Exclusion Has Been a Business Since 1493

In America, exclusion has been a business for centuries. Banks, insurers, landlords and governments have earned money from it, and each time a law, a market shift or a movement shut down one method, they adopted another.

The paper trail goes back to 1493, when Pope Alexander VI’s Inter Caetera gave Spain license to “bring under your sway” the lands Columbus had reached and their peoples, extending earlier bulls that had licensed Portugal to “subjugate” pagans. Together the bulls turned colonization into a legal and financial playbook. Genoese and Portuguese banks issued loans against the future value of captives; Antwerp and London insurers wrote slaving voyages as ordinary commercial risk; slave-voyage insurance made up an estimated 5 to 10 percent of marine insurance premiums. Policies covered captives lost to insurrection while excluding those who simply died, so the shipboard death rate was priced as spoilage rather than as loss.

The Casa de Contratación in Seville logged enslaved Africans on manifests beside shipments of bullion and spices: human beings as another asset class, booked and insured.

From the start, racial exclusion was engineered in contract language and built into ledgers as much as in rhetoric. The colonial system was nothing if not explicit: the Church granted legal cover, merchant banks wrote the checks, and colonial courts turned short-term IOUs into everyday liquidity. These bonds, backed by the expected labor of people not yet even captured, gave European merchants the tools to speculate on human life, and helped kickstart the Atlantic credit system.

The machinery didn’t enable slavery as a side effect; it depended on it.

By the time America broke from Britain, slavery was written into its laws, its credit and its commerce. After the 1807 abolition of the transatlantic trade, the U.S. internalized the machinery, and by 1860, enslaved people made up $3–4 billion in American assets, outvaluing all the country’s railroads and factories put together.

Banks like Lehman Brothers, then based in Montgomery, Alabama, and the New York house of Brown Brothers looked past it all and wrote mortgages against enslaved people. Giants like Aetna and New York Life sold insurance policies on Black lives. Lloyd’s of London insured slave ships by name.

Cotton alone powered half of all U.S. exports, built Wall Street’s early fortunes, and supplied the capital that made these arrangements self-renewing.

Abolition ended the legal ownership of people, but it left an opening for forced labor. The 13th Amendment banned slavery “except as a punishment for crime whereof the party shall have been duly convicted,” and states immediately filled the gap with new statutes: vagrancy laws, debt peonage, and criminal codes written to maximize arrest. Corporations like Tennessee Coal & Iron (which became part of U.S. Steel) leased prisoners by the hundreds at a monthly rate per head, in a system that treated a convict who died as replaceable and turned Black life and death into a budget line item. In 1898, convict leasing supplied 73 percent of Alabama’s entire annual state revenue.1 Sharecropping and crop-lien contracts locked Black families into intergenerational debt, their fates determined by courthouse signatures and merchant ledgers.

When mass criminalization grew harder to defend outright, financial innovation took over. In the 1930s, federal agencies like HOLC and the FHA drew red lines around Black neighborhoods, rating them “hazardous” and freezing out entire communities from access to mortgages and insurance. Major lenders enforced these boundaries, and federally insured mortgages channeled wealth into suburbia while denying Black families the home equity it built. (Mapping Inequality and Richard Rothstein’s The Color of Law show the mechanisms in full.)

Urban renewal was simply the next update. Cities and universities, from Columbia to the University of Chicago, used “blight” designations to bulldoze Black neighborhoods, moved entire populations, and redrew school, voting, and tax districts to cement segregation. Highways and public bonds re-routed investment through planned disinvestment from communities that had been deemed risky, unprofitable, or undesirable.

By the 1970s, carceral capitalism was the new engine. “Tough-on-crime” statutes exploded prison populations, and states signed contracts with companies like CoreCivic and GEO Group that guaranteed occupancy floors ranging from 80% to 100%, most commonly 90%. Jail telecom monopolies like Securus and GTL offered counties commissions that inched toward 100% of call revenue, paid for through the high rates families were charged, and counties treated those commissions as steady revenue. Defendants were charged for probation, drug testing, and even their own jail beds; municipal budgets balanced by extracting from the most surveilled. Where jail fees were capped, monitoring apps and video call surcharges popped up.

Then came the algorithmic era. FICO and VantageScore built utility histories and “thin files” into credit scores. FICO says its scores ignore where you live, but credit history stood in for the neighborhoods redlining had starved of credit, so the scores carry redlining forward by proxy. Tenant screening and background check vendors (RealPage, CoreLogic, Yardi, Checkr) sold black-box risk scores for housing and jobs: unappealable, often racist in effect, and invisible to those shut out. Predictive policing systems like Palantir and PredPol mapped patrol routes on old arrest records, all hidden by NDAs that lock away the algorithmic logic.

Meanwhile, the consulting and ratings giants (PwC, KPMG, S&P) cashed in on a parallel market of “fairness audits” and compliance dashboards that rarely altered the underlying exclusion, but turned regulatory pressure into a new product.

By the 2020s, much of exclusion runs through digital screening. Pandemic relief and benefits are screened through platforms like ID.me and Accenture, whose matching systems flagged thousands of claims for minor inconsistencies or “unstable” addresses, blocking unemployment and food access for those who needed it most. Invitation Homes and other large corporate landlords kept filing evictions through the pandemic: a House investigation found Invitation Homes filed at least 3,300 between March 2020 and July 2021, including while the federal moratorium was in place. Broadband, SNAP, and basic income pilots rely on algorithmic eligibility that optimizes scarcity and offloading risk onto those least able to contest it.

And every time one method is outlawed or exposed, another takes its place. Don’t mistake this for evolution. It’s profit logic: exclusion is simply made more ergonomic, more invisible, and more billable.

From the Indian Removal Act to the Pre-Checked Box explains the design philosophy.

It’s also never random. Every exclusion is written in code or contract, lobbied for, and renewed at each pivot point. If this were accidental or “emergent,” you’d see drift or instability. Instead, the margin compounds, generation after generation.

Emergence Is an Excuse debunks the myth.

No part of the institutional supply chain is untouched: municipalities depend on fines, fees, and incarceration to balance books; banks and insurers filter applicants and protect their margins; data brokers monetize records of arrests and evictions; tech firms provide both the exclusion engines and the “audit” tools that allow the system to self-certify.

No Unprofitable People walks the supply chain.

What would it take to make exclusion less valuable as well as less visible? Whether a reform is a change or a rebrand comes down to who profits every time someone is denied, who sets the scoring rules, whether people can bypass the gate through a universal or cooperative alternative, and whether the burden of proof—and the financial risk—shifts back to the system, not the individual trying to get through.

None of the fixes is a better risk model or another audit:

• universal provision: eligibility for housing, healthcare, credit, and broadband by right, not algorithm
• a complete ban on proxy data like ZIP code or arrest records in critical services;
• public or non-profit stewardship of infrastructure; open contracts and code, no NDAs; and
• binding community vetoes over any new exclusion tool.

Universal systems reduce exclusion and also kill the incentive to surveil, filter, and sort.

Give Everyone the Benefit and There’s No One to Investigate lays out the case.

From papal decrees to tenant-screening scores, exclusion has lasted as long as someone was paid to run it.

Any city, landlord or agency buying a screening tool can be asked who the tool keeps out, what records it uses, and who is paid when it does.