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November 2002

"The Economics of Racism"
Excerpted from an original paper by Peter Jessen, submitted to the "Forum on The Economics of Racism," Metropolitan Council, at Earle Brown Continuing Education Center, St. Paul Campus, University of Minnesota, December 9, 1992.

Available on the web at
From the forum brochure:

Purpose: To discuss issues surrounding the economics of racism

To identify collaborative solutions

Forum for: Decisions makers in private, public, and nonprofit sectors

1st question: What does racism have to do with the economy of the Twin City Metro area?

2nd question: Why the enormous income gap (census figures) between Whites and nonwhites?

Proposed solution: Education, training, expanded opportunities in the workplace"

Brief Response to Forum Brochure

Yes, this could work IF: You don't kill the geese (industrial capitalism, political democracy,

and carefulness/respect for values and tradition) that lay the golden eggs (prosperity, the benefits of material production; equality as access to the ladder of social mobility: to succeed or fail, and if fail, to have a floor below which one doesn't fall; and liberty, in both institutional/political terms and in personal autonomy terms), all of which contribute [using the words of Peter L. Berger] to the "of courseness..." of the "Multiple Realities of the Everyday World" in the "Contestations" of Social World Building Which Last "...Until Further Notice"

and yes, if this key truth is recognized: that racism exists (statistically provable).

It is very damaging to our economy, as noted below (and, therefore, it is also damaging to society as a whole, to our sense of shared community and moral standards, and to posterity, the future in which our children and grandchildren will live). Racism works several ways: Whites vs. Blacks; Blacks vs. Whites; White ethnics against other White ethnics; different black groups against other Black groups; all of which results in a racist culture war in which both White skin heads and Black culturalists fight together against the classic liberal, European ideal of tolerance, of people who want to be in the USA in terms of geography, but who are really part of either White or Black semi-separatist groups, fighting against being American by culture.


An alternative perspective: The issue is, thus, more than race: it is the clash between group identities and individual identities and classes and cultures/sub-cultures, due to the dread and fear of diversity and difference, resulting in the tolerance of poverty (the price willing to be paid to prevent diversity), because of faulty (at best) and evil (at worst) visions of the nature of humans and of society and the responses as to what to do about both. We need to move beyond the false reality of "multi-culturalism" to the empirical reality of "interculturalism," of the constant "cognitive contamination" that takes place despite efforts, by whoever, at retaining "purity," and recognize and celebrate the contributions of both dead White males on one hand and live Black males and live Black and White females on the other. Objectively and historically speaking, "either/or" is incorrect, "both/and" is correct.

[Selected] Alternative discussion points that impact on racism [renumbered]:

(1) View the causal sequence in reverse order: You can't have freedom for all without peace for all; you can't have peace for all without justice for all; you can't have justice for all without love for all; and, as racism is antagonistic to all of these, racism creates an economic imbalance in the key business areas of survival and profits.

(2) Consider whether you can really get people off the end of the welfare distribution line without first enabling them to at least think that they have a chance at wealth, and then secondly to give that chance (to succeed or fail on their own): how to continue doing the good that capitalism has done yet changing the investment and entrepreneurial rules and activity so they are for others than just Whites (which is affirmative perseverance, not affirmative action);

(3) Rethink the pessimistic and empirically false "two-nations" thesis of the Kerner Commission Report regarding the USA , an idea based on race: one Black nation, one White nation. The report incorrectly stated that immigrants pulling themselves up by their bootstraps could no longer be done in this country and that poor Blacks would have to be taken care of by the state. While the government programs set in, the Koreans, Vietnamese, Hmong and a whole host of other immigrants, who didn't "know" this, came in and demonstrated that people could indeed do so, if the entrepreneurial spirit was allowed to be turned loose. Instead, a two-nation idea based on race substitutes the more empirically verifiable reality of economics: one poor and one affluent, regardless of race.

(4) Consider that Social (In)equality and the (In)Justice(s) of "Life Chances" exist at the macro-level of community and society (the world and its interdependent institutions: politics, democracy, various -isms, and economics) and at the micro level of community and society (the world & its interdependent individuals: characteristics of people and small groups).

