C A P ITA LIS M , D E M O C R A C Y

AND DISCRIMINATION
The rise and decline of racism
in Coxs Caste, Class and Race
Ganeshwar Chand 1

Source: The R eview o f B la ck P olitical Econom y 22(2) (1994): 71-92.

In his book Caste, Class and Race, Oliver Cromwell Cox took
positions on the link between capitalism and racism that appear
contradictory; on the one hand he argues that racial exploita
tion emerged with the rise o f capitalism , and on the other, that
advancem ent o f capitalism would reduce racial exploitation.
This article analyzes this seeming contradiction from a M arxian
perspective and argues th a t Cox failed to seriously consider the
central organizing mechanism o f capitalismcom petition to
discuss the relation between capitalism and racism. To analyze
race relations under any m ode o f production, the central organ
izing mechanism o f that m ode has to occupy a focal position. A
failure to take account o f that fact often results in political con
clusions that, like Coxs, are divorced from theoretical analysis
and thus are weak and impractical.

Introduction
Since its appearance in 1948, Oliver Cromwell Coxs book, Caste, Class
and R ace 2 has received mixed reactions from radical writers. Some radical
scholars have labeled the book a superb work of Marxist scholarship3
while others have challenged the attribution of a Marxian status to it.4 Some
regard the work to be in the neo-Marxian tradition5 while others regard
Cox as a critical theorist getting inspiration from a number of critical
thinkers, including Marx.6 As there are differences in views on what is
Marxian and what is not, so are there differences in the methods of evaluat
ing radical writings. Already, varying perspectives have been utilized by radical
writers to evaluate Coxs seminal work. Miles, for example, has criticized
the book on the ground that by not locating race relations in the context of

social formations of the societies under discussion, the work remains unMarxist. Gabriel and Ben-Tovin argue that by attributing a conspiratorial
explanation for the production and reproduction of racist ideology amongst
the working class, the work becomes reductionist.7 Morgan argues that
Cox failed to distinguish between free and unfree labor; thus he (Cox) failed
to locate racism as an ideological legitimation for exploitation carried out
under unfree conditions.8 These lines of analysis are academically stimula
ting, but what they fail to do is to test Coxs work against Marxist economic
theory. Furthermore, they remain too abstract for meaningful political
conclusions.
During the 1970s and 1980s neo-Marxian writers began analyzing the race
question seriously. Some made the issue of political change central to their
writings. Michael Reichs celebrated work, for example, argued that both
black and white workers suffered while the capitalist class gained from racial
discrimination.9 Similar arguments are found in many other radical works.10
The obvious political conclusion emerging from such an argument is that
black and white workers would both benefit from a united working class move
ment. Such an analysis of racial phenomena dominated radical academic
work on racial discrimination during the 1970s and early 1980s.
But this orthodoxy has not remained unchallenged. In her studies of the
South African and American working classes, Bonacich proposed that
the working class could actually be split where instead of forging working
class unity, each segment competes with the other for material gains.11 Years
earlier, Baran and Sweezy also had argued that white workers benefit by
being protected from Negro competition for the more desirable and higherpaying jobs.12That workers could consciously act to preserve and/or further
their gains at the expense of workers of a different race has been argued
recently by Williams who utilized the notion of competition to arrive at this
conclusion.13 The same notion has been utilized to support what appears to
be an opposite positionthat racism declines with a decline in competition.
Cherry interprets Marxs view that with the bankruptcy of technologically
inferior producers competition and superexploitation of the disadvantaged
declines, to imply that the elimination of competition was the principal
reason for the decline in discrimination.14 The implication is that as capital
ism moves away from a competitive stage towards a monopoly stage, i.e., as
it matures, discrimination declines. But yet again, there is a differing opinion
on this issue. Baran and Sweezy argue: as monopoly capitalism develops,
the demand for unskilled and semi-skilled labour declines both relatively and
absolutely, a trend which affects Negroes more than any other group and
accentuates their economic and social inferiority.15
Given the obviously contradictory positions, the crucial question that arises
is whether or not development (or maturity) of capitalism and advancement
of democracy reduce discrimination, or at least, increase cross-racial class
consciousness and solidarity.

It was precisely this issue that decades earlier Cox was grappling with in
Caste, Class and Race. But unable to ultimately decide on it, he took positions

that seem contradictory. On the one hand, he argued that racial exploitation
and prejudice emerged with the rise of capitalism and nationalism,16 and on
the other that advancement of capitalism and democracy reduces racial pre
judice and exploitation.17
This article analyzes, from a Marxian perspective, this seeming contradic
tion and the implication that it had for Coxs political conclusion.

Cox on the rise of racism

Coxs argument on the rise of racism in Caste, Class and Race is straight
forward.18 [RJacial exploitation and race prejudice developed among Euro
peans with the rise of capitalism and nationalism. Though there have been
centuries of contact between peoples of different races, racial exploitation is a
phenomenon specific to capitalism. During precapitalist contact between
different races, the concept organizing these interactions was not race, but
culture. The Hellenic Greeks, for example, had a cultural rather than a racial,
standard of belonging; the division of the greater empire was between Greeks
and barbarians. Barbarians were all those who did not possess Greek cul
ture, especially language. The barbarians, however, were welcomed and
encouraged to adopt Greek culture (learn, participate, intermarry, etc.), thus
become a Greek and thereby a superior being. Similarly, in the Roman Empire
System, which was the next great organization around the Mediterranean
Sea, Cox argues that there was an absence of racial antagonism. Here again,
the norm of superiority was a cultural one; the basic distinguishing criterion
was Roman citizenship. Even the slaves were not discriminated against; some
slaves, especially the Greek ones, were actually the teachers of their masters.
Thus, slavery was not a racial stigma; educated freedmen could rise to high
positions in government and industry.
The rise of Christianity provided a powerful ideology to preclude racial
prejudice/exploitation. In Europe, the policies of the Roman Catholic Church
presented a bar to the development of racial antagonism. Christianity, es
pecially Roman Catholicism, had a folk and personal, not a territorial and
racial, norm of belonging. The division of the greater society was between
Christians and non-Christians. By conversion, which was actively promoted,
a person of a different race could become a part of the dominant/Christian
community.
Similarly, in the Middle Ages, the Asiatics, Huns, Saraces, Moors, Seljuk
Turks, Ottomans, Tartars, etc., all went deep into Europe and subjugated and
sometimes enslaved the white people, but such actions were marked by an
absence of racial antagonism among the invaders. The most powerful invaders,
the Moslems, for example, were prohibited by their religion to display race
prejudice; the criterion of belonging in Islam was a cultural one, not racial.

