Critical Racialization and the Political Development of Wage-Earner Bankruptcy

• In Event: The Racialized Politics of American Debt Relief Policy

Abstract

This paper uses critical racialization theory to elucidate wage-earner bankruptcy’s political development. Critical racialization theory posits that institutions such as wage-earner bankruptcy play a role in the construction of race and applies critical theories of racial contract, racial capitalism, and intersectionality to illuminate how this process unfolds. Following critical racialization theory, the social construction of economic crisis centers intersectionally-advantaged populations whose needs are translated into policy through agreements among predominantly white policymakers (racial contract), which naturalizes racialized processes of accumulation and dispossession (racial capitalism), mixing race and class within a broader matrix of privilege and disadvantage (intersectionality). Critical racialization theory allows us to further flesh out privilege construction for the intersectionally-advantaged by complementing approaches that focus on concentrated versus dispersed interests or the predatory inclusion of disadvantaged populations.

Wage-earner bankruptcy emerged in the American south following the Great Depression. It reflected simultaneous policy goals of supporting white male breadwinners and disciplining intersectionally-disadvantaged populations, particularly Black workers who were increasingly attempting to access the mainstream American political economy. Critical racialization theory directs us to examine how the social construction of the economic crisis influenced who was centered in the policy response. Despite widespread suffering across social classes during the Great Depression, the centering of white, male, wage-earning breadwinners (i.e., the intersectionally-advantaged) in political understandings of the crisis led to their centering in New Deal policy responses such as wage-earner bankruptcy. Scholars have noted that in addition to the creation of the modern welfare state, the New Deal Era also reflects the linked developments of the myth of the bootstrapping white ethnic and the welfare-dependent minority that shaped and continue to shape policy through agreements among predominantly white policymakers. Critical racialization theory analysis highlights how wage-earner bankruptcy’s political development captures both these narratives, turns them into policy through agreements among white policymakers, and thus naturalizes accumulation and dispossession in the financial system through race.

The legacy of this system is alive and well and contributes to the construction of race in America today. Wage-earner bankruptcy is still disproportionately employed in the South and a handful of other districts with large Black populations. It contributes to the preservation of white property by providing a mechanism for intersectionally-advantaged homeowners to resist foreclosure, a protection not available to renters and often rendered inaccessible to intersectionally-disadantaged homeowners through the complexities of the bankruptcy system. Meanwhile, the predominately white financial sector profits by using market logic to transform social difference into supposedly objective conceptions of “riskiness,” justified partly by the possibility of default.

This paper combines approaches from American political development and critical theory to further the study of race within the emerging field of American political economy (APE), which emphasizes race and racism as a central theme but has yet to fully grapple with racial advantage in the financial sector. In particular, this paper emphasizes the link between privilege and oppression, showing that oppression of the intersectionally-disadvantaged enables the privilege of the intersectionally-advantaged and how this process is visible when we use critical racialization theory to analyze aspects of the American political economy such as wage-earner bankruptcy.

Author

• Tess Elizabeth Wise, Wake Forest University