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Friday, June 5, 2020

Here Are Just 10 of the Many Minority-Owned Businesses Destroyed in the Riots

Riots and looting undercut the economic foundation of urban and minority communities.

Image credit: YouTube screenshot from WCCO - CBS Minnesota

The peaceful protests over the police killing of George Floyd are entirely justified. But the rioting, looting, and arson that have broken out in cities from Minneapolis to Dallas are most certainly not. In fact, in many instances, this criminal vandalism is sabotaging the same minority communities that peaceful protesters seek to aid.

Here are 10 examples from the seemingly endless reports of minority-owned businesses suffering at the hands of rioters and looters:

  1. Private Stock Premium Boutique, a black-owned clothing store based in Austin, Texas, was looted and left in ruins during the riots.
  2. Bole Ethiopian Cuisine, an ethnic restaurant in Saint Paul, Minnesota, was burnt, vandalized, and destroyed during rioting.
  3. Guns and Roses Boutique, a Dallas, Texas boutique, was started by a black businesswoman who built her fashion enterprise from the ground up. It was looted and left in ruins during riots.
  4. Go Get It Tobacco, a black-owned tobacco store in St. Paul, Minnesota, was vandalized, robbed, and left in tatters.
  5. King’s Fashion, a Philadelphia boutique, was burned and left layered in soot. Its minority owners had “built the business over two decades, working seven-day weeks.”
  6. MN Fashion and Jewelry, a jewelry store in Minneapolis, Minnesota was raided and looted, leaving its owner, Masum Siddiquee, to pick up the pieces.
  7. Scores Sports Bar, a Minneapolis sports bar, was the brainchild of a black firefighter who used his life savings to start it. He had planned to open it in June. Rioters burned it to the ground, and the owners did not have insurance.
  8. Healing Path Wellness Services, a South Minneapolis minority-owned mental health clinic, was burned, looted, and destroyed.
  9. Ihman’s Hair Studio, a Philadelphia hair salon, was looted and ransacked. The owner wrote that she is “hurt and angry that my people would vandalize and destroy a black-owned business.”
  10. Kane’s Barbershop and Altatudes, a minority-owned barbershop in Austin, Texas, was burned during riots and extensively damaged.

For some of these specific businesses, GoFundMe donors have raised large amounts of money to support rebuilding. However, this is only true for the small number of businesses whose stories go viral, and there are no doubt many more who will receive no such outpouring of support. Regardless of whether generous donors help individual businesses rebuild, this looting and arson has wide-ranging economic ramifications that will adversely impact entire communities in the future.

Famed free-market economist Thomas Sowell once said that property rights “belong legally to individuals, but their real function is social, to benefit vast numbers of people who do not themselves exercise these rights.” Nobel laureate economist and philosopher Friedrich Hayek made a similar point, remarking that “The system of private property is the most important guarantee of freedom, not only for those who own property, but scarcely less for those who do not.”

What Sowell and Hayek are getting at is quite simple: The protection of property rights does not just benefit property holders, it is a necessary prerequisite for any market economy to function.

When property rights are insecure or routinely violated—widespread looting and arson are prime examples—the very foundation of a community’s economy is undermined. Investors understandably balk at the uncertainty and forego investing there, while entrepreneurs cannot launch new enterprises or even continue current ones without the knowledge that they will be secure in their property. As a result, job opportunities and income streams dry up. This is why securing property rights is perhaps the government’s most basic function and responsibility.

It is no coincidence that there is a strong correlation between the strength of private property rights in a given nation and its rates of economic growth:

In the case of these riots, the direct costs and economic disadvantages will likely be borne disproportionately by minorities. And this comes at a time when minority-owned small businesses can least afford it, having suffered extensively under COVID-19 lockdowns. Vandalism in heavily urban, minority communities will cause insurance rates to rise and property values to drop. This is not speculation—it is exactly what happened in the aftermath of similar rioting in the late 1960s.

A 2005 study found “negative, persistent, and economically significant effects of riots on the value of black-owned housing” to the degree of “a 10 percent decline in the total value of black-owned property in cities.”

We also can’t ignore the way this destructive behavior affects not just property owners and entrepreneurs, but all members of minority communities, who are also residents and consumers. A clip shown on Fox News offers a particularly chilling example. A black woman, shaking with emotion, tells the reporter that the riots were “scary” and describes the impact on her community.

“They went straight to OfficeMax, the Dollar Store, and every store over here that I go to,” she says through tears. “I have nowhere to go now. I have no way to get [to other stores] because the buses aren’t running.”

All this destruction is for nothing. As FEE Managing Editor Jon Miltimore explained, rioting actually sets causes back in the eyes of the public:

New research published in The Journal of Personality and Social Psychology suggests the popularity of social reform movements suffers when movements use “extreme protest actions,” which tend to alienate neutral observers and even supporters of a given cause. Study leaders conducted six experiments involving 3,399 participants to measure how people responded to a variety of social causes, from Black Lives Matter movement to anti-abortion groups.

“[Researchers] found that more extreme behaviors—such as the use of inflammatory rhetoric, blocking traffic, and vandalism—consistently resulted in reduced support for social movements,” writes Eric W. Dolan, the founder of PsyPost, a psychology and neuroscience news website.

All of this is to say that while the current looting and rioting may stem in part from understandable frustrations, it is disastrously counterproductive. Not only has it destroyed the livelihoods of many individual black and minority business owners, it has also undercut the economic foundation of urban and minority communities.

Seriously addressing police brutality and inequities in the criminal justice system will require eliminating the liability shield for bad cops, ending mandatory minimums, decriminalizing marijuana, and more. But chaos and disorder only does a disservice to minority communities in need of real reform.