The MacNeil/Lehrer Report; Black Boycott

ROBERT MacNEIL: Good evening. The nation's largest and oldest civil rights group, the National Association for the Advancement of Colored People, yesterday announced a new policy of putting direct pressure on American business. The NAACP said it would start keeping a report card on U.S. corporations' treatment of minorities, and held out the prospect of economic boycotts if they didn't measure up. The Association has already put the movie industry on notice of possible boycott if the industry doesn't hire more blacks. And the NAACP isn't alone. In Atlanta, the Southern Christian Leadership Conference has used the threat of boycotts to reach agreement with several companies to increase the hiring of minorities. But the most aggressive efforts so far have come from the Reverend Jesse Jackson and his Chicago-based PUSH -- People United to Serve Humanity. Jackson has negotiated minority aid packages with the makers of Coca-Cola, Seven-Up and Kentucky Fried Chicken. Two weeks ago he announced a boycott of the nation's largest brewery, Anheuser Busch. Some aspects of this new direction for civil rights activism have aroused fierce criticism, some of it from the black community. Tonight, the economic weapon for civil rights. Jim?

JIM LEHRER: Robin, boycotts and threats of boycotts are among the oldest of civil rights tools. Black and other minority organizations had been using them to extract change from businesses large and small for years. But for the last several years, they've been hanging under a judicial cloud, which was lifted by the U.S. Supreme Court in July. The Court threw out a Mississippi court judgment that such boycotts were illegal. The case had been pending since 1969, growing out of an NAACP-organized boycott of white businesses in Port Gibson, Mississippi, the owners of which sued the NAACP. Black leaders cite the July high court decision and the deal blacks are getting under the Reagan administration as the reasons for going back to the boycott now at the national level.As Robin said, the most aggressive of those programs thus far has been that of Operation PUSH, headed by the Reverend Jesse Jackson. His announced boycott of Anheuser Busch led to charges from some black leaders and black newspapers in St. Louis that he was engaging in blackmail and only for his own personal gain, which in turn led to Mr. Jackson's filing a libel suit against his accusers. Rev. Jackson, are you practicing blackmail?

Rev. JESSE JACKSON: Blackmail is illegal; extortion is illegal; and boycotts are legal. We're engaging in boycotts. They are illegal -- they are legal, they are effective and they are the weapon of last resort. In 1955 in Montgomery the boycott was employed; it was legal; it was effective. And during the '60s we basically got real response in terms of the corporate community conceding that we should have public accommodations when downtown Birmingham or downtown Some City felt the absence of black dollars. And so it is a very effective method. This time a year ago we confronted Coca-Cola and negotiations collapsed, and we had to engage in confrontational boycott. At that time, they had 4,000 fountain wholesalers -- zero black. Now they have 24. It has expanded their business and developed black business. This time a year ago there were no black senior vice presidents. There was no black on the board. There are now. They had $254,000 in 10 black-owned banks. Now one black alone has a $5-million line of credit. The point is, the scientific use of the black dollar, like the collective use of the black vote, is indeed effective.

LEHRER: When you sit down with a company like Coca-Cola, what do you tell them?"I want this, this, this, and if I don't get this, this, this, I will do what, what, what"?

Rev. JACKSON: "Our research shows that we are 'x' percentage of your consumer market." In the case of Budweiser, for example, in the top 50 markets, we are 22% of their consumer base. "And based upon our investment in you, we want a fair return on our investment.We do not want social generosity and aid. We want economic reciprocity and trade." These are not aid agreements. These are trade agreements. "If you will trade with us, we will trade with you. If you continue to boycott us, if you continue to boycott black lawyers and boycott black CPAs and boycott black banks, we will reciprocate with a boycott." We would rather trade than boycott. And, secondly, we're concerned about employment -- executives, professionals and trade.We're not just concerned about full employment. We are concerned about employment, but we had full employment in slavery -- everybody had a job. We want full development, our share of trade. With the President, lastly, so radically dislocating us from the public economy -- where we were pushed disproportionately and undesirably -- now we must take a new look at a return on our dollars. Let the record show, lastly, blacks earned last year $157 billion. Black Americans did more business with corporate America than the Russians, China and Japan combined. We are an economic factor of significant consequence, and therefore we will employ this very legal and effective tool, along with our votes, as a process of social change. And it is gratifying that the Supreme Court has determined that it is legal and permissible.

