Monday, May 20, 2019

Eleanor Marie Lawrence Brown

Abstracted from: Eleanor Marie Lawrence Brown, The Blacks Who "Got Their Forty Acres": A Theory of Black West Indian Migrant Asset Acquisition, 89 New York University Law Review 27 (April, 2014 (287 Footnotes)

In a landmark reflection on the interplay between markets and ethnicity, Amy Chua writes that "[i]n First World countries, markets have tended to reinforce the economic dominance of a perceived ethnic majority over those countries' most salient ethnic minorities."  However, in the United States, sometimes the market-dominant groups are not "perceived ethnic majorities," such as Whites, but instead other eleanor marie brownethnic minorities, such as Korean Americans.  Indeed, Chua characterizes Korean Americans--who are disproportionately likely to own businesses in inner-city neighborhoods compared with their representation among the neighborhood's residents--as "an increasingly glaring market-dominant minority vis- -vis the relatively economically depressed African American majorities around them."  This market dominance has been cited as a primary source of racial tension, culminating at times in boycotts of Korean businesses.

The calls for "market-correcting"  affirmative action programs for racial minorities are rooted in this example.  However, these calls *30 have been complicated by extensive evidence that some Blacks are themselves "market-dominant minorities" who dominate particular business sectors.  West Indian Americans comprise one such market-dominant minority. For example, after 1920, among Black businesspersons in New York, West Indians were disproportionately likely to dominate business, particularly in the real estate, grocery, restaurant, and retail sectors.  Indeed, since as early as the first decade of the twentieth century, only shortly after West Indians had begun arriving in the United States in significant numbers, they were overrepresented among business owners in Harlem.

Recent studies indicate that over fifty percent of New York's Black businesses have historically been owned by West Indians even though West Indians constituted less than one third of the city's Black population.  West Indian Americans are also disproportionately represented on lists of Black multimillionaires.  West Indian entrepreneurs *31 in inner-city communities have attracted far less media attention than their Korean and Jewish counterparts and have largely escaped economic boycotts, perhaps in part because most West Indian migrants are themselves Black. Despite this lower external profile, West Indian market dominance has been a source of resentment in the African American community for some time.  For example, Jamaicans in Harlem were controversially dubbed "Jewmaicans," and in the 1930s, there was a common joke that if a West Indian had ten cents more than a beggar he started a business.

While the legal scholarship has tried to account for the market dominance of other minority groups--such as Chinese and Jewish Americans--by focusing on internal communal norms that reduce transaction costs, encourage contractual relationships, and facilitate property acquisition, very little has been written about Black West Indians' role in the marketplace.  The prevailing narrative in legal *32 scholarship on the historical relationship between markets and Blacks in the United States is overwhelmingly focused on loss.  Much has been made of a repeatedly cited statistic: The median wealth of the average Black family is five percent that of the average White family,  and fewer than half of African American families own their own home, a number that lags thirty percentage points behind White Americans.

Despite being largely neglected in legal scholarship, other disciplines describe West Indians as an economically powerful minority group within the larger community of people of African descent.  Indeed, recent analysis shows that median West Indian net worth is remarkably similar to that of all other Americans.  What differentiates this subset of Black people?  Why has their experience of asset acquisition been so different from that of other Black Americans? I address these questions by looking closely at the lives and experiences of a particular subset of early Black West Indian migrants who entered the United States in the late nineteenth and early twentieth centuries: the "Blacks who got their forty acres."

In the public vocabulary, the "Blacks who got their forty acres" refers to descendants of persons enslaved in the United States who were able to overcome legal bars to property ownership shortly after Emancipation and who are disproportionately likely to own property today.  Despite popular perception, however, the most successful subset of Blacks today are not descendants of American slaves, but *34 instead descendants of free Black migrants whose ancestors were enslaved outside the United States.  Properly accounting for successful West Indian Blacks paints a more inclusive, accurate picture of wealthy Black Americans. Colin Powell--whose family included J. Bruce Llewellyn, a Black beverage distributor in the United States and a multimillionaire who was the largest Black telecommunications entrepreneur--epitomizes this second group.  The group also includes ancestors of Eric Holder and Susan Rice, whose parents and grandparents became property owners after migrating to the United States from the Caribbean.  Upon their arrival in the United States, each of these families began what appears to have been a speedy ascent up the property ladder.

Despite this accumulation of wealth and property, unlike Korean Americans, Lebanese Americans, Chinese Americans, and others,  West Indians are virtually invisible as a market-dominant minority in existing legal scholarship. In failing to address the factors that account for the particular success of these free Black migrants --overwhelmingly British subjects originating from the West Indies  scholarship neglects the attention paid to West Indians in disciplines such as political science, economics, history, and sociology precisely because they are a Black market-dominant minority. In these fields, West Indian material success has not only been extensively examined but has fueled compelling debates, such as what is pithily referred to as the "native Black" versus "migrant Black" question.  The prominent Harlem commentator and activist W.A. Domingo observed that West Indians are "forever launching out in business, and such retail businesses as are in the hands of Negroes in Harlem are largely in the control of the foreign-born."  Thirteen years later, Daniel Patrick Moynihan and Nathan Glazer, in a survey of New York's ethnic landscape, controversially argued that West Indian New Yorkers' patterns of asset acquisition were substantially different from "native" Black Americans' acquisition patterns.

