What Exclusion Produced
When white economic institutions refuse to serve Black communities — when banks will not lend, when insurance companies will not insure, when employers will not hire — Black communities have historically responded by building their own. The result, in the decades between Reconstruction and World War II, was a network of Black-owned economic institutions in cities and towns across the South and Midwest that constituted, at their peak, one of the most remarkable examples of community self-sufficiency in American history.
The most famous example is Greenwood, Oklahoma — the neighborhood known as Black Wall Street. But Greenwood was not an anomaly. It was representative of a pattern that existed wherever Black communities were concentrated and excluded from the white economy.
Greenwood, Oklahoma: The Economics
Greenwood was founded in the early 1900s by Black settlers who came to the Oklahoma Territory partly because its newness offered a brief window before Jim Crow was fully established. O.W. Gurley arrived in 1906, purchased 40 acres, and sold lots exclusively to Black buyers. By 1921, Greenwood had developed into a self-contained economic ecosystem:
- Over 300 Black-owned businesses
- 2 Black-owned newspapers (Tulsa Star and Oklahoma Sun)
- 2 Black-owned movie theaters
- A Black-owned hospital
- Law offices, dental practices, and medical offices
- A Black YMCA
- Hotels, grocery stores, law firms, and a public library
- Black-owned real estate estimated at $1.5 million in 1921 values (approximately $26 million today)
The economic principle that made Greenwood work was the circulation of the Black dollar within the community. A dollar spent at a Black-owned business was spent again at another Black-owned business before leaving the community. Contemporary economists estimate that the Black dollar circulated within Black communities an average of 36 to 100 times in the early 20th century. Today it circulates approximately 6 hours before leaving.
The Pattern: Greenwood Was Not Alone
Black Wall Streets existed across America:
Durham, North Carolina — The Hayti neighborhood contained North Carolina Mutual Life Insurance Company (founded 1898), which became the largest Black-owned business in the United States. At its peak it employed over 1,000 people and held assets of over $40 million. Durham's Black business district also included Mechanics and Farmers Bank (founded 1907), which survived the Great Depression when many white banks failed.
Atlanta, Georgia — Auburn Avenue ("Sweet Auburn") was described by Fortune magazine in 1956 as "the richest Negro street in the world." It contained Atlanta Life Insurance Company (founded 1905), Citizens Trust Bank (founded 1921), and dozens of Black-owned businesses that sustained the Black Atlanta professional class through Jim Crow.
Washington D.C. — U Street Corridor was home to Howard University, Black theaters, Black restaurants, and the social infrastructure of Black Washington's middle class from the 1890s through the 1960s.
Chicago, Illinois — The Bronzeville neighborhood on the South Side developed as the destination of the Great Migration, producing a Black business district and cultural infrastructure that shaped jazz, blues, and Black political life nationally.
The Economics of Forced Circulation
Black Wall Streets were not created by choice — they were created by exclusion. Jim Crow laws and social custom prevented Black customers from shopping at white-owned stores, eating at white-owned restaurants, banking at white-owned banks, or staying at white-owned hotels.
This forced exclusion had an unintended economic consequence: it created captive markets for Black-owned businesses. A Black customer in Tulsa could not bank anywhere but a Black-owned bank. A Black patient in Durham could not see a doctor anywhere but a Black doctor. The exclusion that was designed to harm Black communities simultaneously created conditions for the development of Black economic institutions.
This is a crucial insight for understanding what happened when integration came: the desegregation of public accommodations in the 1960s allowed Black consumers to shop at white-owned stores for the first time. Black dollars that had circulated within Black communities began to leave them. The Black businesses that had been sustained by captive markets now faced competition they had not faced before — without having access to the capital, credit, and supplier relationships that white businesses had built over generations.
Integration opened doors. It also disrupted the forced economic solidarity that exclusion had created.
The Tulsa Massacre: When They Burned It Down
On May 31 and June 1, 1921, a white mob attacked Greenwood. The immediate trigger was the arrest of Dick Rowland, a Black shoe shiner, on disputed charges involving a white elevator operator. When armed Black Tulsans arrived at the courthouse to protect Rowland from potential lynching, shots were fired.
What followed was not a riot. It was a massacre and an act of urban warfare:
- White mobs, some of them deputized by the Tulsa police department, invaded Greenwood
- The Oklahoma National Guard was called — and helped intern Black Tulsans rather than protect them
- Aircraft flew over Greenwood; eyewitness accounts and a 2001 state commission report suggest they may have fired on residents and/or dropped incendiary devices
- 35 blocks of Greenwood were burned to the ground
- 1,256 homes were destroyed
- Between 100 and 300 people were killed (records were suppressed; the true number is unknown)
- 10,000 Black Tulsans were left homeless overnight
- The estimated property loss was $1.5–$2 million in 1921 values
No white perpetrators were ever charged. No residents received insurance payments — insurance companies invoked riot exclusion clauses. The city of Tulsa attempted to rezone the destroyed land as an industrial district to prevent rebuilding.
Greenwood residents rebuilt anyway — demonstrating the resilience that is as much a part of this story as the destruction.
Tulsa Was Not Alone Either
The Tulsa massacre was the largest single act of racial economic destruction, but it was part of a documented pattern:
- Rosewood, Florida (1923): A prosperous Black community was attacked and burned by a white mob over seven days. At least 6 Black residents were killed; the true number is unknown. The town was destroyed and never rebuilt.
- Wilmington, North Carolina (1898): White supremacists overthrew the elected biracial government of Wilmington, killed at least 14 Black residents (estimates go much higher), and expelled Black business owners and political leaders. It is the only successful coup d'état in American history.
- Atlanta Race Riot (1906): White mobs attacked Black neighborhoods, killing at least 25 Black residents. Black-owned businesses were destroyed.
- Red Summer (1919): More than 36 cities saw coordinated attacks on Black communities, destroying homes and businesses across the country.
This pattern — Black economic accumulation followed by destruction — is not incidental to American economic history. It is one of its central mechanisms.
