Carte Blanche: Capitalism Is Not To Blame For Slavery
Peter Dazeley
Over the past several months, I have been a frequent participant in Clubhouse rooms regarding societal and political issues and capitalism is often a subject that spurs contentious debate. While I am used to the “capitalists are greedy” argument, I’ve been caught off guard by a recently recurring argument that suggests that capitalism is inextricably linked to slavery.
This burgeoning theory seems to be attributed to a recent school of thought called “New History of Capitalism” (NHC), characterized by a collection of books and studies that conclude that capitalism is inherently racist. In 2019, The New York Times adopted this view in their ongoing “1619 Project” initiative, a collection of studies and essays with the goal to, “reframe American history” in a way that “requires us to place the consequences of slavery and the contributions of black Americans at the very center of the story we tell ourselves about who we are as a country.”
On its surface, this is a worthwhile exercise. It is necessary to scrutinize history in order to make the best decisions about the future. The best way to do that is to take all perspectives into account. However, NHC theory is littered with dubious and misleading claims.
In one of 1619 Project’s opening essays, sociologist Matthew Desmond expands on NHC’s theory to argue that antebellum slavery was such a crucial part of capitalistic success for America that it still lives on in a racist “low-road” capitalist system. Per Desmond,
“In a capitalist society that goes low, wages are depressed as businesses compete over the price, not the quality, of goods; so-called unskilled workers are typically incentivized through punishments, not promotions; inequality reigns and poverty spreads.”
His evidence for this is shockingly far-fetched. For example, he claims that modern-day corporate management and accounting practices are directly rooted in American slavery. Despite this being patently false, given that accounting has been traced back 7,000 years, even communist countries use modern-day accounting practices - it has nothing to do with free markets. Yet, it’s supposed to serve as evidence that modern-day corporations are essentially run like 17th-century plantations.
In his 2014 book The Half Has Never Been Told, NHC scholar Ed Baptist used erroneous accounting to grossly inflate the size of the antebellum cotton industry to be around half of America’s GDP, about ten times more than the estimated 5-6 percent. Interestingly, exaggerating the market share of the cotton industry was a staple of the anti-abolitionists’ King Cotton propaganda. Of course, they were wrong in the presumption that abolition would be detrimental to the economy. In fact, cotton production didn’t skip a beat after the Civil War, more than doubling by the end of the 19th century.
Furthermore, the anti-abolitionists were rightfully fearful of free markets, as their leader George Fitzhugh argued:
“Socialism proposes to do away with free competition; to afford protection and support at all times to the laboring class; to bring about, at least, a qualified community or property, and to associate labor. All these purposes, slavery fully and perfectly attains.”
His premise was that slavery was morally superior to wage labor in a free market because slavers provided the necessities of food and shelter. If this sounds familiar, it’s because modern-day socialists like Bernie Sanders and Nicolás Maduro use this logic in their attacks on capitalism. The only difference is that the government, not slavers, are the providers in a socialist system – so its success relies on the false assumption that government is virtuous and more capable than history has proven.
Fortunately, its flaws and loose connections purported by NHC scholars like Desmond have come under fire by economists and historians. Aside from blatantly miscalculated figures, they point to the fact that NHC scholars fail to clearly define capitalism or address the intellectual arguments for a free market.
Capitalism is defined by the Oxford dictionary as:
“An economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.”
This is more or less consistent with the libertarian belief in free markets, where voluntary human exchanges absent of any government interference are the formula for a prosperous society. This doesn’t just mean exchanging money for goods – it also means that labor is a voluntary agreement between employer and worker at a negotiated price.
Adam Smith, often known as the “Father of Capitalism”, provided the foundations of free-market economic that spread throughout the Western world in the 18th and 19th Centuries. He also drew the ire of anti-abolitionists because he argued that it had no role in a free-market society and that it was not only immoral but economically detrimental. He also wasn’t optimistic about the prospects of abolition because of the influence that slaveholders had in government. He argued,
“Whatever laws are made with regard to slaves are intended to strengthen the authority of the masters and reduce the slaves to a more absolute subjection.”
This influence that slave-owners had in the creation of laws is antithetical to the idea of free markets. Any collusion between private entities and government is a hindrance to the market, especially in the establishment of laws that diminish the rights of certain people. Slavery is a classic example of this, as it is reliant on the government establishing the legal rights for one group of people to own another’s means of production. This is because the government has a monopoly on violence – meaning it can legally use physical force to punish those who disobey society's order.
Desmond even acknowledges this when claiming,
“Unrestrained capitalism holds no monopoly on violence, but in making possible the pursuit of near limitless personal fortunes, often at someone else’s expense, it does put a cash value on our moral commitments.”
He argues that capitalism allows for greedy behavior in the absence of state interference, so it must be oppressive to the poorest of society. Again, this was an assertion also made by pro-slavery advocates like Fitzhugh and modern-day socialists like Maduro. Their answer to capitalist greed is that all wealth and production should be seized, by force, by the governing elite.
Conclusion
These individualist ideals born out of the Enlightenment and Adam Smith’s visions were adopted by the Founders when, in the Declaration of Independence, they proclaimed,
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
The Founders’ fatal flaw was that this was hypocritical to their allowance for slavery. However, Enlightenment ideals continued to gain popularity worldwide, and it is no coincidence that slavery eventually was abolished in countries that adopted these revolutionary views that valued the individual over the state. America eventually caught up to abolishing slavery and soon after became the richest country in the world during the industrial revolution.
When people falsely conflate free-market capitalism with racism, it only serves to protect the government from blame for creating racial disparities. Wealthy CEOs aren’t responsible for police brutality and the over-incarceration of African Americans – those are consequences of the state creating and enforcing laws in a manner that oversteps its boundaries at the expense of one group of people. The government should be the target in the fight for racial equality, and private enterprise should be embraced.
