The Role of Race in Upholding Capitalism
The system of capitalism cannot exist or continue without a system of exploitative mechanisms. One of the most essential exploitative mechanisms is the expropriation of resources. Another is the undervaluing of paid labor in order to maximize profits. The more developed capitalism becomes, the more dependent it becomes on the ability to expropriate natural resources for lesser and lesser cost.
Race has always been a primary factor in every patriarchal economic system of exploitation, and capitalism is no exception. Racial divisions have always determined who is to be subjugated and exploited for their labor and natural resources, and who is to benefit from that exploitation.
It is no accident that the division between the Global South and the Global North is a division of race. From the very earliest days of Europe’s invasions and colonial expansions, race was the determining factor for which nations would be invaded and exploited.a
In the early days of mercantilism, two things were needed to make that economy profitable: cheap labor and plentiful natural resources. Slavery provided the cheap labor, and the quest for natural resources resulted in Europe’s first colonizing invasions. But it wasn’t until capitalism began developing rapidly as a result of the Industrial Revolutionb that the need for ever-cheaper raw materials (the resources) set off an accelerated colonial expansion.
In fact, the major purpose of colonization was and still is to grab lands rich with resources, exploit those resources, then ship them to the capitalist countries as raw materials which are used in the manufacture of finished goods. Much of the capital used to develop capitalism throughout its early years was obtained by plunder backed with violence—theft of lands, people (slavery), and precious metals.
By dividing humans along racial lines, Europeans were able to literally divide and conquer. Their people wholeheartedly and financially supported the conquest of other races, their soldiers (conquistadors and “explorers” like Columbus) pillaged, raped, and slaughtered without a second thought because these other races, they were taught, these “savage primitives” in exotic foreign lands, were less human than the superior race of white Europeans. As Christopher Columbus remarked after first “discovering” the indigenous people of the Caribbean: “They would make fine servants…With fifty men we could subjugate them all and make them do whatever we want.”1
The invasions were brutal and overwhelming. Through military force, terror, theft of lands, genocide, and enslavement, the European nations were able to establish colonies throughout what is now known as the Global South and begin extracting the natural resources from the lands of indigenous people who belonged to other races. Those who weren’t slaughtered were forced into slavery in order to carry out the work of extracting the natural resources.
The colonization of nations along racial lines not only divided the world into the white Global North and the everything-else Global South, it also established a permanent economic valuation of labor based on race. Since whites came to control the global economy and whites considered themselves superior, whites—especially white males—assign themselves the highest economic value. All other races are considered to have less value, including the value of their labor.
The expansion of international capitalism succeeded because of the race-based valuation of labor: The white capitalist colonizers could not have made any profits or survived at all if they couldn’t find a permanent source of cheap labor, especially one that could be controlled through military force. For the capitalist, being able to control labor costs is crucial to the profit system. The capitalist may not be able to control the costs of raw materials that have to be bought, but so long as he or she can drive down wages in order to make profits, the profit system works.
However, workers don’t always put up with wage cuts, especially in the home country of the capitalist. What makes international capitalism work is the ability to have access to a permanently undervalued labor force. Once the undervaluing of workers based on race has been institutionalized, it doesn’t matter where those workers are; they can be imported to provide cheap labor in the colonizer’s own country, especially when the government eases immigration restrictions through “guest worker” programs.
An early example of the U.S. government easing restrictions in order to bring in cheap, non-white labor was in 1868 with the passage of the Burlingame-Seward Treaty. In the decade before, the railroad companies were beginning to expand westward, but could not find sufficient cheap labor. Companies began bringing in workers from China under the “credit-ticket system,” which was a form of indentured labor, but the U.S. government restricted immigration from China.2 However, passage of the treaty lifted those restrictions. As the State Department’s Office of the Historian explains, the treaty “ensured a steady flow of low-cost Chinese immigrant labor for U.S. firms.”3
Today, the devalued labor of people of color is as much an essential element of U.S. capitalism as the dollar and supremacy of Wall Street. From agriculture to clothing manufacture, from child care services to food production, capitalism has institutionalized paying people of color less than their white counterparts, and reaps enormous profits from that wage differential. And all of it arises from the colonial lie that the people, the lands, and the natural resources of the Global South have less value than white Europeans.
Equally important, the race-based devalution also extended to the natural resources—the raw materials essential for producing everything. Wherever non-white people live, their land and resources are valued at pennies on the white man’s dollar. And so the theft and unsustainable exploitation keeps the Euro profits booming at the expense of the Global South.
By maintaining a permanent racialized underclass, capitalism ensures that labor from the racial underclass will always be undervalued—no matter where that labor migrates—and that the natural resources from any of the nations of the racial underclass will always be undervalued and easily expropriated.
Race not only matters, it makes capitalists rich.
The Notes to The Role of Race in Upholding Capitalism
a: Even the English invasion and colonization of Ireland in 1649 was considered a racial division: the Irish “race” was considered inferior to the English “race.”
b: The Industrial Revolution started around 1750 and ended around 1850. This was the period when the steam engine and other inventions of mechanization were developed which were instrumental in creating a new capitalist economy based on mass production.