Have you ever talked to your kids, neighbors, or coworkers about the relationship between capitalism and slavery? Try it sometime, and I guarantee you will be shocked by what you hear.
Endless propagandizing for socialism by the National Association for the Advancement of Colored People (NAACP), the American Civil Liberties Union (ACLU), and other leading civil rights organizations has left many people, especially African-Americans, thoroughly confused about the roles of capitalism and government in the slave trade. In fact, many believe capitalism caused slavery and government ended it.
The History of Slavery
Capitalism couldn’t possibly be the cause of slavery, because slavery preceded capitalism as the dominant social order in virtually all parts of the world. Slavery was a major feature in the classical civilizations of Athens and Rome and is discussed and defended in much of their great literature. It was practiced without regard to race in Europe, Africa, and Asia, and by Native Americans in North and South America.
In virtually all of these societies, freed slaves aspired to own slaves of their own and frequently did so. There was little emotional discomfort over the violation of what we today see as inviolate human rights.
Slavery in the U.S. was based on the myth of African-American racial inferiority, reinforced in the South by religious beliefs and the leading civil and civic institutions of the day. Orlando Patterson, in his 1998 book Rituals of Blood: Consequences of Slavery in Two American Centuries, describes the Ku Klux Klan in the early twentieth century as:
a highly organized and extremely successful cult that counted thousands of ministers of religion among its membership, and an even higher proportion in its leadership. Its leaders and many of its members were drawn from the most educated and respected citizens of their communities. At its height, in states from Georgia to Colorado and Indiana, it powerfully influenced governors, senators, congressmen, and most of the mayors where its Klaverns were located.
Notice that Patterson, a self-described liberal, doesn’t include “businessmen” in this list of occupations held by typical klansmen. “Slavery was quintessentially about one person assuming, through brute force and the legalized violence of his government, absolute power and authority over another,” writes Patterson (emphasis added). Slave owners were not capitalists, since the principles and demands of capitalism–self-ownership, freedom to trade, voluntary contracts, and equality–are diametrically opposed to slavery.
The End of Slavery
Slavery was gradually losing its place to the institutions of capitalism in the U.S. around the time of the Civil War. Locke, Smith, Jefferson, and Madison clearly understood the universal application of their ideas and consequently abhorred slavery. Their libertarian writings formed the basis for ending slavery in the U.S.
Most of us believe the Civil War was fought to end slavery, but while campaigning for the Presidency and during much of his tenure in office, Lincoln repeatedly said preserving the union, not abolishing slavery, was the sole purpose and aim of the Civil War. Historians still debate whether slavery would have lasted much longer had the Civil War not been fought at all.
There was little danger of slavery spreading outside the South. Republicans, Robert William Fogel writes, “urged the Northern electorate to vote for them not because it was their Christian duty to free the slaves but in order to prevent slaveholders from seizing land in the territories that rightly belonged to Northern whites, to prevent slaveholders from reducing the wages of Northern workers by inundating Northern labor markets with slaves, and to prevent the ‘slave power’ . . . from seizing control of the American government.” In other words, Northerners recognized slavery to be a threat to their businesses.
There is evidence that slavery was in a steep decline in the South in the years before the Civil War. Most plantations were in debt, and foreign imports of cheap cotton were driving cotton prices lower. Over six million Southern whites, out of a population of eight million, did not own slaves and formed at best a precarious political constituency for the institution.
After Slavery: Jim Crow
Regardless of whether capitalism or government gets credit for ending slavery, the record is clear that government systematically oppressed African-Americans in the years following the Civil War. It was a practice that would not end until the civil rights protests of the 1960s finally forced a change in government polices.
The abolition of slavery was followed by a brief period of relative freedom and economic advancement by African-Americans. Self-help efforts, such as those led by Booker T. Washington, showed great promise in creating an economic foundation from which African-American culture could recover from the trauma and injustices of slavery and share in the great American experiment in freedom. But this promising start was stopped by Jim Crow laws.
Sociologist William Julius Wilson, describing the period before World War II, writes, “Except for the brief period of fluid race relations in the North from 1870 to 1890, the state was a major instrument of racial oppression.”
Jim Crow laws, as C. Vann Woodward proved in his 1966 book, The Strange Career of Jim Crow, did not arise from institutions of capitalism or pre-capitalist feudal society, but were invented and used by opponents of integration to exclude African-Americans from the mainstream political and economic life. Woodward pointed to the statist, rather than capitalist, character of Jim Crow laws when he quoted historian Edgar Gardner Murphy: “Its spirit is that of an all-absorbing autocracy of race, an animus of aggrandizement which makes, in the imagination of the white man, an absolute identification of the strong race with the very being of the state.”
In contrast to most governments during this period, many private employers were actively working to bring African-Americans into the economic mainstream. “Such courtesy and deference as they have won may have been in considerable measure inspired by competition for the increased purchasing power of the Negro,” Woodward wrote. Wilson also commented on the vital role played by employers in reducing segregation and discrimination:
Indeed, the determination of industrialists to ignore racial norms of exclusion and to hire black workers was one of the main reasons why the industry-wide unions reversed their racial policies and actively recruited black workers during the New Deal era. Prior to this period the overwhelming majority of unskilled and semiskilled blacks were nonunionized and were available as lower-paid labor or as strikebreakers.
The color-blind capitalist institution of markets rewarded employers willing to cross the age-old boundaries of racism and intolerance to produce products at lower cost, enabling them to better serve their customers. Industrialists may have been no more enlightened than union bosses. The critical difference was that capitalism made racial discrimination by employers unprofitable.
African-American Economic Progress Today
As official and unofficial discrimination faded, African-Americans were allowed to return to the path of economic empowerment they were forbidden to follow for the better part of a century. Though handicapped by the legacy of being treated as second-class citizens, and by political leaders with little understanding of capitalism and its values, African-Americans in recent years have made dramatic progress in closing the income and social status gap with Euro-Americans.
In 1995, the average African-American two-parent family earned 87 percent as much as the average Euro-American family, with most of the difference explained by the concentration of African-American households in Southern states. The convergence between African-Americans and Euro-Americans has been most dramatic among women, where differences have either disappeared or are on the verge of becoming insignificant. In 1998, the poverty rate for African-Americans fell to 26.5 percent, the lowest since the government began collecting data on blacks’ poverty in 1959.
Evidence that this progress occurred without special assistance from government can be found in the fact that those ethnic and religious groups that rely the least on government have progressed the fastest and farthest in the U.S. Jews, Mormons, Chinese, and Japanese have been successful in the U.S. even though they have faced fierce discrimination. Irish-, Italian-, and African-Americans, on the other hand, have been more closely involved with politics and have tended to do less well.
Among the biggest barriers to African-American economic progress that remain today are government regulations, programs, and taxes that have the effect, if not the intent, of discriminating against small businesses and inexperienced entrepreneurs. These include minimum wage laws and occupational licensing laws that prohibit entry into a profession unless a person can afford to enroll in courses and pass written tests on subjects unrelated to the actual skills needed to do the job.
Most people today react with great surprise to the suggestion that government does more to hurt than to help minorities. But once the history of slavery and racism in the U.S. is correctly told, such a finding becomes entirely logical. Capitalism, not government, is the Great Liberator in history. Now, go out and tell someone else!
