Liberty Matters

Why We Don’t Need a “New” History of Capitalism (October 2023)

Was a single industry – cotton – the primary driver of American economic development in the 19th century, and thus the basis of wealth today? This is the claim behind what have become known as the "New Histories of Capitalism." While the New York Times version is the most visible today, it has a long lineage. What's brought these economically suspect arguments back to the forefront of public discourse?
Phil Magness leads this Liberty Matters discussion in a quest to answer these questions.
On the eve of the American Civil War, Senator James Henry Hammond used the occasion of a debate about the admission of Kansas as a slave state to advance a peculiar thesis. Cotton, he maintained, was the economic engine of the world:
“What would happen if no cotton was furnished for three years? I will not stop to depict what every one can imagine, but this is certain: England would topple headlong and carry the whole civilized world with her, save the South. No, you dare not make war on cotton. No power on earth dares to make war upon it. Cotton is king.”
The economic monarchy that he envisioned would undergo an experimental test some three years later as the Confederate States of America attempted to structure a new nation around “King Cotton” theory. The nascent breakaway government expected – as Hammond promised – that “we could bring the whole world to our feet” if the cash crop’s trade was interrupted. Cotton could serve as a lure to the European powers for military aid, or as a stick that decimated the textile factories of New England. And if the north blockaded the southern Confederacy, it would seed its own economic demise by cutting off this essential crop.
As a national economic policy, Hammond’s thesis proved a disastrous miscalculation. Its theoretical underpinnings reveal why, as it was less a product of economic analysis than a radical pro-slavery ideological statement. As Hammond argued, “in all social systems there must be a class to do the menial duties…a class you must have, or you would not have that other class which leads progress, civilization, and refinement.” This servile class of slaves, he continued, “constitutes the very mud-sill of society” upon which all wealth and prosperity could be constructed. America’s position, he maintained, came from that mud-sill of southern slavery. Hinting at secession, he concluded that “[we] took our country in her infancy, and, after ruling her for sixty out of the seventy years of her existence, we shall surrender her to you without a stain upon her honor, boundless in prosperity, incalculable in her strength, the wonder and the admiration of the world.”
Economists have engaged with King Cotton theory since the Civil War era. Writing in 1862, John Elliott Cairnes dismissed the Confederacy’s prospect of securing economic gains through British intervention in the war. “A fleet may raise a blockade,” he wrote, “but it cannot compel a people to buy goods who do not want them.” The war itself, and its effect on England's trade with the northern markets, far surpassed the economic effects of a single commodity such as cotton. By 1865, it was apparent that King Cotton theory had failed. It failed in the Court of St. James, which rebuffed southern pleas for diplomatic recognition; in the shipping lanes of the Mississippi river and Gulf Coast, cut off from trade by blockade and self-embargo; and on the fields around Richmond to the superior industry that fueled the Union armies. Foreign manufacturers went elsewhere for their raw materials, and the war’s disruption proved but a small blip in the textile industry’s development.
The New King Cotton Theorists
Beginning in the early 2010s, a new historiographical movement burst onto the academic scene. Heralded in popular outlets such as the New York Times, this group of scholars dubbed their movement the “New History of Capitalism” (NHC) and presented it as a necessary corrective to the alleged neglect of economic forces in the historical literature. The economics of slavery became a primary object of the NHC’s attention, resulting in books such as Edward E. Baptist’s The Half Has Never Been Told, Sven Beckert’s Empire of Cotton, and NHC fellow traveler Walter Johnson’s River of Dark Dreams. Popularizations of this literature have since entered the classroom, as well as mainstream political discussion, due to its aggressive promotion by journalists in such ventures as the 1619 Project.
Briefly summarized, the NHC literature contends that American economic development and slavery are causally linked, with cotton production and its derivative textile industries being the primary engine of American capitalism between the founding and the Civil War. By implication, the United States’ economic position today is directly derivative of fortunes amassed by coerced labor in previous centuries. At this point NHC scholars shift into prescriptive arguments. If America’s economic position was unjustly acquired through a slavery-sustained “wave of expropriation of labor and land,” to quote Beckert, then capitalism’s origins are necessarily illiberal. It is but a short step from this alleged genealogy to political advocacy, usually consisting of prescriptive policies that redistribute wealth in the name of restorative “justice” for the crimes of slavery.
The assertion of an inseparable link between slavery and capitalism has since become a defining feature of the NHC literature. In maintaining this position, it breaks from previous historical works that treated slavery as a pre-capitalist institution that retained elements of agrarian feudalism and adapted them to the plantations of the new world. Indeed, most slaveowners saw themselves as a continuation of this older system while raging against the “capitalist” modernity of the industrial north. As the radical pro-slavery author George Fitzhugh wrote in 1857, “It is the interest of the capitalist and the skillful to allow free laborers the least possible portion of the fruits of their own labor; for all capital is created by labor, and the smaller the allowance of the free laborer, the greater the gains of his employer.” Slavery, by contrast, placed the laborer in the paternalistic care of the master, giving him food, shelter, and above all else order.
Fitzhugh’s depictions of slavery as a benevolent institution amounted to little more than propaganda, however his anti-capitalism was more than a superficial jab at the free-labor north. He proposed an elaborate theory of labor exploitation, as applied to the factory system, and spelled out a theory of “surplus value” almost a decade before Karl Marx made this doctrine famous in Das Kapital. It is all the more curious, then, that today’s NHC scholars share elements of Fitzhugh’s explicit anti-capitalism while assigning the “capitalist” label to him and the chattel slavery society he defended.
An argument by declamation sits at the core of the NHC literature’s terminology though. To quote NHC scholar Seth Rockman, “the new scholarship recognizes slavery as integral, rather than oppositional, to capitalism.” Curiously, Rockman advances this claim while simultaneously insisting that the NHC literature “has minimal investment in a fixed or theoretical definition of capitalism” and eliding any further attempts to pin down the concept. The resulting definitional imprecision permeates other NHC works, with “capitalism” basically used as a stand-in term for any and all economic activity, but particularly that which involves the many financial and political entanglements of slavery.
It is not difficult to see how the NHC school’s fluid usage of the term slips into a tautology of convenience. Beckert, for example, adopts the label of “war capitalism” as his moniker for a cotton-centric slave economy - one that not only “nourished the emerging secondary sectors of the economy such as insurance, finance, and shipping, sectors that would become exceedingly important to the emergence of the British cotton industry, but also public institutions such as government credit, money itself, and national defense.”
Per this usage, practically any economic activity, as well as a host of public sector activities and expenditures by the government, qualify as “capitalism.” All aspects of cotton and its derivative products – its cultivation, its shipping, its finance, its use of accounting books, and its receipt of preferential treatment by government policy – are thus rebranded as features of “capitalism.” Except for the label of “capitalism,” it is a practice with direct antecedents in the “King Cotton” literature of the 1850s. Indeed, Beckert’s main economic thesis was directly anticipated in an 1855 pro-slavery tract by journalist David Christy:
