An Economic Theory of Pan-Africanism

Introduction

A hundred years ago, in September of 1897, the preparatory meeting of the 1900 Pan-African Conference was held in London. A few months earlier, however, the concept of Pan-Africanism had already been hatched by William Edward Burghardt DuBois, popularly known simply as W.E.B. DuBois. At the March 1897 meeting of the Negro Academy, DuBois presented the paper, “The Conservation of Races,” in which he declared:

“Pan-Negroism” above is equated here to “Pan-Africanism.” While “Pan-Africanism” has historically enjoyed varied definitions, I wish to adopt the interpretation given by W. Ofoatey-Kodjoe: “The acceptance of a oneness of all African people and a commitment for the betterment of all people of African descent.” ² Most broadly defined, “Pan-African people,” or simply African people, could be equated with all of humanity, given the assumption that life began on the African continent. In a more realistic perspective, however, “Pan-African people” may be defined as a union of two sets: (1) Negroids of the African continent and (2) descendants of (1) who reside outside of Africa, referred to generally as African people in the Diaspora. The largest subset of (2), of course, comprises those in the Americas.

Historically, the basic argument in favor of Pan-Africanism has been politically based, in that by banding together, African people everywhere could exert sufficient political clout toward liberation from slavery in the Americas and from colonialism on the African continent. This was especially true during the Jim Crow days in the United States and pre-independence for African countries. Thus, political liberation has traditionally been the more urgent element of Pan-Africanism. Nevertheless, even in the very early period, there appeared to be some economic basis for Pan-Africanism as well, as in the case of Marcus Garvey's call for emigration back to Africa.

The Traditional Economic Concept of Pan-Africanism

The traditional economic concept of Pan-Africanism has usually entailed the call for African people, on the African continent or the Diaspora, to pool their resources in order to establish economic power for the common good. I refer to this form as “Macroeconomic Pan-Africanism” (MAPA). Under this concept, economic agents organize to maximize the multiplier associated with economic activity inside the African (black) community. Thus, consistent with MAPA, African Americans are, for instance, exhorted to spend within the black community, possibly including importations from African countries. African nations are also called upon to unite and to trade among themselves.

At the time in American history when discrimination against blacks was virulent and overt, and blacks were severely limited in their choice set in economic exchange as imposed by the tenets of discrimination, de jure or de facto, this type of economic Pan-Africanism could be viable. There is little doubt, even today, that race is probably the most fundamental determinant of group identities. Nevertheless, blacks can currently patronize, relatively freely, white as well as non-white establishments.

Consistent with rational behavior under neoclassical theory, each individual seeks to maximize his/her utility by engaging in economic exchange irrespective of ethnicity. If so, then political exhortation to “buy black,” in order to maximize the multiplier effect of economic activity within the black community, will now have to give way to economic rationalism, that is, under neoclassical theory, of course.

In particular, it seems rational for many black high achievers, within the neoclassical framework of perfect information and mobility, to engage in economic exchange primarily outside of the black community, where most of the economic resources are controlled. Efforts to get such individuals to switch their activities to the black community would be futile because they would not perceive such commercial exchange to be in their best economic self-interests. Thus, it is doubtful that MAPA would be effective as a plausible modality to improve the lot of the black community in the long or medium run.

Motives for Redistribution

Even if Macroeconomic Pan-Africanism could succeed in raising the economic well-being of the Pan-African community as a whole, there would still remain the usual issues of distribution. Might a rising tide lift all boats sufficiently within the Pan-African economy to provide a stable equilibrium in order to insure the viability of the community? Would there be sufficient gains by the masses in the community to raise its economic respectability in the wider world?

While many in the Pan-African world have achieved significant economic gains, we know that many more languish in economic doldrums. How do we insure that such a large segment of the community also shares in the economic pie? Or should we? What are the motives for economic redistribution within the Pan-African community?

Intergenerational Responsibility

Is intergenerational responsibility a strong basis for Pan-Africanism? After all, in the past many blacks, as well as whites, sacrificed so that future generations of black people would be free from the yoke of racism. Should ensuing generations carry on those efforts? Yes, but will they?

