What the Negro League can teach us about our economy

I am a huge baseball fan, so World Series time is one of my favorite times of the year, especially when my Yankees are playing. (Yes—I’m a Yankees fan. Winners can handle the hate.) I went to my first game at Shea Stadium to see the Yankees play the Senators and played stickball in Lefferts Park imagining I would pitch for the Yankees someday.

I came up as a fan towards the tail end of the first generation of integrated baseball. Jackie Robinson broke the color barrier in the late forties. By the 1950s, the Negro League, which had until that point been the main place for Black men to play professional baseball, was essentially defunct.

This year was the 100th anniversary of the Negro League. It began in 1924 and grew in popularity from there. Despite the talent of the players in those teams, the all-white Major League did everything they could to keep Black men out of baseball. They resisted it for years until Jackie Robinson came along.

Why? Racism, sure. But also, because they were afraid.

They were afraid of putting Black men and white men on the same playing field—literally. They were worried—in some cases, rightfully so—that Black men would outperform white men at the game. Instead of opening the ballparks to everyone, creating a true meritocracy and better baseball for all, they artificially kept a part of the population out of the game.

The problem with limiting inclusion

I see a similar trend playing out in our economy now: We are artificially keeping a whole class of people out, limiting the true potential of what we can achieve.

Almost 400 laws have been introduced in the past few years to stop or restrict the use of social impact considerations in private sector decision-making. These include laws that would ban diversity, equity, and inclusion initiatives to support the most marginalized among us to start and grow businesses. This push has been exemplified by the legal effort to stop a privately funded program from the Fearless Fund, which aimed to help Black women founders and their companies. The Fearless Fund recently settled to avoid creating a legal precedent against these kinds of programs in the future.

I will not put on my attorney hat and get into the merits of these laws or lawsuits. That’s for another time. But clearly, a group of people felt threatened by the support of Black women entrepreneurs, enough to spend time and resources to take legal action.

They are doing this, even though Black women, women of color, and people of color in general, have the most barriers to success as entrepreneurs and small business owners. Black and Latiné business owners are usually constrained by undercapitalization and often lack access to traditional advisor and investor networks. As a result, people of color are less likely to be approved for small business loans, and when they are approved, receive lower amounts at higher interest rates compared to their white counterparts.

Investment returns are the same, yet . . .

The picture on the equity side of the equation is not any brighter. While white men receive at least 77% of the venture capital funding, Black men receive less than 1% of it. However, data have also shown that investment firms managed by people of color perform no different from firms managed by white people, for most asset classes.

For four major asset classes—mutual funds, hedge funds, real estate, and private equity—with a combined $69.1 trillion in assets globally, less than 1.3% are managed by people of color and white women. And of this asset bucket, only 1% percent are managed by Black people. This results in a lack of diversity in which founders are funded with venture capital and private equity. Like segregated baseball, it also begs the question about what innovation, creativity, and productivity are all of us missing out on because of this pattern of exclusion.

Legal advocates and their supporters are doing everything they can to stop anyone trying to upset this norm, just like they kept baseball segregated for as long as they could. Beyond a single case, they have effectively cowed potential investors from expanding economic opportunity for fear of becoming a target of groundless litigation. While Major League Baseball colluded to exclude Black men from competing with white men, white MLB players were also barred from competing in the Negro Leagues and feared reprisals.

Now, similar forces seek to bar Black women’s access to competition with white men by threatening reprisals to private investors and philanthropists. So far, their strategy seems to be successful. Unlike Dodgers owner Branch Rickey who invested in Jackie Robinson to win and ultimately improve baseball, white investors seem to be standing back, avoiding being called out as champions for economic equity and inclusion. (Their support for Robinson is probably the only reason I wasn’t too brokenhearted when the Dodgers beat my Yankees for the series title.) Perhaps investors do not want to find out if Black women entrepreneurs are actually better than the average white male entrepreneur.

We can all win in an inclusive economy

Our nation does not need to impede everyone capable and courageous enough to start a business, keeping up yesterday’s systemic barriers to economic opportunity. Such barriers need to be broken so we can all enjoy the fruits of an economy that recognizes talent and drive.

In the same way, we celebrate Jackie Robinson today and MLB has adjusted its records to include men like my grandfather, New York Cuban all-star pitcher Patricio Scantlebury, we will celebrate those with the courage to demand and strive for excellence and inclusion. They may not win before courts skilled in today’s ahistorical sophistry, but they will win in the court of public opinion. Our history will remember them and those who invested in them as champions for the equitable and inclusive economy we all deserve.

Joe Scantlebury, JD, is CEO of Living Cities.