Jonathan Small | June 16, 2021
Black Wall Street showed benefit of free markets
Remembrances of the Tulsa Race Massacre have focused largely—and understandably—on the tragic and unnecessary loss of life and property. But Oklahomans should not ignore other lessons provided by the rise and resurrection of “Black Wall Street,” Tulsa’s Greenwood district.
Too many observers gloss over the fact that a center of wealth and commerce was a black community in a state where Jim Crow laws were still enforced—at times, brutally so. How could this be so? Because the power of free markets is often greater than even the power of true systemic oppression.
By 1921, the Greenwood district covered 35 blocks and was home to at least 200 black-owned businesses, although some officials believe the actual number of businesses may have been closer to 600.
The value of those properties and businesses was equivalent to at least $22 million in current dollars, based on insurance claims filed after the neighborhood was destroyed by white mobs. Again, that figure likely understates the wealth accrued by Greenwood residents.
Those businesses arose because free black men and women, despite the barriers created by Jim Crow laws and racist attitudes, were able to work hard, invest, and grow businesses and job opportunities. The opportunities created by their efforts in the marketplace allowed tremendous economic progress despite racist opposition.
True, racism created barriers. But racism could not overcome market forces and individual initiative. If white-owned businesses would not serve black customers, black-owned businesses quickly sprang up to fill the void, and great fortunes were made in the process. Black men and women were able to enjoy a life of prosperity previously unimaginable within the living memory of some of those individuals or their family members who had been slaves.
The opportunities provided by the marketplace also played a role in Greenwood’s resurrection. While the community was reduced to rubble by the Tulsa Race Massacre, it did not stay that way. Residents quickly rebuilt.
The rebuilding occurred even though, as The Wall Street Journal recently noted, there “was little or no government assistance.” It also occurred despite insurers refusing to cover the losses experienced by business and homeowners.
How did African Americans rebuild their community? By using their property as collateral to secure short-term mortgages. Those bets on the future paid off. By 1940, the homeownership rate in Tulsa’s African American community was 49 percent, a better rate than the 45 percent achieved by whites at that time.
The Tulsa Race Massacre is rightly remembered as a terrible act of racism and terrorism. But the resilience of the Greenwood community should not be overshadowed in the retelling, nor should the role that a free market and individual initiative played in producing opportunity and prosperity.
The free-market forces that allowed blacks to build—and rebuild—a community of tremendous prosperity in 1921 remain viable today. Oklahoma policymakers should take note.
Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.