Even the gradually increasing commercial journeys of the Europeans pre

cluded racial antagonism as long as religious controls remained effective.
Thus the Portuguese drive in Africa didnt indicate racial prejudice. As long
as the Portuguese and the Spaniards continued to accept the religious defini
tion of human equality , the development of racial prejudice was limited. In
fact the church also received its share of African servants and slaves but there
was no basis for racial exploitation; the church had not yet developed
rationalizations for inborn human inferiority.
It was only with the dawn of modern European civilization that racism
began cropping up as an ideology. With the discovery of America,
the mysticism of the East soon lost its grip on human thought, and the
bourgeois world got under way. The socioeconomic matrix of racial an
tagonism involved the commercialization of human labor in the West
Indies, the East Indies, and in America, the intense competition among
businessmen of different western European cities for the capitalist exploita
tion of the resources of this area, the development of nationalism and the
consolidation of European nations, and the decline of the influence of
the Roman Catholic Church with its mystical inhibitions to the free exploi
tation of economic resources. Racial antagonism attained full maturity
during the latter half of the nineteenth century, when the sun no longer set
on British soil and the great nationalistic powers of Europe began to justify
their economic designs upon weaker European peoples with subtle theories
of racial superiority and masterhood.19
Cox picks the exact years which marked the beginning of modem race
relations as 1493-94.20 This was a time when Spain and Portugal, the first
two great European colonizing nations, had officially assumed a total dis
regard for the human rights and physical power of the non-Christian peoples
of the world, the colored people.21 Pope Alexander Vis demarcation issued
under Spanish pressure on May 3, 1493, and its revision by the Treaty o f
Tordesillas on June 7, 1494 arrived at through diplomatic negotiations be
tween Spain and Portugal, put all the heathen peoples and their resources
at the disposal of Spain and Portugal. The Roman Catholic Church, how
ever, provided a major barrier to the exploitation of these resources. In par
ticular, the church constantly inhibited the incubation of the capitalist spirit
during the early sixteenth century among the Spaniards and Portuguese. The
profit-making motive was constrained by the philosophy and purpose of the
Roman Catholic Church. W hat was lacking was a social theory supporting
capitalist drive for impersonal exploitation of the workers.
Thus, the vital problem for the capitalists was to circumvent the assimila
tive effects of conversion to Christianity. As long as the church stood for the
equality of human beings, that is, of the Christians, maximum exploitation
of the colored workers, which would consign these workers to employment

and treatment that were humanly degrading, could not be carried out. In
order, therefore, to justify this treatment the exploiters must argue that the
workers are innately degraded and degenerate, consequently they naturally
merit this condition.22 Such an ideological justification was finally provided
in 1550 by the Spaniard Gaines de Sepulveda who began arguing that it was
lawful to make war against and enslave the Indians because of the gravity of
their sins, the rudeness of their heathen and barbarous nature (which obliged
them to serve those o f more elevated natures), and for the spread o f the faith
(which would be made easier by their subjugation). Sepulveda, then, argues
Cox, may be thought of as among the first great racists.23 Following this,
there were numerous publications and sermons on the natural incapacity/
inferiority of the coloreds, and thus, arguments against assimilation, for
assimilation destroyed the basis o f exploitation.
This armed the capitalists with an ideological toola social theoryto
oppress the colored and exploit them. It was this that changed the nature
of slavery. Now, slavery became a way of recruiting labor for the purpose
of exploiting the great natural resources of America. But had white workers
been available in sufficient numbers, they would have been used instead.
Indeed, in some of the early experiments with labor in the West Indies
both white and black workers were used in the field and their treatment
and value were ordinarily determined by their relative economic pro
ductivity.24 Slavery, therefore, was not an abstract, natural, immemorial
feeling o f mutual antipathy between groups, but rather a practical exploi
tative relationship.

Race and culture

The above analysis of racial exploitation rests solely on a physical differen
tiation of people. Where people differentiate themselves by culture, racial
exploitation does not arise. This argument is essentially definitional. For,
according to Cox, race has to do with physical distinction. When people
recognize each other physically and use their physical distinction as a basis
for the rationale of their interrelationship, their process o f adjustment is
usually termed race relations or race problems.25 Cox distinguishes this
from the nationality or minority problem, which arises when people,
who may not have any physical distinction, distinguish themselves from
others culturally. In this, the degree of cultural advancement (simple or
complex culture), language, religion, and nationality feature prominently.
Both these senses of belongingphysical and culturalcomprise an ethnic
system, which incorporates both a race relations problem and a nationality
problem.26
Thus, Coxs hypothesisthat racial exploitation and prejudice emerged
with capitalism and nationalismnecessitated him to ignore racial exploitation
and prejudice in the pre-capitalist era. This he did by arguing that a cultural

