Through an analysis of private equity in America, the book Black Wealth/White Wealth published in 1997 by Melvin Oliver and Thomas Shapiro depicts the often-unseen differences in accumulated wealth between whites and blacks. Through their research, Oliver and Shapiro found that the racial disparity of accumulated wealth explains why a large majority of blacks have been unable to rise from the bottom of the social structure. Looking back 52 years ago, we find that Oliver and Shapiro’s findings are given further legitimacy when Melvin Tumin’s critique of Kingsley-Davis and Wilbert Moore’s theory on social stratification is examined.
To find the accumulated wealth disparity between whites and blacks Oliver and Shapiro first had to start with an analytical distinction between wealth and income. After all, simply glancing at Forbes Magazine’s list of top income earners for 2011 appears to indicate that the once prominent socioeconomic disparity among whites and blacks has vanished. Over the past decade, famous black individuals such as Oprah Winfrey, Michael Jackson, Michael Jordan, and Magic Johnson have all topped the charts as the highest income earners in America. At some points in recent history, blacks have even accounted for half of the top ten highest earners, an outstanding feat considering blacks account for only about 13% of the USA population. This picture painted by the list of highest income earners however, only tells half the story. Contrary to Forbes’ highest income list is Forbes’ profile of the 400 wealthiest Americans. This list contains few if any African Americans. Therefore, to explain this disparity a clear distinction had to be made between what is wealth and what is income.
Oliver and Shapiro define income as the “flow of money over time, like a rate per hour, week, or year” (Black 273). Wealth on the other hand, “is a stock of assets owned at a particular time” (Black 273). Wealth is different from income in that it represents a control over financial resources that have been accumulated over time such as land, valuables, stock options, trust funds etc… Wealth when combined with income provides the resources needed to obtain the “good life”. Some examples of what wealth can provide includes: education, business, training, justice, health, and comfort among other things. Most importantly, wealth has the ability to be transferred down from generations allowing one to capture resources gained through advantageous inequality over another group and continue to pass those resources down.
Oliver and Shapiro cite three concepts to understand the racial differences in wealth accumulation. These concepts are “racialization of state policy”, “economic detour”, and “sedimentation of racial inequality”. The “racialization of state policy refers to how state policy impaired the ability of many black Americans to accumulate wealth- and discouraged them from doing so- from the beginning of slavery (antebellum) throughout American...