A Deeper Divide: Stratification Economics as Advancing Institutional Labor Market Segmentation Theory

David Gordon and his cohort of radical political economists identified labor market segmentation as a functional process made possible by the emergence of monopoly capitalism. Gordon, Reich, and Edwards in particular viewed racial segregation as one of several strategies used by monopolistic capitalists to maintain labor market segmentation in a “divide and conquer” strategy that served to weaken the working class as a whole. This article argues that while Gordon’s analysis offers a welcome alternative to neoclassical analyses of racial division in the labor market, it is still insufficient. A more compelling analysis would use the insights of stratification economics and real competition theory, much of which was developed at Gordon’s home institution—the New School for Social Research. Racial stratification in labor and ownership in the United States precedes the consolidation period of monopolistic capitalism and has always incorporated mechanisms of maintenance that go beyond the firm; white supremacy could be considered a fundamental part of the “social structure of accumulation” within the United States. Identity-based stratification is functional within and beyond labor markets, and its goals of hierarchy and population maintenance are consistent with capitalists’ goals of maintaining profitability over both the short and long term.

JEL Classification : Z13, J42