Debates about this disparity in sociology, political economy, and political science contexts have focused on what have been termed "cultural" questions. This scholarship has examined the perception that West Indians (in contrast to "native Blacks," that is, African Americans) possessed a particular set of cultural traits (such as an *37 emphasis on saving) that were distinctly well suited to asset acquisition.  This social science literature contains a glaring omission: the law.

In noting the omission of the law in the existing scholarship investigating West Indian asset acquisition, I use the term "law" as a proxy for an institutional framework that supports property acquisition, whether this framework is formal (state-supported) or customary.  Today, there are widely-employed methodologies used to assess historical wealth differentials among countries based on access to various institutional frameworks.  These same logics may be used to explore differentials in patterns of asset acquisition between different groups of people (as opposed to different countries). Relying on this literature, we can ask whether Black West Indians had early access to institutions for the protection of property and contract, and if so, whether this institutional history might have contributed to the group's long-term asset acquisition patterns.

This Article contends that the success of West Indian migrants may be rooted in the early grant of what I term "de facto property and contract rights" to West Indian slaves. In different iterations of immigration reform in the early twentieth century, Congress sought to make it progressively more difficult for Blacks to migrate to the *38 United States.  Importantly, in seeking to restrict Black migration, immigration officials may have inadvertently selected for propertied "types," that is, more elite Blacks. Through their historical exposure to property and contract rights frameworks in the West Indies and their tight-knit communal networks--which approximated "law" and reduced the transaction costs of business dealings--these Blacks were particularly well equipped to take advantage of opportunities for home and business ownership upon arrival in the United States.

This Article proceeds as follows. Part I traces the genealogy of West Indian migrant asset acquisition from present-day New York  back to slave plantations in the Caribbean. In doing so, I demonstrate the link between patterns of asset acquisition in the United States and historical exposure to property and contract regimes in the West Indies. Addressing the complex issues of causality, I note that it is one thing to argue that West Indians were longtime market participants and well prepared for U.S.-style capitalism. It is, however, another thing entirely to address the precise mechanisms by which exposure to a property and contract rights framework in a migrant's country of origin contributes to this migrant's asset acquisition patterns once he arrives in the United States. I examine these mechanisms by pinpointing a number of specific contributory factors, including West Indian migrants acting as classic "middlemen," this population's dominance of the Black realtor business in New York, and Black informal savings networks that provided West Indians with access to capital and *39 that I show helped facilitate the conversion of White ethnic housing to West Indian-dominated housing enclaves.

In Part II, I consider the counterintuitive notion that West Indian slave societies were a propitious context for the development of a propertied migrant Black class. Unlike "settler societies" (the quintessential example being Massachusetts Bay), in which property protections were spread broadly and early, the West Indies has been classified as a classic "extractive society," in which property protections only existed for a tiny minority of elites.  How could slaves (themselves property) come to own property? The answer lies not in formal law, but in customary law, which created a system of property ownership among slaves that eventually approximated formal law.  The British--in perhaps an inadvertent instance of institutional design--created incentives for slaves to become what I term "property owners in waiting."

In Part III, I explain that by the time of Emancipation, many West Indian slaves were not merely property owners but also full-fledged market participants, particularly in the food markets. Thus, many slaves were already "contractors in waiting." This market security had two effects. The newly freed slaves (1) were enthusiastic participants in formal land markets, and (2) developed an entrepreneurial realtor class, employing the contracting experience these individuals had cultivated during slavery to broker land deals between plantation owners and newly freed slaves.

What is the relevance of the foregoing to the United States context? The history I trace in the first two Parts of this Article uncovers the roots of the West Indian peasantry, the largest class of independent Black property owners in the Americas. It was from this population--what I metaphorically term "the Blacks who got their forty acres"  many U.S. migrants would later originate.  Although *40 this group obtained their property prior to migrating to the United States, I argue that this property provided a base for later business success once this population was in the United States.

This narrative is partly about property, but it is also about contract: namely, the informal contracting arrangements undergirded by communal networks which allowed entrepreneurial West Indians to leverage their property advantages into business success in the United States. As with the property narrative, a contract narrative is unusual in a discussion traditionally dominated by conversations about race and culture. This is precisely my point. West Indians have been successful in particular sectors for reasons that are already familiar from *41 the law and economics literature regarding other populations. It is widely understood that informal contracting helps explain the success of particular ethnic and religious groups in certain business sectors. Lisa Bernstein's study of the dominance of Orthodox Jews in the diamond industry is essentially about internal communal norms that are so powerful within this ethnically and religiously homogenous group as to provide "glue" that approximates law.  The same is true of Eric Posner and Lan Cao's discussions of informal lending among Cantonese and Japanese migrants.  Amy Chua's work on Chinese and Korean migrant dominance of particular business sectors points in a similar direction.

Conversations about what makes this particular group of Black people successful are understandably heavily freighted. Yet why should we think about Black migrants any differently than Orthodox Jewish diamond merchants or Korean grocery store owners? I seek to introduce law and economics into the broader debate on Black migrants' asset acquisition to help answer this question. In doing so, I introduce an ostensibly counterintuitive case study that nevertheless accords with broader research on the implications of network effects and institutional design for how certain groups accumulate assets.



Eleanor Marie Lawrence Brown, GWIPP Fellow and Associate Professor of Law,