divided “in proportion to the amount of their purchases.” The co-op kept records of members’ purchases with stamp books. One of the ways that the Pioneer Cooperative Society recruited members and advertised the co-op was to hold a large ball. By 1920, membership had increased to two hundred, and capital accumulation stood at $4,000. Moore attributed the co-op’s success in “large part due to the loyalty of [its] members” (New York Dept. of Farms and Markets 1920, 10).
The Cooperative Society of Bluefield Colored Institute
The commercial department of the Bluefield Colored Institute in Bluefield, West Virginia, formed a student cooperative store in or around 1925.11 The store’s mission was to sell needed supplies to students and others at the school, to teach cooperative economics to the students, and to be a “commercial laboratory for the application of business theory and practice” (Sims 1925, 93). A share of stock sold for less than $1. After two years in business, the cooperative had paid all its debts and owned its own equipment and inventories (Matney 1927). The store began to pay dividends of 10 percent on purchases made. The student members voted to use profits to pay for scholarships to Bluefield’s secondary school and junior college. Nine scholarships had been awarded by July 1927. According to the co-op’s manager, W. C. Matney, members of this cooperative were the first African Americans to attend the National Cooperative Congress.12 They became members of the Cooperative League of the USA (CLUSA) in 1925. After several years of successful operation, however, “the state of West Virginia eventually forbade its continuance,” according to Du Bois (1940, 759).
The cooperative appears to have gotten some national attention. Du Bois quotes a comment made by a member of the Harvard University Graduate School of Education to the Bluefield Cooperative Society’s manager about its promise as a model: “I am convinced that you are doing a splendid piece of work with this enterprise” (1940, 759). In this cooperative, as in the Citizens’ Co-operative Stores in Memphis, education and training were integral aspects of cooperative development, both initially and throughout its existence. Not only did the Bluefield cooperative educate members about cooperative ownership and business development; profits from the business were also used to send members for advanced educational degrees. Affordable membership was also a goal of this co-op—the price of shares was low. In addition, the importance and documentation of profitability and solvency were apparent. Finally, the success of the Bluefield cooperative provides insight into how African American cooperatives inserted themselves into the wider national cooperative movement by joining the national (White) association and attending national conferences.
Economic Segregation and the “Group Economy”
These examples of early African American cooperatives demonstrate how African Americans have used racial solidarity and economic cooperation in the face of discrimination and marginalization to pool their resources and create their own mutually beneficial and often democratic companies. Jacqueline Jones notes that African Americans’ “ethos of mutuality” has been shaped as much by “racial prejudice as by black solidarity” (1985, 102).
In rural and urban settings, community was important, and families worked together and shared resources. Jones notes the importance of kinship networks and extended households. “Despite the undeniable economic pressures on the family, few households were thrown entirely upon their own resources” (1985, 126). In addition, “cooperative work efforts inevitably possessed a strong emotional component, for they reflected feelings of loyalty and mutual affection as well as great material need” (231).
Du Bois researched and wrote about economic cooperation among African Americans, advocating economic segregation as the path to successful “group economy” in the Black community. In a 1934 letter to NAACP executive director Walter White, Du Bois clarified what he meant by this: “I am using segregation in the broader sense of separate racial effort caused by outer social repulsions, whether those repulsions are a matter of law or custom or mere desire. You are using the word segregation simply as applying to compulsory separations” (1934c, 476). Du Bois distinguished what he meant by “group economy” from the strategies of “black capitalism” and “buying black.” His notion encompassed economic activity based on solidarity among Blacks and free from discrimination. Black group economy, he wrote in his autobiography, “consists of such a co-operative arrangement of industries and services within the Negro group that the group tends to become a closed economic circle largely independent of the surrounding white world” (1940, 711). Jones observes that such a philosophy of separation and self-determination insulated Blacks from Whites “and from the disappointment that often accompanied individual self-seeking” (1985, 100), and provided the “mixed blessings of semiautonomy” (101).
Booker T. Washington also advocated economic separation as part of his promotion of Black self-help and Black business development, or Black capitalism. Washington, known for his conservatism, did promote economic independence and the dignity of work, which had a profound effect on Black entrepreneurship and Black nationalist ideology. Washington was also a founder of the National Negro Business League (see chapter 6). Marcus Garvey promoted Black capitalism and joint business ownership as strategies for economic independence, and to support the emigration of Blacks to predominantly Black Caribbean countries and the African continent—strategies that were also part of Black nationalist ideology. Garvey’s political impact through the UNIA was significant as well as legendary, even though his economic philosophy was much less known and relatively unsuccessful.
Du Bois suggested that voluntary racial economic segregation, in which the “colored group” serves itself in what “approaches a complete system” (1940, 709), explains why the large number of Black businesses and professionals in the early twentieth century were little known and documented. It was a closed system that needed little if anything from the outside (White) world and operated under the radar. White society was unaware of most of these businesses and their interlocking associations, because racial segregation was increasing in the early decades of the twentieth century. Therefore, this was a hidden, almost invisible strategy, and yet in many cases it was quite successful.
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This chapter incorporates heavy revisions of Gordon Nembhard 2004a and 2006a.
DELIBERATIVE COOPERATIVE ECONOMIC DEVELOPMENT
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