The high price of ignoring economics

Buy Black movement.

I stumbled across this and was taken aback. The idea is that in order to increase the Black community’s share of the wealth, Black people should buy from businesses owned by other Blacks. Sounds OK, but…

People become wealthy by making good economic decisions. When you buy, you should shop for the best value without regard for who the seller is. By spending wisely, you can save to accumulate wealth, or at least get more or better stuff.

If Blacks choose to buy from other Blacks without regard for value, they are making bad economic decisions, and collectively become poorer. There is a visible boon to the Black owned businesses who benefit from the undeserved patronage but the overall harm to the community of getting less value is just as real.

13 thoughts on “The high price of ignoring economics

    1. It was dumb then and it is dumb now, though I can see some justification for favoring domestic production of strategically important products if there is only one overseas source and that source is China.

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        1. The real answer to avoiding dependency on China for strategic needs is as much to buy Japanese and buy Indian as it is to but American.

          It is the concentration of manufacturing in the hands of a hostile dictatorship that is my concern, a vigorously competitive global marketplace is not a threat.

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  1. “ People become wealthy by making good economic decisions.”

    True, but overly simplistic. Our economy is very complicated and starting successful enterprises requires a lot of networks, mentors, financing clout and connections. These have been historically more limited in the minority communities. Getting better, but that takes time to develop.

    So “Buy Black” movements are really a way to self-finance in the early stages.

    There are women owned businesses that relied on women to women networks to get off the ground.

    Asian communities still thrive by buying from each other.

    Just look at the virus stimulus monies that small and particularly minority owned businesses have a harder time getting due to less banking history.

    Liked by 1 person

      1. Your assumption that small neighborhood businesses are the “black market” or somehow illegitimate is not really what I was referring to.

        If you were a big customer of Well Fargo you had a better chance at getting the loans.

        But big customers were not the only ones that the money was intended for. Small businesses that hire a few people are, as a group, some of the biggest employers, just not politically powerful.

        The barber shops, tailoring, convenience and small food markets, car repair shops, restaurants are all hiring millions who must also pay rent, buy food and pay bills. Those are core urban businesses that put food on the table, send children to schools and add to the GDP.

        Bottom line, that is a big part of our economy that should not be overlooked.

        Liked by 1 person

  2. RE: “I stumbled across this and was taken aback. The idea is that in order to increase the Black community’s share of the wealth, Black people should buy from businesses owned by other Blacks.”

    Yes, that’s the gimmick, but why shouldn’t black communities have their own Tupperware and Amway programs?

    The economic point you raise is interesting in this context: Markets work best when they are “free,” meaning that transactions between buyers and sellers are not subject to arbitrary restrictions. One might think that skin color is such a restriction, but it may not be wholly arbitrary here. In a truly free market, one should expect black consumers as a group to express any unique preferences they might have.

    I wonder how the BBM organization would respond if I, being white, tried to join. The membership price is $299.99 up front, plus $39.99 per month. I suspect that skin color is not a formal requirement.

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    1. For products with a centrally determined price and value, like MLM products, I don’t see any harm from giving community preferences. But if a Black family pays $100 more for a set of tires from a Black dealer, that’s
      $100 they won’t have to save if the radiator goes out next month, placing them in a position of having to borrow for an emergency.

      It’s just very destructive to the accumulation of family wealth.

      Unwise decisions have a price.

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      1. I try to buy from local businesses as the opportunity arises. Not just to support them per se, but there is also the nuances of service, being an important regular customer and knowing the quality, or lack of, all play into my choices.

        There is more to retail than just price.

        Liked by 1 person

    2. RE: “But if a Black family pays $100 more for a set of tires from a Black dealer, that’s $100 they won’t have to save if the radiator goes out next month, placing them in a position of having to borrow for an emergency.”

      The opportunity cost is both real and foolish to pay. Better to be a seller than a buyer in this program.

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