Black Entrepreneurs

One of the goals of the Pope Center and the North Carolina History Project is to bring to campuses ideas and information that have been neglected. That happened last week when University of Alabama history professor David Beito spoke at St. Augustine’s College, North Carolina Central, N.C. State, and Campbell University. The subject of his talk, “Black Fraternal Societies, Mutual Aid, and Civil Rights,” was based on his book From Mutual Aid to the Welfare State, and he presented a wealth of fascinating information on how black Americans in the deep South formed voluntary societies for their betterment.

In a nutshell, despite the fact that they were denied the right to vote and faced a host of obstacles supported by discriminatory state laws, blacks were able to succeed in many occupations and businesses. They used their wealth and property to good advantage in providing insurance, hospitals, banks, and other services to members of their community. Professor Beito told a story of politically oppressed people advancing in spite of widespread bigotry and governmental barriers against them. It’s a story very few Americans have ever heard.

Here are a few examples from Beito’s presentation.

Maggie Walker was a black woman living in Richmond, Virginia. She founded the Independent Order of St. Luke, a group dedicated to mutual aid that encouraged black entrepreneurship. Walker herself founded a department store, a newspaper, and a bank. She helped to lead a rising black middle class during the late 19th century.

There were two “Odd Fellows” orders, one white and one black. The Odd Fellows were working-class people who joined together for mutual benefit, particularly insurance. Members would pay in a percentage of their earnings and were entitled to sick benefits in case they could not work. (The society carefully evaluated claims to deter malingering.) They also provided death benefits—an early form of life insurance. An indication of the importance of the services it provided is the fact that the Odd Fellows had half a million black members around the turn of the century.

It’s worth noting that the people who ran the Odd Fellows and the other mutual aid societies had little formal education. They succeeded with their native intelligence.

Another very important group was the Knights and Daughters of Tabor, founded by ex-slaves in the late 19th century. Among other accomplishments, this group established a hospital that opened in Mound City, Mississippi, in 1942. The doctors and staff were black. They provided good medical care for people who would not be admitted at other hospitals. Taborian members could purchase medical insurance for $8 per year in 1942, entitling them to up to 30 days of hospital care.

The chief surgeon at the Taborian hospital was Dr. T. R. M. Howard, who was not only an accomplished doctor, but also a remarkably successful businessman. By the early 1950s, he had begun numerous businesses in Mississippi and built the first swimming pool for blacks and had even started a zoo. In 1951 Howard formed the Regional Council of Negro Leadership with the goal of promoting thrift, entrepreneurship, equal treatment under the law, and voting rights. Beito comments that Howard’s approach combined that of Booker T. Washington (who was primarily oriented toward success through the free market) and of W.E. B. DuBois, who advocated more emphasis on politics.

Howard’s group held a very large rally each summer, drawing thousands of supporters. The rallies were in rural areas of Mississippi where violence by the Klan would certainly have been possible. There never was any, however, because Howard made sure to post armed guards all around. Howard himself usually went around armed and his home was an arsenal. Two crucial elements in Howard’s success: the freedom to acquire and profitably use property, and the right to defend himself.

One of the Regional Council’s numerous projects was to use the economic power of the black populace to bring about change. Specifically, it organized a boycott of those gas stations where blacks were not allowed to use the restrooms. That boycott was successful. The national gasoline distributors did not want to lose business and told local station owners to provide restrooms for blacks as well as whites.

After the talk was over, a student asked what has become of the mutual aid societies. Beito answered that after the advent of the welfare state, they went into decline, an unfortunate demonstration of the way politics tends to muscle aside voluntary action and self-reliance.

What most American students hear from their history professors is that political action is the path for minority groups desiring upward mobility. Beito’s research shows that American blacks, using their private property and economic freedom to the extent that they had it, were able to make great strides in the era before they had any political influence at all.

Beito’s point reinforces the conclusion of black economist Thomas Sowell, who wrote in his 1975 book Race and Economics, “There is little evidence of any close relationship between political progress (or retrogression) and economic progress (or retrogression).” When college professors challenge conventional wisdom with facts, they are truly encouraging their students to do some “critical thinking.”