A recent article in Inc. magazine, of all places, made me howl at the moon in frustration over the compulsion of a growing number of Americans to dwell on their own race and ethnicity, in a form of racial narcissism. This is what has been wrought by identity politics, group grievances, and the government's simpleminded racial/ethnic categories.
The article was titled, "The U.S. Economy Is in Serious Trouble if Latinx Founders Don't Get More Funding. Here's Why."
Written by a widely-published and influential Latino who covers Latino, er, Latinx, issues, the article claims that Latinx entrepreneurs are able to increase the scale of their business at only 80% or so of the rate of non-Latinos. The difference is supposedly due to investment capital being less available to Latinos. The message is that something has to be done about this untenable situation, given that Latinos represent a large percent of the population.
As an American of 100% Italian ancestry, I have no idea what the scale-up rate is for Italian entrepreneurs, don't care to know, and never heard the subject discussed once by an Italian American over my many years—and certainly not by my tile-setter father or immigrant, coal-miner grandfather. Chances are, whatever your race and ethnicity, your sentiments are similar to mine.
The Inc. article seems innocuous on the surface, but the racial thinking that undergirds it is not so innocuous. To understand that thinking, this commentary will put the article in a larger context before returning to it later.
You might be wondering what is wrong with studying and highlighting social or economic issues that affect one race or ethnic group more than others. Well, as a lifelong student of history, economics, sociology, ethnography and anthropology—and as a former resident of the barrio—I certainly don't think anything is wrong with it. And it's perfectly understandable that people of any race or ethnicity who felt marginalized in American society of yesteryear and were overlooked by the media, pop culture, and marketers, would want to swing the pendulum in the other direction.
The problem arises when the pendulum swings too far—when intellectual inquiry morphs into a political agenda, when legitimate grievances lead to an air of moral superiority and a cudgel to use on other races, when social justice becomes a cover to gain advantages at the expense of innocents in a racial spoils system, and when the good of one race is spotlighted while the bad of other races is spotlighted, instead of the good and bad of all races being spotlighted.
This was bound to happen when, in a bastardization of the diversity movement, people were hired in the news media, academia, industry, and elsewhere for the expressed purpose of representing the views of their own race or ethnicity, as if an individual can be representative of an entire race or ethnic group. It's just another form of stereotyping and generalizing to consider everyone in a given race or ethnic group as being the same and thus easily represented.
A parallel development has been the use of the word "inclusion" to really mean "exclusion." An exhibit at a museum a couple of years ago demonstrated this.
The exhibit honored American fighter pilots who fought in the Second World War. If it had been inclusive, the exhibit would have honored pilots without regard to race or ethnicity. But that's not what it did. Instead, it featured only Hispanic pilots, thus excluding Polish-American pilots, Irish-American pilots, Greek-American pilots, and so on.
Why mention race at all? Photos of a representative sample of pilots along with their names would have shown that the war was a multiracial and multiethnic effort, in which Hispanics played an important part.
My gut reaction when seeing the exhibit was resentment. I resented that my dad, who fought in the Pacific and is buried in a Veterans cemetery, probably would not be honored if the museum were to have an exhibit about Navy veterans. Wrong race. Wrong minority group.
On the other hand, if the museum had honored only Italians instead of all races and ethnicities, I would have been insulted, feeling that the museum was engaging in racial pandering or trying to compensate for the stereotype that Italians make lousy soldiers, a stereotype that came about because soldiers in the Italian army weren't too keen about fighting and dying for Mussolini and Hitler.
The Inc. article is also exclusionary, because it focuses on one racial/ethnic group, Latinos, and lumps all of the other diverse groups together, thus stripping them of their unique identities. It then compares the scale-up rate and capital acquisition rate for Latinos to this nondescript lump. Such a comparison is even more misleading in view of the fact that Latinos are not monolithic either, given that they can be of any race, or a mixture of races, or can have forebears of different nationalities, or may or may not have Spanish surnames, or, in terms of class, can range from Spanish aristocracy to peasantry.
On a practical level, as someone who is very familiar with demographic data, longitudinal studies, and statistical sampling and analysis, I don't know how it is possible to identify Latino businesses and their rates of scale-up and capital infusion with enough precision to draw valid conclusions within acceptable confidence levels.
