How Centuries of Black Strength Created a Blueprint for Economic Recovery
Black communities have for centuries harbored a spirit of support and mutual aid. It’s time the rest of the country followed their lead.

By Douglas Rushkoff. Published in Medium on 6 July 2020

There is no level of reparation that could ever make up for the devastating impact of white cruelty on African Americans. But long before any such repair was even being floated in mainstream culture, Black Americans were busy repairing things for themselves. In fact, white oppression in America has always been matched by an even greater ingenuity and resilience from Black communities. The more Black people were shunned and segregated from the rest of the American society, the more they were forced to invent the kinds of circular economic and local reinvestment strategies the rest of us are discovering only now.

The fact that Black lives are finally coming to matter in America does not introduce some new encumbrance on anyone. On the contrary, dating back to at least the 1700s, Black Americans developed and deployed robust approaches to mutual aid and cooperative economics. We can all learn from the Black experience right now as we look toward sustaining ourselves during lockdown and remaking our economy without the benefit of a functioning federal government.

The stories have been hidden in many cases because economic success in Black communities inevitably leads to white jealousy, which in turn inspires more oppression, pogroms, and murder. And because co-ops and mutual aid can sound downright communist to the uninformed, even many modern civil rights activists didn’t want to be condemned as “red” on top of everything else.

Comprehensively chronicled in the highly accessible book Collective Courage: A History of African American Cooperative Economic Thought and Practice by John Jay professor Jessica Gordon Nembhard, PhD, Black economic cooperativism began informally among slaves, who would collectively raise money to purchase someone’s freedom. Then, almost like chain migration, the freed slave would save money to get another out, and so on. Nembhard even frames the Underground Railroad as a form of collective knowledge and resource sharing — a commons of data and hideouts.

According to W.E.B. Dubois’ inspiringly detailed accounts in Economic Co-operation Among Negro Americans, slaves would share what money they had in order to fund one another’s funerals or medical expenses. Like any demonstration of autonomy, they had to do so in secret, with the most literate slave among them maintaining and hiding the ledger of accounts.

Freed slaves, who still had no rights as citizens, developed mutual aid circles along the same principles, such as the Free African Society in Philadelphia in 1787. Breathtakingly simple, participants put in dues every month, and whoever needed money would take it out. The closest thing most of us in the privileged economy have to this is insurance — which not only requires a precipitating event to file a claim, but also delivers the bulk of our contributions to the corporation profiting off our collective effort to mitigate risk.

In 1862, the Homestead Act not only continued the dispossession of indigenous lands, but led to the creation of all-Black towns cut off from the rest of the economy. After the Civil War, the freed slave population was declared ineligible for membership in white unions. Without jobs or capital, they started worker-owned businesses, including farms and small factories. As cooperatives, they had no investors to pay up to, and often proved more profitable than their management-owned white counterparts. This, in turn, generated more animosity and more oppression from whites, who didn’t understand why their privilege to participate in the greater economy of bank loans and trade unions didn’t translate into more wealth and security than that of the Black people they excluded.

Even Black people who worked for whites learned to squirrel away their earnings to invest in each other’s businesses, often through community banks. In Durham, they named their prosperous business district Hayti after the first Black republic. The Mechanics and Farmers Bank and Insurance Company, established in 1907, served as the only source of financing for 500 Black farmers and small borrowers, providing over $200,000 in loans by the 1920s. Their philosophy was simple: “No large loans… to a few profiteers, but rather conservative sums to needy farmers and laborers.”

It wasn’t just Black banks that understood this logic, but the Black depositors who used them. Black people working as domestics during the Tulsa oil boom invested their earnings in their own district of Greenwood. Their banks worked like the fictional white-owned Savings and Loan in It’s a Wonderful Life, where deposits from one member of the community were used to pay for the business needs of another member. The nickname “Black Wall Street” didn’t just mean Black people had become wealthy but that the people were invested in their own and one another’s businesses.

This is what we now call circular economics. Instead of extracting money from a community and delivering it to distant shareholders, money stays in the community, circulating through to whichever business needs it. Getting a haircut at the local barber lets him pay back his loan to the bank so the money is available for you to get a mortgage, and so on. Greenwood became so prosperous that they began to invest in infrastructure and generative social institutions such as roads, movie theaters, and ornate churches, leading them to become the envy of their white neighbors.

