By Jack Cashill

June 2007
Courtesy of ingramsonline.com

Today, nearly 40 years after the birth of state-sanctioned “minority capitalism,” there is, in the inner cities of KCMO and KCK, close to no minority capitalism at all.

Don’t believe me? Get in your car, drive across 18th street and head south on Vine. Along the way count all the small but profitable enterprises you might see in a neighborhood like Brookside—custard stands, copy shops, antique stores, shoemakers, tailors, video stores, bars, restaurants, five and dimes, diners, toy stores, flower shops, bakeries, cafes, beauty stores, Hallmark stores.

You can keep one hand firmly on the wheel. You won’t need it to count. In fact, south of the heavily subsidized 18th street, Vine turns into a well tended wasteland with little but green fields on either side of the street.

Turn east on 31st and then south on Prospect, both viable commercial streets back in the day, and keep counting. To make the journey all the more dispiriting, double back north on Brooklyn or Woodland, head over to KCK, and drive the lengths of Parallel, Washington, or Quindaro.

Here and there you will find, among the boarded up storefronts, a few nail shops—“Nails In Da Hood”—a scattering of storefront churches, some well defended liquor stores, but little else in the way of homegrown, unsubsidized enterprise.

It hasn’t always been this way. Check out the photos. 18th and Vine in the 1930s and 40s looked much like Brookside does today. Then, quietly, the whole inner-city economic megillah collapsed as calamitously as ancient Rome, but weirdly, no one was supposed to notice, let alone comment.

It was all the more refreshing then to meet someone of consequence who has paid attention. The fellow in question is a Bangladeshi banker with an American education named Muhammad Yunus.

Yunus and his Grameen Bank in Bangladesh won the Nobel Peace Prize last year, the first for-profit enterprise ever to do so, a refreshing turn of events. Hosting Yunus was the Kauffman Foundation, now refocused on Ewing Kauffman’s entrepreneurial and educational mission, another refreshing turn.

Some thirty years ago, as a well-fed economics professor in a starving country, Yunus felt the moral urge to experiment with what he calls “micro-lending.” The first loan—for just $27—came out of his pocket.

Although traditional bankers thought he was daft, Yunus kept making loans to collateral-less poor people. He was convinced that folks who had the gumption to start cottage industries would have the hon-or to repay their loans, and this they did. Indeed, more than 98 percent of his 2.5 millions loans have been repaid.

Some 100 different countries have since adapted the Grameen micro-credit program, including our own. In the United States, though, the program has run into certain resistance, including a widespread skepticism about the initiative of America’s (relative) poor.

For his part, Yunus rejects the thesis that welfare has turned our poor into “a lazy underclass of dysfunctional individuals.” He has found Americans of all classes to be “remarkably resourceful people.”

That much said, America does present some distinctive obstacles to the success of a systematic micro-credit program. Yunus acknowledges that the welfare system, with its mind-boggling array of disincentives, is one of them.

One major obstacle that Yunus does not discuss, perhaps because of its subtlety and its uniquely American character, is the phenomenon of “minority capitalism” alluded to in the first paragraph.

For the record, the unlikely found-ing father of soi-disant minority capitalism was none other than Richard Nixon. In March 1970, Nixon issued Executive Order 11518, directing the Small Business Administration to “particularly consider the needs and interests of minority-owned small business concerns.” Always calculating, Nixon saw the maneuver as a painless way to gin up votes and donations.

The result of this and similar orders was astonishing. Giddy bureaucrats gave themselves authority to ignore the new-ly minted civil rights acts. Indeed, they began to use the words “disadvantaged” and “black” interchangeably and “set aside” contracts solely on the basis of race.

Without benefit of a public airing, judicial review or even Congressional debate, the Nixon administration had quietly exempted blacks from its historic opportunity-based model and schemed instead to arrange appropriate outcomes.

In fact, this “proportional” model of justice was so far removed from the traditional notion of individual rights that at the time it disturbed even the liberal U.S. Commission on Civil Rights.

Although Nixon would expand the franchise to other ethnic groups—“I’d like to wrap them all together into one program,” remembers Nixon Commerce Secretary Maurice Stans, “and call it ‘Minority Business’”—the program targeted African Americans and did its greatest, unwitting, damage to the black community.

Historically, capitalism had served as an end-run around discrimination. “With his fate in his own hands,” writes Shelby Steele of the ambitious African American before the 1960s, “his energies must go toward the development of excellence, even if there is racism in the world where he functions.”

Historic 18th and Vine was a case in point. Not only did the black entrepreneurs of that era create a safe and productive commercial center, but in the form of Kan-sas City jazz they also created a cultural phenomenon that would sweep the world.

I remember enterprise not unlike this from my own New Jersey childhood. As a young Dodger fan, I and another wee lad walked about a mile from my house through several blocks of largely black-owned commerce to get an autograph from my first celebrity. No, not a Nobel prize winner, but a major league MVP, which was way cooler.

We found our guy at his own establishment, Don Newcombe’s Bar & Grill. At the time, a community-based business like Newk’s was not even considered exceptional, nor was the walk to it by two clueless, nine year-old white boys.

Today, however, the Don Newcombes of the world rarely build businesses from the ground up. Minority capitalism has lured them away from risky, nuts and bolts, neighborhood entrepreneurship and, too often, into fail-safe corporate distributorships of stuff.

The bottom line? In Bangladesh, Yunus and his bank have transformed thousands of poor people into a productive class of entrepreneurs. Here, Nixon and his corporate heirs have transformed thousands of would-be entrepreneurs into a gratuitous class of well-connected middlemen.

Alas, while these heirs give each other awards for their good-deed-doing, Rome smolders around them.

It’s past time for that to change. Yunus has the idea. The Kauffman Foundation has the focus, and we at Ingram’s have the voice.

Our Rome won’t be rebuilt in a day, but if we at least begin restoring real life to it, our shared ambition to make KC America’s entrepreneurial capital just might begin to make sense.

Who is Jack Cashill?