Colonial Capital: How America Profits from Dispossession

-Broderick Dunlap

May 4, 2025

Broderick Dunlap explains how America’s economy was built on stolen land and stolen labor—and it still runs on that colonial logic.

The shadow of colonialism looms large over the history of the United States, shaping the everyday lives of marginalized communities to the present day. Internal colonialism, a framework often overlooked in favor of attempts to close racial, economic, and other social disparities, reveals the layers of dispossession and exploitation that have persistently afflicted Indigenous nations and African Americans. From the violent seizure of indigenous lands to the economic mechanisms designed to maintain control and compliance, the effects of these historic injustices have stuck with us in contemporary society. As we unravel the intricate web of violence and economic exploitation that facilitated colonial expansion, it becomes clear that understanding the past is essential to comprehending the present material conditions and struggles against racism and capitalism. In this essay I hope to illuminate how the commodification of land, racial violence, and economic tools have worked as complementary forces to reveal that the disparities that plague our lives are not simply societal deficiencies that require simple reforms but are fundamental elements of the American political economy that require more aggressive and transformative measures to create an equitable society. 

To properly understand internal colonialism, we have to zoom out a bit and put the term in historical context. The first internal colonies were created for Indigenous nations. Today, we refer to them as reservations.  The land where enslaved Africans were forced to work was stolen from the First Nations. The first European settlers used several methods to take the land from Indigenous people. When diplomacy didn’t work, settlers used violence and various economic weapons to dispossess Indigenous nations of their land. According to Emilie Connolly, annuities were once a powerful economic tool used for early American colonial expansion. Annuities are fixed sums of money paid to someone each year, typically for the rest of their life. Annuities “aimed to economize conquest” and discourage  armed resistance, and “treaty negotiation and compensation acted as complements to force.” Colonial officials expanded their empire by purchasing land. Rather than paying lump sums for Indigenous lands, settlers often offered annual payments meant to last for several years. The agreed-upon price of these annuities was hardly ever competitive with the actual market value of the land being sold. In the context of settler-colonial expansion, however, the market value of the land was irrelevant. The ubiquitous threat of armed settler invasion and governmental compensation would “exclude potential competitors from acquiring Native lands.” Settlers' ability to leverage their military power to prevent competition for Native land and create a market where there is only one buyer, and one price, called a monopsony, is hardly a “free market” at all. The resources extracted from Indigenous lands helped fund colonial projects such as building infrastructure, paying national debts, and other economic development projects. In other words, these processes helped build the country.

Violence was fundamental to American colonial expansion, but it cannot be divorced from the economic tools used as a complementary force to said violence. Racist justifications for colonization and hierarchical social relations became entrenched, informing some key elements of capitalist development in the United States: private ownership of the means of production, competition, and, perhaps most importantly, the commodification of land. According to legal scholar K-Sue Park, capitalist development in the United States has been enabled by the historically distinct “racial structure of the colonizing project.”  In this context, racial violence serves an economic function in the United States that requires an ongoing process of dispossession and accumulation for imperial expansion.  The relationship between state violence, private industry, particularly finance, and the government has been essential to building infrastructure, real estate, and other markets. It is a fundamental feature of American capitalism.

The commodification of land and the development of real estate markets reveal just how critical the process of dispossession, accumulation, and racial violence has been in the development of American capitalism. The process of commodifying land during the colonial period created financial tools and schemes that profoundly influenced contemporary financial practices. It “paved the way” for Europe’s transformation of land to capital and made Indigenous dispossession a mode of capital accumulation for imperialist nations. The discovery doctrine gave an ideological justification for land dispossession and wealth extraction from land by imposing indebtedness on other groups of people and creating a  “racially demarcated” economy. Proponents of the discovery doctrine believe that resource abundance should be used to generate profit or be deemed a waste. For the United States, the right to widespread land ownership, enjoyed by ordinary settlers for wealth accumulation, was fundamental to the discovery doctrine and is essential to the idea that widespread single-family homeownership is the American Dream. Mass land ownership was made possible through federal intervention, and federal intervention was sustained through market manipulation and the development of various financial schemes, coupled with the threat of armed invasion. Force, finance, and the federal government worked hand in hand to enable Indigenous dispossession, imperial expansion in colonial North America, and the commodification of land and creation of real estate markets.

