Business and (In)equalities

Solicited by Business History Conference

Friday, April 3, 2020, 3:00 PM - 4:30 PM

Type: Paper Session

Tags: Business and Economy; Legal and Constitutional; Politics

Abstract

Markets have long been a social institution that can both reproduce and exacerbate inequalities and also potentially remediate them. Capitalism has been heralded as an engine of democratization, providing material goods for greater numbers and economic opportunity for the industrious, yet critiqued as a source of increasing class conflict and socioeconomic disparity. Business can be a path towards upward mobility and empowerment for politically disenfranchised minorities, but minority businesses often confront structural barriers and discriminations that lurk beneath an alleged ideology of a “free” market. The papers in this panel look at the role of businesses, markets, and economic actors, institutions, and ideas in reshaping social and economic (in)equality in American history.

Papers Presented

Massachusetts, the “Job Paradox,” and the Political Economy of Crisis

Writing amid the 1929 depression, pioneer Austrian school economist Ludwig von Mises spelled out what has become microeconomic orthodoxy regarding crisis formation. Capitalism, he argued, was defined by equilibrium. Crises, therefore, were caused by market distortion—in particular, the ways labor unions, unemployment relief, and minimum wage laws conspired against the “natural” tendency for wages to fall low enough to facilitate full employment. In contrast, Mises argued, a truly free market would have entailed wage cuts instead of layoffs; laborers would simply say “Better a lower wage, than no wage at all.”

Was Mises right? Despite his still tremendous following, historically, Misesian prescriptions have had little bearing on historical reality. In fact, workers have often been quite resistant to the idea of taking any job—no matter how low paying or undignified—even when on the brink of privation. Dignity is an intangible and slippery concept. It may seem like poor ideological adhesive for historical theses, but my own research on industrial decline in Massachusetts shows how workers’ subjective sense of “dignified labor” repeatedly kept them from taking this Misesian bargain and opting for economic optimization. I show how local business leaders frequently wrestled with a phenomenon they found utterly perplexing—the so-called “job paradox”: surging rates of unemployment and unfilled jobs (ironically clustered in “deindustrializing” sectors). The problem, of course, was that workers were more discerning than expected. Historians too have implicitly reproduced Misesian logic, missing how workers’ own choices—and their desire for “dignity”—helped hasten industrial decline.

Presented By
Shaun Steven Nichols, Boise State University

A Rich Inheritance: The Not-So-Humble Beginnings of Silicon Valley

Venture capitalist John Doerr called Silicon Valley “the largest legal accumulation of wealth in history.” Missing from this portrait, however, is context: Silicon Valley grew up in America, which had already by the mid-twentieth century assembled the largest accumulation of wealth in history and become the world’s leading manufacturer. The world’s foremost military power, the U.S. government became a price-insensitive lead user for the valley’s early telecommunications and electronics industries. In this paper, I will show that the valley’s beginnings were far from humble.

It’s no coincidence that the valley began in California, a state born rich thanks to the gold rush, just south of San Francisco, America’s largest banking center west of the Mississippi. It began near universities (Stanford and the University of California, Berkeley) with top electrical engineering programs at a time when America’s research universities were becoming the envy of the world—universities funded by winners of the second industrial revolution.

Given the resources and institutions required to develop a high-tech “master cluster” such as Silicon Valley, it was predictable that if such a region developed, it would appear in the United States, and that the Bay Area would be a leading candidate. The rise of Silicon Valley was not a rags-to-riches story. Instead, it was about the beneficiaries of previous industrial activity having an inside track to the next big thing.

Presented By
Stephen B. Adams, Salisbury University

Black-Owned Businesses and the Inequalities of Urban Renewal in Detroit, Michigan

In my paper I will discuss Detroit’s mission to redevelop urban neighborhoods  to construct modern cities in the mid-twentieth century. Most scholarship on the effects of urban renewal on communities has focused on the issue of housing and the displacement of residents. However, I contend that black entrepreneurs’ experiences with urban renewal projects highlight the ways urban planner’s vision of modernity truncated the progress of Detroit’s black business community.

Drawing on the records of city officials and community groups, newspapers, and oral histories, I argue that federally-funded municipal urban planning initiatives were used to support a system of economic white supremacy, and were essentially administered as state-sponsored wealth redistribution programs that benefited white business owners. Land seized through eminent domain was often sold to private developers at depressed prices, and public funds were used for the expansion of white-owned private enterprises. Furthermore, contracts for public urban renewal projects were awarded exclusively to white businesses. Because black entrepreneurs were not compensated equitably for property seized through eminent domain, and many could not afford to set up shop in a new location, numerous black businesses never reopened. The wealth accumulated by black business over the previous decades could not be passed on to subsequent generations—this constituted a major blow for black economic development in the city. My paper will contribute further insights on the persistent economic inequalities and disparities in wealth accumulation in urban American during the second half of the twentieth century.

Presented By
Kendra D. Boyd, History, York University

The Chickasaw Press: A Case Study in Indigenous Innovation and Enterprise

Established in 2006, the Chickasaw Press is the first tribally-owned and operated publishing house in the United States. In this paper, I explore the press’s position as an agent in the movement toward the Chickasaw Nation’s economic, political, and cultural sovereignty. To do so, I uncover the history that enabled the press’s establishment, with particular attention to how the nation’s financial portfolio and gaming enterprises under the 1988 Indian Gaming Regulatory Act (IGRA) make such financing possible. Within the twelve year period spanning 1987 and 2009, for instance, the nation’s annual budget soared from $700,000 to $800,000,000, with more than $60,000,000 devoted to tribal culture, heritage, and history, including the press. In fiscal year 2017, the nation reported that gaming revenue alone totaled $1.44 billion. Thus, coming into fruition in this post-IGRA moment, the Chickasaw press emerged as the nation used business to advance a robust “heritage infrastructure.” In this way, the press demonstrates how the Chickasaw Nation deploys its sovereignty through economic development “to become the author of its own cultural and historical discourse.” The press’s innovation in bringing together traditional knowledge with cutting-edge technologies thrusts the Chickasaw Nation to the forefront of what has become a strategy for political and cultural sovereignty employed by tribes nationally. In this paper, I draw on oral histories and engage the growing body of literature on indigenous economic development. This work draws from my forthcoming article in the American Indian Culture and Research Journal.

Presented By
Elizabeth Rule, American University

Session Participants

Chair and Presenter: Stephen B. Adams, Salisbury University

Commentator: The Audience

Presenter: Kendra D. Boyd, History, York University

Presenter: Shaun Steven Nichols, Boise State University

Presenter: Elizabeth Rule, American University