Capitalism, racism and the 1 Percent

March 31, 2015

Capitalism and racism have been intertwined from the beginning--which is why confronting one requires organizing to confront the other, writes Phil Gasper.

RACISM HAS been an ugly and persistent feature of the United States since the country was founded. Today, despite the important victories of the 1960s civil rights movement and other struggles, racial disparities are in many respects getting worse.

In mid-March, the National Urban League released its annual State of Black America report, which found "little accountability for law enforcement responsible for killing unarmed Black men, teenagers and children; a continual assault on voting rights; [and] widening economic inequality gaps," among other major problems. As the report notes:

Sixty years after the landmark ruling in Brown v. Board of Education ended segregation in America's public schools, separate and unequal is still a pervasive reality. While de jure, or legal, segregation has been abolished, de facto, or the actual practice of segregation, is greater now than it was 40 years ago.

Black and Brown students are less likely to share classrooms with white students. We also see separate and unequal levels of expectations and resources in our schools that continue to break down along economic, and thus largely color, lines.

McDonald's workers and their supporters took their struggle to the company's doorstep
McDonald's workers and their supporters take their struggle to the company's doorstep

Using government data on income and wealth, unemployment, poverty and other factors, the report calculates a Black Equality Index of only 72.2 percent--meaning that "Blacks experience less than three-fourths the quality of life experienced by white Americans," according to the report. The Hispanic Equality Index is only a little higher, at 77.7 percent.

RACISM IS a moral obscenity, but how can we fight it? That depends on how we understand the problem.

Racism is often thought to be a consequence of ignorance and lack of understanding--something that can be overcome by education and reforms that leave the basic nature of the system we live in untouched. But while the racist attitudes of individuals are one symptom of a racist society, this view gives no explanation of where racist ideas come from in the first place.

Since the 1930s, there has been a seemingly endless series of government commissions set up to investigate racism--often following major urban rebellions. But all the policy recommendations of such groups--such as improved police training and more Black officers--have not eliminated racism. More Black cops have done nothing to stop racist police violence.

Because of these failures, it's possible to be pessimistic and conclude that racism is a permanent feature of society. But while the roots of racism run deep, it is not natural, and it can be ended. If we want to understand where racism comes from and formulate a strategy to defeat it, we have to view it in the context of the class divisions that separate our society.

In capitalist societies, a small ruling class controls the wealth produced by the rest of us. Racism is the most important tool used by the top 1 Percent to keep workers divided and thus protect their power. That's why socialists put such a strong emphasis on fighting racism. Unless racial divisions are overcome, it will be impossible to organize a movement that can radically transform society and build a democratic, socialist alternative.

It's common to think that racism must have always existed, but this isn't true. Nothing like the systematic racial oppression of modern slavery, for instance, existed in ancient Greece or Rome, where slavery existed, yet it was possible for people of different ethnic and racial groups to attain high social position.

In fact, the concept of race itself was unknown until the age of European exploration and colonialism, beginning in the late 15th century. The term isn't in the Bible, nor the histories written by the ancient Greek writer Herodotus, nor the writings of Marco Polo.

Modern racism emerged hand in hand with the early development of capitalism in Western Europe in the 16th century and was used to justify two pillars of the new economic system: Imperialism, meaning the colonization of much of the rest of the world by the most powerful nations; and slavery.

In North America, racism was used as the justification for genocide against Native Americans and the enslavement of Africans for plantation labor. It was also consciously used as a method of dividing Blacks and poor whites. As the people's historian Howard Zinn wrote:

[I]n spite of special subordination of Blacks in the Americas in the 17th century, there is evidence that where whites and Blacks found themselves with common problems, common work, a common enemy in their master, they behaved to one another as equals...Black and white worked together, fraternized together. The very fact that laws had to be passed after a while to forbid such relations indicates the strength of that tendency.

Starting with Bacon's Rebellion in 1676, there were significant uprisings in the American colonies, with poor whites and Black slaves often joining forces to fight against their common masters. Ruling classes responded by passing slave codes to discipline Blacks, while offering privileges to poor whites. According to the historian Theodore Allen, this amounted to "the invention of the white race."

After an exhaustive survey of 17th century records, Allen reported: "I have found no instance of the official use of the word 'white' as a token of social status before its appearance in a Virginia law passed in 1691." Soon after this point, however, the Virginia Assembly proclaimed that all white men were superior to Blacks and passed a law requiring masters to provide white servants whose indenture time was up with money, supplies and land.

RACISM ALLOWED the ruling class to divide and conquer the mass of the population. In the words of Frederick Douglass, "They divided both to conquer each." That is why racism survived the abolition of slavery with the Civil War.

In the 1870s, racism was used to subvert alliances between poor whites and former slaves and to undermine the basic democratic rights granted to African Americans during the post-Civil War Reconstruction era overseen by the federal government. In the 1890s, it was used again to defeat the Populist movement, which in the South threatened to unite poor whites and Blacks against the ruling class.

