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In the past I have heard people assert that racism is caused by capitalism, and this has never really made sense to me.

However, this answer references a theory by Immanuel Wallerstein that explains how capitalism leads to racism. In a nutshell, capitalism causes inequality, and inequality causes cognitive dissonance (the wealthy like the existing system but also feel guilty about it). To relieve the dissonance, the wealthy shift poverty onto an easily identifiable group (such as a specific race) so they can believe that it is the group's fault that they are poor, not the system's fault.

This makes a lot of sense to me, but it is not obvious to me whether it is true. Is there a way to empirically verify whether this theory holds water? I can imagine a psychological study could verify that inequality causes guilt and cognitive dissonance, but how would one verify that people repsond to the cognitive dissonance by shifting poverty onto people who are "other"?

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    That depends on what Wallerstein means. If they are saying that this is something that can happen, they are certainly correct: conservative parties in the USA have used this strategy before with Black Americans and immigrants. If they are saying that capitalism is the cause of everything that could be considered racist, writ large, that is probably unprovable: things that would be considered racist in a modern sense certainly existed before capitalism, but with a broad enough meaning of capitalism, anything is possible.
    – Obie 2.0
    Jan 9 at 21:00
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    Um... So there is no inequality before capitalism or in places that don't have it? And people only feel guilty about being wealthy when they got it through free trade? Sorry, but soon I will need to channel Norm Macdonald.
    – Dan
    Jan 9 at 22:41
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While it would be hard to claim that no instance of capitalism has ever caused racism, it doesn't seem all that hard to find cases of racism that had little to do with it.

  • Rwanda with the Tutsi/Hutu mess (which predated Belgium's nasty colonialism, even if Belgium exacerbated it on purpose, as a way to tie Tutsi fortunes to Belgian governance)?

  • India with the caste system? How much "capitalism" is involved?

  • Most of all, historical European anti-semitism, before the advent of capitalism, where Jewish people were at least partially targeted because they were perceived as rich? (Never mind that religious edicts channelled them towards jobs like banking which were forbidden to Christians).

  • The Spanish kingdom's unpleasant history of slavery and native oppression to extract gold in South America. Considering that Adam Smith's Wealth of Nations was at least partially a criticism of Spain's gold-based approach to wealth creation, calling it capitalist would be a stretch.

OK, what if it just a question of "wealth", rather than "capitalism"?

Then consider that you might confusing correlation with causation: if you can suppress/confiscate the wealth of minorities you oppress then you will be richer than them.

Naming capitalism as "the cause" seems far-fetched (but quite likely to correlate with increased book sales).

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    Citations on the caste system claims are forthcoming, right? Jan 10 at 22:09
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    @TedWrigley - To blame "capitalism" for anti-Semitism by saying that Jews were "sanctioned as money-lenders" seems a little problematic to me. Jews were largely forced into the profession of money-lending by their exclusion from most professions and often from land ownership. In other words, anti-Semitism came first and (along with Christian interpretations of prohibitions against usury) caused Jews to be more likely to have to take up professions such as money-lending, not the other way around.
    – Obie 2.0
    Jan 11 at 0:55
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    Like, yes, the caste system certainly became more rigid, widespread, and harmful during the Raj; that is well-attested. But to assert that it was "not problematic" before requires the dismissal of a good deal of historical evidence. The historian Vivekanand Jha asserted, for instance, that untouchability developed well before the Raj or even the Mughal period, between 600 and 1200 AD.
    – Obie 2.0
    Jan 11 at 1:28
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    I am curious as to whether you realize how the (incorrect) statement that "Jews were the only capitalists until the 16th century" sounds, particularly coming from someone who (I presume) has a perspective that is not too favorable towards capitalism. "Capitalism is bad and Jews created capitalism" verges quite close toward popular anti-Semitic ideas.
    – Obie 2.0
    Jan 11 at 3:01
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    Sure, you could debate which came first, but it is pretty clear. Antiochus IV was passing anti-Jewish laws before the birth of Jesus of Nazareth. There were anti-Jewish riots in 3rd-century Alexandria. Anti-Semitism was not invented in 6th-century Europe. And although people's antipathy toward money-lenders, in conjunction with their belief that "Jews are money-lenders," undoubtedly worsened anti-Semitism, the overwhelming majority of Jews were never engaged in money-lending.
    – Obie 2.0
    Jan 11 at 3:19
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Yes it can be easily disproved. One of the more drastic disproofs is The Most Important Graph in the World. For thousands of years there was no meaningful increase in wealth in the entire world. Every means and method of societal arrangement was tried. People bounced around on the ragged edge of starvation, often below that edge.

