The New Racial Capitalism by Jackie Wang

The essays included in Carceral Capitalism attempt to update the analytic of racial capitalism for a contemporary context. Rather than focusing on the axis of production by analyzing how racism operates via wage differentials, this work attempts to identify and analyze what I consider the two main modalities of contemporary racial capitalism: predatory lending and parasitic governance. These racialized economic practices and modes of governance are linked insofar as they both emerge to temporarily stave off crises generated by finance capital. By titling this book Carceral Capitalism, I hope to draw attention to the ways in which the carceral techniques of the state are shaped by—and work in tandem with—the imperatives of global capitalism.

Predatory lending is a form of bad-faith lending that uses the extension of credit as a method of dispossession. In the United States, the kind of credit a borrower has access to depends in part on the race of the borrower. Today, before working on this introduction, I read an article in the New York Times about how the largest bank in the U.S.—J.P. Morgan—will pay $55 million in damages for discriminatory lending practices that targeted blacks and Latinxs for higher-interest mortgage loans than whites of the same income bracket (Wells Fargo also had to pay $175 million for engaging in the same practices). As predatory lending systematically prevents mostly poor black Americans from accumulating wealth or private property, it is a form of social exclusion that operates via the inclusion of marginalized populations as borrowers. For it is as borrowers that they are eventually marked for further social exclusion (through credit and e-scores). Predatory lending exists in many forms, including subprime mortgage loans, student loans for sham for-profit colleges (which Obama attempted to regulate, but may be revived by Secretary of Education Betsy DeVos), car loans, and so forth. Predatory lending practices also have a decidedly spatialized character. In impoverished urban areas, predatory lending exists in the form of rent-to-own scams, payday loans, bail-bond loans, and other practices. Overall, predatory lending enables profit maximization when growth is stagnant, but this form of credit will always be plagued by realization problems, which are sometimes resolved using state force.

Parasitic forms of governance—which have intensified in the wake of the 2008 crash—are rooted in decades-old problems that are coming to a head only now. Beginning in the 1970s, there was a revolt in the capitalist class that undermined the tax state and led to the transformation of public finance. During the subsequent decades the tax state was gradually transformed into the debt state, which Wolfgang Streeck calls “a state which covers a large, possibly rising, part of its expenditure through borrowing rather than taxation, thereby accumulating a debt mountain that it has to finance with an ever greater share of its revenue.” This model of public finance creates a situation where creditors, rather than the public, become the privileged constituency of governments. The hegemony of finance is antidemocratic not only because financial institutions are opaque and can influence finance through their ownership of the public debt but also because fiscal crises (which can be induced by the financial sector) authorize the use of state power to extract from the public.

Parasitic governance, as a modality of the new racial capitalism, uses five primary techniques: 1) financial states of exception, 2) automated processing, 3) extraction and looting, 4) confinement, and 5) gratuitous violence (with execution as an extreme manifestation of this technique).

The Financial State of Exception

Perhaps what I would call a financial state of exception would be best exemplified by the recent cases of the Flint water crisis and the Puerto Rican fiscal crisis. They both entail a suspension of the so-called normal democratic modes of governance (where decisions are made by elected officials) and the implementation of rule by emergency managers (EMs) who represent the interests of the financial sector. Usually it is a state, municipal, or sovereign debt crisis that authorizes the financial takeover of governance (but it can also be a “natural” disaster, as we saw in New Orleans with Hurricane Katrina). A financial state of emergency can also be induced when banks create a liquidity shortage by abruptly refusing to lend money to government bodies (which is what occurred in the 1975 bankruptcy of New York City).

Flint, Michigan, is a perfect example of how a financial state of exception can produce a nightmarish outcome. As I write this, it has been more than a thousand days since Flint had clean water—but what does this have to do with the financial and government processes I have described above? In 2011, Governor Rick Snyder appointed emergency managers to seize control of the financial affairs of the city in the name of the public good. Like many other ailing postindustrial cities in Michigan that have experienced depopulation and the collapse of the tax base, Flint was facing a fiscal crisis. In 2014, to cut costs, the city switched its water source from Detroit’s Lake Huron system to the Flint River. Officials—including the emergency financial managers—did this knowing that the city did not have the infrastructure to properly treat the water. The untreated water corroded the pipes, and high levels of lead leaked into the water, poisoning the primarily black residents of the city.