LEHRER: What do you say, Reverend Jackson, to those people who suggest that your deals, your arrangements with these various companiesresult in jobs for black senior vice presidents and blacks at the distributorship level, but do nothing to help the unemployed blacks, the poor blacks at the bottom who need the help the most?

Rev. JACKSON: That's by and large because the media is rather fascinated with these high-level jobs, but every negotiation first starts at the level of jobs -- basic, blue-collar jobs -- those who load trucks and those who drive trucks and those who are clerk-typists, and our share of philanthropy for scholarships for our children. And in every agreement that we sign, PUSH is eliminated by virtue of the agreement from being a recipient of either philanthropy or any other form of relationship with the proposition, because that would give us a conflict of interest arrangement, and we would be unable to enforce the agreement. So the first level is employment, but whenever we get newspaper ads for a black newspaper, it stabilizes the employment there. When black lawyers, for the first time, are retained, as they were with Hublein, when black CPAs are retained, it stabilizes their work force. It indeed stabilizes their families. I would like to suggest that the restraint-of-trade practices employed against black America by corporate America has had the effect of hurting both the restrainer and the restrained. If it is true that locking blacks out of baseball and locking blacks out of the military service and locking us out of the athletic arena was cost-inefficient as well as immoral, at this point in American history to lock black minds and black money and black acumen out of America's corporate challenge is indeed a mismanagement of the American economy.

LEHRER: Thank you. Robin?

MacNEIL: Now to the modified boycott strategy announced yesterday by the NAACP. The Association's executive director is Benjamin Hooks. Mr. Hooks, what does the NAACP want companies to do?

BENJAMIN HOOKS: Of course it's rather strange that we talk about yesterday when in fact we've already signed agreements going back over a year ago. Our branches in Atlantic City signed a pact with the nine casinos in the Atlantic City area guaranteed a 15% set-aside of $350 million a year, which pact amounts to more than $45 million a year in goods and services for black people. On the day that the Port Gibson decision was handed down, just a few days ago, we had an agreement in principle with the American Gas Association and Edison Electric Institute where their more than 1,000 companies within that have agreed that we will be negotiating with them individually to sign the -- well, you can call it what you want -- pacts, covenants, or whatever. But the whole purpose is to upgrade and improve.

MacNEIL: But you did announce a sort of new policy starting yesterday?

Mr. HOOKS: Well, yes, yesterday we announced a new strategy because one of the things that has bothered us, if all of us who are in this business were to work like Trojans from now until 1999, we'd only get a few of the companies. So, since we have such a large organization -- 1,800 chapters and more than 40,000 dues-paying members -- and the amazing thing about our business to get these things done will be trying to enlist the active support of our local branches. We signed an agreement a week ago with a group of prominent black businesspeople from over the country who themselves do more then $100 million in business, that they will work actively with us through our local chapters to make this come to pass. Now, what are we trying to do? Jesse has explained it very well, I think --

MacNEIL: Would you also indicate what particular kinds of companies you are going to direct your efforts toward?

Mr. HOOKS: Our first efforts were directed against the utilities -- electric, gas. We're dealing with the American Petroleum Association, American Gas Association, Edison Electric Institute and banks. In December of last year, when I went out to speak at the Image Awards, we discovered that out of 240 feature movies made in 1981, only one had a role for a lead -- a leading role for a black actress; only 12 for black actors. And so we took on the Hollywood situation, not because it was our first choice, but because images are important.

MacNEIL: And I was amazed to read today that blacks account for 28% of movie theater tickets. Is that correct?