“Slavery is not an isolated system, but is so mingled with the business of the world, that it derives facilities from the most innocent transactions. Capital and labor, in Europe and America, are largely employed in the manufacture of cotton. These goods, to a great extent, may be seen freighting every vessel, from Christian nations, that traverses the seas of the globe; and filling the warehouses and shelves of the merchants over two-thirds of the world.”
The similarities between the substance of their economic analyses are striking. The NHC literature broadens its terminology though to deploy “capitalism” as a synonym for free market non-interventionism, which in turn is their primary grievance with the economic practices of the modern world – a world that they depict as being rife with economic inequality, insufficient regulation, market failures, and public sector budgetary austerity. The result is a definition that is simultaneously nothing and everything. Capitalism, in the NHC’s telling, can exist as unfettered laissez-faire and as heavily subsidized, regulated, and state-manipulated mercantilism, along with everything in between.
Unchained from needing to conceptualize capitalism, but certain of the economic vitality of the slave system, the NHC literature simply proceeds to link almost all economic activity to slavery by assertion. And in doing so, these scholars advance the thesis that a single industry – cotton – was the primary driver of American economic development in the 19th century, and thus the basis of wealth today. “The cotton plantation was America’s first big business,” to quote Matthew Desmond, who synthesized NHC arguments into the 1619 Project. Desmond attaches a string of anachronistic labels to the enterprise, calling plantations “too big to fail” and crediting them with spawning a uniquely American tolerance for speculative risk:
“That culture would drive cotton production up to the Civil War, and it has been a defining characteristic of American capitalism ever since. It is the culture of acquiring wealth without work, growing at all costs and abusing the powerless.”
Assertions such as these are more than a superficial feature of the broader NHC literature. Baptist presses the claim even further, with a particularly notorious passage from his book The Half Has Never Been Told attributing some 50% of antebellum Gross Domestic Product to cotton and its derivative economic activities. Baptist was rightly pilloried for this claim, which misunderstands how GDP is calculated and accordingly relies on double or triple-counting intermediate economic steps. In reality, cotton only comprised about 5 percent of American economic output prior to the Civil War. But most NHC commentators thus far have been unburdened by a need for empirical precision, and proceed as if their faulty calculations are true.
Baptist even goes so far as to credit slavery for initiating the “Great Enrichment” – the observed increase in economic well-being between the 18th century and the present day. As Baptist puts it, the surge in slave-based “production of high quality, cheap cotton [was] an absolutely necessary increase if the Western world was to burst out of the 10,000-year Malthusian cycle of agriculture.” In a follow-up essay, drafted in part as a response to his critics, Baptist doubled down on this argument, describing American slavery as the point of “initial acceleration out of the Malthusian world’s gravity well.” Beckert and Rockman endorse similar arguments in the same volume, highlighting the theory that cotton from North America fueled Europe’s economic ascendance by jump-starting industrialization in textiles.
This thesis is not novel to the NHC, even as Baptist makes exaggerated assertions that historians before his own cohort “spent relatively few pages on the connection between the South's cotton fields and the cotton textile industry.” It first appeared in the pro-slavery literature of the late antebellum. Extolling the economic outputs of the south, George Fitzhugh wrote that the “ratio of [economic] improvement has been approximated or exceeded wherever in the South slaves are numerous. We have enough for the present, and no Malthusian spectres frightening us for the future.” Juxtaposing the south to the recent famine of Ireland and similar humanitarian disasters in the 19th century, Fitzhugh offered slavery as a solution to the very same “spectres”:
“This association of labor and capital, by means of domestic slavery, would remove another evil that bewilders, staggers and confounds Malthusians, Economists and Socialists alike. This is the evil of excessive population, an evil sorely felt through half of Europe, and irremediable because confined to the most indigent who have no means of emigrating. If they were slaves, their masters would send them at once to countries where population was sparse and labor dear; and they would be sent off in families, not separated as free people generally are when they remove. Thus is slavery the simple and adequate remedy for the greatest evil with which mankind is afflicted at present or threatened for the future.”
As it turns out, there’s very little that’s “new” about the New History of Capitalism. Instead, this literature seems to have stumbled into old economic arguments from the late antebellum, unintentionally repeating them on near-identical terms and reaching near-identical conclusions. The key difference between the two is their respective normative assessments of slavery as an institution. The antebellum King Cotton theorists saw slavery as a positive good, and advanced their economic interpretations of the institution as a justification for its continuance and expansion. Today’s NHC scholars correctly judge slavery as an evil, then adopt and adapt the slaveowners’ economic theories to explain and condemn American economic development, the process of which they then relabel as “capitalism.”
Everything Old is New Again
In noting the striking similarities between King Cotton theory and the NHC, we should not lose sight of the underlying problems with each theory. For all of their respective bluster, both iterations have proven wholly unsuited to the task of explaining American economic development. As the case of Baptist’s creative GDP math illustrates, these theories are not simply inadequate – they are premised on unambiguous errors of fact and interpretation. Economic historians such as Alan Olmstead, Paul Rhode, and Gavin Wright have offered withering empirical dissections of the NHC literature, further illustrating the untenable nature of its main economic claims. For their own part though, most NHC scholars have responded to empirical criticisms of their claims by either ignoring them or waving them away without giving any attention to their substance.
There are other faults to the NHC literature that offer fruitful avenues of discussion and scrutiny, several of which I have summarized in my own work. Consistent with its dismissal of empirical criticism, the NHC literature remains largely detached from (and possibly ignorant of) the previous half-century of cliometric work on the economics of slavery. There’s also an underlying complication of intellectual history, hinted at in the NHC’s definitional games around “capitalism.” Contrary to the NHC’s efforts to wed the term “capitalism” to slavery, many of the leading 18th and 19th century theorists of what we now call capitalism – Adam Smith, Frederic Bastiat, Richard Cobden – were avowed antislavery men. Similarly, proslavery theorists such as Fitzhugh and Hammond would have recoiled at the suggestion that they were “capitalists.” Fitzhugh went so far as to argue that slavery was fundamentally incompatible with what we now call capitalist political economy:
“Political economy is the science of free society. Its theory and its history alike establish this position. Its fundamental maxim Laissez-faire and "Pas trop gouverner," are at war with all kinds of slavery, for they in fact assert that individuals and peoples prosper most when governed least.”
Where does this leave us then? With a “new” history of capitalism that lacks any real novelty, and with a historiographical school that is quickly trending toward an insular chamber of self-citation while ignoring any externally offered complications to their claims. Sadly, I will propose that most NHC scholars are content with this situation, provided that they are able to advance their positions through rhetorical appeals. At its root, the NHC has displayed a strong proclivity to the age-old anti-capitalist political tendencies of the disciplines that produced it, and that, rather than any penetrating scrutiny of the horrors of slavery, seems to be its most salient motivating factor.