Also, the lumping together of all non-Latino races and ethnic groups in the article makes it impossible for the reader to know if there are races/ethnicities other than Latinos whose scale-up rate and access to capital is the same or better or worse than Latinos. Granularity is lost; so is the ability to isolate all of the factors that could affect outcomes, such as culture, tradition, history and geography.
A case in point is Americans and Canadians of Han Chinese descent. I haven't verified this, but It is said that they have a tradition of providing business capital to each other. Moreover, many of the Han Chinese immigrants arrived in Vancouver and Seattle with capital already in hand, because they became wealthy in China and wanted to get their money out of the country and invest it in Canada and the U.S. If this is true, then the experience of the Han Chinese is different from the experience of Latinos, a difference that could explain the lower rate of capital access for Latinos.
Or take the Patel clan of India. It has become a big player in the ownership of independent motels and hotels across America. As with the Han Chinese, it is said that they rely on their own funding for much of their business capital.
And speaking of East Indians, they have a big presence in the tech industry on the West Coast, not only as executives but also as entrepreneurs. Of course, the tech industry has been a magnet for venture capital. Then there is the matter of caste. No doubt, the East Indians who have immigrated to the U.S. are of the upper caste and not the lower caste, and thus speak English fluently and are better educated, wealthier, and more financial savvy.
Jews are another example. Due to being a persecuted minority in much of the world for millennia, they relied on each other for funding, conducted business based on mutual trust, and gravitated to occupations and industries where they could establish a niche, such as shopkeepers, retailers, diamond merchants and bankers. This tradition enabled them to establish leading retail and financial companies in the U.S.
Greeks are a different example. With their experience in operating cafes and restaurants in the mother country, they dominated the diner business on the East Coast. But as far as I know, they did not parlay that knowledge into national chains or franchises, perhaps because they didn't have experience with capital markets.
Italians, on the other hand, should be swimming in capital, given that banking (and double-entry bookkeeping) has its roots in Renaissance Venice, Genoa and Florence. This gave Italians a head-start of centuries in capital markets, a big advantage over, let's say, Guatemalans. But it's unclear how this advantage has played out in modern times.
Sure, the Bank of Italy, which would become Bank of America, was founded in San Francisco by Amadeo Giannini, to provide loans and other banking services to Italian fishermen. But it's difficult to name another big American company founded by Italians, other than Gallo Wines and Chef Boyardee, the company that has the ability to turn Italian cuisine into something that tastes awful. It was founded by Italian immigrant Hector Boiardi and is now owned by Conagra.
Even Panera Bread, which is headquartered in my hometown of St. Louis, was not founded by Italians, although there are some wonderful Italian bakeries in the metropolis. It came about when Au Bon Pain, which was founded in Boston by Ron Saich and Louis Kane, purchased the St. Louis Bread Company, which was founded by Ken Rosenthal.
Maybe my large Roman nose should be out of joint because Rosenthal appropriated my culture. And maybe I should have a big chip on my shoulder because Italians don't dominate banking.
Actually, there is nothing nefarious about why they don't dominate. Wealthy Italian bankers and industrialists did not tend to immigrate to the U.S., but poor and poorly educated peasants did tend to immigrate.
Geography could also explain Latinos' lack of access to capital markets. Historically, Latinos were concentrated in Texas, in other parts of the Southwest, in the Imperial Valley of California, and in Florida—locales that were not centers of finance and banking. This has changed in Houston and Miami as these two cities have grown into megapolises , but much of the Southwest is still somewhat of a financial backwater, as I know firsthand from having lived in San Antonio and from now living in Tucson, where the business environment is quite different from the business environment of New York and Chicago, two locales where I worked for a combined 19 years.
The networking environment is also different in different locales, especially in the Northeast, where the graduates of Yale and Harvard and other Ivy League schools have immediate access to influential networks on Wall Street and in government. In my opinion, the real value of an Ivy League degree is this networking and not a superior education.
In summary, there are many reasons why some races/ethnicities have higher or lower scale-up rates and access to capital than Latinos. But that learning is lost when the issue is positioned as Latinos versus everyone else.
Sadly, such racial narcissism and exclusion have permeated the country in the name of diversity.