Mr. HOOKS: That is correct, but if you were to talk with those who are in Hollywood, of course they would deny it, just as when Reverend Jackson gives these figures, they always try to deny them because this is -- argument. But we've done our research very well. I spent five years, as you know, on the Federal Communications Commission, and I know very well how important images are. That, for many, many years, black folk have been given negative, stereotyped images of themselves. How can we expect our young people to grow up looking to be something when they have been stereotyped as folk who can't accomplish and who cannot achieve?

MacNEIL: Let me ask you this. What will cause you -- after having marked a company's behavior for awhile, what will cause you to start a boycott, and how long will you give them?

Mr. HOOKS: Well, of course, we shy away from the use of the word boycott. I think Reverend Jackson said, and I agree with him completely, that in 1969 and particularly 1977, with that million-dollar judgment against the NAACP, all of us sort of slowed up. It is a fact that the economic withdrawal strategy worked very well. It started in my recollection, in 1927, when Joe Bibb, the editor of the Chicago Whip, mounted a campaign in Chicago. Adam Powell, in New York Coty; many years later, the NAACP, Southern Christian Leadership Conference and Dr. Sullivan in Philadelphia. But after this horrendously bad court decision which threatened to put us out of business, we had to be a little bit more cautious about it, and our office adopted rules and regulations by which we advanced, but for the last three years, in anticipation of victory, we have been laying out the blueprint and making tentative inquiries.I don't want to have to engage in a boycott. I don't want to use economic withdrawal.

MacNEIL: But you will if you're -- you're prepared to --

Mr. HOOKS: But we will if we have to. We're prepared, nonviolently, and they say it won't work. Well, they said that it wouldn't work back in the '60s. They said we couldn't get bread truck drivers and soft drink drivers, that we could not get tellers in the banks, that we could not secretaries. We did it. The problem is, after the Port Gibson thing, we didn't advance as far as we should have. Our second major target, of course, will be the banks. Right here in New York City, we're already engaged with our 27 branches in doing a survey of all the banks that operate in this city. Do they have blacks on boards of directors? Are they practicing aggressive affirmative action programs? And are they doing minority recruitment? And let me suggest to you this. When we are able to pur blacks into business, we must remember that 80% of all the new jobs created in this country in the last 20 years were created by small businesses. Unless we have black people involved actively in small businesses, we will continue to have this horrendous 50% unemployment among our black youth.

MacNEIL: Well, thank you. Jim?

LEHRER: Now to the other side, to those who question the effectiveness of boycotts as a helpful economic weapon. First, Walter Williams, an economist who is a professor at George Mason University in Virginia, and the author of the forthcoming book, The State Against Blacks. What is your problem with economic boycotts as practiced and as just now explained by Reverend Jackson and Reverend Hooks?

WALTER WILLIAMS: Well, first of all, economic boycotts are part of legal activity. Now, the question is, how effective will they be? Now, for example, Benjamin Hooks was talking about the utility companies. Now, I don't believe that a utility company in New York would believe that the boycott of electricity would be a credible threat. And I believe that there are some other good --

LEHRER: Most people have to still use electricity.

Mr. WILLIAMS: Yeah, they still have to use electricity. Now, one of the problems with a boycott that has not been unanticipated by these people is that it can backfire, because I imagine the Pepsi-Cola, for example, who didn't give in to the boycott demands, they might be able to capture a larger share of the soda market by using that as an appeal. That is, "We did not give in to Jesse Jackson so buy our soda," and as a matter of fact, I believe that, let's say, a racist group like the Ku Klux Klan would find that very, very attractive. And so I believe that if it's used, it can get very, very ugly. Now, I would argue that the boycott approach to getting more blacks in business, in dealerships and board of directors -- I think that it misfocuses the energy. That is, for example, in black communities all around the country, their high crime rates -- Benjamin Hooks was talking about getting blacks into business. Well, there are these criminals who live in black communities who get blacks out of business very, very quickly through robbery, fire, assault and things like this. So I believe it's putting the cart before the horse; that is, you have to create a viable economic community -- environment in the black community, and them maybe business will develop. Because keep in mind, you know, Bedford-Stuyvesant, Harlem, and in North Philadelphia, where I grew up, they had thriving business communities back in 1940 and early 1950s. Now these places are deserts. There are no businesses there at all. And surely back in the '40s and '50s there was more racial discrimination than there is now. So I believe that the emphasis is being misdirected. Then there's a moral question as well. Now, I personally feel that if Coca-Cola sells me a bottle of soda, and if I pay 50" for that bottle of soda, and if the bottle of soda does not have any worms in it, that is the termination of Coca-Cola's contract with me.

