The economic philosophy of Marcus Garvey.
Marcus Garvey directed the largest mass-based movement among African Americans in the history of the United States. His phenomenal success came at a time when African American confidence was low and unemployment was considered a way of life. Garvey harnessed these conditions to build momentum for his cause. While his worldwide accomplishments and controversies have been analyzed by numerous scholars (Rogoff and Trinkaus, 1998), this paper investigates the economic thoughts of Marcus Garvey. Specifically, it visits Garvey's capitalistic approach to the economic development of African Americans in the United States. It was suggested by W.E.B. DuBois (1940) that Garvey's business ventures failed because of incompetence and economic ineptitude. However, Marcus Garvey's plan for African American capitalism was an enormous contribution because his ill-fated business enterprises became the procedural and conceptual model for future achievements in African American economic development.
On March 23, 1916, after corresponding with Booker T. Washington, Garvey arrived in the United States to connect his movement to Washington's movement in Tuskegee, Alabama (Stein, 1986). However, Washington died before Garvey arrived. Stein (1986) noted that Garvey came to the U.S. at a time when a new economic order was anchored to American prosperity. A sweeping increase in technological innovations of mass production techniques and new machinery increased American output 13 percent while consequently reducing the workforce 8 percent. Profits were soaring as a 29 percent increase in worker productivity was complemented by only a 4.5 percent increase in real wages. Organized African American unions were suffering as the power of the American capitalists increased.
Garvey had admired Washington's business ownership approach toward self-reliance. He agreed that other forms of advancement would follow economic development. However, he saw a flaw in Washington's approach. Specifically, he believed that focusing primarily on individual entrepreneurial advancement would fail to promote community development because individual profit motives would impede group advancement. In order to promote the collective interests of African Americans, Garvey sought to use collective decision making and group profit sharing. Thus, Garvey created a Nationalist version of Washington's economic program that resulted in mass organization supported by millions of African Americans (Allen, 1969).
Garvey believed that African Americans were universally oppressed and any program of emancipation would have to be built around the question of race. In his mind, African Americans would aspire to positions of influence if they had educational opportunities, and this would bring them into direct competition with the white power structure. However, he believed that within 100 years, such a position would lead to racial strife which would be disastrous for them (Sertima, 1988). Hence, his theory of racial separation was born. It was a stratagem to ensure self-reliance and equality for the downtrodden African race, but it did not stress racial superiority. Garvey stated, "The Negro is ignored today simply because he has kept himself backward; but if he were to try to raise himself to a higher state in the civilized cosmos, all the other races would be glad to meet him on the plane of equality and comradeship" (Martin, 1976). The urgency that he felt for racial independence and self-reliance existed because he believed African Americans suffered in the face of enormous economic superiority and power of the white world. He thought that they should strive to first build a solid industrial foundation and the consequential success would allow African Americans to shape their own destiny.
Within months of his arrival in the United States, Garvey began to research the economic position of African Americans. He wrote, "The acme of American Negro enterprise is not yet reached. You have still a far way to go. You want more stores, more banks, and bigger enterprises" (Martin, 1976). Economic self-reliance was his primary objective. In his opinion, African Americans were living on "borrowed goods" (Garvey, 1924). Garvey thought they needed to innovate and create a new ideology that fit their needs. He was not only talking about capitalism, but the creation of an economic state where they could maximize their economic interests. In short, he was talking about economic development.
Garvey likened the underdeveloped African American communities to underdeveloped countries. Both are often exploited with unfavorable terms of trade and high unemployment. After studying work by Dr. Robert Love, a spokesman who organized blacks in Jamaica, Garvey realized that tax dollars paid by African Americans often ended up supporting economic interests outside their communities (Lewis, 1992). Consequently, he sought to use the tax dollars to make purchases from and support African American entrepreneurs. Monies spent by their schools, hospitals and urban services should go to African American entrepreneurs creating a guaranteed market where there would always be a demand for their goods and services. By directing tax revenue back to the economy, Garvey believed this would foster economic development without requiring large sums of private investment. Therefore, a maximum return for tax dollars would be received by the communities (Haddad and Pugh, 1969).
Garvey's Promotion of African American Entrepreneurship
After coming to America, Garvey was able to use his extraordinary personality to persuade African Americans to invest. These capitalistic economic investments were made possible because of Garvey's poetic words of nationalism and back-to-Africa dreams. Indeed, Garvey was able to raise large sums of money to invest in risky capitalistic ventures. It was through capitalism that Garvey wanted to achieve economic self-sufficiency for African Americans. He believed that protection against discrimination came through financial independence. Once a strong economic base was constructed, they could seek other political and social objectives. He believed that these material achievements by way of entrepreneurial effort would enable African Americans to be equally recognized. It should be noted that this philosophy can be extracted from African attorney Casely Hayford's Gold Coast Leader (Stein, 1986).
