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Race and the Law

Racial Capitalism

“Racial capitalism,” the process of deriving value from the racial identity of others, harms the individuals affected and society as a whole.

Racial capitalism – the process of deriving social and economic value from the racial identity of another person – is a longstanding, common, and deeply problematic practice. This Article is the first to identify racial capitalism as a systemic phenomenon and to undertake a close examination of its causes and consequences.

The Article focuses on instances of racial capitalism in which white individuals and predominantly white institutions use nonwhite people to acquire social and economic value. Affirmative action doctrines and policies provide much of the impetus for this form of racial capitalism. These doctrines and policies have fueled an intense legal and social preoccupation with the notion of diversity, which encourages white individuals and predominantly white institutions to engage in racial capitalism by deriving value from nonwhite racial identity.

Racial capitalism has serious negative consequences both for individuals and for society as a whole. The process of racial capitalism relies upon and reinforces commodification of racial identity, thereby degrading that identity by reducing it to another thing to be bought and sold. Commodification can also foster racial resentment by causing non-white people to feel used or exploited by white people. And the superficial process of assigning value to nonwhiteness within a system of racial capitalism displaces measures that would lead to meaningful social reform.

In an ideal society, racial capitalism would not occur. Given the imperfections of our current society, however, this Article proposes a pragmatic approach to dismantling racial capitalism, one that recognizes that progress must occur incrementally. Such an approach would require a transition period of limited commodification during which we would discourage racial capitalism. Moreover, we would ensure that any transaction involving racial value is structured to discourage future racial capitalism. I briefly survey some of the various legal mechanisms that can be deployed to discourage racial capitalism through limited commodification. Ultimately, this approach will allow progress toward a society in which we successfully recognize and respect racial identity without engaging in racial capitalism.