New Century, Same Problem

Abstract

This paper explores how institutionalized racism functions as a form of neo-imperialism by analyzing the political economy of Israel and its treatment of the Palestinian workforce. Motivated by the need to reassess how imperialism persists in the twenty-first century, particularly through the racialization of labour in liberal-democratic states, the paper builds on Immanuel Wallerstein’s Historical Capitalism and his concept of the ethnicization of labour. I argue that capitalist systems continue to exploit racialized groups to maintain unequal power relations, positioning Israel as both a product and agent of historical capitalism. Under the guise of liberal democracy, Israel systematically marginalizes Palestinians through a racialized division of labour that reproduces colonial structures of domination. Methodologically, this paper combines a critical literature review with a theoretical application of Wallerstein’s mechanism, focusing on three key mechanisms: labour flexibility, cost-saving socialization, and occupational stratification. Drawing on interdisciplinary academic sources in international relations, critical race theory, and settler-colonial studies, I closely examine how Israel’s economic, legal, and social institutions function to ethnicize labour and maintain dominance. This paper critically engages with scholarly debates in international affairs, challenging neoliberal and realist narratives that obscure these inequalities. I further assess the profound implications for democracy, as Israel’s legal and policy frameworks deliberately reinforce ethnic exclusivity while diminishing Palestinian politico-economic agency: an analysis which is particularly relevant given the global resurgence of nationalist and exclusionary state policies. Ultimately, this paper affirms the pertinence of Wallerstein’s framework in understanding global capitalism and exposes how neo-imperial practices persist in the modern era, especially in settler-colonial contexts. I call for renewed attention to the interconnectedness of race, capitalism, and imperialism in analyzing contemporary international political economy.