The white mob that famously burned 10,000 Greenwood homes to the ground and killed likely hundreds of people in 1921 went on this rampage because Black people with less capital and opportunity somehow got wealthier than they were. The white mobs didn’t understand the power of local reinvestment and mutual aid. They only saw the ornate churches. Infuriatingly, the more Black people were excluded from economic opportunity, the better they seemed to do. The gang that destroyed Greenwood’s Black-owned printing plant was led by a white man who had been employed on the Linotype machine there at $48 a week for years. Unlike his Black counterparts, however, he was going home to a community where mutual aid was trumped by rugged individualism — a myth perpetrated by powerful whites to romanticize a worldview that still leads the poor to vote against their own economic interests.

To Black people, this difference was explicit. Radical Black journalist George Samuel Schuyler admonished young entrepreneurs to eschew the traditional, competitive paths toward advancement, and instead engage in cooperative economics. He founded the Young Negroes’ Co-operative League in 1931, an affiliation of local co-ops and buying clubs, in order to foster genuine economic independence.

It caught on. Ironically, the more Black businesses were excluded from participating in the broader economy, the more innovative and prosperous they became. Instead of competing with one another, cooperative networks of grocery stores and other small companies ordered in bulk and negotiated better prices. When segregation or other forms of legal exclusion prevented them from participating in the mainstream markets, Black businesses turned toward one another, and ended up with resilient, locally grounded, mutually supportive, sustainable business networks.

For Black Americans, mutual aid was not just an economic strategy but a political necessity. Even as recently as the 1960s, whenever Black people joined civil rights organizations or registered to vote, they would lose their jobs or get evicted from the land they were sharecropping. So they would turn to organizations like the Black Freedom Quilting Bee — which owned 23 acres — for land to farm. They’d purchase a tractor together, and each use it one day a week. Ineligible for bank loans, they established revolving loan funds, where one person pays back the loan to the next one who needs the money — much in the way slaves would free one person who would then pay it forward.

The cooperative economics developed by America’s Black citizens was not some hippie lifestyle choice. In the South, challenging the white economic structure was punishable by lynching and death. In the McCarthy era, members of Black cooperatives were labeled communist and jailed. So while they practiced cooperative economics, they certainly didn’t talk about it or teach it.

Black businesses and communities have continued to harbor this spirit of support and mutual aid to this day, whether it’s the Federation of Southern Cooperatives protecting the landowners of Black family farms, the National Bail Fund Network getting arrestees (including BLM protestors) out of jail with a common, reusable well of funds instead of onerous for-profit bail bonds, or MBFL — the Movement for Black Lives — developing mutual aid networks and anti-capitalist strategies for Black communities. One fringe benefit of more widespread acceptance that Black Lives indeed do Matter is that these Black ideas can reach the light of day. They’re not a threat to America’s collective prosperity at all, but the surest path to our mutual recovery as we all face economic disenfranchisement under corporate welfare.

Once we, all the people of America, accept that there’s no one coming to our aid — no bailout, no rescue, and no jobs, we can all learn to achieve the autonomy Schuyler demanded of the disenfranchised. The principles are simple: Keep resources and revenue recirculating through the community, and accessible to the working class. Leverage the power of mutual aid to lift up one member of the community at a time, each according to their need. Maintain independence from big employers and disinterested investors by owning businesses cooperatively with other workers.

With local businesses going under and stocks tanking anyway, why not invest what’s left of our savings into the restaurants, bookstores, and barbershops we frequent, ourselves? We can apply rolling loans to getting one another out of debt. The Rolling Jubilee, conceived by members of Occupy Wall Street, has already bought and abolished over $34 million of student and medical debt, for just pennies on the dollar.

Instead of cutting jobs from our companies or competing for scarce jobs, how about turning them into cooperatives and earning equity through labor? Or creating a local favor bank or mutual aid fund for those in greatest need — which also means having it available when our own fortunes turn? These are the kinds of economic practices that work even when you don’t have an underclass to exploit. They’re based in distributing and recirculating prosperity, instead of robbing it from others.

As Black Lives Matter makes abundantly clear, oppression has been a self-defeating strategy, all along.