I recently read The Color of Money, by Mehrsa Baradaran, who is a Professor of Law at UC Irvine. It was recommended to me by my friend Steve Rogers, recently retired Professor at Harvard Business School. Steve knows that I am an avid consumer of #blm books and he said that Professor Baradaran is a unique scholar.
I find that I am incredibly interested in #blm. I mostly keep it to myself as I fear that it would sound odd in some way, as if I’m trying to be on a bandwagon of some sort, or tring to establish myself as some sort of unique white person. Frankly, I am just truly interested in the many explorations of race in America. The history is incredible – racism is in fact a key element in the establishment and growth of the United States of America. There are some excellent books that treat this and demonstrate that the era of racism is really not behind us.
The Color of Money is highly unique. Professor Baradaran discusses the history of racism and the treatment of black people. She does it largely through the lens of our banking system. She proves that the main issue is in fact ‘the economy, stupid!’ Banking provides a multiplier effect, and is the central agent of growth in our economy. By taking in deposits and lending out a multiple of this money (keeping only a fraction on hand for depositors to access as they need), they enable business to have access to credit and grow. Black communities, however, are rarely served by ‘white banks’ and therefore need to bank with locally established ‘black banks.’ That may seem like the answer to the problem, but even these black banks end up providing their multiplier outside the black communities they serve.
There are some ‘wow’ stories in this book. Take Maggie Walker, for example. Walker was the first black woman to own a bank and the second woman of any color to do so in the US. She was born in 1864 in Richmond, Virginia. Her mother was a former slave and her biological father an Irish Confederate soldier. Maggie and her mother lived in extreme poverty after her stepfather was murdered. Her mother earned a living doing laundry for the wealthy white women in Richmond. Maggie turned out to be a brilliant student, graduated high school at 19 and became a teacher…until she was forced to quit after getting married. Married women, after all, were not permitted to teach.
As a member of something called the St. Luke mutual aid society, she established a newspaper, a printing press, an insurance company, and a college education fund. In 1903 she established the St Luke Penny Savings Bank with $9,400 in deposits from member of the society. The story of Maggie Walker goes on, as she becomes well known as a successful banker. Incredible.
Other fascinating personalities in the book include Wisconsin Senator Proxmire, who tried hard to support policies to address inequality. Baradaran explains redlining crisply and clearly and demonstrates how it was in fact government policy that would never allow most black people to make it out of poor neighborhoods that were established because of a lack of credit available to black people.
The book moves through history from the Civil War all the way to modern times, pausing to examine policy decisions made in the Nixon, Johnson, Obama and many other eras. It is an incredibly researched book, but her writing is so crisp and interesting that I enjoyed almost every page and every interesting fact – for example, did you know that by the year 2000, almost 800,000 blacks were in prison, as compared with 600,000 who were in college?!. Thus, there were more black men in prison than there were in slavery in 1850.
Professor Baradaran concludes by asking if we Americans would like to continue to embrace our history of racial tribalism, or shed these divisions and finally become one people indivisible and all created equal. She tries to explain that what can benefit the minority will also benefit the majority. W.E.B. Dubois wrote in 1948 that the problem with American democracy is that “we have not tried it.” Baradaran asks if it is now time to try.
Read this book.
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