Posted on March 8, 2021

The Plan to Build a Capital for Black Capitalism

Kelefa Sanneh, New Yorker, February 1, 2021

In the fall of 1968, Jet, the Black weekly magazine, devoted a special issue to the upcoming election. On the cover was a cheerful headline: “how black vote can elect next president.” Inside, the editors were less upbeat, reproaching the candidates for not doing more to “woo actively” the Black vote. In an effort to do some last-minute wooing, both of the major candidates had taken out two-page advertisements in the issue. Hubert Humphrey, the Democrat, was popular with Black voters, and sought to remind readers of something he felt they should already know. “Vote for Hubert Humphrey and you’ll help elect the right man President,” his advertisement said. “Don’t vote and you’ll help elect the wrong one.” The “wrong one”—Richard Nixon, the Republican contender—had a more specific pitch. His ad showed a Black man in a letterman sweater, beneath the exhortation “This time, vote like Homer Pitts’ whole world depended on it.” Pitts, it seemed, was a fictional college student facing an uncertain future. And there was a Presidential candidate who wanted to help him:

A vote for Richard Nixon for President is a vote for a man who wants Homer to have the chance to own his own business. Richard Nixon believes strongly in black capitalism. Because black capitalism is black power in the best sense of the word. . . . It’s the key to the black man’s fight for equality—for a piece of the action.

This was the heart of Nixon’s outreach to Black voters in 1968: “Black capitalism,” an ideal of independence that promised to unite militants and moderates, Black nationalists and white centrists. This sales pitch does not seem to have been a big success. {snip}

Arguments about Black capitalism were often rather theoretical. But there was one place in America where a group of pioneers tried to build a community devoted to it, upholding both Nixonian free enterprise and Black self-determination. The place was Soul City, a settlement in rural North Carolina, near the Virginia border, which was founded in 1969, and which is the subject of a new book by Thomas Healy, a law professor and a former journalist. In “Soul City,” he explains how this experiment in Black capitalism was tried, and also how it failed. It is no spoiler to acknowledge this failure at the outset; Healy’s subtitle refers to Soul City as “the Lost Dream of an American Utopia.” The modern story of race in America might be told quite differently if there really were, as there was once meant to be, a prosperous Black mini-metropolis of fifty-five thousand people in North Carolina, serving as a beacon for activists and entrepreneurs everywhere. If Soul City had succeeded, perhaps its founder would be enshrined alongside Martin Luther King, Jr., and Malcolm X in the pantheon of Black uplift.

That founder was Floyd McKissick, a lawyer who had risen through the ranks to become the leader of the Congress of Racial Equality, or CORE, which he helped transform into a militant alternative to more cautious civil-rights organizations like the National Association for the Advancement of Colored People. He left CORE, it seems, not so much because he wanted to make money as because he felt that the best way to help Black people in America was to help some of them make money. Healy argues that McKissick’s dream of a new Black homeland in rural North Carolina could have come true, if not for the backlash it inspired. “It was going to be a beautiful place to live,” one of the earliest residents said.

Healy is one of many who have described Soul City as a would-be utopia, but McKissick viewed himself as a realist and a wised-up dealmaker. Like many Black capitalists throughout history, he had been frustrated by the slow pace and limited success of governmental reforms. “Unless the Black Man attains economic independence,” he wrote, “any ‘political independence’ will be an illusion.” As he discovered, these two forms of independence can be hard to disentangle. The demise of Soul City effectively ended McKissick’s time as a national public figure, but the lure of Black economic independence never faded. Last year, following the protests for racial justice, many organizations and corporations launched initiatives to support Black-owned businesses; Facebook urged users to “#BuyBlack for the holidays.” The idea hasn’t changed much since Nixon’s time: to see that every Homer Pitts gets his “piece of the action.” As an ideal, Black capitalism has endured. But how does it work?