Response Essay In Praise of Free Labor

Phil Magness has done extraordinary work in his close examination of the New Historians of Capitalism (NHC), and I fiercely applaud him for it. The NHC—notably the works of Edward Baptist, Walter Johnson, and Sven Beckert—has done much mischief in the history profession and outside of it, too, especially with its influence on the 1619 Project
At root, the NHC takes for its starting point not Plymouth Rock and Boston, but Jamestown and Charleston. Indeed, their southern-centric history historiographically dates back to at least the divide between David Ramsey (1787; the southern view of the Revolution) and Mercy Otis Warren (1805; the New England view of the revolution), and the sectional struggle to tell the story of America. 
What is left out in their history of American capitalism, of course, is not just Plymouth Rock and Boston, but St. Louis, Fort Pierre, Great Falls, Denver, Santa Fe, Chicago, Cleveland, Fort Wayne, Sacramento, and Portland. With the NHC, we readily lose sight of Chinese immigrants in San Francisco as well as Lakota warriors along the Bad River. Instead, we stand only in Atlanta and New Orleans, staring at dry bales of cotton.
There are, at the very least, three things deeply wrong with the NHC’s analysis and interpretation of American history.
First, there’s very little evidence to suggest that slavery was in any way, shape, or form, an efficient form of labor, relative to plantations or to the South as a whole. Southern theorist Hinton Rowan Helper, whatever his many faults, described the situation well:
In our opinion . . . the causes which have impeded the progress and prosperity of the South, which have dwindled our commerce, and other similar pursuits, into the most contemptible insignificance; sunk a large majority of our people in galling poverty and ignorance, rendered a small minority conceited and tyrannical, and driven the rest away from their homes; entailed upon us a humiliating dependence on the Free States; disgraced us in the recesses of our own souls, and brought us under reproach in the eyes of all civilized and enlightened nations--may all be traced to one common source, and there find solution in the most hateful and horrible word, that was ever incorporated into the vocabulary of human economy--Slavery!
By no means was it a foregone conclusion in the pre-Civil War and Civil War eras that slavery was an economic boon or even the prime mover of market capitalism. Textiles, to be sure—as noted by diverse scholars such as Niall Ferguson and Virginia Postrel—played a major role in market capitalism, but cotton could be had from Egypt as well as India, as Magness pointed out in his own critique of the NHC. South Carolina Senator James Hammond—in addition to being a reprehensible human being, as Maury Klein has so shockingly revealed—was simply wrong about “King Cotton.” The British easily moved away from slave-produced cotton at the onset of the American Civil War.
Additionally, the Northeast and the upper Midwest not only supplied the Republican (and Free Soiler) Lincoln with votes in 1860, but they also massively outpopulated the South in terms of babies, outdid them in literacy, and outproduced the South in every economic factor except for cotton. In manufacturing, Massachusetts alone produced more than the entire future Confederacy, and New York and Pennsylvania each outproduced the South two times over. In railroads, iron, firearms, textiles, coal, and banking capital, the competition wasn’t even close. Each category was dominated by the American North. Even in agriculture, the North outgrew the South in wheat at a ratio of 412 to 1.
Second, one should not readily dismiss—as the NHC seem to do—the free soil and free labor spirit of the American Northeast, Midwest, and West of the nineteenth century. For millions of Americans, capitalism meant the freedom of labor, not the enslavement of it. Given his rise to the presidency, no one better expressed or reveled in this than Abraham Lincoln, as demonstrated in the following quotes.
In 1854:
Our republican robe is soiled and trailed in the dust. Let us repurify it. Let us turn and wash it white, in the spirit if not the blood, of the Revolution. Let us turn slavery from its claims of ‘moral right,’ back upon its existing legal rights, and its arguments of ‘necessity.’ Let us return it to the position our fathers gave it; and there let it rest in peace. Let us re-adopt the Declaration of Independence, and with it, the practices, and policy, which harmonize with it. Let north and south—let all Americans—let all lovers of liberty everywhere—join in the great and good work. If we do this, we shall have saved the Union; but we shall have so saved it, as to make, and to keep it, forever worthy of the saving. We shall have so saved it, that the succeeding millions of free happy people, the world over, shall rise up, and call us blessed, to the latest generation.
In 1856:
We stand at once the wonder and admiration of the whole world, and we must enquire what it is that has given us so much prosperity, and we shall understand that to give up that one thing, would be to give up all future prosperity. This cause is that every man can make himself. It has been said that such a race of prosperity has been run nowhere else. We find a people on the North-east, who have a different government from ours, being ruled by a Queen. Turning to the South, we see a people who, while they boast of being free, keep their fellow beings in bondage. Compare our Free States with either, shall we say here that we have no interest in keeping that principle alive? Shall we say ‘Let it be.” No—we have an interest in the maintenance of the principles of the Government and without this interest, it is worth nothing. I have noticed in Southern newspapers, particularly the Richmond Enquirer, the Southern view of the Free States. They insist that slavery has a right to spread. They defend it upon principle. They insist that their slaves are far better off than Northern freemen. What a mistaken view do these men have of Northern laborers! They think that men are always to remain laborers here—but there is no such class. The man who labored for another last year, this year labors for himself, and next year he will hire others to labor for him.
In 1860:
I am glad to see that a system of labor prevails in New England under which laborers can strike when they want to, where they are not obliged to work under all circumstances, and are not tied down and obliged to work under all circumstances, and are not tied down and obliged to labor whether you pay them or not! I like the system which lets a man quit when he wants to, and wish it might prevail everywhere. One of the reasons why I am opposed to Slavery is just here. What is the true condition of the laborer? I take it that it is best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in a law to prevent a man from getting rich; it would do more harm than good. So while we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else. When one starts poor, as most do in the race of life, free society is such that he knows he can better this condition; he knows that there is no fixed condition of labor, for his whole life. I am not ashamed to confess that twenty-five years ago I was a hired laborer, mauling rails, at work on a flat-boat—just what might happen to any poor man’s son! I want every man to have the chance—and I believe a black man is entitled to it—in which he can better this condition—when he may look forward and hope to be a hired laborer this year and the next, work for himself afterward, and finally to hire men to work for him! That is the true system.
One must, Lincoln thought, interpret the constitution through the Declaration of Independence, the “apple of gold.” “The assertion of that principle, at that time, was the word, ‘fitly spoken’ which has proved an ‘apple of gold’ to us,” he claimed in early 1861. 
“The Union, and the Constitution, are the picture of silver, subsequently framed around it. The picture was made, not to conceal, or destroy the apple; but to adorn, and preserve it. The picture was made for the apple—not the apple for the picture.” Less than a year earlier, he had stated publicly, “Only one reason is possible, and that is supplied by us by one of the framers of the Constitution—and it is not possible for many to conceive of any other—they expected and desired that the system would come to an end, and meant that when it did, the Constitution should not show that there ever had been a slave in this good free country of ours!”
Equally important to the free labor assertion of the Declaration of Independence was Article VI of the Northwest Ordinance of 1787. “There shall be neither slavery nor involuntary servitude in the said territory, otherwise than in the punishment of crimes whereof the party shall have been duly convicted,” which later served as the basis of the thirteenth amendment to the U.S. Constitution. As Jon Lauck has so powerfully argued in The Good Country, the Northwest Ordinance fundamentally defined the free-labor spirit of the nineteenth-century American Midwest.
Further, as James McPherson has noted in his definitive history of the Civil War, Ordeal by Fire, one could not separate the Free Soil, Free Labor, and abolitionist movements from the greatest industrialists and manufacturers of the era, both in the United States and in Great Britain. “A similarity existed in the social origins of entrepreneurial and abolitionist leaders—both in Britain and in the United States . . . . the Lloyds, the Barclays, and the Wedgewoods, formed the vanguard of the industrial revolution and furnished many eighteenth-century British anti-slavery leaders.”
Third and finally, at the time that slavery existed in the nineteenth-century, prominent theorists and southern apologists such as George Fitzhugh identified slavery, properly, not with free-market capitalism, but with socialism. As he wrote in 1854’s Sociology for the South:
They will have attained association of labor, for slavery produces association of labor, and is one of the ends all Communists and Socialists desire. A well-conducted farm in the South is a model of associated labor that Fourier might envy. One old woman nurses all the children whilst the mothers are at work; another waits on the sick, in a house set aside for them. Another washes and cooks, and a fourth makes and mends the clothing. It is a great economy of labor, and is a good idea of the Socialists. Slavery protects the infants, the aged and the sick; nay, takes far better care of them than of the healthy, the middle-aged and the strong. They are part of the family, and self-interest and domestic affection combine to shelter, shield and foster them. A man loves not only his horses and his cattle, which are useful to him, but he loves his dog, which is of no use. He loves them because they are his. What a wise and beneficent provision of Heaven, that makes the selfishness of man's nature a protecting aegis to shield and defend wife and children, slaves and even dumb animals. The Socialists propose to reach this result too, but they never can if they refuse to march in the only road Providence has pointed out.”
And, again, Fitzhugh wrote: “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 of property, and to associate labor. All these purposes, slavery fully and perfectly attains.”
Not shockingly then, when the Confederate States of America formed in 1861, they adopted what Richard Franklin Bensel has labeled as statism and what John Majewski has called “Confederate War Socialism”—centralizing intense authority in the executive branch and through a massive bureaucracy, imposing wage and price controls, establishing duties on exports and imports (despite being unconstitutional), taxing everything in and out of sight, inflating the currency, impressing and conscripting soldiers and labor, nationalizing what little industry there was, creating a pass system, and enforcing loyalty oaths.
Again, let me praise Magness for his fundamental takedown of the NHC.
And, on a rather biased note, let me just state that it’s unbelievably perverse to identify free market capitalism—arguably the greatest achievement of liberalism—with slave labor as the New Historians of Capitalism have done. Slavery and freedom simply cannot co-exist harmoniously.

