American capitalism was built on racial exploitation, from the enslavement of Black people to institutionalized discrimination and its structural impact on our nation’s economic and legal systems. Creating an equitable society requires us to examine and understand the history of capitalism and its reliance on racialized oppression, writes Elizabeth Kennedy.

In How to Be an Antiracist, Ibram X. Kendi likens capitalism and racism to “conjoined twins,” each dependent on the other for survival. Is racism essential to capitalism? Can they be separated, or are they inextricably bound? Black Americans currently own one-tenth the wealth of white Americans, a racial wealth gap that would take, by some estimates, over 228 years to close. This disparity is mirrored across every metric of lived experience, from infant mortality to food insecurity, education, air quality, and liberty.

These facts force us to interrogate the relationship between racism and capitalism. As the geographer and abolitionist Ruth Wilson Gilmore notes, capitalism “requires inequality,” and racism “enshrines it.” Yet, American business history often overlooks what Karl Marx described as the “undisguised looting, enslavement, and murder” that powered the industrial revolution.[1] To build a more just economic system, we must acknowledge the role slavery played in capitalism’s development. And we must recognize that even after emancipation in 1865, racist laws, institutions, and policies reinforced racial inequality, shaping market behavior today. Ultimately, to break the bond between these two systems, we must understand the history of capitalism and its legacy of racialized oppression.

Capitalism emerged in Medieval Europe with the decline of feudalism, a social and economic system where the nobility used military power to control labor and land.[2] The Black Death dealt a blow to the feudal order by creating a severe labor shortage, making it costly to raise private armies. Religion had been used to justify a starkly unequal distribution of resources, and race became another. European conquest created classes of “unfree” ethnic populations, such as the Irish, Jews, Roma, and Slavs, whose precarity made them willing to work for meager wages. These migrant populations often settled in urban centers, creating a new class of workers for merchants and manufacturers.

Toward the end of the 15th century, capitalism—which treats labor as a commodity supported by a legal system that protects private property rights—began to take shape. As European nations established colonies in the Americas, the drive to extract resources and profits from these lands galvanized one of the largest human migrations in history.

Nearly one in five of the 12 million African men, women, and children forced on the harrowing voyage across the Atlantic known as the “Middle Passage” died before reaching shore.[3] Those who survived worked under brutal conditions in Caribbean sugarcane fields or Virginia tobacco plantations, generating profits for European investors. Wealth extracted from slavery fueled the growth of a global capitalist economy, stoking the industrial engines of finance, insurance, shipping, manufacturing, construction, and education.

Other unfree Europeans arrived in the Americas under various contracts of servitude and debt bondage. They were also exploited, traded, and forced to work for little or no wages. But fear of white rebellion led the British to terminate many indentured contracts and extend land grants to white laborers, creating a class of white settlers with economic and political fortunes aligned with the ruling regime.[4]

This nascent capitalism of 1619 evolved into a highly efficient system capable of powering an industrial revolution. By 1860, cotton—grown on Indigenous lands expropriated using militarized violence—comprised 59% of American exports. It was, as the saying went, “king.” Other countries could not compete with a nation that codified a caste of workers as non-human and legalized violence as a management technique. As the sociologist and ethnographer Matthew Desmond observes, “Given the choice between modernity and barbarism, prosperity and poverty, lawfulness and cruelty, democracy and totalitarianism, America chose all of the above.” Human bondage was the “beating heart” of this new American economy, pumping wealth to Southern planters, raw materials to Northern mills and British industrialists, and capital to European bankers.

“Whether capitalism could exist without racism ignores, as historian Walter Johnson affirms, that ‘there was no such thing as capitalism without slavery.’”

Whether capitalism could exist without racism ignores, as historian Walter Johnson affirms, that “there was no such thing as capitalism without slavery.” Black bodies were appraised, valued, sold, resold, and used as collateral for loans, bonds, and capital investment by institutions like J.P. Morgan. By 1860, enslaved people were the single largest asset in the American economy, with a combined value exceeding the nation’s railroads and factories. The purchase and sale of enslaved people spurred the creation of new financial products, insurance policies, tax revenues, and notary fees. Children born to enslaved women were sold and separated from their families, which Ta-Nehisi Coates describes as “the for-profit destruction of the most important asset available to any people, the family.”

Caitlin Rosenthal traces the origins of quantitative management practices, recordkeeping, and accounting methods to the plantation.[5] These included scientific production quotas, elegant data dashboards, mark-to-market accounting, depreciation algorithms, and credit instruments. Commercial journals and accounting ledgers helped planters “accelerate the pace of daily labor through calculation and comparison, bonuses and incentives, and, of course, punishment,” a sophisticated human resource management system developed long before Frederick Taylor. The profits extracted from the bodies of enslaved people would be woven everywhere into the American capitalist economy.

Abolition presented an opportunity for the US to confront and atone for its “original sin” of slavery. If capitalism did not depend on racial subjugation, we would expect a total reorganization of American society. Instead, what followed was an extension of slavery’s economic, social, physical, and emotional damages.

