Boston Review - November 2017

"Focusing on ‘black capitalism’ allowed Nixon to neutralize black resistance while also undermining the demand for reparations and diminishing the social safety net."

... The southern strategy, as it became known, opposed overt forms of race discrimination but rejected any government effort at integration. Using race as a wedge issue without actually talking about race, Nixon associated crime with blackness and promised “law and order.” He signaled his allegiance to white voters who were fearful of blacks without sounding like a racist.

The notion of “black capitalism” was another part of this strategy. During the campaign Nixon coopted Black Power’s rhetoric of economic self-determination to call for a segregated black economy. He used the language of free-market capitalism—a racially neutral and popular idea at the time—to embrace the idea of “black enterprise.” “People in the ghetto,” Nixon said, “have to have more than an equal chance. They should be given a dividend.” Black business and black banking, the theory went, would be the “key to black economic progress” because they would allow black communities to use their own money to create a “beneficial multiplier effect.”

This move allowed Nixon to neutralize black resistance—indeed, to enlist the full-throated support of many activists—while also furthering his coalition’s desire for a diminished social safety net. By discouraging welfare dependency in the name of “black enterprise,” he was able to undermine black demands for economic redress and reparations. “People who own their own homes,” he reasoned, “don’t burn their neighborhoods.” This same logic later justified his dismantling of Lyndon B. Johnson’s War on Poverty programs as well as his neglect of other antipoverty efforts, which were seen as costly and responsible for creating dependence on the state.

This strategy highlights Nixon’s mastery of the political sleight of hand. By promoting black capitalism, he was able to accomplish a great deal with very little: he gained business support, lost none of his political base, and spent virtually nothing. The promise of black capitalism was so loosely conceived, it curbed the demands of black separatists and appealed to white voters across the political spectrum. Indeed, in Nixon’s vision, the transformative power of black business would also lead to integration by “build[ing] bridges to human dignity across that gulf that separates black America from white America.”

So great were the political dividends of black capitalism—and at such little cost—that every subsequent administration through Barack Obama’s adopted its edicts and its racially neutral language of “community capitalism,” “enterprise zones,” and “niche banks.” Of all of the components of the southern strategy, black capitalism has perhaps enjoyed the longest life while garnering the least opposition. ...
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