Liberty Matters

Slavery and Capitalism in Leggett’s Day and Our Own

Leggett's emphasis on competitive banking is important, and others have summarized the historical trajectory far better than I could. I also tend to agree with Anthony that Leggett's larger intellectual legacy would only be rediscovered late in the 19th century. I am curious, though, if Benjamin Tucker and others were directly inspired by his writings or if their journey towards "libertarianism" came from a different source?
I'll take back up the slavery thread that Phil returned to. He rightly points out an anti-laissez-faire, proslavery thread, one embodied by George Fitzhugh. I would quibble, though, with the notion that Fitzhugh's "vicious and narrative-confounding attacks on the doctrine of laissez-faire capitalism find no home in the intellectual history of the same purported link." Eugene Genovese and Elizabeth Fox-Genovese—who defined the intellectual history of the South for nearly 40 years, first as Marxists and then as Catholic converts—painted Fitzhugh as the quintessential proslavery thinker, emblematic of a paternalism variously defined as precapitalist, anticapitalist, or the "bastard child" of capitalism.[48] A middling and mostly unsuccessful Virginia planter, Fitzhugh projected his personal losses on the system, claiming that slavery's inefficiencies came because of slaveowners' supposed benevolence to their slave "family." He saw free trade as the enemy and offered up sociology as a discipline capable of saving slaveholders and the plantation South from the corrosive effects of modern capitalism. As a fill-in for proslavery thinkers, he served both Marxist accounts and some classical economic views that similarly stressed slavery's economic backwardness.
That this thread of anticapitalist, proslavery thinking has been downplayed recently is revelatory of a couple of different trends. One is clearly a desire by some historians, especially after last decade's financial crisis, to hitch everything bad, including slavery, to capitalism. But there are also some other interpretive developments worth considering. For one thing, we better appreciate that not all slaves were on plantations, and that life on them was far more brutal than benevolent. We appreciate that modern or "second slavery" was adaptable to nonagrarian activity, with slaves—sometimes hired out, the masters getting the bulk of the profits, to work in factories, building railroads, etc.  As such, proslavery thinkers like industrialist J.D.B De Bow, who edited an influential southern periodical based in New Orleans and stressed slavery's compatibility with capitalism, have garnered greater attention.[49]
But perhaps more importantly, slavery's practice and meaning were laid bare at the slave auction house where at least hundreds of thousands of men, women, and children were "capitalized"—bought and sold. The ledgers of those slave traders look remarkably similar to the account books of other merchants and shopkeepers, albeit with people rather than goods as the chief commodity. This was a marketplace of bondage that slaveholding intellects, including Jefferson, felt uncomfortable writing much about and seldom publicly defended.[50] Yet it was a key feature of southern economic life, one in which market prices determined labor's commodification. When coupled with the statistical data that slaveholders and their allies mounted to highlight slavery's central place within the world economy, this looked rather capitalistic, though as Phil notes, economists and a few historians have challenged the capitalism-as-slavery school's selective and incomplete use of data.[51] To this critique James L. Huston has also recently suggested that the "new history of capitalism" rests on some problematic and undertheorized definitions, ones highlighting a splintering of Marxist theory more generally.[52] Of course the same might be said of liberalism, the definition of which proved as malleable in the 19th century as it is today.
Phil's broader point that proslavery thought in and after Leggett took multiple forms is an important one. Thinkers drew from religion, history, pseudoscience, and Fitzhugh's "sociology" to justify slavery's existence. I think there is also something to Anthony's claim that the South was abandoning its Jeffersonian legacy of natural law. Yet some southern theorists sought a workaround by redefining nature in the starkest of racist terms. Anticipating Social Darwinism, they claimed that nonwhite peoples were naturally suited to slavery.  For our purposes the key question remains the extent to which slavery can be seen as compatible with capitalism then and now. Scholars have offered many options. Jeffrey Young, for example, suggests that slaveholding was a form of "corporate individualism," which I think probably accurately expresses how many slaveholders perceived themselves as economic actors: "managing" property-owning men engaged in an otherwise free marketplace.[53] My own view is that slavery represents a malignant but real form of capitalism and that fortunately there were better, more moral versions that expanded freedom and opportunity.  Ultimately slavery, as Phil rightly notes, required remarkable statism, with governments mobilized to keep aspiring free-men and -women in bondage. Here is where a "Leggettian," or "libertarian," critique is especially useful.
Yet on the reverse side of that coin is the problem of ending entrenched slavery, and here I am not sure how far "libertarianism" gets us. Very few slaveholders followed John Randolph's and George Washington's lead and voluntarily freed their slaves. An older generation of scholars thought that slavery might die a natural laissez-faire death, but most economists and historians (even those using the best data) no longer see that as likely. The question then is who or what would have stopped the slaveholders' violation of the slaves' natural rights and thwart the holders' general legal dominance. Slaves of course often and valiantly resisted, yet except for the case of Haiti, they usually failed to overturn the system on their own. The answer, in almost every instance, has been from the top and often with a strong imperial or national state. In Britain the Parliament decreed it, with government agents enforcing it. In Russia the Czar did. In the United States an executive decree made during a time of war brought it about. Is there a "libertarian" solution to the problem of entrenched slavery that could have achieved that end without the loss of 700,000 men while still liberating four million persons of African descent and offering them actual protection? I am not certain there was, but could be convinced otherwise. 
[48.] Eugene Genovese, The Political Economy of Slavery: Studies in the Economy and Society of the Slave South, 2d ed. (New York: Pantheon Books, 1965); The World the Slaveholders Made: Two Essays in Interpretation, (New York: Vintage, 1971) (Fitzhugh was mentioned over 100 times); The Slaveholders' Dilemma: Freedom and Progress in Southern Conservative Thought, 1820-1860 (Columbia, SC: University of South Carolina Press, 1994);  and with Elizabeth Fox-Genovese, The Mind of the Master Class: Slavery and Faith in the Southern Slaveholder's Worldview (New York: Cambridge University Press, 2005).
[49.] John F. Kvach, De Bow's Review: The Antebellum Vision of a New South( Lexington, KY: University Press of Kentucky, 2013).
[50.] Walter Johnson, Soul by Soul: Life Inside the Antebellum Slave Market (Cambridge, MA: Harvard University Press, 2000); Steven Deyle, Carry Me Back: The Domestic Slave Trade in American Life (New York: Oxford University Press, 2005).
[51.] Add to that list historian Robert E. Wright's, The Poverty of Slavery: How Unfree Labor Pollutes the Economy (New York: Palgrave Macmillan, 2017).
[52.] James Huston, "Slavery, Capitalism, and the Interpretations of the Antebellum United States: The Problem of Definition," Civil War History (June 2019): 119-156.
[53.] Jeffrey Young, Domesticating Slavery: The Master Class in Georgia and South Carolina, 1670-1837 (Chapel Hill, NC: University of North Carolina Press, 1999).