Capitalism And Slavery

 

DON BOUDREAUX
DECEMBER 15, 2016
FREE MARKETS & CAPITALISM

Wrongheaded notions about the economy are always in high supply. Most calamitous was the idea that central planning outperforms the market. The pulverizing poverty and tyranny of the former Soviet Union, North Korea, and similar Workers’ Paradises have ended that particular illusion.

Other less disastrous but equally mistaken notions about the economy remain on the loose — for example, that tariffs promote prosperity.

But the most far-fetched myth that I’ve encountered recently is that the wealth of the modern Western world, especially that of the United States, is the product of slavery.

I first encountered this notion during a talk I gave in Toronto. I explained to the college-age audience how extraordinarily wealthy all of us are today compared to our preindustrial ancestors. I wanted them to understand the great benefits of capitalism. During the Q-&-A session, a young woman informed me that the wealth we enjoy today is the product of slavery.

At first I thought she was speaking figuratively, as in “workers under capitalism really are slaves.” Having heard such an argument before, I was half-expecting it. But no. What she meant is that the modern world’s prosperity is the product of the pre-20th-century enslavement of Africans in the Americas.

“But slavery ended in the United States in 1863!” I responded. “Look at all the wealth produced since then — telephones, automobiles, antibiotics, computers. None was built with slave labor.”

She anticipated my response. “Not directly. But the capital that made these innovations possible was extracted from slave labor. The wealth accumulated by slaveholders is what financed the industrialization that makes today’s wealth possible.”

I looked at her in raw disbelief. (Not a good strategy, by the way, for a public speaker.)

Collecting my thoughts, I pointed out that slavery had been an ever-present institution throughout human history until just about 200 years ago. Why didn’t slaveholders of 2,000 years ago in Europe or 500 years ago in Asia accumulate wealth that triggered economic growth comparable to ours? Why is Latin America so much poorer today than the United States, given that the Spaniards and Portuguese who settled that part of the world were enthusiastic slavers? Indeed, the last country in the Americas to abolish slavery was Brazil — in 1888, a quarter-century after U.S. abolition. By American and western European standards, Brazil remains impoverished.

And why, having abolished slavery decades before their Southern neighbors, were Northern U.S. states wealthier than Southern states before the Civil War?

I don’t recall my young challenger’s response. I recall only that I was as little convinced by it as she was by my answers.

The fact is that slavery disappeared only as industrial capitalism emerged. And it disappeared first where industrial capitalism appeared first: Great Britain. This was no coincidence. Slavery was destroyed by capitalism.

To begin with, the ethical and political principles that support capitalism are inconsistent with slavery. As we Americans discovered, a belief in the universal dignity of human beings, their equality before the law, and their right to govern their own lives cannot long coexist with an institution that condemns some people to bondage merely because of their identity.

But even on purely economic grounds, capitalism rejects slavery because slaves are productive only when doing very simple tasks that can easily be monitored. It’s easy to tell if a slave is moving too slowly when picking cotton. And it’s easy to speed him up. Also, there’s very little damage he can do if he chooses to sabotage the cotton-picking operation.

Compare a cotton field with a modern factory — say, the shipyard that my father worked in as a welder until he retired. My dad spent much of his time welding alone inside of narrow pipes. If you owned the shipyard, would you trust a slave to do such welding• While not physically impossible to monitor and check his work, the cost to the shipyard owner of hiring trustworthy slave-masters to shadow each slave each moment of the day would be prohibitively costly. Much better to have contented employees who want their jobs — who are paid to work and who want to work — than to operate your expensive, complicated, easily sabotaged factory with slaves.

Finally, the enormous investment unleashed by capitalism dramatically increases the demand for workers. (All those factories and supermarkets must be manned.) Even if each individual factory owner wants to enslave his workers, he doesn’t want workers elsewhere to be enslaved, for that makes it more difficult for him to expand his operations. As a group, then, capitalists have little use for slavery.

History supports this truth: Capitalism exterminated slavery. 

Two Ways At Looking At The Same Thing - Slavery In America

 I remember when I was younger, my mom used to always tell me that there are three sides to every story: his, hers, and the truth. Throughout the years what she said has been shown to be true over and over again. There is no greater example of this than the history of slavery in the United States.

Nobody doubts that the United States, for a good portion of its history, participated in one of the worse acts in human history, slavery. This is the 'true' part of the story. This is the part that has the facts behind both his side of the story and her side of the story. However, how it gets interpreted, and what it says about the United States are two very different, I would even say, opposite conclusions.

You have 'her side' of the story, the one we're all familiar with, that says that this fact demonstrates that the United States is inherently racist. It claims that because of this part existed in the history of the United States, the members who trace their roots to those generations should be ashamed, some even go as far as saying that they should pay 'reparations' for what they have done. This past is forever engrained in her image, and determines how she looks at all aspects of the United States history and future.