Garvey believed that commerce and industry were the props of the economic life of the state, community and society as a whole. Progressive nations indulged in commerce and industry, and these activities provided occupations for the residents of the state. You were either an employer, an employee, or a ward of the state, and a man without his own business or specialized training was always at a disadvantage in making a living. Great wealth is made out of commerce and industry. In Garvey's opinion, African Americans who attempted to go into business, commercial or industrial, were at a disadvantage because they could not appreciate starting at a point and climbing up the ladder. While other races started at the bottom and climbed their way up, African Americans always desired to start at the top, thus resulting in failure. Garvey said, "No success ever came from the top, it is always from the bottom up. He will never be an industrial or commercial factor until he has learned the principles of commercial and industrial success." "Without commerce and industry," wrote Garvey, "a people perish economically. The Negro is perishing because he has no economic system" (Martin, 1986).
In 1912, Garvey went to London and studied with Duse Mohammad Ali. Ali, a historian and author, brought to light the plight of African descendants all over the world. His influence shaped Garvey's speeches, and led him to organize the Universal Negro Improvement Association (UNIA) in Jamaica in 1914 (Vincent, 1971). It has been suggested that the UNIA motto, "One God, One Aim, One Destiny" originated from Duse Ali's Islamic influences on Garvey (Rashid, 2002). Their business entrepreneurial approach to economic self-sufficiency mirrored Booker T. Washington's endeavors in the United States. Garvey sought to meet with Washington to discover how to improve Jamaica's educational system. After arriving in the United States, his purpose changed as he organized a UNIA branch in New York. He wanted to create African American owned business firms that would provide them with adequate income. Between 1918 and the early 1920s, Garvey efforts established a number of UNIA businesses.
Garvey aspired to develop an international shipping line that would carry passengers and freight between America, Africa and the West Indies. By drawing on the speculative get-rich-quick mentality of African Americans, he was able to persuade investors to purchase stock in a new shipping corporation. Consequently, the Black Star Line (BSL) steamship corporation was incorporated in 1919. The project was capitalized exclusively by African Americans. Individual purchases were limited to 200 shares priced at five dollars each. In the company's first year, capital stock investments reached approximately $750,000 ($7.825 million in 2002 dollars).
The African American ownership gave Garvey's supporters a sense of pride and hope for prosperous returns. Eventually, the BSL purchased three ships. Unfortunately, the company was unable to negotiate a fair market price for the ships as dealers took advantage, charging inflated prices for severely depreciated capital. These overpriced purchases depleted BSL's funds and contributed to their eventual bankruptcy. By 1922, the ships were lost and the corporation collapsed. The BSL had lost more than $600,000, and accounts payable exceeded $200,000. There were never any dividends paid, and the value of BSL's investment assets had depreciated completely. Nevertheless, the BSL was the first large-scale business venture financed and managed by African Americans. It still remains one of the largest African American owned companies in U.S. history. It should be emphasized that the underpinnings for the BSL's financial losses reflected market troubles plaguing the entire industry. The shipping industry was in a recession magnified by the excess capacity of transport ships after World War I. Many shipping firms were unable to recover their variable costs, and consequently, shut down business operations.
To accomplish the goal of enhancing entrepreneurship, in 1919 the UNIA established the Negroes Factories Corporation (NFC) incorporated in Delaware as 200,000 shares were offered at $5 per share (Lewis, 1992). Its objective was to promote African American entrepreneurship in large industrial centers by providing investment capital and technical expertise. The corporation assisted in the development of grocery stores, restaurants, a steam laundry, a millinery store, a tailor, a dressmaking shop, and a publishing business. Garvey encouraged and established through the NFC a factory that mass produced the first African American dolls. In Garvey's plan, each individual business would be cooperatively owned by UNIA members, and eventually linked into a worldwide system of economic cooperation that simulated a socialistic planned economy (Lewis 1992). This trading community would be sufficiently large so that the economies of scale generated would enable it to thrive even in the face of hostility from the rest of the world. Garvey summed up this idea: "Negro producers, Negro distributors, Negro consumers! The world of Negroes can be self contained. We desire earnestly to deal with the rest of the world, but if the rest of the world desire not, we seek not" (Martin, 1976). Although these business investments were, for the most part, not successful, they became a solid economic foundation for future African American business ventures.
Economic self-reliance was foremost on Garvey's list because he foresaw a depression which he thought would severely harm African Americans (Lewis and Bryan, 1991). Consequently, Garvey's attempts to establish economic self-reliance went beyond cooperate business enterprises. The UNIA also acted as a community service agency by paying death and other minor benefits to members. Local divisions were required to maintain a charitable fund for the purpose of assisting distressed members or needy individuals of the race. A fund for "loans of honor" to active members, and an employment bureau to aid members seeking employment, also established (Martin, 1976).
