Black Cooperatives Built Wealth During Jim Crow — The Model Still Works and Nobody Uses It

We have been told, with such frequency and such authority that it has acquired the weight of revealed truth, that Black Americans have never had the resources, the institutions, or the opportunity to build collective wealth in this country. This is a lie. It is a lie that serves the interests of people who profit from Black dependency and fear the implications of Black self-sufficiency, and it is contradicted by a history so thoroughly documented that its absence from the national conversation can only be explained by deliberate omission. Because the truth is this: during the most oppressive period in the post-slavery history of Black America — during Jim Crow, during legal segregation, during an era when a Black man could be murdered for the crime of economic success — Black Americans built one of the most extensive networks of cooperative enterprises in the history of the United States. They built credit unions. They built agricultural cooperatives. They built mutual aid societies, burial societies, insurance cooperatives, purchasing cooperatives, and marketing cooperatives. They did this with no government support, no philanthropic assistance, and no legal protection. And these institutions worked.

The fact that most Black Americans alive today have never heard of this history is not an accident. It is a consequence of an educational system that teaches Black history as a narrative of suffering rather than a narrative of agency, and of a political culture that finds Black victimhood more useful than Black capability. But the history exists, it is documented, and the model it describes is as viable today as it was a century ago. More viable, in fact, because the legal barriers that constrained it then have been removed, and the technology that can scale it now did not exist.

The History They Did Not Teach You

In 1907, W.E.B. Du Bois published a study through Atlanta University titled Economic Co-operation Among Negro Americans. It is one of the most important documents in American economic history, and it is virtually unknown. Du Bois surveyed Black cooperative activity across the United States and documented a staggering breadth of collective economic organization: beneficial and insurance societies with combined membership in the hundreds of thousands, cooperative stores, cooperative farms, building and loan associations, and cemetery associations that served as both burial insurance providers and community investment vehicles.

Du Bois traced the origins of this cooperative tradition to the earliest days of Black freedom, and in some cases to slavery itself. Enslaved people created informal mutual aid networks — pooling resources to purchase freedom for community members, supporting the families of those who were sold, organizing collective work beyond what the plantation required to generate small amounts of independent income. These practices were not charity. They were survival mechanisms, refined under conditions of absolute economic deprivation, and they carried forward into freedom as the foundation of Black cooperative economics.

“The secret of the cooperative is this: it is the only way in which a poor people can become rich. Not individually — the lottery of individual wealth is stacked against the poor — but collectively, by pooling what little each has and directing it toward what all need.”
— W.E.B. Du Bois, “Economic Co-operation Among Negro Americans,” 1907

The scale of this activity is difficult to overstate. The Colored Farmers’ National Alliance and Cooperative Union, founded in 1886, grew to an estimated 1.2 million members by 1891. One point two million. This was not a small mutual aid society. This was a mass economic organization, larger than many labor unions of the era, operating across the Southern states and providing its members with collective purchasing power, marketing cooperation, and a degree of economic independence from the sharecropping system that had replaced slavery with a different form of economic bondage.

The Knights of Labor, the first major American labor union to organize across racial lines, had more than 50,000 Black members by the late 1880s. Black workers in the Knights organized cooperative workshops, cooperative stores, and cooperative farming operations. In the decades that followed, Black cooperative activity expanded into every sector of economic life: the True Reformers Bank in Richmond, Virginia, founded in 1888, was the first bank in the United States chartered and operated entirely by Black Americans, and it grew out of the cooperative insurance activities of the Grand United Order of True Reformers.

The Brick Rural Life School and the Federation

In Enfield, North Carolina, the Brick Rural Life School operated one of the most successful cooperative farming operations in the early twentieth-century South. Established with the support of the American Missionary Association, the Brick school trained Black farmers in cooperative agricultural techniques: collective purchasing of seed and equipment, cooperative marketing of crops to bypass exploitative middlemen, shared processing facilities, and community land management. The Brick model demonstrated that cooperative farming could increase individual farmer income by 30 to 50 percent simply through the elimination of intermediary exploitation and the achievement of bulk purchasing discounts.

The Federation of Southern Cooperatives, founded in 1967 and still operating today, represents the institutional continuation of this tradition. Based in East Point, Georgia, the Federation provides technical assistance, training, and advocacy for cooperative enterprises across the rural South, with a particular focus on Black land retention and cooperative farming. At a time when Black farmland ownership in the United States has declined from approximately 15 million acres in 1920 to fewer than 5 million acres today — a loss of more than two-thirds of Black-held agricultural land — the Federation’s work in helping Black farmers form cooperatives and resist the economic pressures that drive land loss is not merely economic. It is an act of cultural preservation.

Jessica Gordon Nembhard, in her essential work Collective Courage, has provided the most comprehensive modern account of the Black cooperative tradition. Gordon Nembhard documents not only the historical breadth of Black cooperative activity but its philosophical depth: the cooperative model, she argues, is uniquely suited to Black economic conditions because it distributes risk across a community rather than concentrating it in individuals, generates wealth that remains within the community rather than being extracted by outside owners, and builds the social capital — the networks of trust and reciprocity — that are the foundation of all sustained economic development.

Why the Model Faded

If Black cooperatives were so successful, why did they decline? The answer is a combination of external destruction and internal displacement, and both must be understood to grasp the full picture.

External destruction was literal. When Black cooperative enterprises became economically significant enough to threaten white economic dominance, they were attacked. The Colored Farmers’ Alliance was suppressed through a combination of legal harassment, economic retaliation by white landowners who controlled credit and marketing channels, and outright violence. Black cooperative stores in the South were burned. Black cooperative farming operations were disrupted by white merchants who refused to sell supplies to members. The Greenwood district of Tulsa — Black Wall Street — was not technically a cooperative, but its destruction in 1921 was part of the same pattern: when Black collective economic activity produced visible, concentrated wealth, the response was arson.