LEHRER: They don't have a social responsibility beyond that?

Mr. WILLIAMS: Oh, no. No, no. they don't. I believe that the social responsibility of business -- Coca-Cola; whether it's IBM -- I believe that social responsibility of business is to make a computer of the highest quality at the cheapest price. Now, when business begins to get into other kinds of activities, then they do not live up to their social responsibility, and if I find out about it, I'm goint to sell their stock because they're not living up to their responsibility to me as a dividend -- stockholder, rather.

LEHRER: How to you explain the effectiveness that Reverend Jackson has had in the cases of Coca-Cola, Kentucky Fried Chicken, and some of these others, where he's gone in with his demands and they have given him what he wanted?

Mr. WILLIAMS: Well, businessmen in general in the United States, I think, if I might use the word, I think that they're wimps. They are afraid to stand up and take a moral position. Now, I believe that these are relatively weak people who have given in, but I doubt whether the larger business community will give in. And I think that he's going to come up against a stone wall.

LEHRER: Do you -- just a minute, Reverend Jackson.

Rev. JACKSON: We have not attempted to boycott Pepsi-Cola.

LEHRER: Reverend Jackson, we'll get back to you in a minute. One at a time. Everybody gets a clean shot, remember?

Rev. JACKSON: Okay.

LEHRER: Okay. Is it your position that the practice now of the NAACP and Reverend Jackson is going to actually end up hurting blacks more than it's going to help them?

Mr. WILLIAMS: Well, possibly. I don't think that it's going to work, because it does not deal with the basic problem. You know, back in the early '70s, people were talking about setting up black banks. Black banks, in many, many areas, because they became relevant and started evading the standard policy -- banking policy, a lot of them got in a lot of trouble and went out of business, and had to be saved by the federal government. So I don't think that -- I mean there's some isolated successes. I won't take that away from them, but I don't think that it's a very, effective and good long-run strategy because it ignores the basic causes of the problems in black communities -- such as various minimum-wage laws, union activity that excludes blacks from many activities, which people like Jesse Jackson and Benjamin Hooks, they support. And the rotten schools that rob black children on a day-to-day basis of any chance for a future. And, again, civil rights leaders, they ignore any kind of policy recommendation such as tuition tax credits or vouchers that would give more power to parents in terms of changing the system. So I'm arguing that the boycott is approaching superficially the problems that blacks face, and it will not meet with long-run success.

LEHRER: Thank you. Robin?

MacNEIL: Now a business view of the boycott weapon. Bill Kelleher is director of community and regional development for the U.S. Chamber of commerce. One of the areas he oversees is minority business development. First of all, do you believe with Professor Williams that the largest area of the business community is just not going to give in on this?

BILL KELLEHER: Well, I think our view, and I think the business reaction to this will be that this is a political solution to a fundamentally economic problem. and that it has two negative points to it. One, business is primarily about economic growth and creating a larger market, not redistributing any one given segment of it. So we think it'll fail on that basis. You're talking about cutting up the pie a little differently We want to see a larger pie. The other question is when we look at how businesses develop, it's primarily a competitive situation. When you take a boycott and you get a negotiated number of franchises, you're going to distribute them in a way that's very close to political patronage, and that's not the way the general business community allocates resources.

