Abstract
This chapter examines the economic causes of racism, as argued by diverse theoretical traditions. Building on the summary of the historical roots of racism provided in the previous chapter, this chapter looks at the neoclassical rational theory explanations of racism, and the interpretation of racial discrimination as a cost minimising and profit maximising choice of economic agents that result in unfair inequalities. This conception differs from the psychological prejudice-based or unconscious bias interpretation of racism, and explains racism as an economic phenomenon. Economic theorisation of racism has primarily focused on taste-discrimination, statistical discrimination and occupational segregation. Yet, other than documenting statistical evidences of discrimination, research on racism in economics has not adequately explained why racism continues to be pervasive and engrained in the societal system, as is argued by Critical Race scholarship. Within structural inequality research, social stratification and intersectionality provide analytical tools to understand the relationship among different contours of inequalities (race, gender and class), and locate the economic dynamics of racism. We highlight in the chapter the growing recognition in contemporary research that redressing the injustices of racism may require redistribution and recognition, given racism has both class and status as intersecting dimensions. The chapter therefore explores the racism and structural inequalities literature to examine how race, gender and class interplay, and understand the extent to which particular groups in society stand to benefit from continued prevalence of racial discrimination and consequent inequalities.
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Notes
- 1.
The concept economism, refers to “the reduction of all social relations to market logic”, and “often appears in critiques of political movements and neoliberal economics” (Norgaard, 2015, p. 1). In Marxist orthodoxy, Lenin coined it as a critique to “a determinism of the development of the productive forces” (Balibar & Wallerstein, 1988, p. 3).
- 2.
- 3.
In many Western societies, the category whites is heterogeneous. For example, in the US, Hispanic whites are distinguished from non-Hispanic whites. According to the US census, whites are defined as persons with origins from “any of the original peoples of Europe, the Middle East or North Africa. It includes people who indicated their race(s) as White or reported entries such as Irish, German, Italian, Lebanese, Arab, Moroccan, or Caucasian” (Humes et al., 2011). Historically, the majority White, Anglo-Saxon, Protestants have shaped and dominated the political, socioeconomic and cultural life of the society until the early twentieth century, with Irish, Jews, Italians and others included as whites in the twentieth century.
- 4.
In Cox’s historical analysis, inclusion in this brotherhood within the Catholic doctrine depended on acceptance of the Christian faith rather racial identity.
- 5.
- 6.
Many scholars accept the proposition that the institution of slavery was the precursor of racism. Wilson (1996, p. 37) writes: “Modern racism emerged out of slavery and colonialism. These economic institutions created clear demarcation lines between the oppressed and the oppressor, which overlapped with color lines.”
- 7.
cf. Chapter 2 of this book, a discussion on Charles Henry Pearson’s book.
- 8.
Indeed, there are also scholars who maintain that racism had its origins in classical antiquity, among Greeks and Romans (Eliav-Feldon et al., 2009).
- 9.
Unearned wealth refers to wealth that people accumulate both without having worked for it and by benefit from injustices such as slavery, crime, etc.
- 10.
- 11.
See Chapter 2 for a detailed treatment of institutional racism.
- 12.
Far-right nationalism and contemporary racism are discussed further in Chapter 9.
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Elias, A., Mansouri, F., Paradies, Y. (2021). The Causes of Racism. In: Racism in Australia Today. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-16-2137-6_4
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