Economic development of the inner-city is one of the decade's most pressing political and social problems. No politician today makes a major domestic policy speech without appropriate reference to bringing the ghetto into the "mainstream" of American society. However, there is no general agreement on the proper approach to accomplishing this goal.
Our basic assumption in this article is that the pivotal element of the process of increasing inner city wealth-production is the free access to "risk" capital for new enterprise. Even cursory study of the history of American industry leads to the conclusion that without the initial influx of British investment money the American industrial machine would not have been built so rapidly nor have become self-sustaining at such an early date. Assembling the essential factors of production - industrial plant, machinery, skilled labor and management, technological advances - requires a substantial initial capitalization; if the inner-city is to realize the potential of its labor force, it must find the capital or credit to build the apparatus necessary to use that asset in wealth production. This is all fairly common economic doctrine. Of course, it would be foolish to suggest that an ample supply of risk capital or credit will solve all the problems of economic development of the inner-city; however, all the skill and potential of a people and a community cannot increase their wealth without it.
George Henderson and Paul S. McAuliffe
"Savings Banks and Community Development: A Remedy for Runaway Capital,"
Yale Review of Law and Social Action:
1, Article 5.
Available at: http://digitalcommons.law.yale.edu/yrlsa/vol2/iss1/5