MacNEIL: You mean if the Reverend Jackson or Mr. Hooks and his collegagues persuade a company, whatever it is, to give them a number of franchises for blacks where there weren't any before, they won't be economically viable because they're politically planted? Is that what you mean?

Mr. KELLEHER: I think that's essentially -- what you're going to get -- how are those franchises going to be distributed? They're going to come down from people who are good at writing proposals to which every mechanism is set up to distribute the number of franchises. If you look at, for example, the federal attempt at this, Section 8a, set-aside programs, what you found is that the companies stimulated under that set-aside approach has been they've become very good at being grantsmen. We think franchises you get out of this type of approach will become very good private-sector grantsmen.

MacNEIL: So you think this isn't going to work?

Mr. KELLEHER: We think the potential for it working is very poor.

MacNEIL: How to companies react to being boycotted?

Mr. KELLEHER: I think a lot of them would take a look at it and say, "This is fine confrontational politics, but very poor business judgment and very poor salesmanship."

MacNEIL: Mr. Williams just says they're wimps, many of them, to use his word.

Mr. KELLEHER: Well, we don't view them that way. I think in terms of business reaction we see two possibilities. One, I think a lot of businesses would see this as a symptom and react positively. We've seen a lot of businesses, and we've been involved with helping a lot of businesses develop minority supplier arrangements. In fact, it's interesting to note that back when the Minority Business Development Administration was established, it was announced in the U.S. Chamber of Commerce building. Right now we have a major grant from one of our members to study how you formulate and how the business community can help stimulate Hispanic business. We've got a quarter-of-a-million dollar study going on in that. I think the danger in this is that the business community in a time of private-sector initiative is being faced with a whole range of possible areas where it can be involved. This type of approach makes it look confrontational. It makes it look like a business organization that wants to get involved will bring more trouble on itself than it will in terms of credit for doing something that is corporate responsibility.

MacNEIL: What's your view of the moral difference issue between Reverend Jackson and Professor Williams? Professor Williams says companies don't have any social responsibility beyond delivering an adequate product at a fair price. Reverend Jackson says because of the huge investment by black consumers that companies owe the blacks some of that back in a proportionate re-investment.

Mr. KELLEHER: Our approach is that this isn't situation of right and wrong. We like to think that a company's first responsibility is to its customers and to its shareholders. How they discharge that responsibility, you're going to see a range of options. Professor Williams' approach of saying producing the highest and best products is one definition. Another company, though, in terms of protecting its shareholders -- take a utility that has a large number of fixed plants, fixed lines -- has a different responsibility, and may want to become more involved in its community.

MacNEIL: I see.

Mr. KELLEHER: But you're not going to get one single way of doing that.

MacNEIL: Well, thank you. Jim?

LEHRER: All right, Reverend Jackson, it's your turn now.

Rev. JACKSON: Well, first of all, it's very important that PUSH has not yet opened negotiations with Pepsi-Cola; we have not declared a boycott on them, and boycott is always the last resort. When we cannot get research compatibility, when negotiations break down, we boycott as a last resort. And Pepsi is on the list, but we have not gotten to them yet. We speak of competence, and excellence, and that is important, but by and large, in a political democracy you cannot bequeath a political office to your child, but in the economic free enterprise arrangement, you can gain your businesses through royal blood or through hand-me-down acquisitions and merger. And we found that 2,200 soft drink franchises, zero black. By and large they were let to all white males in perpetuity at the turn of the century. And blacks with money and blacks with ability cannot break into that royal blood, acquisition-merger arrangement. I mean, the confrontation bloodwise is instructive. Blacks are indeed 22% of their market. There are 950 distributors. Only one is black. A $254-million advertising budget; less than 2% black. There's something wrong about that.

LEHRER: You don't see anything wrong with that?