sense of belonging did not cause racial exploitation and prejudice. It would,
of course, not, because by definition racial exploitation has to do with physi
cal distinction and not cultural distinction.27
One obvious question that arises here is whether a racial and a cultural
sense of belonging are mutually exclusive. Miles argues, quite correctly, that
they are not; that many justifications for racial exploitation have attributed
significance to cultural and physical factors simultaneously.28 Even the
evidence that Cox relies on to point to the rise of racism has its very basis in
cultural factors. All four justifications that Sepulveda provided for why it was
lawful to enslave the Indians rested on cultural grounds. The gravity of the
Indians sins, the rudeness of their nature, the need to protect weaker Indians
from being ritually sacrificed or eaten by stronger members, and the need to
spread Christian faith among them are all cultural justifications. Physical
justificationson the basis of cranial size and its impact on measures like
attainment levels, IQs, etc.emerged later in the capitalist trajectory.
Cultural and physical distinguishability, then, are inseparably intertwined.
Indeed, arguments for superiority on the basis of distinction based on color,
size or physical features is untenable and theoretically undeterministic. What
is theoretically deterministic in this context is a cultural distinction.
Culture is a much wider phenomenon than mere language, religion or nation
ality. Culture embodies the entire mechanism of societal organization. Social
(or class) hierarchies, political organizations, role allocations, belief systems,
production and distribution relations, accessibility to means of production,
etc.in other words, the entire set of the social relations of production
is incorporated in the term culture.
Thus, when the whites came in contact with nonwhites, the emergent clash
was as much, if not more, a clash between people from two different modes
of production as it was a clash of people of different skin colors. Because the
dynamics of the different modes of production are contradictory to each
other, the contradictions necessarily formed a firm basis for initial clash
and violence. This, of course, could not have been a visible phenomenon.
What was most visible was the physical features of the two peoples. Different
people distinguished themselves from others on the basis of what was most
visible. And this visibility emerged from ties of common blood, custom and
language. Each people distinguishing itself on the basis of ties of common
blood, custom and language would view its own culture as superior to that of
the other until overwhelmed by the material and physical superiority of the
latter. This has remained the basis of the subordination of the primitive
communal mode of production by the emerging capitalist mode, and thereby
the basis for the subordination of the people under the primitive communal
mode by the people from the capitalist mode. The whites belief that they had
a superior culture, and particularly that they were closer to the God than the
blacks, became the justification for the massive doses of violence dished out
by the whites to the slaves. In fact it became a firm basis for the ideology of

racial superiority. And Christianity long played a critical role in propagating

the ideology of the superiority of white culture.
The development of capitalism and advancement of democracy, however,
began to pave the way for improvements in the conditions of slavery. But the
emerging capitalism and democracy were not the slaves creation; rather they
were the creation of the whites. Slavery ended not so much due to the slave
revolts as to the white revolts against slavery. For, capitalism did not need
slave labor; if available in sufficient quantities, it could survive on free labor.
Indeed, early plantation capital of the new world experimented with (white)
free labor, but the problem was one of adequate supply of such workers.29
If slaves could be converted into a ready supply of free laborers, it was a
possibility worth serious consideration. The advancement in capitalism
towards its purer form, therefore, saw the decline in the intensity and degree
of racial antagonism and exploitation. But would this trend continue until
racism ended?

Capitalism, democracy and race relations

According to Cox, racial exploitation is merely one aspect of the problem
of proletarianization regardless of the color of labor. The white proletariat of
early capitalism had to endure burdens of exploitation quite similar to those
borne by many colored people during the early twentieth century. Thus, under
capitalism race relations are labor-capital-profits relationships; therefore,
race relations are proletarian bourgeois relations and hence political-class
relations.30The problem of racial exploitation, then, will most probably be
settled as part of the world proletarian struggle, for democracy; every advance
of the masses will be an actual or potential advance for the colored people.31
The argument is that where there is greater democracy, the incidence
and intensity of racial exploitation is lower. Cox argues that this explained
the relatively lower prejudice and discrimination against the Negroes in
the Northern United States vis--vis those in the South at the time he was
writing. In the highly industrialized North,
the proletariat is further advanced than it is in the South. In fact, we
may think of advanced capitalism as a state in which the proletariat has
attained some considerable degree of power. In other words, the further
the progress of capitalism, the greater the relative power of the proletariat.
In the N orth democracy, the proletarian system of government, is much
more developed than in the South, where the white and the black prolet
ariat has been consistently suppressed. The first great aim of the pro
letariat in all countries has been the capture of the ballot. In the North
the workers now have the ballot, but in the South it is still limited among
whites and virtually denied to Negroes. It must be obvious that if the
common people, regardless of color, were as free to vote in Mississippi as

they are, say, in Illinois, Mississippi could never be the hotbed of racial
antagonism that it is.32
The point here is not employment or pay discrimination resulting from
the marketplace; it is unequal citizenship. As long as legislation provided
for political discrimination against the blacks, the blacks had to reach the
political decision-making apparatus for eliminating such discrimination. And
for this, political franchise was a necessity. Thus Cox writes: In its struggle
for democracy, the first great aim of the proletariat everywhere has been the
extension of the suffrage.33With the franchise, the race suffering discrimina
tion could influence legislation. Franchise could lead to equal citizenship, and
thus, the elimination of legal discrimination.
The notion of democracy that applies here is one of bourgeois democracy.
A system of bourgeois democratic rights is a definite advance from an ab
sence of a right to vote. With gradual political advancement it, then, is certain
that discriminatory legislation could be gradually eliminated. Thus overt
racism is likely to decline.
But the elimination of political discrimination, i.e., the attainment of equal
citizenship, does not lead to an end of all forms of discrimination. While legal
discrimination is one aspect of racism, market-induced discrimination is
another. Even when legal discrimination is absent, market-induced discrim
ination could, indeed does, continue.34 This involves discrimination in em
ployment, promotions, training, pay, and other job-related conditions for
the workers, and credit, raw material, technology and market accessibility
for the capitalists. Cox ignored a serious consideration of this.
In this respect, Coxs fundamental argument is that with the advancement
of capitalism, workers of various races will see common cause in uniting
against capital. This will tend to eliminate discrimination against workers of
certain races.
Industrialization creates the need for an exploitable labor force, but it is
in this very need that the power of the proletariat finally resides. T he
f a c t o r y o rg a n iza tio n n o t o n ly p r o v id e s th e b a sis f o r th e w o rk e r o rg a n iza tio n
b u t a lso f a c ilita te s th e d e v e lo p m e n t o f a co n scio u sn ess o f c la ss p o w e r a n d
in d isp en sa b ility. Social equality . .. has been an explicit objective of the
whole proletariat, regardless of color or country, almost from the dawn of
industrial capitalism. Therefore, as the stronger white proletariat advanced
toward this end in the North, Negroes have advanced also. In the South
the white proletariat is weak and N egroes.. . weaker still. To the extent
that democracy is achieved, to that extent also the power of the ruling class
to exploit through race prejudice is limited.35

