Poverty of Philosophy (New York: Interna-

tional Publishers, n.d.). The iS " Brumaire of Louis Bonaparte in Collected

Works, Volume 11. (New York: Internat iona l Publish-

ers, 1979).. Capital, Volume 1, trans. Ben Fowkes (New York:

Vintage Books, 1977).. Capital, Volume 3, trans . David Fern bach (New

York: Vintage Books, 1981).

News and Letters Committees, Resident Editorial BoardMinutes o News & Letters (June 15, 1975).

Alice O'Connor, Poverty Knowledge: Sodal Sdence, SocialPolicy, and the Poor in Twentieth-Century U.S. History

(Princeton: Princeton University Press, 2001).

Thomas Sowell, "Marx's 'increasing misery' Doctrine,"American Economic Review (March 1960).

Survival News 2:1 (Winter 1988).

Rhonda M. Williams, "Competition, Discrimination, andDifferential Wage Rates: On the Continued Rele-vance of Marxian Theory to the Analysis of Earnings

and Employment Inequality," in Richard R. Cornwalland Phanindra V. Wunnava, eds. New ApproachesEconomic and Social Analyses of Discrimination. (NewYork: Praeger, 1991).

William J. Wilson, When Work Disappears: The World of theNew Urban Poor (New York: Alfred A. Knopf, 1996).

Eric Olin Wright, "Foundations of a Neo-Marxist ClassAnalysis," in Eric Olin Wright, ed.. Approaches to ClassAnalysis. (Cambridge: Cambridge University Press,2005).

E n d n o t e s

1. Charles Denby, "Lowndes County Shows RevoltGains," News of Letters, August-September 1967.Denby had been the worker-editor of Neru f Lettersfrom 1955 to his death in 1983.

2. Charles Denby, Indignant Heart: A Black Worker's Journal(Detroit: Wayne State University Press, 1989), p. 222.

3. Denby participated in these new revolutionary blackworkers' organizations and edited one of the manyshop newsletters generated by the Black Caucusmovement, the Mack Avenue Chrysler Stinger.

4. William H. Harris, The Harder We Run: Black Workers

since the Civil War (New York: Oxfo rd Univers ityPress, 1982), p. 171.

5. Philip Foner, Organized Labor and the Black Worker,


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7. Resident Editorial Board Minutes ofNews & Letters,June 15, 1975.

8. Edna Bonacich, "A Theo ry of Ethnic An tagonism:The Split Labor Market,"American SoologicalReuiew,October 1972, p. 547.

9. Edna Bonacich, "Abolition, the Extension of Slavery,and the Position of Free Blacks: A Study of Split

Labor Markets in the United States, 1830-1863,"AmericanJournal of Sociology, November 1975, p. 601.10. Ibid. As Oliver C. Cox critically observed of the

South, the original focus of Bonacich's delineationof the split labor market theory, "This kind of thereasoning is common, and it has the significantthough frequently un intendedfunction of excul-pating the S outh ern rulin g class." See OliverCromwell Cox, Caste, Class and Race: A Study of SocialDynamics (New York: Modern Reader, 1970), p. 575.

11. William J. Wilson, When Work Disappears: The World ofthe New Urban Poor (New York: Alfred A. Knopf,1996) ,p. xiii.

12. Edna Bonacich, "Advanced Capitalism andBlack/White Race Relations in the United States: ASplit Labor Market Interpretation,"American Sodolog-icat Review, February 1976.

13. Thomas Sowell, "Marx's 'Increasing Misery' Doc-trine," American Economic Review, March 1960.

14. See the note by Engels in the 1885 German editionof Karl Marx, The Poverty of Philosophy (New York:International Publishers, n.d.), p. 45n.

15. Thomas Sowell, "Marx's 'increasing misery' Doc-trine," p . 116.

16. Karl Marx, Capital!, p. 786.17. Ibid., p. 788.18. Bernard Anderson, The Changing Workplace and

Unions: Implications for Black Workers. A. Philip Ran-dolph Institute, p. 16.

19. Ibid.20. Ibid., p. 20.21.Ibid.22. Ibid., p. 21.23. This was the pattern and trend of the administrative

disadvantaging of the poor that shaped the policyenvironment for the abolition of welfare in the1990s, euphemistically called "welfare reform."

24. See Survival News, vol. 2 (1), Winter 1988.25. S. Lael Brainard and David M. Cutter, "Sectoral Shifts

and Cyclical Unemployment Reconsidered,"Quarterlyfoumat ofEconomics 108 (1), Feb. 1993, p. 220.

26. Rhonda M. Williams, "Competition, Discrimination,and Differential Wage Rates: On the Continued Rel-evance of Marxian Theory to the Analysis of Earn-ings and Employment Inequality." InNew Approachesto Economic and Social Analyses of Discrimination. Eds.Richard R. Cornwall and Phanindra V. Wunnava(New York: Praeger, 1991), p. 81.

27. Eric Olin Wright's concept of "nonexploitative eco-nomic oppression" would seem to be an adequateconceptualization of these relations, i.e., the notionthat not only is "the welfare of the advantaged

no transfer of the fruits of labor from one group toanother." See Eric Olin Wright, "Foundations of aneo-Marxist class analysis," in Eric Olin Wright, ed.Approaches to Class Analysis (Cambridge: CambriUniversity Press, 2005), p. 24. However, the logic ofthis argumen t follows the variations treated earlier inthe critique of Thomas Sowell. Whatever the appearance of equality in the market, including the labormarket, and the so-called externalities that result inmarket forces producing inequalities, Marx arguedthat such were just thatappearances that belie thedespotic relations of capitalist production. So as faras "approaches to class analysis" of the black workingclass, a more dialectical approach is needed to graspthat between the permanently unemployed and theblack working class employed in industry, many ofwhom move back and forth between steady employ-ment and persistent lay-offs, are those employed inthe vast service sectors. Most are non-union, andmost, unable to escape from the inner city, must live

with the so-called "underclass." These intermediatestrata of the black working class are as tied to whatWilson calls the "jobless ghetto" as the permanentlyunemployed. Although these vast strata of the blackworking class are concentrated in the low-wage ser-vice sectors, their presence in the inner city fosters acommunity of interests (social capital). In the so-cal

jobless ghetto there are working-class elements,then, that know no social dependency and whosesocial consciousness has been shaped by their expe-riences in confronting and breaking down the casteand sexist relations that predominate in the manu-facturing, industrial and service sectors.

28 . Timothy Bates, "Circular Causation in SocialProcesses: The Relationship of the Ghetto and Black-owned Businesses." InNew Approaches to Economic andSodat Analyses ofDiscrimination, p. 249.

29. Vladimir Ilyich Lenin, Tlie Development of Capitalisin Russia: The Process of the Formation of a Home Mfor Large-Scate Industry. Collected Works, Volume(Moscow: Progress Publishers, 1972), p. 166.

30 . Timothy Bates, "Circular Causation in SocialProcess," p. 251.

31. Ibid., p. 250.32. Bates maintains that "The ghetto business that com-

petes in the broader marketplace...actually shapesthe flow of income into the ghetto economy. Fur-thermore, its prospects are not held hostage byintraghetto income levels; its prospects are linked toits ability to compete in the broader economy." Ibid.,p. 250.

33. Quoted in Raya Dunayevskaya,Marxism and Freedom(Amherst, NY: Humanity Press, 2000), p. 52.

34. Karl Marx, The IS'' Brumaire of Louis Bonaparte. Clected Works. Volume 11. (New York: InternationPublishers, 1979), p. 130.

35. Ibid., p. 133.

36. Ibid., p. 133.


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