To give you a sense of how toxic the water was, consider that at 5,000 parts per billion of lead, water is regarded as hazardous waste. When the Flint resident LeeAnne Walters had her water tested, the lead level was at 13,200 parts per billion. Like many of the children and infants exposed to the contaminated water, Walters’s son Gavin was diagnosed with lead poisoning. In short, the financial state of exception created by the budget crisis authorized the implementation of emergency financial managers whose primary goal was to make Flint solvent by any means necessary, even if it meant endangering the health of the residents. Under the auspices of the EMs, Flint was barred from borrowing money or issuing bonds. Given that, under the current fiscal paradigm, the federal government no longer provides significant funds to cities, the residents were left to suffer the consequences of the dramatic spending cuts.

As dry and technical and boring as the topic of municipal finance and fiscal retrenchment is, we see in the case of the Flint water crisis that these matters form the invisible backdrop of our lives: They directly determine our quality of life and even our health outcomes. We cannot, even on a bodily level, flourish under these conditions. But it should be emphasized that vulnerability to parasitic government practices is not equally distributed in the country. The practices you are exposed to depend on where you live (which, given how segregated our country is, is determined in large part by your race and class).


The second technique of the parasitic governance model I am outlining is automation. In Weapons of Math Destruction, Cathy O’Neil points out that “the privileged, we’ll see time and again, are processed more by people, the masses by machines.” When government bodies are strapped for cash, they can raise revenue by implementing software that automates the process of fining people; garnishing wages, Social Security, and tax returns; ticketing people; and extracting wealth—all while avoiding the cost of hiring personnel to individually file cases against people. To cite a common example: Tickets for traffic violations such as running a red light can be issued by mail when sensors and cameras are affixed to traffic lights. Though this practice seems benign, it can become a nightmarish scenario when a person (perhaps because they have moved) never receives the ticket and thus has a warrant out for their arrest. But perhaps the most paradigmatic example of this practice is a situation that recently came to light in—again—Michigan. In 2013—during the peak of the same fiscal crisis that led to the bankruptcy of Detroit and the Flint water crisis—the Michigan Unemployment Insurance Agency (UIA) implemented a system that automatically issued more than 20,000 accusations of fraud against people who were applying for unemployment benefits. After a class-action lawsuit was filed, a review of the cases found that 93 percent of the fraud claims issued by the Michigan Integrated Data Automated System (MiDAS) were false. After the implementation of MiDAS, the balance of the UIA’s contingent fund (which consists mostly of funds generated from fraud fines) ballooned from $3.1 million to $155 million. Just a week before the report was released, Michigan passed legislation that enabled the state to use money from the UIA’s contingent fund to balance the state budget. As the attorney David Blanchard put it, “It’s literally balancing the books on the backs of Michigan’s poorest and jobless.” Unfortunately, because the social consequences of automated processing are difficult to make legible and identify, cases such as the MiDAS case often fail to register as scandals.

Extraction & Looting

While extraction and looting are the lifeblood of global capitalism, it occurs domestically in the public sphere when government bodies—out of pressure to satisfy their private creditors—harm the public not only by gutting social services, but also by looting the public through regressive taxation, fee and fine farming, offender-funded criminal-justice “services” such as private probation services, and so forth. While in the private sector the extension of subprime credit is often deployed as a racialized form of expropriation, in the public sector municipal governments (in tandem with or on behalf of financial institutions) use the police and the criminal-justice system to loot residents of primarily black jurisdictions. I would like to briefly turn to Brandon Terry’s analysis of what could be described as a domestic staging of what Marxist and post-Marxist thinkers, including David Harvey, have analyzed in terms of how the advanced global economies—and the U.S. in particular—use their military, economic, and political might to secure access to natural resources and cheap labor: the expropriation of wealth from black America.

In “Insurgency and Imagination in an Age of Debt,” Terry uses Stokely Carmichael and Charles V. Hamilton’s conceptualization of black America as an “internal colony” to elucidate finance capital’s predatory relationship to black America. Since the neoliberalization of the U.S. economy, household debt has ballooned, and this debt load is disproportionately borne by black Americans and the poor. Given this unequal debt load among urbanized black Americans who have lost access to secure employment (owing to the loss of unionized manufacturing jobs and the scaling back of the public sector), Terry is justified in his centering of “debt and financialization” over “labor and production” as his main axis of analysis. This debt regime operates not only through categorizing and targeting certain racialized subjects for loans that are essentially scams—it is also territorializing insofar as it relies on spatialized segregation in order to function. In his description of the “consumer life of the ghetto,” Terry provides a number of examples of predatory scams such as “rent-to-own” that are only possible vis-à-vis the ghetto as a spatial configuration.