CORE had been founded, in 1942, to fight segregation; McKissick gave it a more assertively Black identity. Not long before the march, he had moved its headquarters from lower Manhattan to Harlem, and the next year core expunged the word “multiracial” from its official self-description, effectively sidelining its white members. {snip}

At the time, McKissick was seen as a candidate to succeed King as the preëminent voice of Black America, but McKissick realized that there could never be another leader of Black America—it was hard enough being the leader of CORE, which was riven by arguments over tactics and ideology. And so, a few months after King’s death, McKissick left the group to start McKissick Enterprises, which promised to invest in everything from restaurants to book publishing. In a brochure announcing the new venture, McKissick said that his focus was “the development of Black Economic Power,” which he called the “last chance to save the Republic.” No more marching, and no more pleading—it was time to build.

Within months, McKissick Enterprises decided that it would build a city. This was not an unusual ambition; in fact, McKissick’s genius was to bring together two trends then ascendant. There was a vogue for master-planned communities, sometimes known as “new towns,” such as Reston, Virginia, founded in 1964, and Columbia, Maryland, founded in 1967. And there was a continuing determination to transform the so-called “ghettos”—neighborhoods that were widely thought to be not just a reflection of Black poverty but a cause of it. McKissick proposed to rescue Black people from the economic stasis of ghettos by creating a new town designed by and for Black people. Whenever he was challenged, as he often was, McKissick stipulated that his community would be “open to all races.” But the name Soul City reflected the Black identity that was, for McKissick, one of its most important selling points. He was a stern and effective presence on television, with a skeptical squint and a crooked smile that could be even more skeptical than the squint. During one of his innumerable media appearances, he promised that Soul City would be “a place where Black people can come, and know they’re wanted.”

The appeal of Soul City was a chance to start anew. McKissick didn’t see the community as an extension of the long history of Black settlements in America; the whole idea was to build something where just about nothing existed, so as not to be influenced by whatever it was that made many Black neighborhoods inimical to prosperity. McKissick found a plot of eighteen hundred acres of undeveloped land, available for three hundred and ninety thousand dollars—a good price, although it was evidently about three hundred and eighty-seven thousand dollars more than McKissick Enterprises had on hand. Chase Bank agreed to loan McKissick half the purchase price, and the seller agreed to accept it as a down payment. In late February, 1969, McKissick closed the deal.

The story of Soul City has been told a number of times over the years, and few of the tellers have failed to notice the central irony: McKissick’s experiment in Black independence depended on the benevolence of white government officials. As McKissick was launching his company, President Lyndon B. Johnson signed the Housing and Urban Development Act of 1968, which directed the government to finance “the development of new communities.” By the time McKissick bought his land, a new President had been inaugurated, and much of the history of Soul City involves McKissick doggedly attempting to shake money loose from the Nixon Administration. Dozens of construction workers took up residence in trailers on the property, but prospective employers weren’t eager to move to Soul City without prospective employees, and vice versa. “Three years of my life have gone into this project,” McKissick wrote, at one point, to a sympathetic government official. “I am sure my creditors within the next ten days will be on the attack unless McKissick Enterprises secures additional funds.” In his effort to get free from white control, and from political wrangling, McKissick wound up more ensnarled in these things than ever.


The cause of Black capitalism has often been championed not by successful entrepreneurs but by leaders who wanted to “tell the white world to go to hell,” even if they didn’t agree about where they wanted the Black world to go. {snip}


Nixon was not wrong to discern in this tradition a conservative impulse. Compared with King, who had called for billions of dollars of federal aid for “the Negro community,” many Black-power advocates seemed to be making less expensive demands. In April, 1968, Nixon gave a radio address in which he claimed that some of the “militant” Black activists were on his side, or ought to be. He praised those who abandoned “welfarist” rhetoric in order to extol the importance of “ownership” and “self-respect.” And he called for a “new approach” that would be grounded in “Black capitalism.” {snip}


