Alberto Mingardi  

Cotton, slavery and capitalism

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I am still waiting for my copy of Sven Beckert's "Empire of Cotton: A Global History", which Amazon promised me for January. But I have read Eric Herschthal's review in Slate, and I am a bit perplexed.
Herschthal offers qualified praise for the book, that he considers "remarkable and unsettling". But why? Because the book

insists that many of the myths we tell ourselves about capitalism--how it functions best when government gets out of the way, how it broke clean from slavery--are as false today as they were during its 500-year history. In Beckert's account, not only does slavery play a pivotal role in capitalism's rise, but so does the state. Governments supplied the guns, built the roads, enacted the tariffs, and regulated the markets that made, and continue to make, capitalism thrive.
Empire of Cotton.jpg
Herschthal makes the interesting but somewhat dubious point that the "history of capitalism" is gaining new attention after the financial crisis. Is this really true? The names of many great economic historians immediately come to mind, from Eric L. Jones to Joel Mokyr, not to mention Nobel Laureates Robert Fogel and Douglass North. They may not have been, though, "historians of capitalism" in the sense that Herschtal appears to have in mind, since he writes:
If anything like "the history of capitalism" existed, it exalted entrepreneurs and inventors, extolled the efficiency of the factory and the free market, and suggested that the whole system thrived only in the absence of a regulatory state.

So, Herschthal associates proper history of capitalism with a reflection on the role of government and slavery, and improper history of capitalism with history of entrepreneurs and inventors. Now, this is a rather complicated issue: certainly "real" capitalism emerged in history intertwined with government actions and regulations of different kinds. Lobbying is not "new" in any sense. And yet was government patronage what defined capitalism, and made for its success? At the end of the day, was this or that kind of regulation/protection/subsidy more important than entrepreneurial ingenuity and creativity, for industrial capitalism to transform the world?

Certainly American slavery played a role in the global supply of cotton, which in turn was an important part in the British industrial take off. And yet, as Herschthal asks, then "Why did the British government, at precisely the moment cotton was fueling its Industrial Revolution, back the anti-slavery movement?"

One answers lies perhaps in those very ideas that suggested the whole system may thrive by keeping the regulatory state to a minimum: classical liberalism. During the American Civil War, John Bright and Richard Cobden were known as "the two honourable members from the United States" in the House of Commons, though they had never abandoned their committed anti-interventionism (read Cobden here). Workers in Manchester famously sided with the North, in spite of their own self-interest, which was hindered by the blockade of confederate exports.

This is not to say that the British cotton mills did not take advantage of cotton imports from the American South. But to deduce that slavery played an _essential_ part in the development of capitalism, or better, to say that early capitalism couldn't make it without it, is a rather difficult logical jump. Both government intervention and slavery are ubiquitous in human history: industrial capitalism is not, and it developed into what Deirdre McCloskey calls "the great enrichment" in a very peculiar situation. So, we shall search for what differed from previous periods - thus slavery, which was widespread in human societies, is hardly the right single "enabling factor" of capitalist development.

On a slightly different point... Read David Levy and Sandra Peart on why Carlyle coined the sentence "dismal science". I think it is safe to say that economics (and those classical liberal ideas that were, for quite a few years, associated with it) played an _emancipating_ function too. It discovered consumers, and by placing a new emphasis on peaceful cooperation, dethroned ideas such as the "great man view of history" so dear to Carlyle. Perhaps there was something exhilarating and inspiring in the stories of inventors and entrepreneurs, and "history of capitalism" should thus take notice of them.

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COMMENTS (11 to date)
pseudoerasmus writes:
This is not to say that the British cotton mills did not take advantage of cotton imports from the American South. But to deduce that slavery played an _essential_ part in the development of capitalism, or better, to say that early capitalism couldn't make it without it, is a rather difficult logical jump.

These "historians of capitalism" out of history departments just keep ignoring the work of economic historians. So many of them keep citing Eric Williams as though no one had ever addressed his arguments before -- say, Engermann or McCloskey. Actually I'd written precisely about this topic. Was slavery necessary to western industrialisation ?

Tom Davies writes:

I think you meant to say that the workers of Manchester sided with the North

AS writes:

I think you are understating the importance of slavery to the cotton industry. According to some estimates (see, in 1860 slaves represented nearly half of all the household wealth in the South. The majority of these slaves were put to work in the cotton fields, and of course the American South was the biggest global supplier of cotton.