(5) Consider how to achieve a more equitable (fair) access to the opportunities and resources of society by changing the rules regarding who is to get and who is to give the "3 P's" of privilege, prestige and power (which include wealth, status, and position), using various moral criteria, not determinable by social science, but which social science can "inform", such as a "Calculus of Pain"/"Human Suffering"; "a Calculus of Meaning"/"Cognitive Respect," a "Postulate of Ignorance," political liberties and human rights vis à vis limits, of responsible self-government and civility, and a calculus of (in)justice to determine whether or not to advocate or not advocate a "preferential option for the poor" (as opposed to a preferential option for a race or ethnic group), as a first step toward the public duty to sufficiently ensure present and subsequent generations a posterity worth preserving and continuing [all terms of Peter L. Berger].

(6) Consider "building community," not jails, for to solve the problem of the inner city is to also solve those of the suburbs, etc.

(7) Consider extending the three keys to economic success to non-whites as well as Whites: (1) a truly level (not just rhetorically so) playing field in the pursuit of making money (a positive net left after expenses, also called profit), (2) saving money (the opposite of debt-based economies), and (3) solving technical/management/administrative problems (to cut costs, increase market share, and increase the value of shares for investors).

NUMBER ONE: Recognize the need for a vision (especially of one for ending/reducing racism and its economic costs across the board.

NUMBER TWO: Recognize the validity of the vision of Martin Luther King, Jr., recognizing that his dream for ending/reducing racism and its economic costs across the board in both social/political/citizenship terms and economic/wealth/entrepreneurship terms:

to remove the "manacles of segregation and the chains of discrimination. the promissory note of the Declaration of Independence...make real the promises of Democracy...lift our nation from the quicksands of racial injustice to the solid rock of brotherhood...not be satisfied until justice rolls down like waters and righteousness like a mighty stream...the table of brotherhood...injustice and oppression transformed into an oasis of freedom and justice...judged not by the color of their skin but by the content of their character...all transformed into sisters and let freedom ring."

Micah 6:8: "He has told you, O mortal, what is good; and what does the Lord require of you but to do justice, and to love kindness, and to walk humbly with your God?"

I John 3:17: "How does God's love abide in anyone who has the world's goods and sees a brother or sister in need and yet refuses help?"

Langston Hughes: "A long time ago, an enslaved people heading toward freedom made up a song: Keep Your Hand on the Plow! Hold On! That plow plowed a new furrow across the field of history. Into that furrow the freedom seed was dropped. From that seed a tree grew, is growing, will ever grow. That tree is for everybody, for all America, for all the world. May its branches spread and its shelter grow until all races and all peoples know its shade."

Real discrimination and real integration are neither racial nor ethnic. Real discrimination is in the area of power and wealth. Monopolies and oligarchies discriminate on two things and two things only: power and wealth. The racial and ethnic questions depend on which country or nation or company or organization one is in. The history of the world is of discrimination of the powerful and wealthy against the non-powerful and non-wealthy. In this the powerful and wealthy are "equal opportunity discriminators" equally against all others, regardless of race, religion, color, ethnicity, sexual orientation, etc., who were not in their circle who controlled power and wealth. Racism will be said to be over when minorities are thus included in both power (political mainstream) and wealth (economic mainstream), which will then include them in the social mainstream.




1. Adopt a [Conflict Resolution] Process Model to follow to facilitate problem resolution:

2. Adopt an action sequence

3. Put together a "Reader" to serve as the basis for the next forum or conference, consisting of

the following: Three short essays, (1) point (from one end of the spectrum), (2) counterpoint

(from the other end), and (3) synthesis of reconciliation (written by looking at both with an urgent concern for a strong economy and social justice, and doing so with a relentless intellectual integrity uncompromised by either ideology or the fact the writer is white or nonwhite, male or female).

