The Culture-of-Poverty Thesis and African Americans: The Work of Gunnar Myrdal and Other Institutionalists
Cherry, Robert, Journal of Economic Issues
[T]he poor, or at least a subset of them, are different from the nonpoor in terms of their attitudes, values, or aspirations and that these personality traits produce behaviors that mire them in long-term poverty. A softer version of this hypothesis is that attitudes and behaviors, whatever their origins, change only slowly in response to greater opportunities, and thereby contribute to the persistence of poverty.
- Isabel Sawhill, 1988
This paper will describe the evolution and the influence of this culture-of-poverty thesis on the work of institutional economists who have tried to explain the low economic status of African Americans. Prominent among these institutionalism is Gunnar Myrdal, whose study An American Dilemma  was a catalyst for important changes in race policies. Prior to Myrdal, there was a broad consensus within the economics profession that the inferior status of African Americans reflected genetic inferiority [Cherry 1976, 1980]. This consensus began with the founders of the American Economics Association, including Richard Ely  and its first president, General Amasa Walker . It was supported by association publications, most notably the monographs by Frederick Hoffman  and Joseph Tillinghast . Indeed, the founders and many economists also believed that southern and eastern European immigrants were genetically inferior. These economists, including Irving Fisher [Aldrich 1975], persistently fought for immigration restriction legislation to stem what they believed was "race suicide."
The Progressives rejected the notion that southern and eastern European immigrants were genetically inferior. Instead, they offered what has become known as a culture-of-poverty thesis to explain the inferiority of these newer immigrants. Many Progressives, including John R. Commons, used this thesis to justify institutional policies to improve the situation of European immigrants. Commons [1920, 220] believed that unions were instrumental to the assimilation of the new immigrants:
The influence of schools, churches, settlements, and farming communities applied more to the children of immigrants than to the parents. The immigrants themselves are too old for Americanization, especially when they speak a non-English language. To them the labor-union is at present the strongest Americanizing force.
Commons [1919, 108] considered the union shop particularly important in helping develop democratic values in the eastern and southern European immigrants:
When this particular shop scheme was started, many of the workers were newly arrived immigrants, acquainted only with the despotism of Austria, Hungary, Russia . . . Many were what is known as Bolsheviks . . . Many were successful agitators, hostile to employers as a class. In the course of time their employers were astonished with the changes that came over them.
While Progressives, such as Commons and Walter Willcox, were optimistic that these newer immigrants could be integrated into society once their cultural inferiority was overcome, they were pessimistic with regard to African Americans. Like Hoffman and Tillinghast, they believed that African Americans were genetically inferior.
The culture-of-poverty explanation presented by Commons was, however, eventually applied to the situation of African Americans. This adaptation to African Americans originated in the work of Booker T. Washington and such sociologists as Louis Wirth and Edward A. Ross. It was only with the publication of American Dilemma that the culture-of-poverty thesis was applied to African Americans within the economics profession. Myrdal rejected the notion of genetic inferiority and instead identified cultural factors to explain the persistence of racial inequality. Contemporary institutionalists Michael Piore and William J. Wilson, like Commons and Myrdal before them, use the culture-of-poverty explanation to buttress their views on how structural characteristics of labor markets can explain the persistence of racial wage inequalities. …