The legacy of slavery in America is once again becoming a hotly discussed topic. The New York Times has launched The 1619 Project, commemorating the 400th anniversary of the first African slaves brought to the colony of Virginia. The project “aims to reframe the country’s history, understanding 1619 as our true founding, and placing the consequences of slavery and the contributions of black Americans at the very center of the story we tell ourselves about who we are.” One of the lead essays informs us that “in order to understand the brutality of American capitalism, you have to start on the plantation.” And over at Vox, an interview with historian Edward E. Baptist teaches us that slavery was a remarkably modern and efficient business practice, which helped the U.S. transform from a colonial economy into “the second biggest industrial power in the world.”
There are rhetorical and ideological concerns on both sides of this sensitive topic. The case for systematic reparations collapses, for example, if it turned out that slavery was an inefficient system that made blacks and whites—with a few notable exceptions—poorer. On the other hand, if the vision of The 1619 Project is correct, and modern America was built on slavery, then it would be silly for MAGA-wearing patriots to try to downplay the peculiar institution as an unfortunate footnote in the story of liberty.
In the present post, I am not going to weigh the historical evidence. For critiques of the “New History of Capitalism” (with its alleged reliance on slavery), see this article from Olmstead and Rhode, or this essay by Phil Magness.
Instead, I want to clarify the logical framework to show what it would mean to actually argue or demonstrate that slavery was an economically efficient method of production, which not only enriched those directly involved in the slave trade and labor sites, but also showered material benefits on the rest of (free) society at large. As we will see, in his Vox interview the historian Baptist doesn’t even attempt to make such a case.
Once we clarify the actual issue, it should be clear that slavery is like war: Yes, a few privileged elites can benefit financially from it, but it’s not “good for the economy.” Slavery, like war, is a destructive institution that reduces the welfare of most people in society, though a few beneficiaries can profit from the insidious system and thus have an incentive to sing its blessings.
Framing the Issue
To understand if slavery is an “efficient” method of economic organization, we have to ask the standard economist question: Compared to what?
There is no doubt that a healthy adult slave in a region with adequate natural resources can produce more than a subsistence amount of output, allowing for the owner to keep the slave alive and keep the surplus for himself, living up to the Marxist vision of how labor markets work in general. So if the question is, “Was US output higher with millions of productive slaves working, than it would be if those slaves suddenly disappeared?” then the answer is, “Yes, of course, slavery was ‘productive’ in this sense.”
But that’s not really the question. The question is, if all of the plantation owners in (say) the year 1850 had suddenly freed all of their slaves and turned them into free laborers, what would that have done to the course of US economic development? Is it really true that this change would have made the country as a whole poorer?
The issue isn’t whether cotton was an important export, or whether the expected future flow of labor of the slaves was a valuable financial asset (codified in the market price received in auctions). The issue is whether had the slaves all been freed, would that change have made cotton exports grow more slowly over the 19th century, and would it have made the productivity of the (former) slaves’ labor grow more slowly? Those are the types of questions we need to answer, if we want to know whether slavery was a boon for American capitalism rather than a blight that was not only immoral, but also inefficient.
Baptist Doesn’t Even Try
I was very excited to read the Vox interview with the historian Baptist, because at first he took on exactly the kinds of issues I’m discussing above. Here’s how the interview opened:
When you talk about the sort of myth-making that has been used to create specific narratives about slavery, one of the things you focus on most is the relationship between slavery and the American economy. What are some of the myths that get told when it comes to understanding how slavery is tied to American capitalism?
Edward E. Baptist
One of the myths is that slavery was not fuel for the growth of the American economy, that it actually the brakes put on US growth. There’s a story that claims slavery was less efficient, that wage labor and industrial production wasn’t significant for the massive transformation of the US economy that you see between the time of Independence and the time of the Civil War.
As I said, when I read this first exchange, I was very excited to see Baptist offer either arguments or empirical evidence refuting these (alleged) myths.
And yet he doesn’t even try. To be clear, I’m not saying that Baptist offered an argument that I found weak; he literally doesn’t even try (in the interview) to refute the “myths” that slavery was inefficient and slowed US growth.
To be sure, Baptist gives some statistics and facts. For example, he points out that the output of slave-using plantations increased greatly over time, and that the US economy grew in relative size on the world stage when slavery flourished.
Yet again, notice that these claims show nothing at all about the actual issue. We need to ask: Would the output of plantations have increased more had they been based on free labor? Would the US economy have been even bigger in (say) 1860 if slavery had never plagued America?
Look, I can just as easily use the same “evidence” as Baptist. From 1865-1965, the output of a field hand has grown tremendously, and the U.S. jumped ahead to be the #1 economy in the world, and cotton farmers got even more involved in sophisticated financial markets (dealing in futures and other options on their commodities). So there, I just “proved” that getting rid of slavery was a boon to the economy, upsetting the whole Baptist thesis, right?
The irony here is that you’d think the leftist opponents of slavery would be glad to hear my analysis. They are in the awkward position of explaining how beneficial slavery is to everybody else. So if they are right, then it’s only moral qualms that prevent a majority in a given region from enslaving the minority.
In contrast, I agree with the worldview of Ludwig von Mises. When making the case for classical liberalism, Mises didn’t need to appeal to altruism. No, he argued that slavery was an inefficient system:
The abolition of slavery and serfdom is to be attributed neither to the teachings of theologians and moralists nor to weakness or generosity on the part of the masters. There were among the teachers of religion and ethics as many eloquent defenders of bondage as opponents. Servile labor disappeared because it could not stand the competition of free labor; its unprofitability sealed its doom in the market economy. (Human Action, p. 625)
Indeed, you see a tacit recognition of this brute fact in the discussions of the Civil War. For example, a popular talking point is that “by the dawn of the Civil War, the Mississippi River Valley had more millionaires per capita than any other region.” Now the reason they have to put “per capita” in there, is that the South presumably did not have more millionaires than the North.
More generally, it’s just taken for granted that the North was richer than the South, and that’s why it was able to blockade and invade it during the (inaptly named) Civil War. If slavery makes your nation such a powerhouse, why didn’t the South conquer the North?
Slavery was a monstrously unfair and immoral institution, but it was also inefficient, compared to a system based on free labor. Although I understand the rhetorical context of these arguments in regards to reparations and pride in U.S. history, it’s very dangerous to be making the case that enslaving others is the path to national greatness.
To return to Mises, he argued that the only way to end war was to get average citizens to realize that they were made poorer by conquest, even if their militaries won on the battlefield. In a similar manner, both in the interest of economic accuracy and long-run peace, academics should be teaching the masses that slavery benefits an elite few at the expense of everyone else, not just the slaves.
Robert P. Murphy is a Senior Fellow with the Mises Institute. He is the author of many books. His latest is Contra Krugman: Smashing the Errors of America’s Most Famous Keynesian. His other words include Chaos Theory, Lessons for the Young Economist, and Choice: Cooperation, Enterprise, and Human Action (Independent Institute, 2015) which is a modern distillation of the essentials of Mises’s thought for the layperson. Murphy is co-host, with Tom Woods, of the popular podcast Contra Krugman, which is a weekly refutation of Paul Krugman’s New York Times column. He is also host of The Bob Murphy Show.
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