As capitalism has developed and drawn workers from all corners of the globe to the main metropolitan centers, the rulers of the system have tried to keep workers divided along racial, ethnic and national grounds. In the early 20th century, racial quotas were instituted in many Northern industries. As the employment manager at one steel foundry explained: "It isn't good to have all of one nationality; they will gang up on you...We have Negroes and Mexicans in a sort of competition with each other."

In adopting racial quotas and deliberately inciting racial antagonisms, employers were following the examples set in Southern coal mining, iron and steel, and other industries.

Employers often used "divide and rule" tactics of this kind to defeat strikes. The 1919 steel strike, for example, which involved more than 360,000 workers throughout the entire industry, was defeated in large part because the employers imported more than 30,000 Black strikebreakers to keep the plants operating.

Racism has clearly been used to benefit capitalists, but some people argue that it is also in the interest of white workers, since in general they receive higher wages and other advantages compared to Blacks. Citing the work of the Black historian Lerone Bennett, Jr., Theodore Allen rejected this conclusion:

First, racial slavery and white supremacy in this country was a ruling-class response to a problem of labor solidarity. Second, a system of racial privileges for white workers was deliberately instituted in order to define and establish the "white race" as a social control formation. Third, the consequence was not only ruinous to the interests of the Afro-American workers but was also "disastrous"...for the white worker.

The Berkeley economist Michael Reich published an extensive study of this question in the 1980s. He found that "where racism is greater, income inequality among whites is also greater," and that "most of the inequality among whites generated by racism [is] associated with increased income for the richest 1 percent of white families."

Reich also found that "increases in...racism...had an insignificant effect on the share received by the poorest whites and resulted in a decrease in the income share of the whites in the middle-income brackets." This remained true even when data from the South was ignored.

THERE ARE two reasons why racism operates against the interests of the working class as a whole, including white workers.

First, competition among workers over wages and working conditions drives down the standards for all workers. The standards for specially oppressed sectors of the working class drive down living standards for all workers. As the pre-eminent African American social theorist and historian W.E.B. Du Bois noted: "So long as white labor must compete with Black labor, it must approximate Black labor conditions--long hours, small wages."

Second, racial antagonisms inhibit union growth and labor militancy, as well as political unity between Blacks and whites. Where racism is worst, unionization rates are lowest, average wages for white workers are lowest, and profit rates go up. To quote the words of Karl Marx from the 19th century, "Labor cannot emancipate itself in the white skin where in the black it is branded."

Ruling-class politicians are adept at manipulating racial stereotypes to push through policies that benefit the 1 Percent at the expense of the rest of the population. Law professor Ian Haney-López examined how this played out in the U.S. over the past 40 years in his recent book Dog Whistle Politics: How Coded Racial Appeals Have Reinvented Racism and Wrecked the Middle Class. He summarized his findings in an interview last year:

[O]ne of the central dynamics in American politics since the civil rights era has been the use of cultural provocations--primary among them race, but not try and advance a conservative agenda that favors tax cuts for the rich and that favors a deregulation of big industry.

In that context, Democrats had to decide how to respond. And when the Democrats responded, they responded not by contesting that politics, but instead by embracing it. And this is part of the story of dog-whistle politics. Republicans shift right and the Democrats have tracked rightward, following them.

RACISM HAS deep roots. But despite this, its grip can be broken, particularly at times of heightened class struggle, when working-class people see their interests most clearly.

The organizing drives of the Congress of Industrial Organizations (CIO) in the 1930s provide one important example. The CIO hired Black organizers, built a strong working coalition with the NAACP and worked actively to educate racist white workers. "Black and white, unite and fight" became one of its most important slogans.

In contrast to the American Federation of Labor at the time, the CIO prohibited constitutional exclusion clauses or the segregation of Blacks into separate locals, and worked to include Black workers on an equal basis. With this policy, it was able to overcome initial Black skepticism about the labor movement, which had accumulated as a result of decades of discrimination by white unions.

The CIO succeeded in organizing hundreds of thousands of Black and white workers in mass production industries, and the number of Black union members increased from 56,000 in 1930 to 1.25 million by 1945.

In each industry that the CIO organized, union bargaining committees negotiated contracts in which the biggest wage increases went to unskilled workers. Large numbers of Black workers--concentrated in unskilled occupations as a consequence of the legacy of racism--were thus among the main beneficiaries of these efforts.

These policies were no accident--they were a result of the active role of Communists, socialists and other radicals in the unions. As one labor historian puts it: "The CIO was to no small degree given birth by Communists, and largely as a result of red anti-racism, the CIO stood up for Black workers and their communities."

Tragically, these policies were not continued after the 1940s. This was partly due to the weaknesses of the Communist Party's broader politics, and partly to the sharp shift to the right in U.S. society during the late 1940s and 1950s. This drove leftists out of the unions and ushered in decades of tame business unionism, which betrayed the interests of Black and white workers alike.

Today, we are seeing the reemergence of a multiracial movement challenging horrific levels of police violence and mass incarceration. There is a new opportunity to build the kinds of organization that can lead a fight against the material conditions and inequality that gives rise to racism.

Racism and capitalism are intertwined. To fight one, we have to organize to fight both.

Further Reading

From the archives