A look at Marcus Garvey’s Black Star Line, Negro Factories Corporation, and Negro Word Newspaper from a 21st century financial and economic perspective.
On Monday, one of our readers made the following comment:
…We must study the movements from the past that found success among our people such as the Marcus Gravy UNIA, the Nation of Islam, and the Black Panthers. We must build institutions that will stand long after their founders are dead and gone. Institutions like wealth are multigenerational, and this is a concept we, as Blacks have missed. Blacks in America have a combined annual income approaching one trillion dollars and we own nothing…
His comment forced me to go back and look at how Marcus Garvey’s United Negro Improvement Association sustained itself economically, and what his philosophy was when it came to black men and women doing for themselves. The business lessons that we can learn from Garvey, the Father of the Black Nationalist movement would serve us well, especially in today’s global (crisis prone) economy.
“Why should not Africa give to the world its Black Rockefeller, Rothschild and Henry Ford? Now is the opportunity. Now is the chance for every Negro to make every effort toward a commercial, industrial standard that will make us comparable with the successful business men of other races.” – Marcus Garvey
Vertical and Horizontal Integration
Vertical integration is the degree to which a firm owns its downstream suppliers and its upstream buyers. In other words, rather than just buying and frying a chicken to serve in your restaurant, you own the chicken farm, the seed company that feeds the chicken, the processing plant that cuts the chicken, the land that produces the brick and mortar to build the restaurant, and the construction company that builds the restaurant.
Horizontal Integration is the expansion of a firm within an industry in which it is already active for the purpose of increasing its share of the market for a particular product or service. In our example above, you would use your profits to buy out competing chicken farms, seed producers, other pieces of real estate, etc -think monopoly on a macroeconomic scale.
McDonald’s, Coca-Cola, and De Beers have all executed successful horizontal and vertical integrations.
In effect, Vertical and Horizontal Integration is what Marcus Garvey attempted to do with The Black Star Line, three seaworthy steamships that were purchased to move raw material from one Black Nation to the next. Bananas and Coffee from Central America could be taken to Africa using those three steamships. Mineral wealth from Africa could be brought back to the U.S., and finished goods could then be sent to the Caribbean.
To source raw material for industrial and manufacturing activities, Garvey began the process of acquiring land in Liberia and building infrastructure to establish a colony. However, Marcus Garvey’s plans were ultimately ruined by white colonial powers that brought pressure on the Liberian government. Liberia reversed its decision to support Garvey, and instead turned the land over to the white American industrialist Harvey Firestone (Firestone Corporation). All the expensive equipment shipped to Liberia for the use of Garvey’s colonists was seized. If not for sabotage on the part of the United States, the Black Star Line and Liberia industrial colonies would have laid the foundation for a Pan-African economic empire that would still serve us today.
The Negro Factories Corporation
The finished goods that would be produced with Black hands and sold in Black communities and countries around the world we to be managed by The Negro Factories Corporation, a cornerstone entity for U.N.I.A. Within two months of its establishment in March of 1920, the corporation had created Universal Steam Laundry, a Universal Tailoring and Dress Making department, at 62 West 142nd Street in Harlem (where U.N.I.A. uniforms, insignia, and fashionable clothing was designed and manufactured), three grocery stores in New York, and a printing press that produced Garvey’s organizational newspaper, The Negro World. Plans were laid for a string of national black-owned factories, retailers, and other businesses that would eventually be profitable enough to power and sustain a global, all-black economy.
Entrepreneurship and Employment
What We Can Learn