Slavery and capitalism

I recently decided to explore the literature about the relationship between slavery and capitalism. I did so after reading this article in the Chronicle of Higher Education, although I had planned to do this for a while. After reading Seymour Drescher’s history of abolition a few months ago, I became convinced that, despite the widespread belief to the contrary (which I used to share), slavery wasn’t in fact economically on the decline when abolition happened and that, if you ignore the negative externalities it had (not just the suffering of the slaves, but also the economic retardation it probably caused in regions where slavery was practiced), it was economically very efficient.
 
But recently a bunch of historians, especially Edward Baptist from Cornell, have made some much more radical claims, which have become extremely popular on the left. In particular, according to them, slavery played an essential role in the industrial revolution in the US and elsewhere. (In a way, this isn’t new, Eric Williams famously defended that view in 1944, as well as the view that abolition happened for economic reasons. As I noted above, the latter view is false, and as I will explain shortly so is the former.) For instance, not so long ago, I heard Chomsky — who has praised Baptist’s book elsewhereassert on Democracy Now that much of the US wealth today derived from slavery.
 
The article in the CHE misleadingly suggests that there is room for reasonable disagreement about that. To be clear, having read the critiques of Baptist’s book and looked at the evidence, there is not. Baptist’s book and, to a lesser extent, that of the other historians who made similar claims should never have been published, let alone be praised in the New York Times and in many other places. Not only does he clearly lack any mastery of some basic economic concept such as GDP, but he even misrepresents the qualitative evidence he uses to support for some of the claims he makes.
 
If you are interested in that debate, I recommend that you read Eric Hilt’s critique of the “new history of capitalism”, which you can find on his website. You should also read Alan Olmstead and Paul Rhode’s critique of that new history, which focuses on Baptist and is really damning. The upshot is that, despite what Baptist and other historians recently claimed, slavery didn’t play a major role in the industrial revolution and economic growth in the US. Baptist’s argument to the contrary is based on estimates he makes without any evidence and a pretty shocking confusion about the concept of GDP. When you do the math correctly, you find that slave-grown cotton in the US made up less than 6% of the GDP. (See also this for how ridiculous Baptist’s methodology is.)
 
It’s also not the case that slavery was causally responsible for the industrial revolution in Great Britain, as David Eltis and Stanley Engerman show conclusively in this paper. (Note that Engerman played a major role in the discovery of the economic efficiency of slavery, so he is not opposed to all aspects of the “new history of capitalism” and certainly not to revisionism in principle.) Of course, this is hardly surprising, if you just think about it for a second: if slavery was so good for the economy, Portugal and Spain — whose economy depended much more on slavery than the UK or the US — would probably not have remained economically backward for so long, at least compared to countries such as France, the UK and the US. It would also be hard to explain why the economy of countries that didn’t benefit from slavery, such as Germany, have developed so fast during the 19th century.
 
This sort of considerations should make the view that slavery explains the economic development of the West pretty implausible from the outset and, when you actually look at the evidence closely, it clearly confirms that it’s false. You should also read this post argues that the cotton industry didn’t play a crucial role in economic growth of the UK in the 19th century. (There are typos in some of the formulas: “(0.035) – (1.9 percent) + (0.035) • (0.313 percent) = 0.077 percentage points a year” should be “(0.035) • (1.9 percent) + (0.035) • (0.313 percent) = 0.077 percentage points a year” and “(0.035) -(0.945 percent) + (.035) • (0.313 percent)” should be “(0.035) • (0.945 percent) + (.035) • (0.313 percent)”.) This other post on the same blog, which argues that economic growth in the UK after emancipation didn’t crucially depend on slave-grown cotton from the South of the US, is also interesting.
 
The same thing can be said about the view, made popular by poor scholarship produced by Marxist historians a few decades ago, that the West became rich thanks to colonization. Of course, it’s the other way around: the West colonized the rest of the world because it was economically superior to it. Otherwise it would have been impossible for relatively small countries such as France and the UK to control more than 30% of the world land area containing a lot more people. Indeed, if you read Angus Maddison’s excellent book on the economic history of the world, you will see that the evidence confirms that.
 
Another claim that Baptist makes is that the amazing increase in productivity of slave-grown cotton in the antebellum South was the result of increased torture of slaves. Olmstead and Rhode show conclusively that, not only is this not supported by the evidence (see also this), but the evidence clearly indicates that the productivity gains were largely the result of biological innovations, i. e. the creation of new varieties of cotton that were easier to pick. The CHE article is particularly misleading on that, since when you read it, Baptist’s reply doesn’t seem unreasonable. But again Olmstead and Rhode make it very clear that Baptist’s claim is directly contradicted by the available quantitative evidence. (Indeed, as Bradley Hansen points out in the blog post I mention above in this paragraph, he doesn’t even try to give the kind of evidence he would have to give to support his claim.)
 
