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Racism represents an organized system of privilege and bias that disadvantages a set of people on the basis of their group membership. Racism is enforced by the intentional or unintentional actions of individuals and the operation of institutional or societal standards that, in concert, produce disparities, by race or by social categories such as national origin, ethnicity, religion, and cultural beliefs or ideologies, that are racialized and assumed to reflect biological differences. There are two defining elements of racism. The first element is the culturally shared belief that groups have distinguishing race-based characteristics that are common to their members. The second factor is that the perceived inherent racial characteristics of another group are held to be inferior or that those of one's own group are superior to those of other groups. In its very essence, racism involves not only negative attitudes and beliefs but also the social power that enables these attitudes and beliefs to translate into disparate outcomes that disadvantage other races or offer unique advantages to one's own race at the expense of others. The term racism was popularized by its use in the 1968 Report of the National Advisory Commission on Civil Disorders.

Racism is related to concepts such as discrimination (unjustified negative behavior), prejudice (an unfair attitude associated with group membership), and stereotypes (generalized beliefs about a group and its members), but it is a more encompassing term than any of these. Because racism is a culturally shared system of beliefs, it may be supported by “scientific evidence” of group difference and inferiority and may be sanctioned by social norms, policies, and laws. Although racism typically involves negative attitudes, it may instead reflect a paternalistic orientation, which fosters the dependency of a group or a set of beliefs that may ostensibly be favorable in some ways but that systematically limits the opportunities for group members and undermines their dignity.

Whereas psychologists have typically studied stereotypes, prejudice, and discrimination in terms of intrapsychic (e.g., cognitive, motivational, or psychodynamic) processes and interactions between individuals, racism operates significantly at broader social levels, as well. James Jones has identified three applications of the term racism. The first is individual racism, which relates to the joint operation of personal stereotypes, prejudice, and discrimination to create and support disparities between members of different groups. The second is institutional racism, which refers to the intentional or unintentional manipulation or toleration of institutional policies (e.g., poll taxes, admissions criteria) that unfairly restrict the opportunities of particular groups of people. The third is cultural racism. Cultural racism involves beliefs about the superiority of one's racial cultural heritage over that of other races and the expression of this belief in individual actions or institutional policies. Thus, cultural racism includes elements of individual and institutional racism. Because of its broad scope and emphasis on institutions as well as individuals, racism is a common focus of research in political science and sociology, as well as in psychology. These three applications of racismindividual, institutional, and culturalare considered in separate sections of this entry.

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