The crucial argument, therefore, is that with the increasing advancement

of capitalism, not only would the need for political democracy rise, but very

critically, contact between the workers of different races at the fa cto ry floor
level would rise. This contact would lead to an increasing realization of the
common class interests of the workers. Thus, with advancing capitalism, one
would expect greater working class solidarity which could be utilized to
attain real gains for the entire working class irrespective of the race of the
workers. A lower incidence and intensity o f racism would, therefore, follow.
The argument proposed here is an argument typically emanating from
Marxs view that the industrial working class would be the propeller of the
proletarian revolution. In the face of capitalist exploitation, there would be a
strong tendency for industrial workers to unite and work towards socializing
the work place. This is what Cox calls accomplished democracy.36
There is no doubt that as an outcome of the generalization of capitalism, a
greater class sentiment and a lower racial sentiment is a strong tendency. But
there are two very strong counter-tendencies within the capitalist mode of
production which emanate from the phenomenon which organizes capital
ism: competition.
Competition is a cutthroat process whereby participants aim not only at
gaining an upper hand in the battle, but also at preserving the gains. The
process is basically antagonistic, violent destructive and turbulent. It was
such a process that Akio Morita, the Chairperson of the Sony Corp, was
referring to when he stated business is war. Competitive wars are ever
occurring phenomena between different capital owners, different industries,
capital and labor, labor and labor, producers and consumers, capitalist and
noncapitalist sectors, and even between nations. Unlike the neoclassical
notion of (perfect) competition which describes a market in which there is a
complete absence of direct competition among economic agents and which
as a concept is the diametrical opposite of the entrepreneurs concept of
competition,37 the Marxian notion of competition describes a process where
rivalry is very much personal to the participants.38 Thus the Marxian concept
of competition, rehabilitated by writers like Clifton, Shaikh, Weeks, Semmler,
Darity and Williams, Williams, and Mason,39 is totally different from its
neoclassical counterpart.
The first tendency that concerns us here is the competitive behavior that
emerges at the commodity exchange/circulation level. This is the competitive
struggle between merchant capital and workers/consumers. As long as one
race dominates the distribution sector, competitive struggle between pro
ducers and consumers would lead to a racial interpretation of the behaviors
of the different participants. The distribution sphere is a very visible sphere.
Participants interact with each other at a very personal level. A consumer/
worker going to a store to purchase a commodity meets the store owner most
directly. In the store the workers meager income and various needs confront
the shelves full of commodities. The evident translation of this confrontation
is into the people representing the different objective positions. This transla
tion takes an especially rapid pace where the people are of different races.

In the United States, the blacks were long confined to the working class
and the distribution outlets were controlled predominantly by the whites. A
significant part of race relations in modem America, therefore, has been
shaped within such a framework. The competitive struggle between the black
workers/consumers and the white distributors tended to be translated into
racial prejudice. Thus, discussing discrimination of the 1960s, Harris argues
that the small white businessmen (petty capitalists) operating in the black
ghetto had to be tough and mean in the application of capitalist game rules if
they were to survive the competition from large distributors. The victims of
their toughness and meanness [were] black workers and consumers. Since
some of the capitalists themselves [were] white their behavior always [took] on
the outward appearance of white racism.40
With the advancement of democracy, the possibility of the black population
entering the distribution sphere rose. But white distributors viewed the entry
of the blacks into this sphere as a threat to their profitability and exclusivity.
Attempts by the white distributors to preserve the sector for themselves
and the attempts by the blacks to enter this sphere became the cause for a
competitive war in which capitalists from each race used race as a battle tool.
The insignificance of the blacks as capitalists in the industrial sector has
been, at least in part, a result of the attempts by existing capital to prevent
new capital from entering various industries. That existing capital was white
and new capital included black capitalists, gave a concrete form to antiblack
racism. The consequence of this was that black capital had to be confined to
those industries/ventures which catered predominantly to a black clientele,
or, what is often called the secondary sector.
Wilson points out that the emerging Negro businessmen and professional
class turned inward and espoused the philosophy of self-help and racial
solidarity41 as that articulated by Booker T. Washington. The Buy Black
campaign of the 1920s and 1930s, initiated by black businessmen was speci
fically aimed at black consumers.42 The aim of this, together with an appeal
to black nationalism, was to create a cohesive and self-sufficient black metro
polis, but this attempt failed because most black businesses could not survive;
they were undercapitalized and could not obtain credit from white banks.43
The 1968 Nixon proclamation that the United States must create black
capitalism by getting private enterprise into the ghetto and the people
of the ghetto into private enterpriseas workers, as managers, as owners44
also failed. Nixon had proposed provision of additional finances (through a
small business loan scheme, reinsurance programs, building relations between
white and black lending institutions, the creation of a Domestic Development
Bank, etc.), the creation of a New Enterprise program that was to provide
training in business skills, upgrading black human capital, etc., to encourage
black capitalism.45
But writers like Baron46 and Franklin and Resnik47 argue that the idea of
black capitalism has a long history; interestingly, however, the history is one