In urban ghettos, ethically dubious extractive methods prevail because residents are spatially exposed to predation. Terry suggests that, given the territorializing and expropriative character of capital’s relation to black America, the colonial analogy in Carmichael and Hamilton’s conceptualization of black America as an internal colony is apt in the domains of geography and economics (precisely where the analogy seems “ill-fitting”). Some theorists—and particularly Afro-pessimists such as Jared Sexton—would likely cavil at the use of colonialism as an analytic to understand antiblack social dynamics, as black racialization historically occurred on the axis of enslavement (by associating blackness with the transferrable condition of enslavement) and not colonization or territorial conquest. Nonetheless, Terry’s analysis is convincing insofar as it shows how racial segregation and the spatial concentration of poverty essentially create zones that are marked lootable. The looting persists because residents in these zones have access to neither “good-faith” credit nor the material means to escape spatial exposure to predation.


While the first three categories (financialization, automation, and looting) represent exclusionary processes that proceed by way of inclusion (subjectivation as citizen debtors, incorporation through the extension of credit), confinement and gratuitous violence are examples of exclusionary processes that result in civic and actual death. In other words, in the first three instances the parasitic state and predatory credit system must keep people alive in order to extract from them; in the latter two instances it must confine and kill to maintain the current racial order.

As we move to the fourth and fifth techniques of parasitic governance—confinement and gratuitous violence—we reach the point at which political economy fails as a lens through which to analyze racial dynamics in the United States. Although the concept of the prison-industrial complex draws attention to the industries that benefit from the prison boom of the last several decades—including the construction companies contracted to build the prisons, the companies contracted to supply food and commissary items, the predatory phone and video companies contracted to provide communication services, and private prison companies such as GEO Group and the Corrections Corporation of America (which has recently rebranded itself as CoreCivic)—the profit motive itself is not sufficient in explaining the phenomenon of racialized mass incarceration. Nonetheless, an economic analysis of prisons should not be wholly abandoned.

In addition to drawing attention to the private companies that benefit from the existence of prisons, there is much that political economy can tell us about prisons in the U.S.: it can elucidate how the economies of rural white America were revived through the construction of prisons and the employment of displaced white workers as prison guards; it can explain how deindustrialization and the migration of jobs to the suburbs and abroad created zones of concentrated black urban poverty; and it can show how the expansion of prisons “solved” the surplus population crisis caused by the wave of unemployment that followed the restructuring of the U.S. economy. Political economy also gives us a way to understand the growth of private prisons in the last several decades (particularly in the arena of juvenile detention) and the use of prison labor to produce goods at an average cost of 93 cents per hour. The lens of political economy can even shed light on why there has been a marginal decrease in the prison population in the wake of the 2008 financial crash, which led to revenue shortfalls that left many states desperate to slash public spending.

Yet to reduce mass incarceration to the profit motive would be misleading, considering that most inmates are held in publicly operated state and federal facilities as well as public local jails. Though as many as 700,000 prisoners are employed in a variety of jobs (ranging from facility maintenance to manufacturing jobs in industries such as furniture production), the majority of those in prisons and jails don’t work. At the end of the day, the cost of housing prisoners is high, and the public bears the burden of the cost. A question that a purely economistic view fails to address is why, when the welfare state was being dismantled and there was an ideological pivot away from “big government,” was the public induced to believe that a prison binge was legitimate while spending on social services, education, and job creation was not? Is it possible that, as the government withdrew from the arena of social welfare and the revolt among those in the capitalist class reorganized politics such that the government was no longer allowed to regulate the economy, the only remaining social entitlement—the entitlement that has come to give the state as an entity its coherence—is the entitlement of security?

This evolution in the social function of the state from provider of social services to provider of securityalso represented an evolution in how racialized populations in the United States would be managed. The project of dismantling the welfare state gained legitimacy through the association of social entitlements with blackness. If black Americans were seen as the primary beneficiaries of social programs (whether affirmative action, Medicaid, or food stamps), then the post–civil rights era conservative view that black Americans were getting ahead at the expense of white Americans would conveniently delegitimize the welfare function of the state as a whole. This is perhaps why many poor and working-class Americans can rail against welfare and “greedy minorities” while not even being aware that they are beneficiaries of the very services and programs undermined by their sentiments. It is hardly surprising that today, a Pew Research Center survey found that 43 percent of Republicans said that whites, rather than blacks, experience a lot of discrimination, while only 27 percent of Republicans believed that blacks experience a lot of discrimination. Given that white conservatives feel that blacks have a social advantage over whites, and that this “unfair advantage” is, in their view, facilitated by the state, it follows that gutting social entitlements will bring about their warped version of “equality.”