I had a brief email exchange with a participant of the debate mentioned in the CHE article, whose identity I do not reveal because I don’t know if he’d be okay with me publishing what he told me, in which at some point I said this:

« I read both Hilt’s paper and Olmstead and Rhode’s one and I find the extent of Baptist’s mistakes really shocking. The piece in the CHE makes it look like there is room for rational disagreement about Olmstead and Rhode’s main criticism, which upon reading their paper I think is not at all the case. They also document several misrepresentations of the evidence in Baptist’s book which, frankly, come awfully close to academic misconduct in my opinion. Unlike the double counting in which he engages when he estimates the share of the GDP that was directly or indirectly related to slave-grown cotton, which can be ascribed to mere economic ignorance, it’s hard to imagine a “benign” interpretation of some of the things Olmstead and Rhode discuss in their paper. »

 
Here is what he replied to me: « At the dinner after the debate, Olmstead challenged the historians to defend Baptist and none of them was willing to do so. Even they suggested he came close to committing academic malpractice. So the response of the economists was “we don’t hesitate to criticize our own, why can’t you guys do it too?” »
 
This begs the question: given that Baptist’s claim, and similar claims made by other historians, is so clearly not supported by the evidence, how come they have been so well received by many other historians and in the media? The answer is pretty obvious: both history departments and the media are dominated by liberals and that the wealth of the US is the product of slavery is exactly what American liberals want to hear, so they will accept that kind of claims uncritically no matter how implausible they are. What makes that even more absurd is that, as Olmstead and Rhode note, the fact that slavery wasn’t necessary for the industrial revolution to happen only makes it worse: had it really been essential to the development of capitalism in the West, one could at least have said that something good came out of slavery, because the development of capitalism in the West was undoubtedly one of the best things that ever happened. (Of course, that’s another thing liberals are prone to deny, but that’s because they don’t read enough economic history. See also my post on Oxfam’s misleading report on this.)
 

8 thoughts

  1. Thanks for the extremely interesting and well-written post. More like this!

    If you’re interested, there are a few links contesting the idea that slavery was necessary for the Industrial Revolution that I can dig up. Historical economic evidence seems firmly on this (your) side.

    1. You’re welcome and I plan to write a lot more of that kind of analysis. I would definitely be interested in reading anything you can tell me about on that issue. You should post the links in a comment here, so that everyone can see them.

      1. I apologize for the delay in replying — first, I forgot; later, I remembered… and forgot the blog name. Chrome treacherously denied that I had ever visited a site with “some kind of Latin phrase I think” in the URL, so I had to look around the SSC comments a bit.

        Here’s the main essay I was thinking of: https://pseudoerasmus.com/2014/11/10/slavery_and_industrialism/

        You may already be familiar with the blog, but I thought this post might be worth linking. PseudoErasmus has written more on the topic (linked at the end here), and there’s another essay I remember but haven’t recovered yet. Hope it’s interesting and/or useful!

        https://pseudoerasmus.com/2015/04/26/mccloskey-cotton-ir/

      2. Oh, I just saw that you actually linked PsEr yourself– d’oh. That will teach me not to follow all the links…

        Something else that sort of bears on this is Scott Alexander’s post on the “compound interest” argument; those arguing that slavery has caused great wealth for whites and none for former slaves are vastly over-estimating the heritability of past good fortune, and under-estimating the heritability of… “money sense”, I suppose.

  2. This postmodernist reimagining of history and economics serves the Neo-Marxist academic in two distinct ways. For one, it furthers the labor theory of value in claiming that slaves were not only exploited through the institution of slavery itself–that is in being commodified and legally treated as property–but that their value was much more than that which bourgeoisie economics can quantify.

    This Marxist criticism of capitalism is distinct from the more recent phenomenon of white guilt, whereby leftist social justice warriors virtue-signal their empathy and compassion for African Americans through symbolic apologies and “recognitions” of past injustices. White guilt is not primarily tied to anti-capitalism but rather the notion of collective guilt in an intersectional context.

    Aside from this important distinction which needed clarification, I found this post to be succint and well sourced.

  3. Interesting post, and I will read the links. The certainty that the British economy was utterly dependent on American cotton was strongly held by Confederate leaders and was a key assumption in how the South was going to force Britain to enter the conflict on its side and establish its independence. The importance of slave cotton was tested in 1860, and failed. British manufactures foresaw potential supply issues and began preparing alternatives in 1858, and with the aid of a record crop yield just before the Civil War, was able to transition to cotton from India, Egypt and Brazil. The power of King Cotton was illusory and independence (which probably meant the South would become some sort of pseudo-colony of the UK anyway) slipped away.

    1. Thanks, I’m glad you liked it. France was actually open to supporting the Confederacy, though not just or perhaps mainly because of cotton, but rather because Napoleon III was trying to create a catholic empire under French influence in Mexico and he knew the US would never go for it. However, he wasn’t willing to recognize the Confederacy unless the British also did and, after some hesitation, they decided against it.

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