of failure, not success. Franklin and Resniks explanation for the failure is
that black capitalism never went beyond the marginal service and retail stores
that operated in unstable segregated markets, were run by people with no
commercial and financial experience, and where blacks regarded businesses
as a supplementary income source.48
My contention is that these explanations do not reach the core of the
problem. Blacks attempts to enter the mainstream of the capitalist business
sector have been met by strong opposition and antagonism from existing
capital. Added to this is the problem of credit unavailability from large banks
which in many cases have ongoing relations with existing businesses to which
credit to black capitalists would provide competition. Discrimination in
obtaining raw materials and other supplies, and obtaining markets is another
cause.49 Perlo argues that intense racism characterized the mortgage bank
ing and real estate industries.50 Similarly, Swinton and Handy explain the low
participation rate of blacks as owners in terms of a lack of external financing
available to black owners and restricted demand for products supplied by
black-owned businesses.51 The restricted demand for commodities produced
by blacks leads to a largely black-only clientele.52 The latter is a result of
competition between consumers and sellers with white consumers preferring
the larger, and often cheaper, white stores, and the blacks having the option
of the cheaper white stores as well.
The natural result of such competitive struggle was the marginalization of
a majority of black capitalists to the ghetto and the secondary sector.
Racism, therefore, was not eliminated by the progress of capitalism and
democracy; rather it changed its form from overt racism legislated by the
state to market-induced racism. The Civil War eliminated any legal color bar
but numerous discriminatory practices continued, such as city inspectors
refusing to approve work of black plumbers and electricians, and, in general,
state or local government collaborating with exclusive white craft unions to
frustrate black advancement.53 Thus, while the granting of equal citizenship
rights ended legalized discrimination, equal citizenship could not do much to
stop market-induced discrimination.
The same result is obtained from the labor market. While the shared
experiences of black and white workers at the factory floor level tended to
give them common cause against capital, the competitive struggle within the
working class for employment, better tasks, promotions, training, etc., pitched
workers against each other. With race being a very visible element, combined
with pre-established color prejudice, race became a battle tool in the com
petitive war between black and white workers.
The bid to get jobs, especially in an economic environment of less than full
employment, created conditions escalating racism. Fredrickson argues that
in the antebellum and in cases even postbellum South, blacks had little
chance of getting industrial employment. In the North, they were effectively
excluded from virtually all the opportunities provided by the beginning of

industrialization. Such exclusion was on the ground that the white working
class needed the jobs first. Factory work was considered honorable and thus
the particular preserve of the whites. After the war, a significant proportion
of the white population was without property ownership; thus it needed to
subsist by selling its labor power. The factory owners recognized that factory
employment was the only avenue left for poor whites. They thus deliberately
favored whites over blacks.54
Blacks had great difficulty gaining industrial jobs. The first major influx
of blacks into the urban industrial market coincided with a period of white
labor unionization and unrest. Between 1875 and 1914, the entry of blacks
into northern steel mills was chiefly in the capacity of strike-breakers.55
This pattern continued to the New Deal. Because of white union policies, in
many cases scabbing was the only way by which blacks could enter industrial
employment.56
The entry of blacks into industrial employment during 1900-1930 sharply
exacerbated not only the economic and social anxieties o f the white working
class but also their racial antagonism, replacing the utilization of blacks by
the management for strikebreaking (scab labor) and substituting the class
conflict between white labor and management with racial conflict between
white workers and blacks.57
Black influx into the industrial areas also involved competition for urban
space, eventually resulting in ghettoization and other associated problems,58
thus adding another dimension to black-white race relations.
The New Deal legislation (for example the National Industrial Recovery
Act of 1933, the National Labor Relations Act of 1935 and the Fair Labor
Standards Act of 1938) attempted to eliminate wage discrimination, but with
capitalists able to bypass the laws or finding loopholes, the ideals were never
realized.59 In the short run, however, these laws increased white-black worker
solidarity. But internal and external plant relocation and automation due to
the rising wage rate affected black workers disproportionately (for reasons
which included black concentration in unskilled and secondary sectors).
The result of this was the creation of a class of hardcore unemployed in the
ghettos, becoming full blown in the mid 1950s when black-white unem
ployment ratio became 2:l.60

Capitalism, declining rate of profit, and discrimination

Within industries, apart from attempts at exclusion of competitors, a major
battle tool in the competitive struggle is reduction of costs of production. A
tendency of competition within industries is towards equalization of prices.
Given this, profit margins get inversely related to the costs of production. In
their ever-rising quest to reduce the cost of production, capitalists constantly
introduce improving techniques of production by increasing the organic

composition of capital. This in turn gives rise to the tendency for the rate of
profit to fall.
As profitability declines, the eventual outcome would be a crisis. The
decline in general economic activity is accompanied by a decline in employ
ment levels. Consequently, the reserve army of labor is replenished. Within
the working class, an intense battle for protecting employment and prevent
ing wage reduction would be fought by the workers. Race (and gender)
occupy central roles in this battle. A strong tendency, therefore, would be a
rising intensity of racial antagonism within the working class. The cycles
of booms and busts create corresponding weak and strong cycles of racial
antagonism as well.
While reasonable data is unavailable for the early part of this century,
there is, between 1947 and 1985, a very clear declining trend in the rate of
profit in the United States.61 So far, however, no empirical study has been
done on the implication of this for racial earnings and employment patterns.
But what is clear is that the ratio of mean earnings of blacks to that of whites
in the United States is higher in prosperity than in recession.62
Historically, during upswings, black participation in skilled and semi
skilled jobs, as well as incomes relative to white incomes, increased. In 1910,
for example, only 7.9 percent o f the black labor force was engaged in skilled
and semi-skilled work. The proportion rose to 12.6 percent in 1930; the war
time shortages plus the postwar boom boosted the figure to 23.8 percent
by 1950.63 The 1950s and 60s boom continued, improving the relative posi
tion of the blacks. In 1950, 16.4 percent of black males were employed in
middle-class occupations; by 1960 the figure reached 24 percent and by
1970, 35.3 percent, while those in lower-class jobs fell from 62.1 percent
in 1950 to 50.7 percent in 1960 and to 36.4 percent in 1970.64 With reces
sion beginning to grip the economy, the movement from low paying jobs to
high paying jobs for blacks slowed considerably. In 1969, black median
family income was 61 percent of that of whites; by 1978, it dropped to 59
percent.65
In Caste, Class and Race, Cox did not pay any attention to these cyclical
trends in racial discrimination. This failure was a direct consequence of
ignoring a consideration o f the basic mechanism and operation of capitalism
as a system of production and distribution. The capitalist system is organized
around competition. Cox failed to consider the impact on race relations of
the competitive battle within the working class, between the workers and
capitalists, and within the capitalist class.
Thus Cox explains the relatively lower racial prejudice of the whites against
the blacks in the Northern United States vis--vis the Southern United States,
at least until the early part of this century, in terms of the progress of
democracy. The question that arises here is whether it was the progress
of democracy or advancement of capitalism which explained lower racial

