Hi, The Investor’s Podcast Network Community!

One thing that tends to get overlooked about Martin Luther King Jr. — he was just 39 years old when he was assassinated in 1968.

🗣️ Yet, in his short life, he became one of the most prominent leaders in the Civil Rights Movement, with messages around equality and nonviolence that endure.

As a reminder, markets are closed on Monday for Martin Luther King Jr. Day, a federal holiday. This year, it falls on January 15, his actual birthday. We’ll take off and return to your inbox after the close on Tuesday.

Today, we’ll discuss MLK’s messages about economics, employment, poverty, and markets.

All this, and more, in just 4 minutes to read.

— Matthew

QUOTE OF THE DAY

“Life’s most persistent and urgent question is, ‘What are you doing for others?’ Everybody can be great because everybody can serve.”

— Martin Luther King Jr.

WHAT ELSE WE’RE INTO

📺 WATCH: Why Egypt can’t afford its new $58 billion capital city

🎧 LISTEN: Spotting and correcting common investing mistakes

📖 READ: Howard Marks’s latest must-read memo, ‘Easy Money’

MLK’s Call for Economic Justice

Photo by Unseen Histories on Unsplash

A dream

Martin Luther King Jr. isn’t often remembered for his critically important, passionate message to redistribute wealth. But the Civil Rights leader urged political leaders and the community to end economic disparities, mitigate poverty, and improve education. He knew that to improve equality and foster peace, the economic and wealth systems had to improve, too — both for Black and white Americans.

In his 1964 Nobel Peace Prize Address, he said: “There is nothing new about poverty. What is new, however, is that we have the resources to get rid of it.”

In a 1967 speech at Stanford University, King added, “The curse of poverty has no justification in our age…. The time has come for us to civilize ourselves by the total, direct, and immediate abolition of poverty.”

The original intent behind his most famous speech, “I Have a Dream,” centered on economic and employment inequalities. It came on Aug. 28, 1963, amid the March on Washington for Jobs and Freedom.

For years, King recognized the power of Black employment. He also believed that the American economic system had been skewed against Black residents. He argued that integrating schools would help Black people’s economic outcomes — a more educated population leads to economic progress and wealth.

One of his biggest — and most controversial — ideas was that the U.S. government could eradicate poverty by giving Americans a guaranteed, reasonable income.

“We must rapidly begin the shift from a thing-oriented society to a person-oriented society,” King once said. “When machines and computers, profit motives, and property rights are considered more important than people, the giant triplets of racism, materialism, and militarism are incapable of being conquered.”

From the National Bureau of Economic Research

Income and wealth disparities

Wealth concentration hasn’t improved lately: During the pandemic, wealth concentration reached its highest level since World War II, before King rose to fame. The top 0.01% of American households own about 36% of private wealth.

More than 50 years after the Civil Rights Act, Black-white family income disparities in the U.S. are virtually the same as they were in 1968. The unemployment rate for Black workers remains about twice what it is for white workers.

In housing, the racial gap has worsened in recent years. The homeownership rate for White Americans is 72.7%, but the rate for Black Americans is 44%, according to the National Association of Realtors.

A groundbreaking study from researchers at Princeton University in 2022 found that “the Black-white wealth gap in the U.S. shows that progress on closing the gap has all but stalled since the 1950s, and inequality is on track to grow moving forward.”

Source: Pew Research

‘Insufficient funds’

Before King improvised his speech at the March on Washington, saying “I Have a Dream,” he described the challenging economic environment Black people faced.

Here’s King: “In a sense, we’ve come to our nation’s capital to cash a check. When the architects of our Republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir.

“Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked ‘insufficient funds.’ But we refuse to believe that the bank of justice is bankrupt.”

King emphasized that America’s economic system had left African Americans behind. He felt that while corporations should be able to make money, leaders didn’t think enough about cultivating a more sustainable economic system that addresses the welfare of all its citizens, regardless of the color of their skin.

“We have come a long way in our understanding of human motivation and of the blind operation of our economic system,” King wrote in his final book, Where Do We Go from Here: Chaos or Community? “Now we realize that dislocations in the market operation of our economy and the prevalence of discrimination thrust people into idleness and bind them in constant or frequent unemployment against their will.

“The poor are less often dismissed from our conscience today by being branded as inferior and incompetent. We also know that no matter how dynamically the economy develops and expands, it does not eliminate all poverty.”

Photo by Elizabeth Villalta on Unsplash

Final thoughts

King didn’t see all of his dreams become real, but it’s clear that the Civil Rights Movement he spearheaded might have helped reduce the Black-white wealth gap.

There’s only one period since his activism that the gap closed as quickly as it did: from the 1960s to the 1980s.

“This is a really important observation from the data, because it suggests that the Black activism that led to civil rights legislation, a larger social safety net, and better labor standards may have given an extra boost to Black wealth accumulation,” noted one of the Princeton researchers.

Dive deeper

For more, check out King’s talks on income inequality and wealth.