Response Essay Classical Liberalism and the Real Anti-Racists

The rise of global markets has resulted in one of the most stunning shifts in all of human history: the reduction of abject poverty to 8% across the globe. There are almost no words that can capture the significance of such a thing; it’s a bit like the discovery of fire. I often remind my students that this is not about the few people who own yachts. It’s about the billions of people whose children can go to school instead of work, or have access to the antibiotics that will allow them to survive past five years old. It’s about women being educated and delaying marriage and child-bearing past their young teen years. Those of us who spend our time in the liberty movement are well aware of these things and their deep connection to individual freedom. The human flourishing that we see around us arises from systems that respect the dignity of the individual, property rights, and freedom of contract, and set up enforcement mechanisms that reliably grant the equal protection of the rule of just laws.

How then, is the opposite notion so prevalent? We must ask ourselves why intellectual movements that associate economic growth with injustice and oppression have become not just prominent, but wildly popular. There is no shortage of diatribes against the left’s “long march through the institutions,” and I do not discount this explanation at all. However, I am sensitive to the critique that conservative movements are inherently reticent to address deep-seated injustice because of their fear of the disruption of stabilizing institutions. The conservative temperament is not naturally activist, either. If we are honest with ourselves, must we admit that we need a few leftist radicals around who will force us to address genuine cases of oppression? If so, this would certainly explain their persistent popularity in spite of the sorts of academic malfeasance that Phil Magness describes in his critique of writers like Ed Baptist, as well as the chaos and violence often associated with their movements. If the academic left has a monopoly on standing up for those who have been genuinely oppressed, their bad ideas about economics will never lose traction. Who else has defended the enslaved; those whose lands and homes have been confiscated by the state; those whom the police failed to protect from the terrorism of their neighbors (or against whom the police even joined in on the destruction); or who have been unjustly imprisoned in a system that barely cares about innocence or guilt?

One of the most profound discoveries that Marcus Witcher and I made in our research for Black Liberation Through the Marketplace is that the classical liberal movement has an amazing track record of active and effective defense of the rights of the oppressed while defending free markets. In fact, rather than thinking of these two causes as somehow being in tension with one another, the classical liberal tradition has always treated them as the very same thing. How else do governments oppress their citizens than by ignoring their property rights and contract rights, and utterly failing to protect them when their neighbors also ignore their rights? Furthermore, America’s heartbreaking history of racial slavery and Jim Crow served up plenty of virulent racists in both progressive and conservative circles. In contrast, and with very few exceptions, the classical liberal concern with individual freedom based on the concept of human dignity protected the tradition from the ideologically collectivist concept of racism. Nevertheless, the liberty movement today has not emphasized this legacy enough, leading to the natural association in the minds of many between the concept of political or economic liberation and the left’s deafening claims of righteousness and justice.

The anti-slavery commitment of the early classical liberals is undeniable. John Locke famously argued against it in his Second Treatise on Government, declaring slavery to be a “vile” institution that flies in the face of the natural freedom of every person. He expressed shock that great thinkers from a civilized nation like England could think to defend it. Adam Smith lamented the existence of slavery and the difficulty of abolishing it, but hoped that the rise of a more Enlightened Age would end it. More importantly for a figure often touted as the father of economics, Smith argued explicitly against any economic justification for slavery. Workers must be at “perfect liberty” to labor wherever and for whomever they please. To this day, the engraving on Smith’s tombstone in Edinburgh reads: “The property which every man has in his own labour, as it is the original foundation of all other property, so it is the most sacred and inviolable.” Our right to our own labor and to the fruits of our labor has the salutary effect of creating the most efficient economic system in the history of the world – one in which labor and goods flow to where they are most useful because people can decide based on their own local knowledge. To the extent that such rights are denied the efficiency of that system will be distorted, making the vast majority poorer, not richer.

This insight means that there’s a strange nonsense at the source of all the talk about “benefitting from past oppression.” Of course, there may have been direct economic benefits to the particular people doing the exploiting, but oppression and exploitation of others limits their free movement, their innovation, their incentives, and their growth in human capital. That means that everybody else in the economy misses out on most of what they had to contribute. Very few of us have benefitted from past oppression, because oppression isn’t particularly beneficial in general. This is all backed up by county-by-county data, showing that greater participation in slavery and the slave trade in the past still translates to economic stagnation today.

That Richard Cobden is not a household name in the liberty movement represents a major marketing failure on our part. Cobden’s commitment to peace and free trade super-charged the Anti-Corn Law League and resulted in the incredibly successful mid-19th century English experiment in free markets. Especially significant to America, Cobden and the Manchester School were the major influence on the abolitionism of William Lloyd Garrison, Henry Ward Beecher, Joshua Leavitt, and Ralph Waldo Emerson. Both of these groups sprang, after all, from a kind of principled Christian commitment to non-coercion.

Garrison’s greatest student, Frederick Douglass, toured Ireland with Cobden and his compatriot John Bright. He was called “Black O’Connell of the United States” because he joined Cobden and Bright in arguing that repeal of the Corn Laws would make food cheap and affordable to the desperately poor of Ireland. Frederick Douglass had a knack for explaining why socialism makes no sense. The socialist unions of his day were guilty more of “honest stupidity” rather than “villainy” since they foolishly believed that “every piece of bread that goes into the mouth of one man, is so much bread taken out of the mouth of another.” This zero sum approach to economics made them believe in a perpetual war between owners and workers and to miss the concept of mutually advantageous exchange. Douglass was also more nuanced than his former mentor, Garrison, arguing that the Constitution was a “great liberty document” in spite of its compromise with slavery, and that the real question was whether Americans would have honor enough and courage enough to make their practices accord with their Constitution. Of course, it goes without saying that Frederick Douglass was the greatest abolitionist in the history of the United States, not to mention his work on women’s rights as well.

