Yes, there is a huge part of the economy fueled by racism — and not in a good way.

There are two main ways societies have tried to eliminate racism. Let’s look briefly at history, not to go deep, but to observe what’s worked and what hasn’t.

1. The Spanish Model: Assimilation

If you travel across Latin America, you’ll notice a wide mix of ethnicities united by one thing: their nationality and language. You won’t hear terms like Irish-Mexican or Afro-Honduran used in everyday identity. Why?

Because during the colonial period, the Spanish implemented a post-slavery policy of assimilation. They incentivized mixed marriages through subsidies for housing and education. Laws banned racial group classifications, and the government stopped interfering once the playing field was leveled.

That’s key: knowing when to stop is as important as knowing when to start.

2. The Group-Identity Model

In contrast, many Western democracies — especially the U.S. — doubled down on group classification. They divided society into as many identities as possible, then tried to manage inequality through quotas, programs, and policies.

This model doesn’t rely on merit or markets. It depends on government action to “balance” society through targeted interventions — in education, employment, and economics.

The problem? It doesn’t empower people. It empowers government.

Power and Money

Governments are made of people — and those people, like everyone else, want power and money. But unlike private citizens, governments don’t create wealth. They extract it — through taxes, regulation, and debt.

Think of it this way:

🔒 0% taxes = absolute economic freedom

🧷 100% taxes = slavery

When a government divides society into atomized identity groups, it doesn’t amplify voices — it weakens them. Then it picks which groups deserve amplification. And in doing so, it masks the deeper reality:

⚠️ There are only two groups in any society: those who govern, and those who are governed.

America’s Risk

America has been the most successful economic experiment in human history — precisely because it emphasized personal freedom, responsibility, and merit. But that foundation is being corroded.

Why would a successful society destroy itself?

Usually not out of malice — but from good intentions, over-correcting past injustices. Government steps in to “fix” problems, and in doing so, becomes bigger, more powerful, and harder to stop.

The more responsibilities are transferred from citizens to the state, the more power the government accumulates. More power requires more taxes. More taxes mean less freedom.

Eventually, the desire to “help” turns into control.

Latin America’s Warning

Latin America got something right: it dismantled racial classification. But why is it still poor?

That’s a separate thesis, but in short: corrupt, socialist-style governments — whether left or right in name — have choked the region.

They can’t divide by race, so they divide by class. Once the middle and lower classes are over-taxed, they go after the rich. That destroys capital. No capital, no investment. No jobs. Just misery — and yet even a miserable population can enrich a small ruling class.

And when that fails? They print money. Inflation becomes the invisible tax. It’s unavoidable.

Except for the U.S.

Because the dollar is still the global reserve currency. But that can — and likely will — change. And when it does, the collapse will be sudden. Days, maybe hours.

The True Cost of Racism

So, what is the economic cost of racism?

It’s absolute — when used as the justification to hand over power from citizens to a “well-intentioned” government.

🧨 Many atrocities began with good intentions.