When Richard Nixon first brandished the phrase "Black Capitalism" during the 1968 campaign, it captured the imaginations of blacks and whites alike.
There was something exhilarating in the idea that racial strife could be ended by helping blacks to get, in his words, "a piece of the action." As President, Nixon created an Office of Minority Business Enterprise to oversee Government efforts aimed at helping blacks and other racial minorities to start their own businesses, and expanded programs to lend more money to—and buy more products from—those striving firms.
Now, as the effort begins its fifth year, the record of Black Capitalism at best is mixed. Government purchases from nonwhite firms have rocketed from $17 million to $394 million since 1969, the Small Business Administration has increased loans and loan guarantees to nonwhites to $258 million a year, and the OMBE budget has grown to $52 million. In concert with the Government, Manhattan's Capital Formation persuaded major corporations and others to deposit more than $200 million in nonwhite banks, thus vastly in creasing their ability to make business loans. Yet Black Capitalism's impact on the economic status of America's blacks has been minimal. While thousands of nonwhite firms have been created as a result of the Government effort, only a minuscule number of new jobs have been opened for black, Puerto Rican, Indian and Chicano workers. Racial minorities, which comprise 17% of the U.S. population, still control only about 4% of the nation's businesses, and these firms have less than 1% of total business receipts. The figures have not changed perceptibly in the past four years.
Even the most bitter critics of the program concede that it has benefited some entrepreneurs. The Government's emphasis on black business development, coupled with the greater availability of federal funds, has contributed to a climate in which ambitious blacks can aspire to owning their own businesses. Typical of the new entrepreneurs is Electronics Engineer George G. Rock of Manhattan. Until last year, he was a high-paid employee of a defense contractor. When the firm developed an airborne alarm device to prevent collisions between planes, Rock acquired the rights to the device in return for a promise of royalties. With $173,000, part of it lent through a Government program, he opened Rock Avionic Systems, which will market the device.
Similarly, the Watts Industrial Park, a 54-acre conglomeration of 24 firms. 22 of which are nonwhite owned and which make products as diverse as truck seats and choir robes, owes its existence largely to Government loans. Located on a site where rioting occurred eight years ago, the park provides employment for 1,200 workers; sales total $25 million to $30 million a year.