Expansionist Japanese capitalism developed racist ideologies toward Korea and the Koreans. In 1910 Japan annexed Korea. After 1917, Korean labor was imported on a large scale into Japanese society, where racist attitudes were rapidly taking shape. However, cheap Korean labor produced a wage differential that caused a split in the labor market along ethnic lines. Thus, competition for jobs between Japanese workers and Korean immigrants transformed racial prejudice into overt ethnic antagonism. Under the circumstances, the Japanese government was forced to intervene, because it was primarily concerned with maintaining a social context conducive to the effective functioning of the economy. The government attempted to integrate Koreans into Japanese society through assimilation. Ironically, however, attempts at assimilation by the state served only to reproduce and crystalize the hierarchical ethnic order.
Thus, our central theoretical task is to locate race relations in a capitalist society at the intersection of racial dynamics generated through the split-labor market on the one hand, and the state on the other. The interface is historically defined. More broadly, we must examine the unique historical configuration of economic, political, and ideological forces that produce racist ideologies and ethnic antagonisms. However, the economic element is the most fundamental to our theoretical scheme.