Through terror, disenfranchisement, and exclusion, American capitalism was able to survive the emancipation of the enslaved people upon whose labor it had depended. During the era of “reconstruction,” President Andrew Johnson, a former Tennessee enslaver, condoned the passage of “Black Codes,” which criminalized the refusal to work as “vagrancy.”[6] Convictions resulted in fines that the newly freed could not pay, leading to imprisonment and the “leasing” of convict laborers to planters, railroads, and mining companies. Many Black farmers, lacking capital, were forced into coercive “sharecropping” contracts that required them to pay for using land, tools, and seeds in exchange for a share of harvest proceeds. If they could not repay the debt, they had to work in debt peonage or risk arrest. This “slavery by another name” fueled an explosion of Southern prison populations in a system described in 1949 by historian Fletcher Green as akin to “the persecutions of the Middle Ages” and “prison camps of Nazi Germany.”

When Black Americans managed to accumulate wealth, they were met with an organized and violent racial backlash. Racial pogroms, such as the one in which white mobs murdered over 300 Tulsa residents in the neighborhood known as “Black Wall Street, destroyed Black businesses, homes, and civic and cultural institutions. As millions of Black people migrated away from the South between 1919 and 1950, Northern cities enacted Jim Crow laws, which excluded them from parks, restrooms, schools, restaurants, hospitals, nursing homes, public pools, jobs, and transportation.

The policies of the New Deal, intended to combat poverty on a national level, further entrenched Jim Crow segregation. Black agricultural and domestic workers were excluded from landmark labor protections, preventing them from saving for retirement, collectively bargaining for raises, or receiving compensation for workplace injuries. While these programs were a critical safety net for white working-class Americans, the NAACP called them “a sieve with holes just big enough for the majority of Negroes to fall through.”[7] Black veterans could not take advantage of the G.I. Bill, as it did not require universities to admit non-white students. At the same time, FHA “redlining” prevented Black potential home buyers from qualifying for federally subsidized mortgages.

Notably, people have engaged in collective resistance at every point in the history of capitalism. Black resistance took many forms, from establishing worker-owned cooperatives and credit unions to labor organizing and civil uprisings. Though the Civil Rights movement of the 1960s brought about significant legislative change, it did not eradicate the systemic discrimination that had long kept Black families from accessing integrated neighborhoods and the educational and economic opportunities they provide, as well as basic necessities such as clean air, water, and green space.

Even today, those residing in once redlined areas continue to suffer from higher rates of illness, such as cancer and asthma, and elevated risks of Covid-19 and the impacts of climate change. Furthermore, algorithms used in artificial intelligence often perpetuate these disparities, a phenomenon Safiya Umoja Noble calls “technological redlining.”[8]

In “The Wealth of Nations,” Adam Smith proposed that the balance of power and distribution of advantages between capital and labor could be maintained in a society where “there was perfect liberty, and where every man was perfectly free both to chuse [sic] what occupation he thought proper and to change it as often as he thought proper.”[9] Such conditions of equality did not exist in 1776, nor do they now.

Just as the rise of the automobile was deeply entwined with the use of fossil fuels, the development of capitalism was inextricably linked to the institution of slavery. Transitioning from a carbon-based to a sustainable economy is not as simple as swapping a combustion engine with a rechargeable battery. We must also unwind a century of economic, residential, and workforce policies prioritizing roads over rails, speed over security, and consumption over conservation. Likewise, creating a racially equitable economy requires unraveling and repairing the racialized violence, inequality, and exploitation woven into the fabric of American capitalism.


This article is adapted from Kennedy’s chapter, “Racism and Capitalism,” in the forthcoming book, Sustainable Capitalism: Contradiction in Terms or Essential Work for the Anthropocene?, Inara Scott, ed., under review by the University of Utah Press.

[1] Marx, Karl. Das Kapital. Edited by Friedrich Engels. Washington, D.C., DC: Regnery Publishing, 1996, 535.

[2] Robinson, Cedric. Black Marxism: The Making of the Black Radical Tradition, 3rd ed. Chapel Hill & London: The University of North Carolina Press, 2000, 10-25.

[3] Baptist, Edward E. The Half Has Never Been Told: Slavery and the Making of American Capitalism. New York: Basic Books, 2014, 57.

[4] Alexander, Michelle. The New Jim Crow: Mass Incarceration in the Age of Colorblindness. New York: The New Press, 2012, 12.

[5] Rosenthal, Caitlin. Accounting for Slavery: Masters and Management. Cambridge: Harvard University Press, 2018, 51, 127.

[6] Marable, Manning. How Capitalism Underdeveloped Black America, 2nd ed. Cambridge: South End Press, 2000, 109-115.

[7] Baradaran, Mehrsa. The Color of Money: Black Banks and the Racial Wealth Gap. Cambridge: Belknap, 2017, 102.

[8] Noble, Safiya Umoja. Algorithms of Oppression: How Search Engines Reinforce Racism. New York: New York University Press, 2018, 1, 167.

[9] Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations. Indianapolis: Liberty Classics, 1976, Chapter X.