All this is to say that antiblack racism is at the core of mass incarceration and the transformation of the welfare state not only into the (neoliberal) debt state but into the penal state as well. At the dawn of the carceral era, the United States chose the path of divestment in social entitlements and investment in prisons and police. There was nothing inevitable about this policy path, as Elizabeth Hinton captures in her brilliant book From the War on Poverty to the War on Crime: The Making of Mass Incarceration in America.

The project of dismantling the welfare state was intimately tied to constructing urban black Americans trapped in zones of concentrated poverty as deserving of their situation. Coded racism was used to construct poverty as a personal moral failure. A structural analysis of urban poverty was set aside, and a racialized narrative of cultural pathology was taken up. In holding those hit hardest by cataclysmic changes in the economy responsible for their suffering (attributing their situation to laziness, criminal proclivities, and cultural inferiority), black Americans were simultaneously constructed as deserving of punishment. The conversion of poverty into a personal moral failure was intimately tied to the construction of black Americans as disposable and subject to mass incarceration. Antiblack racism, and not merely the profit motive, is at the heart of mass incarceration. Thus, the title of this book, Carceral Capitalism, is an attempt not to posit carcerality as an effect of capitalism but to think about the carceral continuum alongside and in conjunction with the dynamics of late capitalism.

Gratuitous Violence

There are fundamental disagreements between those who use racial capitalism as an analytic (whether the axis emphasized is debt, labor, or expropriation) and those who use an Afro-pessimistic lens, which is partly centered on gratuitous violence as a defining feature of antiblack racism. The focus on the dynamics of capitalism and how black people are bilked by that system (as workers or debtors) ignores the fact that global capitalism’s condition of possibility was black enslavement—a legacy that continues to this day in modified iterations. Under slavery, black people were—as racialized subjects—considered commodities and were not the owners of their labor power (white workers) nor of property (the capitalist). Frank Wilderson writes, to Michael C. Dawson’s chagrin, “work is a white category. The fact that millions upon millions of black people work misses the point. The point is we were never meant to be workers; in other words, capital/white supremacy’s dream did not envision us as being incorporated or incorporative. From the very beginning, we were meant to be accumulated and die. . . . Today, at the end of the twentieth century, we are still not meant to be workers. We are meant to be warehoused and die.” Dawson responds that this claim is “fundamentally wrong: we were brought here to work, and to die.” Perhaps what is at stake in their disagreement is the question of whether black racialization proceeds by way of a logic of disposability or a logic of exploitability.

In this book I hold that black racialization proceeds by way of a logic of disposability and a logic of exploitability. While I analyze how government and financial institutions use extractive mechanisms designed to plunder black Americans, I am also aware that this line of thinking can create the impression that racism is rational insofar as it can be reduced to a set of economic determinants or a profit motive. An economically deterministic analysis would just paper over and soften the raw brutality of American racism. For Afro-pessimists it is not the economic sphere that forms the “base” from which the “superstructure” of civil society, politics, and culture emerges but antiblack violence that makes possible and is necessitated by global capitalism, freedom, civil society, and the interlocutory life of white (and nonblack) subjects. In short, antiblack violence is not a deviation from the supposedly American values of liberal equality, multiculturalism, and freedom—it the foundation on which the United States has been erected.

Though analyses of racial capitalism are much more nuanced than the caricatures of Marxism articulated by Afro-pessimist thinkers, analyses that focus on how racism is incentivized by capitalism and instrumentalized for monetary gain can sidestep the intractable psychological dimension of racism. In “Beyond the Wages of Whiteness: Du Bois on the Irrationality of Antiblack Racism,” Ella Myers describes how Du Boisian analyses of race that reduce whiteness to a “public and psychological wage” selectively draw from only part of W. E. B. Du Bois’s account of how white supremacy operates. Such analyses rely on a divide-and-conquer narrative: Racism buttresses capitalism by fracturing the working class and providing psychological compensation for exploited whites, which in turn enables the smooth functioning of capitalism by impeding political cooperation between working-class whites and blacks. However, while Du Bois focuses on the proprietary dimension of whiteness when he writes that whiteness is “the ownership of the earth, forever and ever, Amen,” Myers notes that he was also attuned to the ways in which white supremacy was sadistic, defined as much by a “lust for blood” as by economic exploitation and psychological compensation. Although Du Bois initially believed that racism was a matter of ignorance and that knowledge could free whites of their racial delusions, after witnessing the lynching of a black man named Sam Hose in Georgia, Du Bois recognized the depths of whites’ hatred toward blacks and became disillusioned with the social sciences. Du Bois—who prided himself on his scholarly fastidiousness and commitment to objectivity—was en route to deliver “a careful and reasoned statement concerning the evident facts” regarding Hose’s case when he found out about the lynching. In his 1940 autobiography, Dusk of Dawn, he reflected that he had “regarded it as axiomatic that the world wanted to learn the truth.” The realization that racial hatred trumped enlightened reason led him to two conclusions: “First, one could not be a calm, cool, and detached scientist while Negroes were lynched, murdered and starved; and secondly, there was no such definite demand for scientific work of the sort that I was doing.” Furthermore, Du Bois became more cognizant of the “irrational” dimensions of racism at the dawn of the Freudian era: “I now began to realize that in the fight against race prejudice, we were not facing simply the rational, conscious determination of white folk to oppress us; we were facing age-long complexes sunk now largely to unconscious habit and irrational urge.” Like the Martinican anticolonial theorist Frantz Fanon, Du Bois was able to offer a multilayered account of racism by combining a Marxist-inflected analysis of capitalism with a psychoanalytic-inflected analysis of the unconscious life of racism.

