Black Capitalism and Black Inequality: Some Sociological Considerations*

Though economists have demonstrated that, in theory, black capitalism should have little direct impact on the well-being of black noncapitalists, indirect and non-economie effects have not been investigated. Empirical tests of this relation-ship have been inadequate. Though not denying that black economie well-being may affect black business, we argue that the effect is at least reciprocal, and proba-bly stronger in the other direction. We find that, for cities, the extent of black en-trepreneurial activity has a strong statistical effect on the well-being of the black population, even when controls are introduced for the many other factors that af-fect aggregate black welfare. We argue that the apparent effect is a sociological one, operant through variables such as group status and group pover. The intro-duction of intervening measures of black "clout " into the model produces results that support this hypothesis. The point that, in a capitalist society, entrepreneurial activity by group members can enhance the status and power of the whole group is not an obscure one. The point follows from the assumptions of several perspec-tives, most directly from those of the Marxian perspective. Strangely, those arguing from a Marxist perspective have been the most adamant in contending that no benefit to blacks can derive from black entrepreneurial activity. The idea of "black capitalism " as a major curative for black eco-nomic woes is a very old one, but has been newly debated, revitalized, and subsidized in the preceding decade and a half. The National Advisory *We are grateful to Sharon Villemez for writing special-purpose PUI computer programs fo