As the chains of racism loosen for many in the black community, such efforts appear not to be in the individual self-interest. Meanwhile, it is only natural that as blacks move further away from the most blatant form of racism to the relatively implicit, the “we” identity begins to give way to the “I.” Hence, intergenerational responsibility appears to be a weak basis for Pan-Africanism.

In fairness, there are many in the black community, and elsewhere, who continue to give of themselves for the benefit of the future as well as the present generations. Nonetheless, there are many others who do not because they simply do not perceive the economic benefit for themselves or their immediate families. This is the classical free-rider problem in the intergenerational sense. Is there, therefore, no basis for economic Pan-Africanism?

Microeconomic Pan-Africanism

Race is, arguably, one of the most important attributes defining group identities in the labor market. Thus, it seems reasonable to assume that under conditions of imperfect and costly information, black achievers would be mapped into the lower mean characteristics of the wider black community. This is the usual case of “statistical discrimination,” which adversely affects high-achieving blacks.

Under statistical discrimination, the black high achiever, type 1, would be relegated to a lower income than would otherwise be realizable. Hence, a type l's income depends not only on his/her personal characteristics but also on those of his/her identity group. A lower mean attribute of the identity group would reduce his/her income, while a higher one would raise it.

Thus it may be economically beneficial for the type 1 to engage in “redistributive” activities that augment labor-market attributes of the underclass in the Pan-African community, type 2. By engaging in such activities, type 1 can raise his/her own income. In effect, the motive for Pan-Africanism, which necessarily entails redistribution, need not require altruism or intergenerational responsibility which, we have argued, would be untenable even in the medium run. We refer to this concept as “Microeconomic Pan-Africanism” (MIPA).

However, the rationale for MIPA may extend beyond the labor market, for statistical discrimination is present in all facets of the black experience: indeed in all areas of contact in society! A given black person may be presumed to be less capable than an Asian or a white a priori due to statistical discrimination. Yet we know that many, many blacks have outperformed the average white or Asian counterpart inside and outside the labor market.

It seems reasonable to assume that others' perception and subsequent treatment of an individual are an important argument of the individual's utility function. Then the amount of redistribution from type 1 to type 2 individuals within the black community, for purposes of optimality in the more general environment, may actually be larger than that required for Pareto-optimality under the usual scenario of statistical discrimination limited to the labor market.

Alas, the existence of statistical discrimination in society may provide a major impetus for Pan-Africanism in a way that none of the traditional motives could. That is, we no longer need to appeal to the transitory attributes of altruism, intergenerational redistribution, or even macroeconomic motives to justify economic Pan-Africanism.

Casual empiricism suggests that other peoples with similar plights have benefited from such ethnic-based cooperation, and so can Pan-African people. Indeed, the economic argument may be of even greater urgency for Pan-African people than for others. After all, the group identity of Pan-African people is likely better defined within the worldwide community than that based on other distinguishing characteristics.

Conclusion

We are told in neoclassical theory that statistical discrimination evaporates in the long run. Yes, of course, but it has been around for centuries; it is alive and well today and it likely will continue to be for the foreseeable future. In the words of the famous economist John Maynard Keynes many years ago, “We are all dead in the long run.”

Until then, we must join hands with the great Pan-Africanists in the likes of W. E. B. DuBois, Kwame Nkrumah, George Padmore, and Jomo Kenyatta to advance the cause of Pan-Africanism in the economic realm. Such efforts would not necessarily be justified by altruism or a sense of responsibility toward Pan-African people, but by the pursuit of individual self interests. Forty years ago, Kwame Nkrumah proclaimed at the time of Ghana's independence: “The independence of Ghana is meaningless unless it is linked up with the total liberation of the African continent.” ³

In that spirit of Pan-Africanism, we must now modestly declare:

Abiding by the above declaration is apparently in our individual, as well as collective, interests. We must act on this declaration now as we enter the dawn of the 21st century.