Mr. WILLIAMS: No. You know, I would like for it to be different, but you know, one of the problems about -- Mr. Jackson points out the dealerships in the black community, or wholesalers. Do you know that Safeway and Giant, they can't wait for Bekins to come to move them out of of black neighborhoods. That is, black neighborhoods are unattractive for business, whether it's a white person or a black, and you know, these crooks in black neighborhoods, they're equal opportunity crooks. They will rip off a black man just as well as a white man. And so, again, he's misfocusing on the problem. That is, if the black community were an attractive economic environment, safe, and etc., etc., then I believe that you would in fact see these organizations moving in. Now, the point is, I think, that many of these companies that will give in and set up some dealerships and wholesalers in black communities, they will have to subsidize these companies in perpetuity unless we change the situation.

LEHRER: Let me ask Reverend Hooks the basic point of Professor Williams a moment ago, that the approach that you and Reverend Jackson are taking ignores the basic problem that blacks face right now, and it's a superficial approach.

Mr. HOOKS: Well, I think Dr. Williams as a distinguished economist needs to re-read history. He talks about black banks failing. I read about Penn National failing the other day. and Franklin. They were not black, and that's more money than all the black banks that ever failed. He talks about this thriving business community of the 1940s. Does he not know that prior to the World War II 80% of all the business was done in downtown and local communities, that shopping centers have helped to destroy that? There are many other factors involved. This is not a superficial effect. He talks about strong companies saying, "If you don't buy Pepsi, then we'll get Coke." Well, that's the same thing they told us in the 1960s in Memphis and in Birmingham: "If this department store will let black folk eat hot dogs, all the white business will go to another store." No greater nonsense ever told. We're talking about not a social compact; we're not talking about a gift or giveaway. We're talking about economic equity. We are talking about making a better market. We're talking about the fact that 30% of all black people in this nation -- nine nillion people -- live at or below the level of poverty. When those prople come up to a larger, they will become consumers and buyers. We are talking about the fact that change has to come about, and that black people have a right. A boycott it the single weapon that they have listened to. We don't want to engage in it. We have already signed some agreements that did not require boycott. But if it comes to that, then we're prepared to do it.

LEHRER: Well, let me ask you that, Professor Williams. Both Reverend Jackson and Reverend Hooks have said boycott is a tool of last resort, that there's nothing else that they can do in order to get these things done. You don't see it that way? What are some of the other things, besides, obviously, solving the crime problem, and the other things, but in the immediate sense, what else could they do?

Mr. WILLIAMS: Well, I mean, there are no quick fixes to the problem of the black community. There are many, many laws that are supported by civil rights organizations that deny black people many kinds of opportunities. For example, in New York City, where Benjamin Hooks is sitting, you know, you have to have a $65,000 license in order to own and operate one taxi legally.And we have many, many other laws, and I could sit here and talk about a thousand other similar laws. We need to attack those kinds of regulations that regulate blacks out of the market.And I think that's the best approach.

Rev. JACKSON: Well, why can't we approach with both/and? I mean, we met with Burger King last week in Miami. Here's a case, we're more than 30% of their market. There's only one black-owned Burger King in the whole state of Florida, only one in the whole state of Texas. Seventy-five blacks and 3,100 whites. By and large this has occurred without any sense of accountability. So what we want from them is not aid or favor; we want balanced trade. If they will trade with us, we will trade with them. But if they will not trade with us, we will not trade with them.

LEHRER: Mr. Kelleher, does the term balanced trade mean anything to the average American businessperson?

Mr. KELLEHER: I don't think it does. I think it comes back to a redistributional question. I'd like to go back to something that Reverend Hooks mentioned, which is the small business. Eighty percent of jobs do come out of that. Primarily boycotts are going to be aimed at the large Fortune 500 firms, and that's going to give you fine political coverage; it's going to get you exposure like this, but it's not going to generate real employment, real economic growth.

LEHRER: We have to go, Mr. Kelleher. Robin?

MacNEIL: Yes, sorry, our time's up. Thank you, Mr. Jackson, Professor Williams, Mr. Kelleher and Mr. Hooks. Thank you for joining us.Good night, Jim.

LEHRER: Good night, Robin.

MacNEIL: That's all for tonight. We will be back tomorrow night. I'm Robert MacNeil. Good night.