Could the cotton industry, and the larger capitalist system, have developed without slavery? Perhaps. But in purely economic terms, slaves were the biggest capital input for the world's largest producer of cotton. I think that counts as more than just slavery "playing a role".

pseudoerasmus writes:

Then how come basically nothing happened to the US economy after emancipation ? Here is Piketty's time series of US wealth including slave-wealth. The wealth represented by the market value of slaves was, just like stocks, the expected value of future earnings from slaves used in production. But after emancipation the ex-slaves continued to work in raw cotton production, albeit supplying at least 25-35% fewer hours of labour (i.e., they understandably substituted leisure for work). So the wealth held as slaves did not disappear completely, but was partially transferred to the slaves themselves. Except nobody counts the present value of returns to human capital as "wealth".

Anyway, cotton could have been grown under free labour (as emancipation demonstrates), and there were substitutes for American cotton for the rest of the world. Growth would have been a little slower, that's all.

Alberto Mingardi writes:

@Tom_Davies: of course. Corrected! Thank you.

Andy Johnson writes:

l long for a history that reflects the history of ordinary farmers who had less than ten slaves and barely survived the financial risks of farming and boom/bust market cycles.

These farmers had few sons and many acres to work. Slaves filled a need in a tight labor market. They lived with or in similar housing as their owners. They ate the same foods. They suffered the same diseases,ills, snake bites, broken bones, except for genetic advantages as their owners. Both races were seen by the same doctor.

The society was not comprised by rich/white on one hand and slave/black on the other alone.

Like Roman Empire, and all other societies, there was a broad mix of economic classes, ways of living, cultural artifacts and habits. There are no purely good or evil economies or societies.

The American South was no different.

Please help me find an economic book that looks at the whole society of that period.
Thank you.

Thanatos writes:

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Tracy W writes:

pseudoerasmus: thank you, your articles are very interesting (and now I sound like a spambot).

Les Cargill writes:

Correct me if I am wrong. but slavery *per se* was completely a legacy of *Mercantilism*. Black chattel slavery in the Antebellum South was almost purely accidental - skin color served to identify one as a slave because it was irrevocable. When indentured servitude had been used prior to the large-scale advent of slavery, the indentured could simply run off. Had the Potato Famine happened say, 80 years earlier, you can imagine a completely different outcome.

Capitalism quite shines a light through the open sores on such an odious policy. And as there are more and more workers for hire, unpaid labor goes from annoyance to worth taking up arms against.

Slavery more or less continued, through Rotten Boroughs and such, in the Caribbean; you can make what you will of the situation in India.

Please also note that your "average" Abolitionist was generally a rock-ribbed Congregationalist Yankee who had no use for the Papist Irish and treated his workers of that land like dogs. The concern was less for the slaves themselves ( although it varied ) than the outrageous - *immoral* - profits from Antebellum plantations and the sort of ideology which embraced that there must be an aristocratic class to do all the managing, and that hard labor was inconsistent with that.

Finally, the only way that even Jefferson Davis could see to win the Woah was for outside support form the buyers of all that cotton - the British, which no less than Karl Marx did a workman's job of killing off in his role as newspaperman.

Racism was just a thing back then.

Had some genius figured out a "Missouri Compromise" that could have worked and had the fugitive slave problem been resolved ( both are intractable so such a stroke of brilliance is oh so unlikely ) there is no telling what could have happened. But as Lincoln said, from his vantage point as a railroad lawyer, it was irreconcilable.

Yi Wang writes:

I think though slavery played an important role in early capitalism system. Somehow, not only the low production efficiency but also the characteristic of slavery prevented it from further participating in economic activities. The role of slavery was the foundation of capitalism but not the bridge to the future form of capitalism. The success of industrial revolution was the prove of limitation about slavery, which means that slavery would never be a factor to push economics forward but only satisfy economic activities with its production and its own values.
Rather than saying it’s better for governments to play a role in capitalism system, I would like to say that it’s better for governments just build the stage for economic activities, maintaining the liability and credits for activities in market. Not only control from governments would affect market with regulations but also this behavior itself would twist expectations from people during market activities. Though the fact is that government always played a role, more or less, of coordinator during economic activities, from time to time, trying achieving its purpose of regulating the market under control or reaching people’s expectations to improve the economic condition, it would never be wise to interfere market too much most of time. It’s government duty to maintain the order of the market but not the way how market goes. The will of people who participate in economic activities would become the invisible hand of market to adjust it to its finest condition and this tendency will keep going on without control from governments all the time.

Daublin writes:

Regarding roads, it's a motte and bailey argument. Few libertarians are all that down on government-sponsored roads. A world where all governments did was maintain the roads would be a libertarian paradise.

The discussion usually comes up for things like price controls, efficiency standards, licensing requirements, and tarriffs. These things are mostly a loss. When multiplied across all the industries that humankind is taking part in, the loss is rather large.

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