How racism is an essential capitalist tool


United States capitalism survived because it found a solution to the problem of its instability. Because capitalism never could end cyclical downturns, its survival required making their effects socially tolerable. Systemic racism survived in the post-Civil War US partly because it helped to achieve that tolerability. Capitalism provided conditions for the reproduction of systemic racism, and vice-versa.

Every four to seven years, on average, capitalism produces a downturn (“recession,” “depression,” “bust,” “crash” — many words for a problem so regularly repeated). Political leaders, economists and others have long searched for a cure for capitalism’s instability. None was ever found. Capitalism has already recorded three crashes this century (in 2000, 2008 and now in 2020).

Defenders of capitalism prefer to call its inescapable instability the “business cycle”. That sounds less awful. Yet its cycles’ hard reality has always frightened capitalism’s defenders. They recognise that when large numbers of people suddenly lose their jobs, many businesses die, production shrinks and governments lose tax revenues, the results can and often do threaten the entire economic system. Capitalism’s cyclical crises could potentially turn their victims against it and make them receptive to the system’s critics.

This would be more likely to happen if everyone in society were roughly equally vulnerable to cyclical downturns. Most employees would then worry that their jobs would be lost in the next crash. They would periodically face income losses, interrupted education, lost homes and so on. Whatever relief employees felt if neighbours, rather than themselves, got fired, they would know that it might well be their turn in the next cycle. The losses, insecurities and anxieties produced by such a capitalism would long ago have turned employees against it and provoked a transition to a different system.

US capitalism solved its instability problem by making cyclical downturns afflict chiefly a minority of the whole working class. It positioned that minority to bear the brunt of each cycle and suffer its damages disproportionately. That minority was repeatedly drawn into and then thrown out of jobs as the cycle dictated. 

Any savings people in the minority might accumulate when working would be lost when they became unemployed. Repeated firings precluded such a minority from enjoying the benefits of job longevity (seniority, promotion, stability and so on). Poverty; disrupted households and families; and unaffordable housing, education and medical care would haunt such a minority. It would become capitalism’s “business cycle shock-absorber” — the last hired, first fired.

For capitalism, making such a minority absorb most of the costs of the system’s instability allowed the majority of the working class to be relatively exempted, relieved and  freed from them. The majority could be less subject to cycles because the minority was made relatively much more subject. Capitalism promised the majority relatively secure jobs and incomes because it took those away from the minority. 

The majority could thus worry less about the next cycle, whereas the minority had to worry more and adjust their lives more. Racists could then attribute the resulting differences between minority and majority subparts of a population to inherent qualities of different “races” instead.

Other advanced capitalist countries found parallel solutions. Some condemned immigrants to play the role assigned to African Americans in the US. Racism often followed. In cyclical upswings, immigrants would be brought in: North Africans into France, southern Italians into Switzerland, Turks into Germany and so on. Then, downswings would return those immigrants to their home countries. Capitalism would thus save on costs of unemployment insurance and welfare payments for the workers who had returned. 

While some capitalism systems relied on domestic minorities to be shock-absorbers and others relied on immigrants, some countries relied on both. The United States used Central American immigrants alongside domestic African Americans, and it still does. Germany allowed some immigrants to settle and acquire German citizenship alongside immigrant “guest workers”.

In the US, married white women also played the role of business cycle shock-absorber. During cyclical upswings, they would enter the paid labour force in part-time or full-time positions. Like African Americans, they earned less than white men. Women’s jobs, too, were likely to be temporary, undone by downturns.

Whatever communities were forced into the shock-absorber role, poverty, depression, broken families, slums, and inadequate education and health facilities became more widespread among them than they were among the majority of the working class. Insecure jobs, incomes, homes and lives often bred bitterness, envy, desperation, crime and violence. These collateral damages had to be “managed” by the capitalist systems whose survival depended on producing and reproducing those communities. Police and prisons were and are assigned that management task.

Police and prisons were to “keep the lid on”, “tame”, and “patrol and control” the restive portions of the shock-absorber communities sequestered in slums or ghettos. Interactions with police coupled with cycling and recycling through prisons were the chosen means to manage capitalism’s collateral damage. Those means generated collateral damage of their own: the long, tragic record of police violence; use of excessive force; the harshness and violence of incarceration; and the killing of African Americans.

Why were African Americans “chosen” to be key (but not the only) cyclical shock-absorbers in the US? One factor concerned the racist legacies of US slavery. 

They included beliefs that slaves were either not fully human or inferior humans. Accommodation to slavery before the US Civil War had already shaped a racialised consciousness in both masters and slaves. And because US slavery entailed different skin colours for masters and slaves (unlike many slaveries in world history), a readily identifiable minority had already been defined in racial terms in the slave portions of the US.

Moreover, that definition had spread to other parts of the US as well. US capitalism used, absorbed and built on slavery’s legacy by inserting large portions of the African American community into the shock-absorber role. The racism developed by US slavery thereby both facilitated US capitalism and was reinforced by it.

A significant portion of the white working class in all capitalist systems has always also been forced into the shock-absorber role. “White trash” in US capitalism was never far from the African Americans similarly situated. There thus arose possibilities of class solidarity between these black and white working-class communities. US history displays moments when those possibilities were realised, but it also displays moments of intense racist violence used to block the realisation of those possibilities. 

Employers played on racialised differences to keep employees from unifying against them. In bitter competitions between black and white shock-absorbers for cyclically scarce jobs, whites could and often did use racism to gain advantages in access to those jobs. In multiple ways, then, capitalism fostered and benefited from racism; it thus settled deeply into the system.

Fundamental injustice characterised the relationship between police and prisons, on the one hand, and the African American and other communities (indigenous, people of colour) condemned to play capitalism’s shock-absorber role, on the other. The solution was and is not better training or more funding; both have been tried repeatedly and both have likewise failed repeatedly. 

A real solution would provide a decently paid job to everyone who wants one as a matter of right. Unemployment would then be outlawed, much like slavery, child abuse and so on. Taxes levied on capitalist enterprises would provide the funds needed to find jobs, private or public, for those laid off by an employer (much as such taxes help to  fund unemployment insurance now). 

Those funds would include wages or salaries paid for each worker’s time between being laid off and rehired. Minimum wages, applied univer-sally, would cover reasonable housing, transport, healthcare and other living costs.

If such a solution were deemed to be incompatible with capitalism as a system, capitalism would have to give way to a system that made adequately paid employment a basic right for all. Enterprise profit would then finally be ejected from its throne as capitalism’s number-one social priority.

Such a solution would finally free African American, indigenous and brown people from long-standing abuses in and by police and prisons. It would thus reduce the racism that those institutions have exemplified and reinforced. It would also reduce pressures on police and prison personnel to behave in ways that self-destructively rob them of their humanity, as well as oppress others. 

Police and prisons in the US today serve an inherently unstable capitalism by means of systemic racism. The logic of alliance between anti-racism and anti-capitalism could not be clearer.

Richard D Wolff is professor of economics emeritus at the University of Massachusetts, Amherst. This article was originally published by Economy for All, a project of the Independent Media Institute.

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Richard D Wolff
Richard D Wolff is professor of economics emeritus at the University of Massachusetts, Amherst.

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