Internal displacement came later and was more subtle. The civil rights movement, for all its moral necessity, shifted the strategic focus of Black leadership from economic self-organization to legal and political integration. This was not a mistake — legal equality was a prerequisite for economic equality, and the Jim Crow system had to be dismantled. But the shift had an unintended consequence: the cooperative economic tradition, which had been the primary vehicle of Black economic agency for a century, was deprioritized in favor of strategies that sought access to existing white institutions rather than the strengthening of Black ones.

The Great Migration accelerated the decline. As millions of Black Americans moved from the rural South to the urban North, the agricultural cooperatives that had been the backbone of the cooperative tradition lost their membership base. The mutual aid societies that had functioned in tight-knit Southern communities were harder to maintain in the anonymity of urban life. The social bonds that made cooperatives possible — the face-to-face accountability, the reputational consequences of default, the shared identity rooted in place — were attenuated by the dislocation of migration.

And consumer capitalism did the rest. The post-war American economy was organized around individual consumption, not collective production. The advertising industry, which reached its full cultural power in the 1950s and 1960s, sold a vision of the good life that was fundamentally individual: your house, your car, your appliances, your brand loyalty. The cooperative model, which subordinates individual consumption to collective investment, was incompatible with this vision. And Black Americans, newly admitted to the consumer economy after decades of exclusion, were understandably eager to participate in it.

Why the Model Still Works

The conditions that made cooperatives successful during Jim Crow have not disappeared. They have, in many respects, intensified. Black Americans still face a wealth gap that makes individual capital accumulation more difficult. Black entrepreneurs still face lending discrimination that makes bank financing less available. Black consumers still spend the vast majority of their income with businesses owned by people outside their community. The cooperative model addresses every one of these conditions.

Food cooperatives can address the food desert crisis that affects millions of Black Americans. In neighborhoods where major grocery chains refuse to operate because the profit margins are insufficient, a community-owned food cooperative can provide access to fresh, healthy food at cost. The Mandela Food Cooperative in West Oakland, the Renaissance Community Co-op in Greensboro, and similar initiatives across the country are demonstrating that cooperative grocery stores can survive and even thrive in markets that conventional retailers have abandoned.

Housing cooperatives can provide affordable homeownership in markets where speculative real estate investment has priced out low- and moderate-income families. In a housing cooperative, residents collectively own the building and pay monthly charges that cover the mortgage, maintenance, and operating costs. Because the cooperative is not a speculative investment — resale prices are typically limited to prevent windfall profits — the housing remains affordable permanently. New York City has more than 100,000 cooperative housing units, demonstrating that the model operates at scale.

Worker cooperatives can provide living-wage employment and wealth-building opportunities in communities where conventional employment offers neither. In a worker cooperative, the workers are the owners. Profits are distributed among the workers rather than extracted by outside shareholders. Cooperative Home Care Associates in the Bronx, the largest worker cooperative in the United States, employs more than 2,000 home health aides — predominantly women of color — and provides wages, benefits, and ownership stakes that far exceed the industry standard.

Credit unions — which are, by definition, financial cooperatives owned by their members — can provide the lending, savings, and financial services that conventional banks have withdrawn from Black communities. There are currently approximately 5,000 credit unions in the United States, but only a small fraction are designated as serving predominantly Black communities. Expanding the number and capitalization of Black-serving credit unions would address the banking desert that affects millions of Black Americans and provide the community-controlled capital that cooperative development requires.

The Path Forward

The cooperative model is not a panacea. It will not, by itself, close the racial wealth gap or solve the economic crisis of Black America. But it is a proven, documented, historically validated tool that is uniquely suited to the specific economic conditions that Black Americans face, and it is being used at a fraction of its potential.

What would it take to revive and scale the Black cooperative tradition? First, education. Most Black Americans — like most Americans generally — have never been taught the cooperative model, either as a historical fact or as a contemporary economic option. Incorporating cooperative economics into educational curricula, from high school business classes to HBCU programs, would create the knowledge base that cooperative development requires.

Second, seed capital. Cooperatives require startup funding, and the sources that serve this function for conventional businesses — bank loans, venture capital, personal savings — are less available to Black communities. Federal and state cooperative development programs, community development financial institutions, and philanthropic investment in cooperative startups can provide the initial capital that cooperative enterprises need to launch.

Third, technical assistance. Starting and operating a cooperative requires specific knowledge — governance structures, financial management, legal compliance, member engagement — that is distinct from conventional business management. Organizations like the Federation of Southern Cooperatives, the Democracy at Work Institute, and university-based cooperative development centers provide this expertise, but their capacity is a fraction of the need.

Fourth, and most fundamentally, a cultural shift. The cooperative model requires a willingness to subordinate individual gain to collective benefit — not permanently, not in all things, but in the specific domain of economic organization. It requires the understanding that collective wealth-building is not a substitute for individual ambition but a foundation for it, that a community with strong cooperative institutions provides a platform from which individual achievement can launch. This understanding was natural during Jim Crow, when collective survival was a daily necessity. It must be deliberately cultivated now, in an era when individual consumption has become the dominant mode of economic participation.

The history is there. The model is there. The need is there. The only thing missing is the decision — made by individuals, in specific communities, with specific resources and specific plans — to build. Du Bois documented this tradition in 1907. Gordon Nembhard documented it again in 2014. The Federation of Southern Cooperatives has been living it for nearly sixty years. The question is not whether cooperative economics works for Black America. The question is whether this generation will pick up the tool that their grandparents forged, that their great-grandparents wielded under conditions of unimaginable oppression, and that sits waiting — tested, proven, available — for a people ready to use it.