Than you have 'his side' of the story that says that a part of the history that has been left out shows a greater picture. Yes, the United States participated in slavery, but the portion that is often left out is that so did practically every other race, religion and continent. Slavery has been a part of human history for as long as history has been recorded. And every group has participated in one way or the other. Christians, Atheists and Muslims all had a big hand in it, so did the vast majority of cultures. Bernard Lewis, emeritus professor at Princeton University, writes "The institution of slavery had indeed been practiced from time immemorial. It existed in all the ancient civilizations of Asia, Africa, Europe, and pre-Columbian America. It had been accepted and even endorsed by Judaism, Christianity, and Islam, as well as other religions of the world." In fact, the name slavery comes from the word Slavic, because of the frequent enslavement of Slavs in central Europe.

So it is not slavery that makes the United States unique, since it was actually practiced by every race and color and for every reason imagineable. In fact, a good portion of African slaves were sold to Europeans by Africans themselves. So undoubtedly, all people making the charge that the United States is racist have somewhere in their history, some roots in slavery, both being enslaved, and being the slave owners. So what is it that makes America unique, if it's not in having slaves? Thomas Sowell hints at it when he writes,

...nowhere in the world was slavery a controversial issue prior to the 18th century.

People of every race and color were enslaved -- and enslaved others. White people were still being bought and sold as slaves in the Ottoman Empire, decades after American blacks were freed.

Everyone hated the idea of being a slave but few had any qualms about enslaving others. Slavery was just not an issue, not even among intellectuals, much less among political leaders, until the 18th century -- and then only in Western civilization.

Among those who turned against slavery in the 18th century were George Washington, Thomas Jefferson, Patrick Henry and other American leaders. You could research all of 18th century Africa or Asia or the Middle East without finding any comparable rejection of slavery there.

Deciding that slavery was wrong was much easier than deciding what to do with millions of people from another continent, of another race, and without any historical preparation for living as free citizens in a society like that of the United States, where they were 20 percent of the total population.

It is clear from the private correspondence of Washington, Jefferson, and many others that their moral rejection of slavery was unambiguous, but the practical question of what to do now had them baffled. That would remain so for more than half a century.

In 1862, a ship carrying slaves from Africa to America, in violation of a ban on the international slave trade, was captured. The crew were imprisoned and the captain was hanged in the United States -- despite the fact that slavery itself was still legal in both Africa and the U.S. at the time.

What does this tell us? That enslaving people was considered an abomination but what to do with millions of people who were already enslaved was not equally clear.

That question was finally answered by a war in which one life was lost for every six people freed. Maybe that was the only answer. But don't pretend today that it was an easy answer -- or that those who grappled with the dilemma in the 18th century were some special villains, when most leaders and most people around the world at that time saw nothing wrong with slavery.

So the United States isn't unique in having slaves, the United States is unique in fighting against slavery. Yet little of this is mentioned in 'her side' of the story.

Furthermore, if you factor this into the fact that the United States is the most pro-immigration country in the world, you arrive at opposite conclusions than those arrived at by 'her side' of the story.

So the United States, when looking at the big picture, is not the 'racist' country it is made out to be, but the exact opposite. Compared to other countries in the world, it is one of the most open, unracist countries in the world. And its about time 'his side' of the story gets told more. (Originally published: 10/17/2004)

Is Racism Still Important?

A continued theme on Matthew Yglesias blog is that conservatives in general are more concerned with anti-racism than racism, this is how he explains it:

"...most conservatives, think that the preeminent racial problem in the United States is that white people are too put upon by political correctness. Conservatives are very very very concerned about this alleged problem of anti-racism run amok. And they’re very concerned about the alleged problem of reverse discrimination. But they don’t seem concerned at all about racism or discrimination and certainly not nearly as concerned as they about helping out the poor, put-upon white man.

This is actually true and though Yglesias views it as a flaw, I see it as a virtue. In fact, its one of the reasons why I find the conservative side more appealing than the progressive side. Just to be clear though, Yglesias is not saying that conservatives view racism as historically unimportant, or that racism is completely unimportant, cuz then I would agree with Yglesias that that is a flaw; no, Yglesias is chiding conservatives for not seeing todays racism as a bigger problem than todays "anti-racism".

Of course racism is important, very important,  to those who are suffering under racism. If I was denied a job solely because of my race, I would be really pissed off and want some justice. However, as a policy issue I think racism is very low on the totem poll of problems (though not zero).

