The Changing Economic Subtext of Race Relations in America

While we at The Neanderthal are not shy to expend ink on controversial subjects, we have generally avoided topics where opposing opinions are prone to devolve into the incendiary. Disagreement on civil terms makes for dialogue, but disagreement on uncivil terms is merely an exercise in the projection of power. Of late, our nation has experienced much of the latter. In the shadow of Charlottesville, when the social fabric of America is fraying swiftly, we wish to add a constructive voice to the conversation.

We present a novel lens through which to peer at the issue of race relations in America, and we weave the historical evidence into a continuing narrative that carries through to today.

Herewith, we find ourselves writing more pointedly than usual – that is because the subject demands a certain degree of directness & candor.



Race relations in America have been fraught with vitriol for a very long time. The problem of disharmony between the races dates back to the very founding of the country, with the displacement of Native Americans by inquisitive sea-faring Europeans. This discord was perpetuated & exacerbated with the importation of slave labor from Africa to till the nation’s fields. Lincoln’s Civil War marked the next chapter in the saga, followed by a century of gradual de-escalation and desegregation.

The most recent page in this history is recidivistic, with a renewed escalation that perhaps has only just begun. The elections of 2018, 2020, and beyond will decide its trajectory.

While race relations and racism are generally viewed as cultural or sociological phenomena, we suggest that the underlying causative dynamic here is economic. Economic motives are the primary drivers of the harmony or disharmony between races, and this economic subtext has evolved vastly over the ages – leading to vastly different fundamental characteristics of race relations in each age.



The first era of racial disharmony, that of the displacement of Native Americans by Europeans, was motivated by the quest for capital. Land and its associated resources were of limited supply in Europe, and much less readily available to new economic participants because of entrenched ownership. Columbus’s first mission was a mercantile one, in search of new trade routes & markets. And his discovery of the New World opened a Pandora’s box of inflow from Europe of those seeking individual economic opportunity. Therefore the founding impulse of America was economic.

To the Europeans, the Natives seemed a people apart, of another world. The two were so culturally & economically (& immunologically) dissimilar that any hope of constructive engagement between them was probably meagre to begin with. Militarily, the skirmishes with the Native Americans were one sided, because being technologically behind they offered little resistance to the newcomers. Therefore, given the scant relatability between the two and the rapidity & ease of the European push, it was easy for the Europeans to gloss over the human toll of their commercial expansion westward.

But surely the homesteading of Native lands was the kindling that jumpstarted the economic miracle of America.



With land aplenty in their hands, the next input in the economic process was labor. The Native Americans had largely been decimated, as much by the microbe as by the bullet, and so they provided no source of labor.

Labor was thus imported, first from Europe and increasingly from Africa, on primarily perforce terms. While it had been possible for the Europeans to largely ignore the toll imposed on the American Natives, particularly because so many of them succumbed to disease which spared the Europeans much of the deliberate bloodshed of clearing them, with the African slaves the oppression was more direct & more emotionally charged.

The African slaves lived on the plantations next to their white masters – they spoke their language, they tilled their fields, and in some cases they bore their children. And because of this close & persistent proximity, a social system of dehumanization had to be implemented that legally & psychologically reduced the slaves to chattel – so that they would not dream of rebellion.

Therefore, while the taking of lands from the Native Americans constituted a discrete act of dispossession, the employment of slave labor was a continuous act of oppression. And while land, once possessed, is emotionally inert, labor is living breathing flesh and always conscious of its plight.

The enslavement of labor is perhaps the darkest chapter of the economic story of America. But without it, America would not have succeeded, it would not be what it is today. For as James Baldwin stated and later historians have echoed, “the economy, especially of the Southern States, could not conceivably be what it has become, if they had not had […] cheap labor.”



It took a civil war, with over a million wounded or dead, to address the question of slavery in America. At its core, the American Civil War was a referendum on whether the commercial benefits of slavery (to the slave owners) outweighed the moral cost of the same. The Union did win the war, and the Thirteenth Amendment set in stone what the North had sought to achieve. It was only then that labor, which had for so long had been denied its due particularly in the South, was properly accounted for in the calculus of manufacturing & agriculture.

But just because the salves were free in name did not mean that they were free in fact. Through a thousand legal and extra-legal cuts, commerce sought to retain the advantage of free labor for as long as possible. A patchwork quilt of laws enabled a state of racial segregation where the blacks were disadvantaged in highly consequential ways. This essentially diminished their economic standing in the modern economy. Voting whites benefited indirectly from this disenfranchisement of the blacks, because it meant that whites were in a protected labor pool separate from the blacks –  with greater pay, greater standing, and greater opportunity for advancement.

Therefore the system of legal & social enslavement established in ante-bellum America was only slowly dismantled, such that the blacks suffered almost a century of economic handicap even post Emancipation.



Which brings us to the most recent chapter in the saga of race relations in America. While there has finally been some equilibration in the economic opportunities available to blacks & whites & people of other races, there is alas a new force of economic upheaval at play. Increasing automation, combined with the influx of relatively inexpensive labor from Asia in the form of imported goods, has greatly disturbed the historical norms of hiring & wages in America. This is particularly true of labor involved in manufacturing. The manufacturing workforce feels that its economic status has been eroded, gradually but surely, and this has led to a heightened state of anxiety in much of the country, particularly in the industrial heartland of America.

This insecurity, this economic stasis, is much to blame for the recent reversal in race relations in America. The position of privilege that Americans in general, and whites in particular, have enjoyed on the global economic stage, has been diminished in relative magnitude. America’s innate sense of hope & optimism has slowly been transmuted into a gnawing sense of angst & discontentment. What seemed until the 1980s & 1990s to be a steadily growing economic pie with increasing gains for all, now feels like a zero-sum game with diminishing rewards for only the few. And this time it is not just the blacks, but also the whites, who are feeling dispossessed.

This sense of disenfranchisement is prompting a search for solutions, but the problem at hand is a complex one with no easy remedy. In many ways, it is in fact the growing pains of technological advancement and globalization, which will likely get worse before it gets better. In the absence of quick fixes, ideologues on both ends of the political spectrum are gaining currency with their characteristic dogmatic prescriptions. At the moment, the Far Right is ascendant with its harkening back to fascist symbolism and its easy scapegoating of minorities & foreigners. In time, we expect that the Far Left will also make its presence heard, with demands for extreme taxation & redistribution, and much greater fiscal intervention.

Both extreme ideologies have failed the test of time, and in fact both represent great moral failures that should not be resurrected. In this sense, both also constitute a dangerous recidivism that will set the world back at least a decade, if not more.



In closing, we posit that the economic character of race relations in America has gone through three stages. Firstly, naked oppression for economic gain, from Founding to the Civil War. Secondly, continued disharmony for the preservation of economic advantage, post Emancipation. And thirdly and most recently, the resurgence of discord in reaction to the relative diminishment of said economic advantage.

As the economic subtext of American society evolves, along with the larger global economic context, we expect that race relations in America will continue to change. Whether these changes will be positive remains to be seen. The factors that will encourage harmony & cooperation include: stronger GDP growth, universal opportunity for economic participation at the individual level, and more uniform distribution of gains between the coasts and the heartland.

Hopefully by identifying the underlying economic drivers of racial discord, we can tailor policy responses to address these causative factors before they morph into social malaise. But whoever thought that race relations in American will improve monotonically is mistaken. This will be a constant quest, and each one of us has a very consequential role to play.