Moorefield Storey and Oswald Garrison Villard were central players in the founding of the NAACP and both dedicated classical liberals. Rose Wilder Lane, Laura Ingalls Wilder’s daughter and one of the “mothers of libertarianism” argued in the pages of the Pittsburgh Courier for the civil and economic rights of Black Americans against the evils of lynching and zoning. Lane’s editor and fellow anti-communist George Schuyler not only fought for the members of his own race, but defended the Japanese against Roosevelt’s internment camps. The profound novelist and anthropologist Zora Neale Hurston was blackballed by Langston Hughes for her contrarian individualism and anti-New Deal positions. In South Africa, William Hutt, whom James Buchanan brought to West Virginia for a visiting professorship, laid out a detailed plan to end apartheid by recognizing that white unions were using race to limit the supply of labor.In recent years, libertarians have carried the torch by fighting the persecution of gays, arguing against the drug war and mass incarceration, policing the police, and loosening regulations on small business operations. Sadly, the 19th century notion that the liberation of the oppressed is inextricably tied to the fight for individual liberty has gotten lost as the political categorization of “left” and “right” has made the classical liberal philosophy increasingly mysterious to the majority of Americans. In our increasingly tribal and polarized age, there has never been a better time to blow up these useless categories and reclaim the classical liberal legacy of liberation for the common man. 

Response Essay Slavery, Capitalism, and the New Moralism

I’ve been aware of Phil Magness’ views on the New History of Capitalism for many years, even before 2018, when Magness wrote a chapter on the subject in a book he and I co-edited called What is Classical Liberal History?  Magness argued then, as he does now, that the New History of Capitalism is guided by strong ideological priors. Since 2018, the most consequential development in this field of study has been the appearance of the 1619 Project, which Magness has also rebutted at length. I see the New History of Capitalism, the 1619 project, and the increasing policing of historians’ language about slavery  (enslaved persons, not slaves, etc) as allies in a kind of new moralism that seeks to control the historiography of slavery and capitalism. In short, scholars who hold these views believe that they are making moral contributions by helping us see the history of slavery and capitalism in the right way. If the worst elements of the past can be shown to have been born out of capitalism, or gave rise to capitalism, or even were capitalism, then capitalism in the present day must be marred by its historical sins and alternatives must be considered. More than an ideological project, then, I believe this is a moralizing project, as the supporters attempt to label their opposition as more than factually wrong, but morally wrong for expressing opposing views.
Magness suggests that there isn’t much novelty in the arguments proffered by the New History of Capitalism. This may be true, but there is a sense in which their general attitude and focus is quite new to scholars under the age of sixty. If you would have told American historians twenty years ago that the next big trend in historiography was American capitalism, you would have been laughed out of the room. Economic history then had few practitioners in history departments. History departments were much more likely to offer courses on communism than capitalism. The popularity of the New History of Capitalism and of the 1619 Project would have seemed unlikely. Historians in decades to come will still be asking how and why these developments came about. The usual explanation of the 2008 economic crisis as the catalyst seems insufficient. There are deeper cultural and institutional reasons. 
In a way, I’m a pessimist about historiography in general. The best-written and best-argued histories seldom dominate historiographical currents. Rather, success in this regard is just as likely to be determined by the position and power of the writers and their ability to appeal to their audiences’ a prioris. Elite institutions, themselves some of the greatest beneficiaries of capitalism, play an outsized role in shaping academic currents. Magness considers Baptist, Beckert, Johnson, and Rockman as the core figures of the New History of Capitalism. These scholars all teach at elite universities, and in fact, they all taught at those universities before their leading works were published. No doubt the prestige of a Harvard, Brown, or Cornell helped these authors find a publisher and an audience and still gives them a perch to spread their ideas. They are well-funded to organize conferences on these topics and well-positioned to direct dissertations that will help spread these ideas. Their books win awards even while their research is challenged and subject to criticisms that would sink lower-placed academics. The opposition to the New History of Capitalism that one finds in academic journals comes from senior scholars, raised in the empirical traditions of the 1960s and 1970s. Younger scholars who oppose the new orthodoxy are ostracized. This is why, from a liberal perspective, Magness’s dissenting voice is so important. 
Magness addresses the best-known works in the New History of Capitalism, and he suggests that the Cotton Thesis is at the core of their thought. But the powerful anti-capitalist perspective in studying the history of American slavery extends well beyond studies of cotton. Even if historians sympathetic to the New History of Capitalism read Olmstead and Rhode and rejected the Cotton Thesis and the larger idea that slavery made the West rich, they would still be united in seeing greed and coercion as essential elements of capitalism responsible for the rise of American slavery. Dissenting historians cannot disabuse them of the idea that capitalism is intimately connected to slavery.
Nevertheless, there are some positive developments in this. The New History of Capitalism has encouraged an increased interest in the history of slavery, capitalism, and the two together, and this has yielded important studies. Generally, the narrower the study, and the less grand its aims, the better these works have been, so that dissertations about slavery in particular states or cities are still well-grounded, while larger nationally-focused works reach for the moral heights. 
For example, there is brewing a historiographical revolution in how we see slavery in the Northern states, with many good works published on the topic in the past few years. Relatively few of these are explicitly part of the New History of Capitalism, even if they generally agree with its aims and conclusions. In my own work on slavery in New York (The Slow Death of Slavery in Dutch New York [Cambridge University Press, 2024]), I argue against the staple interpretation by showing that slavery was viable and profitable to slaveholders even in wheat production, not just in the traditional staple slave crops of sugar, tobacco, and cotton. I argue, moreover, that slaveholding was always a moral, or rather, immoral choice, and not entirely determined by geography or demography. No one had to own slaves because their land was best for cotton cultivation, and no one had to own slaves because their colony had few available free laborers. They choose to own slaves instead of engaging wage labor. From the beginning, slavery in America was an attempt to avoid the costs, including the turnover costs, of wage labor. 
 I find the use of “capitalism” in these discussions to be so loaded with ideology and anachronism that it is no longer of much use, except maybe only as a description of the field itself. Scholars who claim to study slavery and capitalism are those who study forced labor, markets, and the economy. What defines capitalism? Is it markets, wage labor, property rights, lack of regulations, or something else? Markets must be a feature of capitalism, but markets alone do not make an economy capitalist. Good socialists are quick to remind us that markets exist in socialist economies as well. It is not true that because there were markets for slaves in America that American slavery was capitalist. There were markets for slaves in the ancient world, and I don’t think it’s fair to describe any ancient society as capitalist. Nor are owners of capital, i.e. capitalists, always the same as those who support free markets and wage labor.  Those who own slaves own capital, but I believe it does not follow that all slaveholders are capitalists. 
Slave labor in America was one kind of input in an economic system that could be broadly considered capitalistic, but how capitalistic it was depends on the standpoint of the observer. To a true anti-capitalist, everyone to the right of Stalin is a capitalist, and it is common among anarchist-minded libertarians to divide the world into the elect few freedom lovers and reprobate masses of statists. History, like ideology, is usually messier than this. In my research on slavery in New York, I discovered that slaves were often paid for work, either when they were rented out, or as motivation for working harder for their owners. Slave labor merged with wage labor and sometimes transformed into wage labor. In some cases, the incentives of wage labor were responsible for bringing about or speeding up the end of slave labor arrangements. 
 As noted above, antagonism towards markets, a hallmark of the New History of Capitalism, is often combined with a progressive language movement. It is not a coincidence that all these developments have arisen together. Just like it was a surprise to many to see historians studying capitalism, it would have been difficult to imagine a decade or so ago that a word like “slave,” which has been in the English language for at least a millennium, would suddenly become “problematic.”  Books written merely a decade ago, even by the most progressive scholars, could now be labeled insensitive if they were published today. Language changes, and offensive language does exist, but the speed with which the “language authorities” have selected the new appropriate language is more than a little contrived. One’s willingness to use the new, and ever-evolving language, is a signal of belonging to the new moral project. Those who disagree are, as one recent review suggested, acting in a “harmful and offensive” manner.  Likewise, by coining new terms to link capitalism and slavery, the New History of Capitalism is waging a rhetorical campaign. Beckert coined “war capitalism” and he and Seth Rockman have a book titled “slavery’s capitalism.” The term “racial capitalism” dates to the early 1980s, but is used more now than ever. These kinds of terms are far from neutral and they bring more confusion than clarity to the debates. 
Writers in the new moralist school of slavery and capitalism are constantly reminding their readers of the immorality of the pair. One of the traditional virtues of a historian is being dispassionate. However, history writing always requires empathy with the human condition and there are certain subjects like slavery that allow or even require historians to make a clear moral stance. But in many newer works on slavery, there is moral judgment on every page. Since no one reading these books thinks slavery was good, the constant moralism appears more as a signal of the author’s desire to be understood as a good person than as a necessary element of the presentation. 