I like the way economist Walter Williams explained it:

Like the March of Dimes' victory against polio in the U.S., civil rights organizations can claim victory as well. At one time, black Americans did not enjoy the same constitutional guarantees as other Americans. Now we do. Because the civil rights struggle is over and won doesn't mean that all problems have vanished within the black community. A 70 percent illegitimacy rate, 65 percent of black children raised in female-headed households, high crime rates and fraudulent education are devastating problems, but they're not civil rights problems. Furthermore, their solutions do not lie in civil rights strategies.

Civil rights organizations' expenditure of resources and continued focus on racial discrimination is just as intelligent as it would be for the March of Dimes to continue to expend resources fighting polio in the U.S. Like the March of Dimes, civil rights organizations should revise their agenda and take on the big, non-civil rights problems that make socioeconomic progress impossible for a large segment of the black community.

In other words, racism as a source of minority failure is not all that important anymore.  Most real impediments to minority success - issues like illegitimacy rates, crime, failing public schools - are only loosely, very loosely I would argue, tied to race. But because race is such a hot button issue, these issues are difficult to talk about openly - ultimately harming the search for the cure. Bring up your concerns with crime in the ghetto, illegitimacy rates, the widening educational gap, or affirmative action and unless you walk a very tight line, you can be easily accused of racism. This censorship, namely, this "anti-racism", hampers progress on such important issues (even some progressives agree, see here).

This is much more a problem on the left than it is on the right. The left tends to see the world through the prism of "racism" (and"class warfare"), making honest dialog on race issues extremely difficult - trust me, I've tried. The right, on the other hand, has a more balanced view on these issues and because of it you are able to go further in finding a cure.

Not only does overemphasis on racism result in unintended censorship on important topics,  but it also leads to a blinding force when searching for solutions. When dealing with the issues of illegitimacy rates, crime and failing public schools, for example,  the progressive tries hard to find its racist connection - however strained that connection may be. This is a serious stumbling block and is one of the main reasons why real educational reforms, whether it's charter schools, vouchers, or even NCLB have all come from the right.

So I would argue that as far as real effective policy goes, emphasis on racism has now ran into significant diminishing returns, whereas the overemphasis on racism is a real roadblock to discussing important minority problems.

And it seems like Matthew Yglesias, ultimately, is not too far off. For example, in a separate post, he lists what he considers the real problems of racism today:

At any rate, I’ve made this point a million times, but it’s fascinating to me the kind of double standard conservatives apply to these issues. You never hear Rush Limbaugh decrying everyday racism against non-whites in the United States. You never hear him recounting an anecdote about an African-American man having trouble hailing a cab or being followed by a shopkeeper. He doesn’t do stories about how people with stereotypically “black” names suffer job discrimination. He doesn’t bemoan the fact that the United States has an aircraft carrier named after a fanatical segregationist.

What is interesting about this list is what type of "racism" it is: specifically, statistical racism (more here and here), or what economists call statistical discrimination. This type of "racism" is very different than the invidious racism that comes to mind when we think of racism: issues like being forced to sit in the back of the bus, forced segregation, laws against interracial marriages, poll taxes and so forth. Statistical discrimination, while still offensive, is based on statistics, not bigotry.

That is not to say that it is any less offensive to the person being statistically discriminated against but it makes a huge difference when looked at from a policy perspective. Take the claim "about an African-American man having trouble hailing a cab", as an example. The reason that Blacks have trouble hailing a cab, specifically in New York City, is because Blacks have a higher crime rate than many other groups. A cab driver, being in an especially vulnerable position, has a strong incentive to ensure his safety but at the same time he also wants to make the most money he can. So every approaching customer gets put through some sort of subconscious statistical analysis: is this person more likely to rob me? Given that the cab driver has a limited amount of information to go on, race plays an important factor. This is not unique to white cab drivers either, cab drivers of every race, including Black cab drivers, show the same tendency of picking up Black passengers less than non-Black ones. While this may be offensive, from a policy perspective there is no practical way to prevent it - as long as the cab driver has an incentive to reduce the likelihood of robbery, and as long as being Black signals a higher probability for robbery, there is always going to be the desire to resist providing a cab when the cab driver deduces the risk is too high. The same general principle applies about stereotypically “black” names, see here.

The real gains in reducing statistical discrimination come not from government fiat but from the inside, as economist Bryan Caplan states,"If you really want to improve your group's image, telling other groups to stop stereotyping won't work. The stereotype is based on the underlying distribution of fact. It is far more realistic to turn your complaining inward, and pressure the bad apples in your group to stop pulling down the average." Which is, btw, more likely when you don't see racism behind every corner.


Besides, hasn't Yglesias noticed that we have a Black President? How much of an impediment can racism really be in a country that elected its first Black president? John McWhorter has more here. (Originally published 10/30/2009)