The system of colonialism has a slightly different impact on Africans in the US. To be an internal colony, there needs to be a nation. When our enslaved ancestors were first brought to the Americas, they did not necessarily consider themselves African. Instead, they identified as Wollof, Ashanti, Xhosa, and Igbo, among other diverse identities, representing several complex and ancient societies with unique political, economic, and cultural practices. It was through struggle, resisting enslavement every step of the way, from the Middle Passage, the seasoning process, on the plantations, and in the cities, that enslaved people began to congeal into a syncretic African identity. This is exemplified in some of the first organizations we organized in the US, such as the Free African Society and the African Methodist Episcopal Church. To call oneself African means to recognize this long history of struggle. Since emancipation, there have been several proposals, demands, and attempts to secure a national territory to ensure our safety against white supremacist violence, exploitation, and oppression. These projects have not always been perfect. From the Exodusters in Kansas to attempts to colonize territory in Africa, particularly Liberia, to more anticolonial objectives, such as the Black Belt thesis and the Republic of New Afrika, the struggle for self-determination and independence has persisted for centuries. 

Racial terror functioned as a tool of social discipline against Africans in America, property dispossession, and wealth accumulation. Urban planners and reformers, politicians, federal agencies, and real estate agencies relied on the racism of colonial discourse to establish racially demarcated cities and real estate markets, suggesting that racial conflict naturally stems from the proximity of different ethnic groups. However, the idea that enslaved Africans in the US are an internal colony has persisted among Africans in the U.S. since before emancipation.  Activist and former advisor to Dr. Martin Luther King Jr., Jack O’Dell, argued that activists build networks with anticolonial, nationalist leaders, not simply based on “the bonds of color,” but on the shared experience of colonial domination. He asserted that “[T]he decolonization of the American mainland achieved by the Revolution of 1776, which at the same time left the institution of slavery intact, meant that the African population in America remained a colonized people.” The colonial mechanisms left in place after the American Revolution merely replaced the British as colonial masters of North America. The revolution was not yet complete.

Colonialism is not just a process but a system. It is crucial to understand segregation as a tool of colonial domination and expansion. In settler colonial nations, segregation is a distinctive characteristic of the spatial organization of urban and suburban areas, and it has persisted despite several waves of anti-colonial sentiment worldwide. The same violent racial structure of the colonizing project and the monopsonistic economic conditions that dispossessed Indigenous nations were used to prop up real estate markets and shape the racial makeup of communities across the country today. During the early stages of modern capitalist development, new social anxieties held by colonial powers led to an age of “segregation mania,” which lasted from 1890 until 1920. This coincided with a period in which colonial metropoles, particularly, saw exponential economic growth, development, and demographic shifts due to the Second Industrial Revolution. Throughout modern history, upticks in racial violence, antipathy, and dispossession have coincided with periods of capitalist restructuring and crises.

As Black people began to migrate to metropolitan areas at the turn of the twentieth century, the rhetoric of a “negro invasion” made the proposition of a “race war of serious proportions” seem imminent. Newspapers used the language of war, describing Black families in white neighborhoods as “advance scouts of an impending negro invasion” of “white settlements,” and organized vigilante militia groups like the Ku Klux Klan began to intimidate and coerce Black families from white communities. For example, the Tulsa Riots of 1921 occurred in the thriving, predominantly Black business district of Greenwood, which bordered Downtown Tulsa, the concentration of white capital. The destruction of thousands of Black-owned businesses and homes pushed the Greenwood community north, further away from downtown, and prevented any further substantial economic development for Africans in the region, while facilitating further wealth accumulation in downtown Tulsa during a recession. The process of dispossession and accumulation that enabled the colonization of North America was now being used to annex or confine Black neighborhoods to nurture capitalist development and ensure white control of real estate markets.

