Domestic mercantilism keeps the race question out of banking …

Lineage is the framework through which I see myself in this political economy. My views on the political economy are steeped in observing my family members participate in trade. I saw members of both sides of my family in the Eastern Caribbean act as retail and wholesale merchants. Through merchant activity they brought their communities value.

Value gets overlooked in the political environment. Time, labor, and capital move toward activities that generate value that can later be exchanged for what we need or desire. That has been the merchant’s role for centuries, to determine arbitrage opportunities by gathering as much information as possible from multiple potential markets. For example, my great-aunt, Margaret Maynard, sat in multiple markets as a merchant in St. Kitts by not only serving the retail sector but the wholesale sector as well.

I can only assume that she established networks and relationships that allowed her to accumulate information on the markets. As I may have mentioned in an earlier post, such was that network that my parents’ wedding was sponsored by the island’s merchant class. That’s networking.

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Here in America, I believe that the focus on race has hindered those who refer to themselves as black from generating value within their communities upon which they can trade. I don’t wish the blanket of this statement to cover the whole bed. There is, I sense, a growing minority within the black community that gets this, but their voices are being drowned out by those who wish to participate on the majority-owned infrastructure using sentiments from past wrongs as an entry point. 

The problem with focusing on the reparations of past wrongs via immoral acts toward blacks is that such a strategy does not attract sustainable bank financing. How would you approach a bank and convince them to loan money for a DEI program and provide that financing at a favorable i.e., prime rate? The push back we are seeing today on DEI gives insight on how risky a proposition that would be, where programs are under serious threat less than four years after they were significantly ramped up.

Another problem has to do with blacks firmly occupying the consumer class versus the producer class. Blacks have an estimated spending power of approximately $835 billion according to a report by McKinsey & Company, a consulting firm. The report notes that about $300 billion of this spending power is available to be tapped by firms that are prepared to provide underserved needs of the black community, particularly in healthcare, housing, and higher education. Suppose the black community were to spend that $300 billion on providing those services themselves?

I can attest having lived in this country for almost 44 years that the black community has enough juris doctors and MBAs to convert $300 billion into an attractive vehicle for 5x that amount from major US banks. Rather than creating value from the consumer perspective, why not create value from a producer perspective? Production based on a strong business plan or model catches the eye of a banker seeking sustainable, long term net interest income versus cries for inclusion based on short term events that fade in significance along with any income that might have been generated.

Could steady, long term focus on value reduce the persistent focus on what amounts to differences in phenotype and genotype? I believe so. We should keep in mind that there will not always be value to exchange. As a lawyer with an interest in heading off conflict, the focus on trade value and recognizing that where there is none that we should smile, shake hands, and say, “Maybe next time”, is better than coercing engagement via politics and law. Coercion creates conflict.

Alton Drew

28 January 2024

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