Conversation Comments Disingenuous Anti-Capitalism and the New Histories of Capitalism

I extend my thanks to Michael Douma, Rachel Ferguson, and Bradley Birzer for their insightful commentaries on the New History of Capitalism (NHC). All hit on related themes that speak to the shortcomings of this academic literature. In an attempt to offer some structure for the evolving discussion, it may help to identify two specific lines of criticism of the NHC for further exploration.
The first issue is historiographical, and concerns the NHC’s position in the crowded field of academic work on slavery. As I noted in my original essay, the NHC literature has aggressively projected tenuous claims to what it depicts as “new” findings about slavery’s economic dimensions. Michael Douma’s essay extends these observations, calling attention to the tendency of NHC scholars to frame their exaggerated novelty in highly moralizing language about the claimed justice of their own work. I will add that these academics often direct their moral outrage against non-NHC assessments of slavery, even going so far as to imply that non-NHC scholarship is insufficiently opposed to the institution.
This is, of course, an absurd charge. Severe moral disapprobation of slavery is a near-universal feature of almost all modern scholarship of the subject, and rightly so given the dehumanizing barbarity of the institution. And yet the NHC has actively sought to position itself as having only recently broken the silence on this subject. The result is a game of nearly constant “social justice” one-upmanship, seen in the recently-trendy semantic games that Douma notes over the terminology of “slave” versus “enslaved person.” The forced and tedious phrasing of the latter term is a subordinate concern to its primary purpose, which is to signal that its user stakes a higher claim to expressing moral outrage over slavery than those who employ the more conventional term.
They do not, of course, and Rachel Ferguson reminds us that the moral condemnation of slavery has been at the heart of classical liberal philosophical reasoning for over two centuries. But the NHC school’s purpose here is not to interpret the past – it is to bludgeon it from a position of self-righteousness. The NHC-infused 1619 Project is highly symptomatic in this regard, frequently depicting its historical commentaries as a “suppressed” but “true” history of slavery in the United States while caricaturing its critics as defenders of an interpretation of slavery that is not only antiquated but morally blameworthy.
The result makes for historiographical disarray, often built on comically inept assessments of the prior literature by NHC scholars. Ed Baptist, for example, asserts that “most historians and economists have accepted” the comparative efficiency of free labor to slave labor as “a point of dogma,” suggesting that the pre-NHC literature depicted a late-antebellum plantation system in economic decline. Baptist’s purpose here is to position himself – in 2014 - as having finally challenged this viewpoint after centuries of uncritical repetition.
There’s a problem with Baptist’s historical rendering. In a classic study from 1958, economists Alfred Conrad and John Meyer empirically established the economic viability of plantation slavery on the eve of the Civil War. Although a debate continues over the crucial distinction between slavery’s profitability and its economic efficiency, the major point of Conrad and Meyer’s study has gained near-universal acceptance. This much was evident in a 1995 survey of economists by Robert Whaples, and is further attested in an update of the literature since then by Bradley A. Hansen. To find the position that Baptist assails requires ignoring over 60 years of empirical work from economic historians.
To make their position seem plausible, NHC scholars must turn not to economists but to the writings of historian Ulrich Bonnell Phillips (1877-1934), who portrayed antebellum slavery as an institution in natural and gradual decline. Although he was considered a leading historian of his generation as well as an apologist for the racial hierarchy of the old south, Phillips’s views were displaced long ago – including as a direct result of Conrad and Meyer’s empirical work in the 1950s and 60s.
This oversight places the NHC almost a century out of date. Instead of engaging with other recent non-NHC works, its practitioners concentrate their energies on litigating obsolete claims from the early 20th century Dunning School of historiography. It’s a convenient sleight of hand, as the Dunning School interpretation of slavery that the NHC installs as its foil has not had a champion of any note in many decades. The purpose here is not to counter an already-debunked interpretation though – it is to make Phillips and the Dunning School into a strawman for competing scholarship on slavery that falls outside of the NHC’s ideologically charged chamber.
The NHC cohort has not responded well to challenges that call attention to its own deficient literature reviews on the economics of slavery. Their default pattern is to offer a tendentious and self-serving assertion of a new academic consensus on slavery that conveniently confirms their own work.
A characteristic example may be seen in Seth Rockman’s defense of Matthew Desmond’s NHC-based 1619 Project essay. Although Rockman makes almost no attempt to engage non-NHC literature from economic historians in his own work, he charges his critics with being “disconnected from educational research literature, as well as recent scholarship on slavery and capitalism in American economic development.” By “literature,” he really means a circular self-citation “consensus” of other NHC scholars, all of whom axiomatically accept the union of capitalism and slavery.
Rockman’s attempts to specify examples of the alleged disconnect accordingly fall flat. In a revealing passage, he suggests that NHC opponents, and particularly those of us who criticized Matthew Desmond’s 1619 Project essay, have failed to engage with Caitlin Rosenthal’s book Accounting for Slavery. This is a peculiar charge, given that Rockman names me personally among those critics. One of my first published works on the 1619 Project documents how Desmond badly misrepresents a key interpretation from Rosenthal’s book.
Next he charges Desmond’s critics with failing to offer “sustained engagement with scholarship in African American history, beginning with Eric Williams’s famous Capitalism and Slavery (1944).” I’ve actually discussed the Williams thesis at length in this context. More importantly though, Rockman himself is guilty of precisely what he alleges of his critics. As H. Rueben Neptune exhaustively documented, the NHC literature does little more than name-drop Williams while sidestepping or even misstating the particulars of his arguments. Neptune even singles out Rockman’s own co-authored work with Sven Beckert, describing its engagement with Williams as “notably contradictory.” As he elaborates,
[Rockman and Beckert] admit that Williams’s “powerful” argument has been “often ignored,” then turn around and claim also that it has “often [been] universalized to assert that nothing new remains to be discovered about slavery’s centrality to American capitalism.” There is no citation for Americanist scholars who have done this universalizing.
Contrary to its self-depiction as a new consensus of leading scholarship, the NHC literature has now repeatedly demonstrated that it is out of touch with basic historiography on the subject it purports to study.
Sadly, these considerations appear to be subordinate to the second problem I have endeavored to convey about the NHC, its overt anti-capitalist ideological bias. It is difficult to avoid the conclusion that the NHC quest to link capitalism with slavery is an explicit political strategy for shaping economic policy in the present day.
Ferguson and Birzer call attention to particular complications with this narrative – the historical association between abolitionists and classical liberal theorists of what we now call capitalism, the capitalistic economic arguments for free labor that diagnosed and assailed slavery’s labor system in the nineteenth century, and the empirical observation that economic prosperity defies the notion of a zero-sum-game of Marxian struggle over material resources.
Here too, the NHC literature’s modern ideological commitments place them at direct odds with historical fact. A revealing example may be found in a recent claim by NHC-adjacent historian Manisha Sinha, who spells out the strange associational logic of their position in a 2020 essay:
If slavery is capitalism, as the currently fashionable historical interpretation has it, the movement to abolish it is, at the very least, its obverse. The history of capitalism illustrates that it has rarely marched in lockstep with democracy.
Note that Sinha’s historical reasoning works exactly backward. She starts by asserting a false modern consensus from the NHC about slavery and capitalism. From there, it follows that historical abolitionists are anti-capitalists with motivations that conveniently map onto modern NHC political beliefs. As Ferguson and Birzer have shown us, this conclusion requires directly contradicting abolitionist political affiliations in their own time (see e.g. Frederick Douglass’s relationship with Richard Cobden) and the explicitly free-market arguments they deployed against slave labor.
In a functional academic environment, these two points of evidence would be sufficient to condemn the NHC as little more than an incompetently executed political fad. But NHC adherents are unbothered by the explicit contradictions created by their inattention to historical detail and evidence. Instead, the signaled narrative in relation to the present day is all that seems to matter.

