Racial capitalism

Racial capitalism is the process by which people secure some form of value from the racial identities of others. In the past, the practice was tied to the system of slavery in which Black workers were forced to generate wealth without receiving any payment for their labor. As slavery was abolished, many areas allowed Black workers to be paid a lower wage than white workers. This continued to allow Whites to extract additional economic value from the labor of Black people.

As awareness of economic injustice became rooted in public consciousness, the government began to offer additional tools to help Black people recover economically from their previous mistreatment. These tools, such as affirmative action, helped Black people find employment in workplaces that had in the past predominately hired only white people. Additionally, diversity became a favored societal concept. Businesses with diverse hiring practices were viewed more favorably than those that employed only white people. However, this encouraged businesses to hire minorities specifically because of their racial identity, once again working to extract economic value from racial identity.

Background

Capitalism is a complex economic system in which private citizens own the majority of the means of production. This differs from other economic systems, in which the means of production are owned by the general public as a collective entity. Most definitions of capitalism include four key components: economic capital, labor, entrepreneurship, and natural resources.

Economic capital refers to the physical assets to which people ascribe value. It may also include the physical assets that are used to create value. Common types of economic capital include property, equipment, and tools. Entrepreneurship refers to the act of starting new businesses. These businesses innovate, driving technological progress and generating money for the business owner.

Labor is the physical and mental effort that is used to create value. Most businesses are designed to turn labor into profit. Workers in a capitalist society are compensated for their labor. In a truly capitalist society, the value of both labor and goods is determined strictly by supply and demand. However, many modern societies have instituted laws that are designed to protect the value of labor, such as minimum wage laws.

Finally, natural resources are the materials that may be used to create value. Control of these resources is an important part of a capitalist society, as these resources will be highly sought-after by businesses. Renewable resources, such as wind and solar energy, can be found in limitless supply. Non-renewable resources, such as oil, natural gas, and other fossil fuels, exist only in finite quantities. This further increases the value of non-renewable resources.

Capitalism provides societies with many benefits. As entrepreneurs strive for advantageous positions in the market, they are motivated to innovate. This helps push society forward, developing new technologies, ideas, and infrastructure. However, capitalism has been criticized for continually amassing wealth and power in the hands of a small subset of the population and promoting wealth inequality.

Overview

Racial capitalism refers to racist practices that disproportionately benefit white people. According to this school of thought, these practices gradually transfer wealth away from the working class and toward the wealthy. In the United States, racial capitalism has been used to extract value from people of color. Racial capitalism typically involves the commodification of specific racial identities.

Some anti-discrimination policies have inadvertently contributed to the rise of racial capitalism. Policies such as affirmative action forced predominately white institutions to recruit and accept Black members and people from other racial and ethnic minorities. These policies made diversity an important part of American politics. Institutions that mostly employed white people realized that to become socially acceptable, they had to employ a select number of non-white individuals. Businesses that appeared to embrace diversity would have an economic advantage over those that failed to do so. However, these actions are examples of racial capitalism. These institutions and businesses attempted to extract some form of economic value out of their employees’ racial identity. Non-white employees were not being evaluated solely on their merits. Instead, businesses viewed them as a means to appear diverse, even if company policy or general hiring practices remained racist. Implementing these policies allowed businesses to appear progressive and diverse without enacting significant or meaningful change. The identities of minorities are once again reduced to a means of profit for others, reinforcing that they are not viewed as equals to those who were employed solely on their merit. Instead, minorities are aware that they were hired, in part, because their racial identity created a profitable appearance of diversity for a company. This leads to resentment, making minorities in the workforce feel that they were exploited by their employers. Many resent having their economic value assigned by their race rather than their talents, experience, and work ethic.

In addition to its modern connotations, racial capitalism has referred to the idea that racism played an essential role in the rise of capitalism as the dominant economic theory in the United States. For example, the infrastructure of the early Southern United States was heavily dependent on the economic value of enslaved Black people. They provided value to plantation owners while being allowed to keep very little of the capital their labor generated. Following the end of slavery, racism allowed many employers to pay their Black workers substantially less than their white workers, perpetuating racial capitalism at the expense of workers. Additionally, many Black workers remained trapped in exploited working conditions due to an abusive system of tenant farming known as sharecropping.

Despite the many real and documented ill-effects brought on by free market enterprise, capitalism remained the only economic system proven to lift people out of grinding poverty. This was regardless of ethnicity. For example, China turned to free market capitalism in the 1980s to undo decades of disastrous communist-driven economic policies that had left almost 90 percent of its citizens in poverty and squalor.

In the 2020s, a political pendulum turned in the United States, and many policies aimed at advancing economic opportunities for traditionally marginalized communities came under fire. For example, in June 2023, the US Supreme Court reversed the ability of US universities to allow ethnic origin to be a consideration for admission. This action countered a mechanism universities employed to counteract decades of legalized action limiting access of men and women of color to higher education. This denial is most vividly portrayed by the need in 1961 for President John F. Kennedy to deploy the National Guard to the campus of the University of Alabama. This was done to ensure the registration of two Black students over the objections of Governor George Wallace, who physically blocked the doorway of the registration building. An example of the continuing complexities could be found a mere generation later. Supreme Court Justice Clarence Thomas was one of the strongest proponents of eliminating race-based college admission policies, although he had benefitted from affirmative action policies while attending college. 

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