prejudice in the North. At least Orlando Patterson seems to lean towards the
latter variable. Discussing the antislavery tunes of the North, Patterson
suggests that it was the fear of competition from the slave-based Southern
aristocrats rather than any wish for democratic principles to be extended to
the black that made the Northerners anti-slavery:
For the middle-class northerners what was of central concern was not
the dehumanization of blacks under slavery but the fear o f . . . slave
power spreading to the west and ultimately to the north. The threat
which the north saw in the slave power was the centralization of wealth in
the hands of a conspiratorial southern elite which had already taken
over the national government and seemed on the verge of taking over the
national economy. . . Should the southern elite grab the west, it would
be the norths turn next. Not only did the middle-class leadership of
the Republicans believe this, they were able to skillfully play upon the
fears of the northern working class in persuading them to this view. For
the working class the west held out the same hope as it did for the ambi
tious southern working peoplea land of boundless opportunity, a way
of finally achieving the prized independence that was the essence of
America.66
Baran and Sweezy also argue that the Civil War was not fought by the
Northern ruling class to free the slaves. Their explanation of the relation
between the North and the South, however, seems to be somewhat different
than that given by Patterson. They argue that the Civil War was fought
to check the ambitions of the Southern slave-owning oligarchy which
wanted to escape from what was essentially a colonial relation to Northern
capital. The abolition of slavery was a byproduct of the struggle, not its
purpose, and Northern capitalism had no intention, despite the interlude
of Reconstruction, of liberating the Negro in any meaningful sense.
Having subdued the Southern planters, it was glad to have them resume
their role of exploiters of black labor whom it could in turn exploit.
The notorious compromise of the 1870s was a tacit recognition that the
renewed colonial status of the South had been accepted by both sides, with
the Southern oligarchy exploiting the Negro and in turn paying tribute
to Northern capital for the privilege of doing so.67
What emerges from both these views is that the struggle was basically an
outcome of competition between different types of capital as well as between
two different regions for economic and political hegemony.
Indeed, the post-Civil War period may not even have seen a drastically
reduced incidence of racial discrimination in the job market in the Northern
United States. Bonacich points out that in the North, while wage differentials

for the same work may not have been all that common, differentials appeared
in disguised forms, like racial segregation by job titles and segregation by
firms.68
It is, then, suggested here that the post-Civil W ar race relations between
whites and blacks in the Northern and Southern United States should be
located in competition for material gainsfor both the working class and
the elite.

Competition and change

Ultimately, Coxs failure in Caste, Class and Race to incorporate competition
in his framework for the analysis of racism under capitalism kept this work
wanting in terms of Marxian comprehensiveness. Competition is the basic
organizing mechanism under capitalism. If discrimination under capitalism
is to be adequately understood, an analysis of competition must occupy a
central place in discussing race relations. Darity and Williams argue that the
phenomenon of competition explains Coxs analysis of racial and ethnic
division of the labor force in a class-based society.69 Explain it does, but Cox
himself had not utilized this phenomenon to analyze race relations.
This was a major theoretical lapse in Caste, Class and Race, a lapse which
greatly muddled Coxs line of argument. It forced Cox to alternate between
the argument that capitalism created racism and advancing capitalism re
duced racism. The uncertainty eventually led Cox to divorce his political
conclusions from his theorization. But before we move on to Coxs political
arguments, let us return to the seeming contradiction in Coxs argument. For
arguing that capitalism created racism and advancing capitalism reduced
racism does indicate a contradiction.
A very strong argument could be made that both positions are tenable
within a social system. Indeed, it is very often the case that one system
produces two contradictory results. But theoretical endeavor requires that
these contradictions be resolved. One outcome, for example, may be more
powerful or dominant than the other. Or the outcomes may be fed by
different dynamics. It is true that Cox was talking of two different periods in
the capitalist trajectory: an early period when capitalism was just emerging
in the New World, and a late period when capitalism was in maturity. At
different stages, the functional status of slavery was differentin the former,
capitalism grew on the basis of the slave system while in the latter, the needs
of the capitalist system (though not the needs of individual capitalists) de
stroyed the slave system. Eric Williams demonstrates this dialectic clearly in
his analysis of capitalism and slavery.70
But the point stressed here is not that mature capitalism did not need slave
labor; rather it is, unlike Coxs argument, that advancing capitalism did not
eliminate racial exploitation. As argued earlier, advancing capitalism tended
to eliminate unequal citizenship, but in doing so it, in direct correspondence,

increased racial exploitation, which was enforced and perpetuated by the

market mechanism. Cox could not locate this latter phenomenon in his
scheme because he did not examine the impact of competition on racial
relations. This failure was responsible for the estrangement of Coxs political
conclusions from his theorization.
Coxs significant political argument was that revolutionary change can
not be initiated by the blacks because black democratic leaders would not get
white support.71 But if advancing capitalism leads to cross-racial worker
solidarity, as Coxs theorization implies, why could the black leaders not get
white support? On the other hand, if capitalism created racism, then why
should cross-racial solidarity arise in the first place? Cox was unable to
resolve these contradictions.
It should also be kept in mind that while an analysis of competitive behavior
can explain race relations under capitalism, it cannot do so in societies which
are not already capitalist. For pre-capitalist societies, the organizing mech
anism of the specific pre-capitalist mode will provide the initial theoretical
basis for the analysis. While Cox did isolate one feature of pre-capitalism
that of the importance of a sense of belonginghe did not carry the analysis
to its logical end, which would have revealed the existence of racial/ethnic
antagonism even between different pre-capitalist peoples. For if different
people organized themselves around different senses of belonginglike color,
custom, kinship, religion, etc.then their interaction with each other would
see conflict in proportion to differences in the contents of these factors. Cox
instead, by mere definitions, eliminated the possibility of racism and ethnic
antagonism under pre-capitalist systems.

