The Color of Money book cover

The Color of Money Book Review

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The Color of Money: Black Banks and the Racial Wealth Gap addresses the fallacy that black banks are the solution to the racial wealth gap. With intricate detail, this book outlines how a banking system that can only rely on money from inner cities (ghettos) but does not have the support of the rest of the banking system and society cannot grow wealth in the way most mainstream banks can.

The Racial Wealth Gap Definition


In the United States, the racial wealth gap is the difference in median wealth between white households and households of color. According to the Brookings Institute, the median wealth of white households in 2017 was $171,000, while the median wealth of black households was just $17,150. That is a tenfold difference.

This disparity is primarily due to structural factors such as racism and discrimination in housing, education, and employment. The racial wealth gap has profound implications for economic mobility and opportunity in the United States. Closing the gap would improve the lives of millions of people of color and boost our economy as a whole.

Black family having a celebration

The False Hope Of Black Banks


It traces how black banks and businesses suffered for years because people were not rational actors. The study of economics assumes that people are logical and only act in their best interest. But as we know and The Color of Money clearly shows, there is no rational behavior regarding bias and racism. Once that is acknowledged, we can see why the notion that black banks could save the black community has a massive flaw.

As outlined in the book, the historical view of banking is that black people lacked adequate access to banking services and capital. To access these necessities, many thought they should get them through black banks. And while it is true access was denied to many black people, it is also true that they could not get meaningful access via black banks either. 

Since many black banks were funded by lower incomes and were less able to invest their deposits in appreciating assets like homes outside of the ghetto, black banks could not multiply wealth like other banks. The Color of Money does an outstanding job detailing the many challenges black banks had to grow wealth for the banks and the communities they served.

Access to banks, especially ones that cannot grow wealth, is insufficient to solve black communities’ lack of access to capital. Unfortunately, discrimination has been the norm when it comes to banking. Even when it is not explicit, we have seen that banks do not see all clients as equal. So it is easy to see why there was hope that if black people had access to black banks, this would solve the problem. But of course, it does not. It cannot. That concept is similar to saying that black people need to solve racism or women need to solve misogyny. The minority cannot solve these problems without the majority.  

Black banks cannot solve the racial wealth gap.

Dollar bills

Thoughts on The Color of Money


This book is pronominal. It is a beautiful union of history, politics, economics, and policy. Sometimes challenging to read at times, but not because of the writing. In fact, I found the content very easy to consume. Hearing about the policies that have continually set people of Color back is the challenge. From redlining to the GI bill that excluded black veterans to the introduction of the minimum wage that again left many black domestic and farm laborers behind. 

The book is well-researched and finds a way to refine decades of policy and history into a complete sequence of events that have led us to the current wealth gap. What could have been a massive text is a very digestible book.

Baradaran’s outline of how wealth is created and compounded is clear, concise, and eloquent. Similarly, I thought the rationale used to explain how a black bank that was not allowed to operate like a mainstream bank could not survive and definitely could not be the source of capital that the black community desperately needs to thrive.

The Color of Money Book Review: Conclusion

If you like to go super deep and maybe a little wonky on the history of black banking and economic policy, The Color of Money is for you. If you want to read about how those policies have affected the black population in America or get a sense of how we got to where we are regarding the racial wealth gap, get this book. 

The Color of Money takes a broad approach to comprehending the many causes of the racial wealth gap and lays it all out so that it is hard to argue the finding. I highly recommend this book to anyone who wants to know why black banks won’t save us, how we got to this point, and where we go from here.