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

We have been told a lie, so often and with such authority that it feels like settled fact, that Black Americans have never had the resources, the institutions, or the opportunity to build collective wealth in this country. This is a lie.

This lie serves people who profit from Black dependency and fear the implications of Black self-sufficiency. It is contradicted by a history so well documented that its absence from the national conversation can only be explained by deliberate omission.

The truth is plain. During the most oppressive period in the post-slavery history of Black America — during Jim Crow, during legal segregation — Black Americans built one of the most extensive networks of cooperative enterprises in American history. The record is specific.

• Credit unions — member-owned financial institutions that kept capital inside the community
• Agricultural cooperatives — collective purchasing, marketing, and processing operations
• Mutual aid societies — community insurance pools that predated the welfare state by a century
• Burial societies — cooperative funds that doubled as community investment vehicles
• Purchasing cooperatives — bulk buying networks that eliminated exploitative middlemen

They did this with no government support, no philanthropic assistance, and no legal protection. And these institutions worked.

Most Black Americans alive today have never heard of this history. That is not an accident. It results from an educational system that teaches Black history as suffering, not agency. It comes from 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, 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. It is virtually unknown.

Du Bois surveyed Black cooperative activity nationwide. He documented a staggering breadth — insurance societies with hundreds of thousands of members, cooperative stores and farms, building and loan associations, and cemetery associations that doubled as 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. They pooled resources to purchase freedom for community members, supported the families of those who were sold, and organized collective work beyond plantation requirements to generate small amounts of independent income. These practices were not charity. They were survival mechanisms refined under absolute economic deprivation. 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 hard to overstate. The Colored Farmers’ National Alliance, founded in 1886, grew to 1.2 million members by 1891. This was a mass economic organization operating across the South. It provided collective purchasing power and marketing cooperation. It offered economic independence from the sharecropping system — 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. 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 at bulk rates
• Cooperative marketing of crops to bypass exploitative middlemen
• Shared processing facilities that no individual farmer could afford alone
• Community land management that prevented parcel-by-parcel dispossession

The Brick model demonstrated that cooperative farming could increase individual farmer income by 30 to 50 percent simply by eliminating middleman exploitation and achieving 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. Its particular focus is Black land retention and cooperative farming.

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.

• Risk distribution — The cooperative model spreads risk across a community rather than concentrating it in individuals
• Wealth retention — It generates wealth that remains within the community rather than being extracted by outside owners
• Social capital — It builds the networks of trust and reciprocity that are the foundation of all sustained economic development

The Puzzle and the Solution

A puzzle master looks at that timeline and identifies the variable that changed. The cooperatives did not fail under oppression. They faded when three things happened at once — external violence destroyed the most successful examples, political strategy shifted from economic self-organization to legal integration, and consumer capitalism offered an individual alternative to collective investment.

“You cannot cure what you refuse to diagnose.”

The diagnosis is not a lack of capital or opportunity. The diagnosis is a deliberate and sustained historical amnesia, enforced by an educational and political system that finds Black victimhood more useful than Black capability. The cooperative model — credit unions, agricultural co-ops, mutual aid societies — is not a theory. It is a documented, century-old proof of concept that built wealth under legalized terrorism. Its near-total erasure from our collective consciousness is the primary barrier to its revival.

Top 5 Solutions That Are Already Working

1. Mondragon Cooperative Corporation (Spain). In 1956, a Catholic priest and five students in the Basque Country founded what became the world’s largest worker cooperative federation. Today Mondragon operates 81 self-governing cooperatives and 12 research centers spanning manufacturing, retail, finance, and education. It generates 11.2 billion euros in annual revenue and employs over 70,000 worker-owners. The CEO-to-worker pay ratio is capped at 6-to-1. Fewer than 5 percent of Mondragon cooperatives have ever faced bankruptcy, compared to the roughly 50 percent failure rate for conventional businesses. Worker-owners share 80 percent of profits. This is not a boutique experiment. It is the fifth-largest private employer in Spain, and it has been running for nearly seven decades.

2. Cleveland Evergreen Cooperatives (United States). In Cleveland, Ohio, a network of worker-owned cooperatives is anchored to the purchasing power of major institutions — the Cleveland Clinic, University Hospitals, and Case Western Reserve University. Evergreen Cooperative Laundry, Evergreen Energy Solutions, and Green City Growers together employ 320 workers who earn over $28,000 per year on average. The Cleveland Clinic alone signed a $40 million five-year contract with the laundry cooperative. Worker-owners build a $65,000 ownership stake after seven years and receive profit-sharing, free medical and dental benefits, and legal assistance for criminal record expungement. In 2023, the cooperatives distributed $1.5 million in profits to employee-owners.

3. Emilia-Romagna Cooperative Economy (Italy). In the Emilia-Romagna region of northern Italy, two-thirds of the population belongs to a cooperative. Cooperatives generate roughly 30 percent of the regional GDP — rising to 60 percent in the city of Imola. The region accounts for 9 percent of Italy’s total GDP, 12 percent of exports, and 30 percent of patents. Per capita income runs 30 percent above the Italian national average and nearly 28 percent above the EU average. Unemployment sits at 3 percent. In 1970, Emilia-Romagna ranked near the bottom of Italy’s 20 regions. Today it ranks first. The entire transformation was built on cooperative enterprise rather than corporate capitalism.

4. M-Pesa Mobile Money (Kenya). Launched in 2007 by Safaricom, M-Pesa turned basic mobile phones into banking tools for people with no access to traditional financial institutions. The system now reaches at least one person in 96 percent of Kenyan households and processes over $100 billion in annual transactions in Kenya. Research published in Science found that M-Pesa lifted approximately 194,000 households out of extreme poverty and shifted 185,000 women from subsistence farming into business occupations. Financial inclusion in Kenya rose from 26.7 percent in 2006 to 82.9 percent in 2019. The model proves that cooperative financial infrastructure does not require brick-and-mortar banks — it requires technology, trust, and access.

5. Cooperative Home Care Associates (United States). In the South Bronx, a worker-owned cooperative grew from 12 employees to over 2,000. CHCA trains and employs low-income women of color — 99 percent women, 75 percent Latina, 20 percent Black — as home health aides. The cooperative provides free training, and workers buy in for $1,000 through payroll deductions. Over 600 people complete the training program each year. CHCA is the largest worker cooperative in the United States, and it operates in an industry known for poverty wages and zero benefits. Its workers earn ownership stakes, build skills, and stay in jobs that conventional employers cannot fill.

The Bottom Line

The numbers tell a story that no excuse can override.

• 1.2 million — Black cooperative members in the Colored Farmers’ Alliance by 1891
• 15M to fewer than 5M acres — Black farmland lost since 1920
• $514 billion — annual revenue of U.S. cooperatives today, with a negligible Black share
• $24,100 vs. $188,200 — median net worth, Black vs. white families
• 2,000+ workers — employed with ownership stakes at CHCA, the largest worker co-op in America

The Black cooperative tradition was not destroyed by incompetence. It was destroyed by violence and erased by amnesia. The model that sustained 1.2 million members under legalized terrorism is sitting in a library, waiting to be read, funded, and rebuilt. The only barrier is the deliberate forgetting that this article exists to reverse.