Conclusion
There is no doubt that Coxs 1948 book, Caste, Class and Race, had a
significant impact on the study of race and class. Indeed, the book was
a breakthrough in many respects.72 In the era in which it was written and
with the purpose with which it was written, the book had a lasting impact on
radical thinkers. The plea for working class solidarity came out most strongly
from the book.
But an analysis of competitive behavior within the working class shows
that working class solidarity is not the only tendency of capitalism. While
progress in capitalism and democracy, by encouraging equal citizenship, does
tend to eliminate overt and legalized racial discrimination, it gives rise to
another form of racism: market-induced discrimination. The latter can actu
ally be a more persistent phenomenon because there is no visible and overtly
discriminatory statute or convention which a society could rally against.
The competitive nature of capitalism is a major factor perpetuating racism.
As experiences from countries like America, Britain and Germany adequately
illustrate, discrimination does not end with mature capitalism. As capitalism

progresses, its basic driving forcecompetitioncreates strong and weak

cycles o f racial discrimination corresponding, respectively, with economic
downturns and upswings. Marxian logic indicates, quite contrary to Coxs
assertions, that as a system capitalism neither creates racial antagonism nor
ends it. W hat it does, however, is to give a particular form to race relations.
But whether racism declines with the rise of socialism is another question.
Cox argued that since capitalism created racism, only a socialist revolution
could end racism. This issue has not been investigated in this article. The
recent developments in Eastern Europe, especially the ethnic wars going on
among the former Soviet states and within Yugoslavia, could provide a
useful starting point and direction in analyzing this contention.
In passing, it should be mentioned that whether the defects in the argu
ments made in Caste, Class and Race have been corrected in Coxs subsequent
works also needs to be investigated if a comprehensive understanding of the
theoretical contribution of Oliver Cox, one of Americas most significant
African American scholars, is to be achieved.

Notes
1 I acknowledge the useful com m ents provided on earlier drafts o f this paper by
R honda Williams, R obert N orton, Sara A braham , and two anonym ous referees
o f this journal. The usual disclaimers apply.
2 Oliver C. Cox, Caste, Class, & Race: A Study in Social D ynam ics (New York:
M onthly Review Press, 1959).
3 S. Castles and G. Kosack, The F unction o f L abour Im m igration in W estern
E uropean Capitalism , N ew L eft Review 73 (1972): 16. See also G. D. M organ, In
M emoriam: Oliver C. Cox 1901-1974, M onthly Review (M ay 1976): 34-40.
4 R obert Miles, Class, Race and Ethnicity: A Critique o f Coxs Theory, Ethnic
and R acial Studies 3 (April 1980): 169-187.
5 S. B. Greenberg, R ace and S ta te in C apitalist Development: A Comparative P er
spective (New Haven: Yale University Press, 1980), p. 131.
6 H. M. H unter and S. Y. A braham (eds.), Race, Class, and the W orld System : The
Sociology o f Oliver C. C ox (New York: M onthly Review Press, 1987), p. xliv.
7 John G abriel and G ideon Ben-Tovin, M arxism and the Concept o f Racism ,
Econom y and Society, 7, 2 (1978): 118-154.
8 G lenn M organ, Class Theory and the Structural Location o f Black W orkers,
The Insurgent Sociologist X (W inter 1981): 27.
9 M ichael Reich, R acial Inequality: A Political-Economic A nalysis (New Jersey:
Princeton U niversity Press, 1981).
10 D. M. G ordon (ed.), Problem s in P olitical Economy: An Urban Perspective
(Lexington, Mass.: D. C. H eath and Company, 1977), p. 148; V. Perlo, Economics o f
Racism U .S.A . R oots o f B lack Inequality (New York: International Publishers,
1975), pp. 128, 150-178; M. Silver, Employer Taste for Discrim ination, Wages
and Profits, R eview o f Social Economy, 26, 2 (1968): 185; Castles and Kosack,
ibid., p. 17; and R. Cherry, Discrimination: Its Economic Im pact on Blacks, Women,
and Jew s (Lexington, Mass.: Lexington Books, 1989), pp. 60, 222.
11 E dna Bonacich, Advanced Capitalism and Black/White Race Relations in the
U nited States: A Split L abor M arket Interpretation, American Sociological Review
4 1 (February 1976): 34-51, and E. Bonacich, A Theory o f Ethnic Antagonism: The

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13

14
15
16
17
18
19
20
21
22
23

24
25
26
27

28
29
30
31
32
33
34
35
36
37
38

39

Split L abor M arket, American Sociological R eview 37 (October 1972): 547-559.

See also S. Shulman, Racial Equality and W hite Employment: An Interpretation
and Test o f the Bargaining Power H ypothesis, Review o f Black P olitical Economy
(Winter 1990): 5-20, and Patrick M ason, The Divide-and-Conquer and Employer/
Employee M odels of Discrim ination: Neoclassical Com petition as a Familial
Defect, R eview o f B lack P olitical Economy (Spring 1992): 73-89 for other recent
empirical and theoretical critiques o f Reichs divide-and-rule basis o f racial relations.
Paul A. Baran and Paul M. Sweezy, M onopoly Capitalism (Suffolk, U K: Pelican
Books, 1966), p. 258.
R honda M. Williams, Capital, Com petition, and Discrim ination: A Reconsid
eration o f Racial Earnings Inequality, R eview o f Radical P olitical Economics 19,
2 (1987): 115.
Cherry, p. 53.
Baran and Sweezy, p. 257.
Cox, p. 322.
Cox, pp. 569-70.
See Cox, pp. 322-45.
Cox, p. 330.
Cox, p. 331.
Cox, pp. 331-32.
Cox, p. 334.
Cox, p. 335. See also Ja n Carew, Colum bus and the Origins o f Racism in the
Americas: P art One, R ace and Class X X IX (Spring 1988): 1-19 for a similar
argument.
Cox, p. 338. See also Eric Williams, Capitalism and Slavery (London: A ndre
Deutsch, 1964) pp. 3-20.
Cox, p. 317.
Cox, ibid.
The long section on Caste in India in Caste, Class and R ace m ay at first reading
indicate that Cox was dealing with racial exploitation in pre-capitalist systems.
But this is far from the case. Cox very clearly states that physical differences did
not determine peoples position in the caste hierarchy (Cox, p. 13). Cox identifies
race with physical distinction. Thus, the section on Caste in India should n o t be
taken as a discussion o f racial exploitation under pre-capitalism.
Miles, p. 181.
See Eric Williams, Capitalism and Slavery, p p . 3 -2 0 for a discussion o f the extent o f
and the difficulties in the use o f free labor in the new world plantations.
Cox, p. 336.
Cox, p. 583.
Cox, pp. 569-70.
Cox, p. 226.
Com pare w hat Baran and Sweezy (1966) had to say on this issue: legal equality
does not guarantee real equality, p. 267.
Cox, pp. 569-70, emphasis mine.
Cox, p. 227.
J. P. Gould and C. E. Ferguson, M icroeconomic Theory (Hom ewood, Illinois:
R ichard D. Irwin, Inc., 1980), p. 212.
A nw ar Shaikh, M arxian Com petition vs. Perfect Com petition: F urther Com
ments on the So-Called Choice o f Technique, Cambridge Journal o f Economics
4 (December 1980): 75-83.
J. A. Clifton, Com petition and the Evolution o f the Capitalist M ode o f P ro
duction, Cambridge Journal o f Economics 1 (June 1977): 137-51; Shaikh, ibid.;