Conversation Comments Perspective and Finality

Before getting into this second post, I very much want to thank Liberty Fund for inviting me to participate, Phil for his excellent original contribution, and Michael and Rachel for their equally excellent responses. As I look back over all three responses, I realize that I was rather proudly being “very Hillsdale” in my own, especially with my emphasis on Abraham Lincoln as nineteenth-century exemplar.
In Michael’s response, I was very taken with the discussion of language as it has evolved—profoundly—over the past decade or so, with those in elite positions defining what terms can and cannot mean, what they should and should not mean. As Michael rightly notes, language naturally evolves, but it has evolved recently for mostly political reasons.
In Rachel’s response, I was quite taken with the discussion of the disadvantages—to individuals as well as to societies—of oppression. As she so eloquently puts it, “Very few of us have benefitted from past oppression, because oppression isn’t particularly beneficial in general.” To this, I would like to give a rousing “Amen.”
As I tried to mention in my original response, I believe that the New Historians of Capitalism and the consequent 1619 Project are deeply flawed. With Michael, I agree that they bring up some interesting ideas and questions, but they also distort much.
First, the history of America is not simply the story of whites and blacks. Or, perhaps more narrowly it is not merely the story of Protestant whites and oppressed peoples from Africa. This is a vital component of America’s history, to be sure, but if taken in exaggerated isolation, it ignores or slights so many other peoples, and especially Native Americans, Asians, and a whole mix of immigrants who have come to this country over the centuries.
Second, as my colleague and friend Miles Smith likes to remind me, the history of America is also a history of abolitionism and anti-slavery movements.
A year or so ago, I listed some of these at The Imaginative Conservative:
“Perhaps, rather than a 1619 Project, we need the 1776 Project, or perhaps a 1861 Project, or, let’s hear it for Silent Cal, a 1926 Project. On a serious note—what we really need is good moral history. And, what would good moral history tell us?
  • That racial slavery was always and everywhere an evil.
  • That no people should be ripped from their homelands and made property.
  • That free labor always outcompetes slave labor, and that, as Tocqueville so wisely observed, the Ohio River separated not just the free from the unfree, but the productive versus the unproductive.
  • That abolitionist societies first sprang up in Philadelphia in 1776.
  • That northern states systematically uprooted slavery as an institution.
  • That the common law forbade slavery.
  • That the Declaration of Independence, especially in its first draft but always in its intent, condemned slavery.
  • That for every pro-slavery man in the Constitutional Convention, there was an anti-slavery man as well.
  • That Congress, unanimously, prohibited slavery in the Northwest Territories, 1787.
  • That Congress ended America’s participation in the international slave trade as early as January 1, 1808.
  • That, as late as the Missouri Compromise of 1820, Founding Father Rufus King, though advanced in age, continued to fight the good fight against slavery.
  • That colleges—such as Hillsdale, founded in 1844—were abolitionist.
  • That northern states, throughout the 1830s and 1840s, passed Personal Liberty Laws, disallowing the use of state personnel or property to aid slave catchers.
  • That, the Civil War and the 13th Amendment forever ended slavery and slave holding.
While none of the above is written—in any way, shape, or form—to justify America’s slave history, it should be clear that the history itself was deeply divisive and extremely complicated. Yet, if we have to sum it all up, I would go back, happily, to the speech of President Coolidge. There is, after all, a finality to the subject. In the end, we abolished slavery, ending the scourge forever in this country.”
It's well worth remembering, too, what Coolidge so wisely said on the 150th anniversary of the signing of the Declaration of Independence.
About the Declaration there is a finality that is exceedingly restful. It is often asserted that the world has made a great deal of progress since 1776, that we have had new thoughts and new experiences which have given us a great advance over the people of that day, and that we may therefore very well discard their conclusions for something more modern. But that reasoning cannot be applied to this great charter. If all men are created equal, that is final. If they are endowed with inalienable rights, that is final. If governments derive their just powers from the consent of the governed, that is final. No advance, no progress can be made beyond these propositions. If anyone wishes to deny their truth or their soundness, the only direction in which he can proceed historically is not forward, but backward toward the time when there was no equality, no rights of the individual, no rule of the people. Those who wish to proceed in that direction cannot lay claim to progress. They are reactionary. Their ideas are not more modern, but more ancient, than those of the Revolutionary fathers.
As with Rachel’s statement quoted above, I want again to yell “Amen.”