{snip} From the start, Soul City attracted plenty of media coverage, much of it critical. {snip}  But its existence, even in a preliminary form, was a tangible example of Black capitalism under Nixon, and so in late 1971, when McKissick had trouble getting loans from the Department of Housing and Urban Development, he wrote to a friend in the Administration that he was prepared to switch sides from Democrat to Republican, and to publicly back Nixon’s 1972 reëlection campaign. The offer was accepted, and McKissick became an enthusiastic Nixon surrogate, giving the keynote address at a lively gathering of Black Nixon supporters who included Betty Shabazz, the widow of Malcolm X, and the jazz musician Lionel Hampton, who performed an original composition, “We Need Nixon.” {snip}

Not long afterward, McKissick secured a pair of government grants for Soul City: half a million dollars toward the construction of an industrial park, and a million toward a health-care center. In July, 1972, the federal government agreed to guarantee fourteen million dollars of Soul City’s debt, for infrastructure improvements, like road paving and electrification, meant to lure businesses. {snip}


Even with the President on its side, though, Soul City faced extraordinary political opposition. Newspaper articles noted that, despite lots of federal money, the town still hadn’t sprung to life; the Government Accountability Office hunted for corruption and impropriety, though it found nothing worse than occasional incompetence. Matters weren’t helped when, in 1972, a former Democrat named Jesse Helms won a North Carolina race for the U.S. Senate—as a Republican, although with no help from McKissick, who declined to endorse a candidate. Helms was known for his hostility to the civil-rights movement, and he told McKissick, “I do not favor the expenditure of taxpayers’ funds for the project known as ‘Soul City.’ ”

It isn’t clear that McKissick was wasting taxpayer money, but the idea was hard to refute, especially when Soul City consisted mainly of a health clinic, a few shops, a cluster of trailers, and some upgraded utilities. McKissick’s support for Nixon wasn’t much of an asset after Nixon’s resignation, and his Republicanism, however nominal, was even less helpful after the election, in 1976, of Jimmy Carter, a Democrat who was sympathetic to civil rights but not particularly interested in Soul City. At one point, McKissick even considered changing the name, which he loved, as a way of making his town more appealing to white corporations and tenants. (A report commissioned by HUD had found that the name had “a negative connotation” for white people.) HUD finally foreclosed on the property in May, 1980, leaving McKissick Enterprises with a small fraction of the land and some mortgages to pay. He rejoined the Democratic Party and lived quietly as a trial lawyer and, after a late-in-life divinity degree, a preacher; he died from lung cancer, in 1991, aged sixty-nine. Today, in the former future home of Soul City, there is not much to see besides a medium-security prison—a planned community but in no sense a utopia.

One of the people who helped plan Soul City was a young Black architect named Harvey Gantt, who later became the mayor of Charlotte, and who twice ran for the Senate as a Democrat against Helms, unsuccessfully. Talking to Healy, Gantt says that when he thinks of Soul City he sometimes wonders, “Why did I think that was going to succeed?” In defense of McKissick’s vision, Healy points out that Soul City was not unusually troubled: HUD funded thirteen new towns, only one of which endures today—the Woodlands, a majority-white outlying suburb of Houston. It is impossible to disprove the contention that, with sufficient government investment, Soul City might have thrived. (With sufficient support, just about any settlement might succeed.) But the promise of Black capitalism was a promise of independence, a promise that Black people could run their own businesses and make their own rules. {snip}

There is a paradox at the heart of “Black capitalism,” two words that pull in opposite directions, toward both community-mindedness and individual striving. When Du Bois proposed “economic emancipation through voluntary determined cooperative effort,” a slogan not designed with placards in mind, he was simultaneously embracing the private sector and urging it to be more public-spirited. And, of course, Soul City, even in theory, turned out to be something less than an archetype of Black capitalism. Because the settlement relied on HUD funding, it was prohibited from discriminating against any potential resident. In other words, McKissick could not accurately say that his city would be unambiguously capitalist, or unambiguously Black.