By Alton Drew
While waiting for a haircut one day, a lovely young lady, who was waiting on her companion, asked me if I was a professor. I was caught off guard by the question for it seemed almost prescient in nature. I had been an adjunct professor back in Maryland, I told her. She then asked if I had been on television. Again I informed her that I had made two appearances on a business news channel. I expected the exchange to end there since her companion was finished with his haircut, but fortunately the conversation did not end there. She proceeded to ask my opinion about the current state of the economy as it impacted Black people. I was happy to oblige since the topic was interesting and, yes, when you get to engage a very attractive woman on the state of the political economy (underscore very attractive), you don’t pass it up.
The conversation turned to whether African or “Black” Diaspora communities could use their own currency. My answer was yes – but to get there we have to first identify a resource that could be used to generate an underlying value for the currency. A true community is built on a resource the extraction, processing, and distribution of which leads to an industry that generates the income necessary for sustaining the communities members.
Second, there has to be a banking/financing resource in place to convert the assets of the underlying resource into loanable funds.
Right now we have very little of the above two components. For example, Africans in America hold very little of its capital. By some estimates, Africans in America hold approximately two percent of total capital in the United States. In addition, consider farm holdings by Africans in America. Africans in America hold approximately two percent of all farms in the United States, according to research by the Center for American Progress …
Compounding the farmland problem is the lack of strong financial infrastructure through which not only lending can be accomplished but also trade in the securities that have underlying them black farm output. There are approximately 45 Black-owned farms located in 20 U.S. states. There are, however, only 19 Black-owned banks identified by BankBlack that are located in fifteen states to support these farms.
It is a strong financial infrastructure that provides funding for land acquisition, seed, and new equipment. Yet, the current Black-owned infrastructure for lending is not enough.
Money is created when loaned funds for land acquisition, seed, and equipment are placed in a farmer’s checking account. At this point Black-owned banks could issue currency distributed by the Federal Reserve or create its own currency where a special currency is designed for use by Black farmers and any other industries related to or depending on Black-owned farms. This could include Black-owned suppliers, Black-owned restaurants, Black-owned pharmacies and wellness stores, etc.
There is theory and there is application. With one to two trillion dollars in output, Africans in America could invest in more farmland while expanding their financial infrastructure in order to support lending, securitization of debt, and issuance of their own debt. Where more land is not available, the next move may have to be the cultivation of intellectual capital and thus make greater inroads into the creative industry space.
On the other hand, Africans in America, rather than trying to replicate the existing model, may have to consider a completely new model for generating and trading currency, one where the resource is unique to and managed solely by Africans in America.