Conversation Comments The Line Between Slavery and Freedom

It has been a joy, for once, to be the least conservative participant in an academic debate.
Rachel Ferguson presents the history of classical liberalism as a liberating force. She, and Brad Birzer, can hardly imagine free market liberalism and slavery as in cooperation. To be fair, neither can I. It seems so plainly obvious that slave labor is not free labor and that western Liberalism played a determining role in bringing about the end of slavery. Yet, from the left-side view, it was precisely market activity that allowed for American slavery to be successful. And in this, the left has a point.  The American slave economy had certain features in common with the market economy. After all, there was a market for slaves and for their products. Banks provided slaveholders with loans and insurance. Slaveholders may have made rational calculations about the labor output of their slaves. There was profit to be made.
As horrible as slavery was as an institution, and as immoral as ownership of a person is, slave labor was not wholly distinguishable from many kinds of free labor arrangements including indentured servitude, apprenticeships, child labor, or even the labor of freed Blacks who had little power to negotiate wages. If one could go to the fields of 18th century New York and New Jersey, and look at the labor force, one might have difficulty guessing which laborers were enslaved and which were free. The condition was not always worn on one’s face.
And yet, in principle, slavery and capitalism could not be further from each other.  As a metaphysical condition, slavery is the rejection of self-ownership, the very first principle of most theories of capitalism. While the battle over slavery was shaped by economics and waged in politics and war, it was ultimately fought in the minds of Americans who could not reconcile the principles of self-ownership and freedom with enslavement.
Contrary to the claim by Brad Birzer, there is indeed plenty of evidence that slave labor was efficient, and there is in fact a long historiography on this topic, with Fogel and Engerman at the center of the debate. However, the strength of the evidence here is in question. We should perhaps ask instead how efficient was slavery in certain places and times, compared to free labor, and for what reasons might it have been efficient? While this debate is still relevant, historians have reached the point of diminishing marginal returns on investigating this topic. Instead of focusing on comparative efficiency of slave labor and free labor, scholars like Gavin Wright have pointed to the importance of slaves as holdable, moveable property, while Christopher Hanes has pointed to the role that turnover costs played in the choice between hiring free labor and buying slave labor. The point is, it was not necessary for slave labor to be efficient for it to be preferable to those who sought laborers.

Conversation Comments Reclaiming the Moral High Ground

The essays of my fellow responders raised the issue of language and its manipulation amidst a rising tide of illiberalism among American academics. With regard to the New Historians of Capitalism, the question has often been posed: To what does ‘capitalism’ refer? Brad Birzer points out that those espousing free labor and free soil sentiments in the 19th century would have been stunned at the suggestion that their goal of social mobility in a free society somehow necessarily involved slavery! Conversely, defenders of the institution such as George Fitzhugh might have been even more shocked at the suggestion that his precious institution was a necessary plank in a capitalist platform. Instead, he saw the plantation as a beautiful specimen of socialist planning with no greater goal than the proper and orderly rule by a class of natural aristocrats over those who he believed could not rule themselves. He even hoped to include poor whites as well, in order to put all poor sops in their proper and most harmonious place. But these historical perspectives may not, in the end, matter to the New Historians of Capitalism. Michael Douma makes an incisive point about the conundrum we’re in. Even if these historians could be convinced by Magness’s arguments that slavery did not make the West rich, “they would still be united in seeing greed and coercion as essential elements of capitalism responsible for the rise of American slavery.” In other words, capitalism may not require slavery, but slavery does require capitalism.
Herein lies the rub, and I wonder if it doesn’t offer us a moment of self-reflection about the language that many have adopted in defense of capitalism. In Milton Friedman’s 1971 attack on the concept of corporate social responsibility, he insisted that the manager of a publicly traded company must, as a matter of fiduciary duty, work to increase profits within the appropriate legal and ethical bounds. He was quite right. Loosely, though, the notion of the ‘profit motive’ has become bastardized to paint a nasty picture of life in business as requiring greed and cultivating oppression. While medical or education students are encouraged to think of themselves as fulfilling a meaningful calling to serve others, business students are told by their own professors, textbooks, and by popular culture and art that their professional work is inherently amoral, or perhaps even immoral. Corporate social responsibility, then, becomes a chance to “give back” to a community one has apparently taken something from, a kind of redeeming oneself for one’s sins. Never mind that most doctors will make much higher incomes than many who go into business.
One might argue that the New Historians of Capitalism are parroting the most common way of presenting capitalist endeavor, as motivated by nothing but the desire for monetary profit, and as requiring more ruthlessness than most other professions. Is the term ‘profit motive’ appropriate? I think not. When defending capitalism it is more appropriate to say that capitalism works well because business people follow profit and loss signals. This adjustment in language achieves several goals. First, it reminds us that markets depend just as much on allowing business people to lose as they do on allowing them to win. When we don’t let them lose, we create massive distortions in the economy, as we all experienced in 2008. But more importantly, it’s simply not true, psychologically speaking, that the vast majority of people engaged in a capitalist system are motivated by profit. Profit is required to cover one’s costs and to direct business toward satisfying customers, but I cannot name an entrepreneur that I’ve ever met who said they went into their business primarily for the sake of making money. Entrepreneurs tend to be people who are passionate about solving problems and building things, and are often as likely to lose everything (at least temporarily) as they are to gain success in any particular venture. Instead, profit and loss signals indicate what to do next, allowing the entrepreneur and other economic participants to calculate economically.
Frederick Douglass demonstrates this distinction between profit as a signal and profit as a motive when he describes one of the moments in his young life that lit a fire for liberty within him. At one point his slave-holder allowed him to make labor contracts in the town. Douglass experienced making the agreement with an employer, doing the work, and receiving his pay. But at the end of the week, he had to hand over 9/10ths of his wages to his ‘owner.’ Nothing could have been more infuriating. Of course, his slave-holder had been stealing his labor all along! But watching that money pass out of his hand into the hand of someone who had been involved in no part of the process was too much to bear. He was determined to be free!
Did Frederick Douglass want the money? Of course he did! But it would be ridiculous to reduce this story down to his desire to keep the other 9/10ths of his wages. The issue was a question of dignity, self-respect, and justice. In fact, many early laws against Blacks owning property blatantly state that the problem with property ownership is that it confers too much self-esteem! For the rest of his life, Douglass argued against the socialists in some of his abolitionist circles. He insisted that wage labor is not slavery and that it was offensive to use the term in that way; that it’s good and right for a man to save up for his future and his family; and that those who believe you can only ever gain by making somebody else lose are guilty of “honest stupidity.”
Presumably, slave-traders, whether living 200 years ago or 2000 years ago, really always have been especially motivated by greed for profit (even though many slave-holders were not). So a capitalist system that claims to be all about the ‘profit-motive’ would seem to be exactly the system driving slavery. But Adam Smith wrote The Wealth of Nations to argue against mercantilism, or economic protectionism. Government schemes that hope to prop up domestic industry by keeping other goods out are perfectly compatible with the profit motive, especially for the politically well-connected. And mercantilism is perfectly compatible with slavery and other immoral forms of trade. The doctrine of free trade, on the other hand, is not. It is straightforwardly committed to the freedom of the individual to build his human capital, move to where his labor is most needed, and trade as he sees fit. The free trader guards against schemes to increase profits at the expense of the competitive environment. Smith warned that “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”
The popular notion that the central marker of capitalism is the profit motive has given rise to the kind of confusion we see among the New Historians of Capitalism. It’s a good reminder to retain the moral language of property rights, freedom of movement, individual dignity, and human flourishing. The mechanisms of the price system are a miracle of information dispersal and resource allocation, something to be deeply appreciated and utilized, but probably not a great reason to wake up every morning and go about one’s business. Let’s not let the academic enemies of capitalism get away with sloppy, catch-all definitions of the term or somehow claim the higher moral ground. Great prosperity, far more evenly spread across populations than ever before, arises from institutions that protect individual rights and a civil society that praises innovation and the virtue of integrity among business people. The institution of slavery opposes such a society in every possible way.