Garvey on Capitalism
Garvey's thoughts on economic development led him to consider his views of capitalism and communism. He considered capitalism to be necessary in the process of human advancement but expressed difficulty with the results of its unrestrained uses. He remarked, "It seems strange and a paradox, but the only convenient friend the Negro worker or laborer has in America at the present time, is the white capitalist. The capitalist being selfish is seeking only the largest profit out of labor--is willing and glad to use Negro labor wherever possible on a scale `reasonably' below the standard white union wage" (Jacques-Garvey, 1969). It was Garvey's belief that white capitalists tolerated African American workers only because they were willing to accept a lower standard of wage than unionized white workers. If, however, African American workers organized and unionized demanding comparable wages as the white union men, the preference of employment would go to the white worker.
Garvey aimed to reform the social democratic nature rather than attempting to eradicate the capitalist system. He felt that the capitalistic system gave African Americans a chance for competitive employment and also gave them the opportunity to make a profit from their labor. Henderson and Ledebur (1970) noted that Garvey favored strict limitations on the amount of income or investable funds controlled by individuals and corporations. Sums accumulated above these figures should be appropriated by the state. The state should also expropriate, without compensation, the assets of capitalists and corporations who started wars and strife in order to further their own financial interests. He attempted to implement these ideas by organizing his business ventures along cooperative lines and by placing a ceiling on the number of shares any one person could own. In his mind, these actions were attempts by poor people to establish "a capitalistic system of their own to combat the heartless capitalistic system of the masterly ruling class" (Martin, 1976).
Garvey on Communism
Garvey felt that communism was a white man's creation to solve their own political and economic problems. He believed that the communist party wanted to use the African American vote "to smash and overthrow" the capitalistic white majority to "put their majority group or race still in power, not only as communists but as white men" (Jacques-Garvey, 1969). To him, it suggested the enthronement of the white working class over the capitalistic class of the race. It was never intended for the economic or political emancipation of African Americans, but rather to raise the earning capacity of the lower class workers. Garvey said, "It is a dangerous theory of economic and political reformation because it seeks to put government in the hands of an ignorant white mass who have not been able to destroy their natural prejudices towards Negroes and other non-white people. While it may be a good thing for them, it will be a bad thing for the Negroes who will fall under the government of the most ignorant, prejudiced class of the white race" (Nolan, 1951).
The communists hoped to capture the UNIA movement spawned by Garvey's magnetic appeal over the African American masses. The act of the communist party inviting them to join their ranks was to support the theory that they were communists too. Hence a white employer would be faced with the choice of hiring either a white communist or an African American communist and the appeal of race would give the white communist an advantage. Garvey's plan involved letting the communists fight their own battles. African Americans needed to take advantage of the opportunities that were presented during the fight, without joining in the fight. The danger of communism to Garvey is that they sought the minority vote to overthrow and become a dominant power. He believed that the communists were still white men who would still seek to take advantage of African Americans. Consequently, Garvey advised against supporting the communist party, or he would be guilty of transferring government from the intelligent to the ignorant (Martin, 1986).
In the perspective of history, Marcus Garvey was a phenomenal success. Through the accumulation of risk capital, Garvey sought to fight capitalistic inequality through capitalistic methods of economic organization. This gave African-Americans a sense of unity, and provided hope for a better way of living. However, Garvey's economic philosophy for business success was doomed to fail in the United States. His ideas were handicapped by numerous theoretical and conceptual flaws. Specifically, Garvey's economic ideas did not meet the demands of twentieth-century development. Indeed, it was Garvey's own personal economic ineptitude and his unwillingness to evolve his pro-capitalistic activities that led to his business failures. He failed to discover that there were economic theories applicable to the African American movement other than the accumulation of risk capital.
Garvey's Nationalism lacked the racial equality and economic thought to address problems of poverty and political rights needed for African American economic success. While he did not openly endorse any major economic system, his philosophy for limited individual and corporate ownership helped label him a "welfare-state liberal" (Vincent, 1971). It remains, however, that the Black Star Line was a landmark in African American history providing a blueprint in which to build entrepreneurial business ventures. Indeed, Marcus Garvey's plan for African American capitalism was an enormous development. Garvey's ill-fated business enterprises became the procedural and conceptual model for future achievements in African American economic development.
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Shawn Carter is Assistant Professor of Economics at Jacksonville State University, Alabama. He holds a Ph.D. from Texas A&M University. Please send all correspondence to 700 Pelham Road North, Jacksonville, AL 36265, or call (256)782-5799.
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|Publication:||The Western Journal of Black Studies|
|Date:||Mar 22, 2002|
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