40
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42
43
44

45

46

47
48
49
50
51
52
53
54
55
56
57

58
59
60
61

John Weeks, Capital and Exploitation (Princeton: Princeton University Press, 1981);
Willie Semmler, Com petition, M onopoly, and Differentials o f Profit Rates:
Theoretical Considerations and Empirical Evidence, R eview o f R adical Political
Economics 13 (W inter 1982): 39-52; W illiam A. D arity, Jr. and R. M. Williams,
Peddlers Forever?: Culture, Com petition and D iscrim ination, American Econ
omic Review 75 (M ay 1985): 256-261; R. M . Williams, (1987), ibid.; R honda M.
Williams, Com petition, Discrim ination and Differential Wage Rates: O n the
C ontinued Relevance o f M arxian Theory to the Analysis o f Earnings and Em
ploym ent Inequality, mimeo (University o f M aryland, College Park, 1990); and
Patrick M ason, The D ivide-and-Conquer and Employer/Employee M odels of
Discrim ination: Neoclassical Com petition as a Familial Defect, Review o f Black
P olitical Economy (Spring 1992): 73-78.
D onald J. H arris, The Black G hetto as Colony: A Theoretical Critique and
Alternative F orm ulation, Review o f B lack P olitical Economy 2, 4 (1972): 16.
W illiam J. W ilson, The Declining Significance o f R ace (Chicago: University of
Chicago Press, 1980), p. 125.
E. Ofari, The M yth o f Black Capitalism (New Y ork and London: M odern Reader,
1970), p. 21.
Wilson, p. 125.
Richard M. Nixon, Bridges to H um an D ignity, an address by Richard
M. Nixon on the CBS Radio N etw ork (25 April 1968), transcript, U.S. Inform a
tion Agency Library, W ashington, D .C ., p. 9.
Richard M. Nixon, Bridges to H um an Dignity: II, an address by R ichard
M . N ixon on the N BC R adio N etw ork (2 M ay 1968), transcript, U.S. Inform ation
Agency Library, W ashington, D.C.
H. M. Baron, Racial D om ination in Advanced Capitalism: A Theory o f N atio n
alism and Divisions in the L abor M arket, in R. C. Edwards, M ichael Reich and
D avid M. G ordon (eds.), L abor M a rk et Segm entation (Lexington, Mass.: D. C.
H eath and Com pany, 1975), p. 190.
R. S. Franklin and S. Resnik, The P olitical Economy o f R A C IS M (US: Holt,
R inehart and W inston, Inc., 1973).
Ibid., p. 186.
See Perlo, Economics o f Racism , pp. 188-89 for a similar argument.
Perlo, ibid., pp. 184-85.
As cited in Cherry (1989), p. 194.
W allach, as cited in Cherry (1989), p. 195.
George M. Fredrickson, W hite Supremacy: A Com parative Study in American and
South African H istory (New York: O U P, 1981), p. 235.
Fredrickson, ibid., ch. 5.
W ilson, p. 71-72.
Bonacich, (1976), pp. 42-43 and Fredrickson, p. 226.
Wilson, p. 73. W ilson also argues that com petition within the labor m arket
determined race relations only during the late nineteenth century and the first few
decades o f the tw entieth century and th a t it has ceased to be a m ajor determ inant
o f conduct since. This is an incorrect way o f viewing com petition, for com petition
has remained the driving force behind capitalism all along.
Fredrickson, p. 227.
Bonacich (1976), p. 45.
Bonacich (1976), pp. 47-49.
A nw ar Shaikh, The Falling R ate o f Profit and the Economic Crisis in the U .S.,
in R obert Cherry, et al. (eds.), The Im periled Economy, B ook I: Macroeconomics
fro m a L eft Perspective (New York: The U nion for R adical Political Economics,

1987), pp. 115-126. See also Fred Moseley, The Falling R ate o f Profit in the
Postwar United States Economy (New York: St. M artin s Press, 1991).
62 See Perlo, ibid., pp. 56-57, and K enneth J. A rrow, M odels o f Job D iscrim ina
tion, in A nthony H. Pascal (ed.), R acial Discrimination in Economic Life
(Lexington: D. C. H eath, 1972), p. 84.
63 Fredrickson, p. 237.
64 Wilson, p. 129.
65 Wilson, p. 158.
66 Orlando Patterson, The U nholy Trinity: Freedom , Slavery, and the American
C onstitution, Social Research 54 (A utum n 1987): 552-53.
67 Baran and Sweezy, p. 247.
68 Bonacich (1976), pp. 36-37.
69 D arity and Williams (1985), p. 260.
70 Eric Williams, Capitalism and Slavery.
71 Cox, p. 571.
72 R obert Miles Class, Race and Ethnicity: A Critique o f Coxs Theory, Ethnic and
Racial Studies 3 (April 1980): 183.

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