 In the United States, the end of the Civil War was a driving force behind demographic shifts as well. The exponential economic growth of the Second Industrial Revolution, coupled with the fraught social conditions of a society adapting to the collapse of its long-established social and economic order of chattel slavery, created a unique set of circumstances for the United States. The Thirteenth, Fourteenth, and Fifteenth Amendments dramatically shifted the political landscape and limited how segregationists could address dissent to their proposed programs. According to historian Carl Nightingale, “The only segregationist strategy left” was to convince “state and local officials, and ordinary white citizens” to pressure the federal government into action. When the Baltimore City Council passed the “West Segregation Ordinance” on December 20th, 1910, dividing every street in the city based on race, they participated in a larger political discourse and movement across imperial boundaries concerning how to structure metropolitan areas with rapidly shifting demographics. This segregation policy was unique for two reasons: if either party moved into the other group’s block, they would face a fine of $100 and up to a year in the city jail. An exception was made for Black domestic servants living with their employers.

Settler colonial society required colonized labor, as land markets began to develop, “land speculators invented the intellectual principle of class segregation, the idea that having poor people as close neighbors would lower the property values of the rich.” The West Segregation Ordinance served as a blueprint for redlining, which cordoned off Black people to specific sections of the city and suburbs ostensibly to protect market values, ultimately keeping colonial social and economic hierarchies intact. These Black enclaves are often undervalued in the market, resulting in an uneven distribution of resources. This materializes as poor quality schools, low employment, poor public health, higher police presence, criminalization, and higher incarceration rates. When capitalism is in crisis or undergoing restructuring, it employs several methods to ensure that the racial hierarchy remains intact. In the post-emancipation period, it was segregation. In the late twentieth century and the present moment, the primary method is mass incarceration.  The rise of mass incarceration and the development of the prison industrial complex are evidence of the existing colonial system and reveal that our relationship to the land, the law, and labor markets is a colonial one. When capitalism had to restructure during the neoliberal turn of the late 1970s and 1980s, the state cut social programs and built prisons instead of meeting the needs and improving the material conditions of the masses. Military budgets saw exponential growth, and the police became increasingly militarized. In the aftermath of the widespread urban rebellions during the 1960s and deindustrialization, African youth were depicted as lazy, violent, and dangerous. The state views them as nothing more than surplus labor, and the deindustrialized land is converted into prisons to warehouse them and exploit their labor for pennies on the dollar.

Understanding internal colonialism requires recognizing the complex relationship between land dispossession, racial violence, and capitalist development in the United States. The historical context of Indigenous dispossession laid the groundwork for a system that not only facilitated the expansion of settler colonialism but also informed the oppression of other marginalized groups, including enslaved Africans. The commodification of land and the financial instruments developed during this period have had a profound and lasting impact on economic practices and social relations, and have been fundamental to capitalist development. While the shadow of colonialism and the systemic injustices it bred remain deeply entrenched in the fabric of American society, there is room for hope and transformation as a new period of capitalist restructuring is underway. 

Organizations that function primarily as study groups, charity organizations branded as mutual aid, and so-called vanguard parties that run candidates with no intention of winning have proven insufficient in achieving any meaningful political objective. Their demands often fall on deaf ears because they are powerless, with no real financial backing, and rely too heavily on moral appeals. Genocide has raged for eighteen months in Palestine despite collective actions that have mobilized millions to oppose it. Building institutions could provide the leverage that grassroots movements have desperately needed to advocate for bold policy changes, disrupt the flow of capital, and bring war criminals to heel. Ultimately, the journey toward an equitable society demands courage, new strategies to give our solidarity teeth, and transform the material conditions of the working class.

Bold solutions lie in developing a deeper understanding of the economic weapons used against marginalized communities to understand the current landscape and to find more efficacious ways to counter them. While anti-capitalism is a politic, it is not a strategy for change, and ignorance of how economic weapons are used has led to impotence. Embracing frameworks prioritizing economic self-sufficiency to develop independent, sustainable institutions serving the working-class majority is a potential way forward. Institutions like unions, independent political parties, educational and policy institutes serve specific needs that can garner mass support and gain the necessary leverage to make a difference. Establishing land trusts is a way to decommodify, develop, and maintain the land for the greater good. Building worker-controlled, revenue-generating infrastructure to sustain these institutions would ensure their existence far beyond this generation.