AT the time of writing this introduction, over the course of a single week, three separate trials that have involved a police officer fatally shooting a black man have resulted in no convictions. Following the acquittal of Jeronimo Yanez—the officer who shot Philando Castile—Castile’s mother, Valerie Castile, gave a powerful speech to the reporters who were gathered to hear statements from the family. When Castile’s mother spoke about the trial, her revelation echoed Du Bois’s thoughts after the lynching of Sam Hose: The truth had done nothing to bring about justice. Dash-cam footage revealed that Castile was in his car and that he calmly disclosed that he was (legally) carrying a weapon. When the officer screamed at him to not pull out his gun and he calmly replied that he wasn’t going to, the officer proceeded to shoot him seven times. Given that Castile lived in the St. Louis region, where predatory fine farming by the police is a common practice, it is hardly surprising that before this fatal encounter, Castile had been stopped by the police fifty-two times for minor traffic infractions.

Empirical evidence (such as video footage) that reveals that cops are murdering black people without reason does very little to disabuse some white people of their belief that the officers are justified in their actions. Take, for instance, the dash-cam footage of Yanez shooting Castile. Some conservative news commenters claimed that when Castile said he wasn’t going to take out his gun, what he actually said was that he was going to take it out. This “interpretation” is both factually wrong and nonsensical as an explanation. Why would Castile calmly disclose he was carrying a firearm if he were planning to shoot the officer? Even many commenters who were not sympathetic to Castile had to concede, based on the video, that the officer was trigger-happy, but they justified siding with the officer by characterizing Castile as a thug, thus marking him as unworthy of sympathy. One YouTube commenter noted, “This officer didn’t have trigger discipline, and that is entirely his fault . . . But some people are acting like Castille [sic] was some sort of saint, HE WASN’T!”

While reading the comments, I was struck by how racism affects people on the level of perception, enabling them to hallucinate a reality that conforms to their predetermined expectations. Thus, hallucinated racial expectations enable a conservative commentator to hear Castile say “I’m gonna pull out my gun” when watching the dash-cam video of Yanez shooting Castile. Similarly, officer Darren Wilson imagines that Mike Brown has turned into the hulk while ticketing him, and officer Raymond Tensing imagines a threat that is not substantiated by body-cam footage of him shooting Samuel DuBose. When the body-cam footage did not support Officer Tensing’s claim that he shot DuBose because his arm was stuck in the steering wheel and DuBose was trying to drive away, rather than this being grounds to convict Tensing, the trial became about what was in the officer’s “mind” at the time of shooting DuBose—in other words, whether it was plausible that Tensing “imagined” a threat.

This case lays bare the fallacy of believing that body cams will curb antiblack policing. Not only does this “solution” expand the surveillance state, it also seems more likely that the footage captured by body cams will be used against the people who are being policed and not against the police officers who are legally given discretion to shoot people. The statements of Castile’s sister and mother cut through this wishful line of thinking: Even the truth (captured by the dash cam) will not bring about “justice” when the adjudicating institutions have been systematically designed to fail black people (and not only to fail them but to be used against them). The raw despair and anger in Valerie Castile’s voice when she says that the “system continues to fail black people” ruptures the myth of American fairness and justice. Philando Castile’s sister, Allysza Castile, echoed this sentiment when she ended her statement with the mantra “I will never have faith in this system; I will never have faith in this system; I will never have faith in this system”—repeated three times as she retreats from the microphone and her voice hauntingly fades.

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