Race Self-employment & Upward Mobility: An
Elusive American Dream
by Timothy Bates.
The Woodrow Wilson Center Press:
Washington, D.C. The Johns Hopkins
University Press, Baltimore and London. 228
Race, Self-Employment and
is a work which was destined to
appear. Like a train packed with tons of data and
analysis, it is running head on with propositions
and explanations which have been developed by
sociologists in the area of immigrant entrepre-
neurship. The data are from the much-treasured
but rarely-made-available-to-scholars, Character-
istics of Business Owners Survey, collected by the
U.S. Census in 1992 (N = approximately 90,000).
Bates argues that research developed by sociolo-
gists, which rests on the assumption that waves
of immigrants arrive on American shores and pull
themselves up through self-employment, is a myth
which cannot be substantiated by data. Bates
posits that variables associated with successful
self-employment are independent of one’s eth-
nicity. In the authors words,
“People most likely to pursue self-employment are highly
educated and skilled, often possessing significant personal
financial resources. Likewise, those lacking the requisite
skills and capital, whether immigrant or otherwise, are
unlikely to start small businesses. Among people who
choose self-employment without appropriate education,
skills, and financial resources, business failure and self-
employment exit rates are high. These patterns typify
black, Asian, and white Americans, men and women,
immigrants and the native born” (p. 1).
Bates’ study is from the business side of
receipts, debt equity, and death of firms. The
sociological side is less concerned with these
issues, although income data do appear when
comparisons are made between immigrants and
Americans. The question is when the two trains
collide, can a new synthesis emerge which will
give us a better understanding of the study of race,
ethnicity, and entrepreneurship, or are the two
traditions on separate tracks, destined to fly by
each other like strangers in the night? Because
propositions developed in the field of sociology of
entrepreneurship are central to Bates work, we
pause to take a cursory review of this tradition.
The study of the relationship between ethnicity,
race, and self-employment has been of interest to
sociologists since Max Weber and Georg Simmel’s
turn of the century works, which tried to account
for the development of new ventures in societies.
Weber’s influential work,
The Protestant Ethnic
and the Spirit of Capitalism
, gave us the proposi-
tion that religious or ethnic minorities who have
little opportunity to serve the state are driven into
economic activity with peculiar force. He noted
that this has been true for the Huguenots of
France, the Poles under Lewis XIV, and Jews for
hundreds of years. Simmel called such groups
“strangers” and noted their role as traders in
societies as they moved from traditional to market.
Simmel’s strangers and Weber’s excluded groups
are what we now called immigrant and minority
entrepreneurs respectively, albeit with variations.
This tradition, with little emphasis on the business
side of debt and receipts, has been the sociolog-
ical theoretical source, of course with modifica-
tions, for the study of race, ethnicity, and
entrepreneurship around the globe.
Studies have emerged from this source which
document the modern experiences of immigrant
entrepreneurs and emphasize how they develop
and maintain enterprises within host communities.
In America, research on immigrant Koreans,
Vietnamese, Chinese, refugee Cubans, and
Pakistanis appear throughout the literature.
Following in the tradition of Weber and Simmel,
entrepreneurship is viewed as being socially
embedded; immigrants enter self-employment
because they have few opportunities within the
larger society since they lack human capital, such
as education (sometimes formal and other times
because credentials are not accepted in the host
Small Business Economics
12: 183–188, 1999.
1999 Kluwer Academic Publishers. Printed in the Netherlands.