4. Hold a 3rd Conference

5. Take Action


The following action program combines collaboratively the private sector, the public sector (government), the not-for profit sector (tax exempt organizations, churches, charities, etc.), and the education/ training sector (public, private, not-for-profit) in economic activity/construction/ business/manufacturing/services that will create growth and development, and the training and opportunities to make it happen, and the profits and jobs that will come as a result.

1. Multi-economic enterprises: the private sector. This could be part of the third


2. Multi-services: the government sector.

3. Multi-training enterprises/services/activities: a joint venture/partnership between the government, private, and not-for-profit sectors.

4. Multi-activities: the not-for-profit world

Existing Programs: Inner city development and business

Proposed National Service Corps

City Year Program now in place in Boston

Enterprise Zones which are inclusive, not exclusive


There is no shortage of ideas regarding "what to do" to "reconstruct" society, to improve upon Jefferson's project of "Inventing America," as the [four pages] books listed below clearly demonstrate.

We need the will (political will, economic will, corporate will, personal will) to deal with both the ideas and the empirical facts. ... Ideas and programs should be approached like manufacturing, seeking a balance between Total Quality Management (TQM), Just In Time (JIT)delivery, and Zero Defects Management (ZDM). The following list is by no means exhaustive; rather it lists popular works based on scholarly undertakings [original was 4 pages long]:

Regarding the Cities and Population Clusters in the U.S.A., as well as Clusters in terms of Race, Poverty, and the Underclass

1. City: Rediscovering the Center by Willam H. Whyte
2. Where We Live by Irving Welfeld
3. Edge City: Life on the New Frontier by Joel Garreau
4. The Nine Nations of North America by Joel Garreau
5. The Clustering of America by Michael J. Weiss
6. Commonwealth: A Return to Citizen Politics by Harry C. Boyte
7. Free Spaces: The Sources of Democratic Change in America by Sara M. Evans and
Harry C. Boyte.

Regarding the Question of Justice, especially as it relates to the "Economics of Racism"

1. A Theory of Justice by John Rawls
2. Anarchy, State, and Utopia by Robert Nozick
3. A Passion for Justice: Emotions and the Origins of the Social Contract by Robert C.
4. With Justice for All by John Perkins
5. The Faces of Injustice by Judith N. Shklar
6. Six Theories of Justice: Perspectives from Philosophical and Theological Ethics
by Karen Lebacqz
7. Justice in an Unjust World: Foundations for a Christian Approach to Justice by Karen
8. Struggles for Justice: Social Responsibility and the Liberal State by Alan Dawley2002 Postscript:
Because of the words below by the Star Tribune and Pioneer Press, these materials were also submitted to the Star Tribune Publisher and the Pioneer Press Editorial Page Editor. However, no response was received from either of them. And although they did not lead the charge "to walk the talk," they were able "to talk the walk:"

Here are the words of the Star Tribune Publisher in 1992:
o "social justice, a global rather than isolationist perspective, good government, and the obligation of businesses to make the community better."
o "diversity, openness, empowerment, and win/win solutions."
o "not form...views by counting votes, but surely should listen and learn and change."
Here are the words of the Pioneer Press Editorial Page Editor in 1992:
o "talking about what must be done to stem growing poverty, social isolation and racial tension in the Twin Cities"
o "what is important is a recognition that serious problems are spreading...the will to do something about them"
o "we ignore these messages at our own peril"
o "improve life for those in poverty and to avoid confining poverty
in core communities

To discuss these issues across the board, from a higher plane of reference, freedom and liberty, see also the essay "The Culture of Liberty: An Agenda," Peter L. Berger, 35th Anniversary Issue of Society, Vo. 35, No. 2, January-February 1998, pp. 407-415
Finally, I direct you to my list of 16 models, 8 micro-level models and 8 macro-level models, at, for how to deal with conflict resolution, whether between individuals, organizations, jurisdictions, or nations.

Ron hosts “Black Focus” on Channel 17, MTN-TV, Sundays, 5-6 pm. Formerly head of the Minneapolis Civil Rights Commission and the Urban League, he continues his “watchdog” role for Minneapolis. Order his book, hear his voice, read his solution papers, and read his between columns “web log” at

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