• Sam Fleming


You may have heard people say, “We should keep our business in our communities” or “support Black banks” but not completely understand what that means. In The Color of Money Mehrsa Baradaran breaks down what these two phrases mean and why keeping money in the Black community is both more complicated and counterintuitive than it may seem. She begins by giving a history lesson on Black wealth accumulation and explains why it has been nearly impossible for Black-owned banks to stay alive. She then demonstrates how dangerous it can be for Black Americans to take their money out of circulation and focus only on Black communities. This text shows the complex ways in which American capitalism was built on the exploitation of Black labor, and how the way Black people in America can acquire and use money is inherently different from the ways in which whites can.

Baradaran also looks extensively at what generates money in black communities and then shows all the ways that white people have engineered black banks to be unsustainable. Essentially, she lays out the ways in which the black community has been tricked into funding white institutions no matter how hard we try not to. She finds that black banks as institutions are still subject to the same discriminatory practices as black individuals. This powerful revelation makes it clear that black banks are a viable solution for black people, but due to external forces, it is unlikely that they will be able to compete with white banks.

She speaks at length about the multiplier effect as a somewhat hidden result of this racism. While larger, white-owned banks are able to consistently generate wealth, multiplying over years and generations, black banks have struggled to even stay afloat. Therefore, while white wealth has been multiplying, black wealth has been stuck in place. This is why we have seen the gap between white and black wealth widen in the last 50 years rather than shrink like we may have thought it would.

Most importantly, Baradaran challenges that there must be black self-help in order to revive our communities. She places the blame squarely on the systems that have been inherited and perpetuated throughout the centuries. Promoting black banking as a be-all-end-all solution only serves as a distraction from the true need for radical reform in the banking industry to move away from racist practices.

While this may all seem like a bit of a niche topic, Baradaran writes about banking in a way that is directly related to other racial and cultural struggles. Many of the systematic issues that she points out are tied to laws that have oppressed and continue to oppress black Americans to this day. If you care about economics or finance this will be a fascinating read for you and if not, I promise you will learn how deep racism goes in this country's financial systems.

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