Then, near the end of the 18th century, capitalism was invented. The result was an explosion of wealth. It is an exponential increase such that it is quite possible that within 20 years we could see the near eradication of absolute poverty. No other arrangement of society has ever done anything to lift people out of poverty. Only capitalism has done so, and it has done so world wide for 2 centuries.

enter image description here

The notion that capitalism can only enrich people at other's expense is wrong. Massively and clearly wrong. One might almost call it culpably wrong. Capitalism enriches the people who engage in voluntary trade. The well-known win-win trade arises only in voluntary free exchange. If it isn't win-win then people won't voluntarily engage in it. If they are not voluntarily engaging in it, then it is only going to be win-win by sheerest accident.

The notion that inequality didn't exist before capitalism, or that it does not exist today in non-capitalist countries, is just silly. The notion that racism only exists or arose only where capitalism exists is also just silly. Satraps and kings and warlords exist and existed long before capitalism.

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Correlation does not equal causality. Yes. But at no point did I claim that.

All of history produced no enrichment. None. Zero. No form of government, no form of society, no arrangement of people produced anything but stagnation. Freedom arose and POOF! Freedom arose in another country and SHAZAM! Freedom is predicted to produce enrichment in other countries. Freedom is instituted and BIG VIOLINS! Wealth follows.

Put not your faith in princes becaue princes produce stagnation. Then global substitute for "princes" every other form of government or society organization and note that 2000 years of history clearly show they don't raise people out of poverty. Then note that people who have been raised out of poverty were so done by capitalism. Not by some unknown mechanism but explitly and openly by capitalism. Win-win trades openely arrived at with force banned. People doing what their own self interest dictates. People free to choose their own path. The rising tide raises all boats.

At the same link is the next graph. The interesting thing here is not that world per-capita GDP is increasing exponentially. Which it is. It is that it is increasing fastest where there is more freedom.

We do not have to guess how this happened. We can go ask the people involved in it. Freedom means they can choose to participate in trades that are good for them. Lack of freedom pushes them off these choices. It is entirely open and clear. Capitalism produces these things as predicted. In the manner predicted.

enter image description here

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    This answer is very wrong. To begin with, the notion of a "capitalist" is attested from the 17th century, not the end of the 18th century. It would also be a mistake to believe that capitalism only came into existence when the word was invented: the East India Company, for instance, dates to the 1500s and is widely considered an early capitalist entity. Further, limited forms of capitalism go back much further: some of the first joint-stock companies are attested in Tang China, for instance. That also undermines the argument presented in the answer.
    – Obie 2.0
    Jan 10 at 2:49
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    Then, the graph presented is massively misleading in the context of the argument. To start with, it is an estimate of real GDP, but what matters for quality of life is closer to real GDP per capita, and the human population has been growing. That significantly reduces apparent GDP per capita growth during the period considered. Even worse, there are serious problems with estimating historical GDP from time periods without adequate record-keeping and with completely different technology and lifestyles.
    – Obie 2.0
    Jan 10 at 3:02
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    Which of course brings us to the most significant problem: correlation versus causation. This answer implicitly gives capitalism the credit for any increases in real wealth over the last few centuries. However, this period was also home to significant technological progress and social developments apart from capitalism, such as dramatic population increases. Does growth cause capitalism? Does technological development cause both? Is it a mere historical coincidence that the two started around the same time? The graph certainly does not establish what is claimed.
    – Obie 2.0
    Jan 10 at 3:06
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    There is also problems with suggesting that absolute poverty may be nearly eliminated within 20 years, because this is strongly threshold-dependent. With a threshold set at $1.90 per day (2011 PPP), the number of people in absolute poverty is decreasing relatively rapidly, but with a threshold set at $10 per day, the number of people in absolute poverty is actually increasing. Attributing these decreases to capitalism also seems dubious: the most significant changes occurred after 1960 and particularly after 2000, hardly directly corresponding to an explosion of capitalism.
    – Obie 2.0
    Jan 10 at 3:13
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    I'm sorry, but this isn't proof of your point, and isn't precisely what I would call reasoned argument. It's mainly an assertion of Right-Libertarian articles of faith. I mean, no one argues that science and technology haven't raised the standard of living for most people in the Western world (and many people in the third world). I might dispute the relationship of science and technology to capitalism, but that discussion wouldn't go anywhere, so let it slide. The problem is that simply brushes the notion of exploitation under the catch-phrase 'voluntary free exchange'. Jan 10 at 6:31

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