This article addresses the social and historical relation between Chicago School neo-liberalism and contemporary racism, and its connections with the formations of racism in classical liberalism and its colonial character. I show the pragmatic and discursive operations of neo-racism in the context of this shift to a neo-liberal discourse, drawing particularly on Michel Foucault's seminars, Society Must be Defended, and Birth of Bio-politics. Insofar as "race" cannot be understood as a discrete category outside its social, economic, moral, and political embeddedness in liberalism, I argue that methodological individualism and expectations of high-specialization constrain the theorization of race in U.S. scholarship. Racial lines will continue to be (re)excavated, borrowed, or inscribed afresh to channel, reinforce, and institutionalize the social violence that neo-liberalism must unleash.Keywords: neoliberalism; race; Foucault; liberalism; internal racism This article analyzes the social and historical relationship between Chicago school neo-liberalism and contemporary racism, or what some have called neo-racism (Balibar 1991;Bonilla-Silva 1997; Goldberg 1993Goldberg , 2011, in light of the formation of racism in the colonial origins of classical liberalism. I will be discussing racialization through the thought/works of Michel Foucault, who locates race in the historical formations of liberal ideology and governmental practice. I will then move on to pursue the ramifications of the constitutive raciality of liberalism into post world war II neo-liberalism. My emphasis is on the seeming coincidence that an extreme discourse such as American neo-liberalism should originate in a country where a racial schism runs deep in the social consciousness. I am arguing that the historically entrenched sociological condition of race, and its punitive ferocity, make possible the extreme metaphysics of American neo-liberalism. The latter, in turn, engineers a form of racism that operates effortlessly, if viciously, under the cover of a post-racial epoch.