Boudreaux on capitalism and slavery

Could you explain more what you like about it?

It seems like Don is assuming that a key to the establishment of a capitalist growth in one society must be the key in all historical contexts and all societies. That’s what he relies on to make this claim and that seems very obviously wrong.

I’m amazed at how controversial this whole thing is. Maybe some proponents have made stronger, less defensible statements about it but the claim about the importance of slave labor for the growth and success of early capitalism in the UK and the US seems pretty straightforward. That doesn’t mean it has to be an element of capitalism (obviously), and it doesn’t mean it needs to be an element of capitalism (obviously). If these two things were less obvious perhaps the argument might merit more consternation, but they are.

the claim about the importance of slave labor for the growth and success of early capitalism in the UK and the US seems pretty straightforward.

It’s so straightforward that leaders in the South believed it, much to their detriment when it proved not to matter all that much.

We don’t even need a counterfactual here. We know the price of cotton ended up much the same after the civil war than before. The only hardship was caused by the sudden supply disruption from the South’s foolhardy geopolitical gamble. So the notion that slave labor was instrumental, even just to to the textile industry, is already on shaky ground.

Going a step further and tying it to the industrial revolution in some way is not meaningful at all.

Seems like slave labor was instrumental in building up the wealth of slaveowners and not much else. Which makes sense: at the start of the industrial revolution, all unskilled labor is cheap, slave or not.

UnlearningEcon: I believe that if you read Christophe Biocca’s post again and carefully, you’ll find there a good reason why the argument that cotton produced on southern U.S. slave-manned plantations is unlikely to have been responsible even for the launch of capitalism. (Relatedly, the argument that I – and, I think I can say, also Mr. Biocca and Alberto – criticize isn’t that slavery was essential only to the start of capitalism in the U.S. but to capitalism in the the U.S. and Great Britain. The difference is significant.)

The fact that the industrial revolution in England was marked (and indeed furthered) by the rise of textile mills, along with the fact that much of the cotton that those textile mills used was grown on chattel-slave plantations, is a poor basis on which to conclude that slavery was necessary to spark the advent of capitalism. (Slavery is even more clearly not sufficient to have sparked the advent of capitalism.) To give reasonably sound evidence that slavery was necessary requires some sensible story for why capitalism as it emerged in Britain and in the U.S. would not have otherwise emerged (or would not have emerged with anywhere near the force or the success that it enjoyed). That an admittedly key input to an admittedly key early capitalist industry was produced largely on slave plantations is simply not strong enough evidence.

What’s the alleged mechanism? Is it that – given that all of the other prerequisites for capitalism had also happily occurred in conjunction – slavery produced a key input at an unusually low price? Again, the evidence for this claim is dubious. (See Mr. Biocca’s comment.) But even if it’s true that slave-grown cotton was, because of it was slave-grown, was much less pricey to mills than it would otherwise have been, that fact remains a weak reed on which to tell the story that you want to tell. History is full of instances of input prices falling without sparking an industrial take-off.

On the other side, the subsequent history of capitalism is indeed relevant to this debate. Subsequent history allows us better to separate factors that were relevant in capitalism’s early histories from factors that were not relevant. If capitalism started successfully elsewhere in later times without slave-produced inputs, this fact strongly suggests that the slave-produced inputs that were used by the earliest capitalist industries were likely not necessary for the rise of capitalism. Likewise if capitalism continued growing and flourishing without any slave-produced inputs.

So, history proves (as much as history can prove anything) that slavery isn’t sufficient to spark capitalism. And because history also provides ample evidence that capitalism can start without slave-produced inputs in places where capitalism hadn’t before existed – and that capitalism can continue to flourish without slave-produced inputs even in places where it happened to have such inputs at its inception – history strongly suggests that slave-produced inputs are not, and likely never were, necessary for the start or the success of capitalism.

This expansion on Don’s previous comments is a lot more satisfactory than the first iteration, in my view, in that it allows for history. I don’t think the issue is “necessity,” because anything that happened in one view can be defined as “necessary,” and anything that didn’t as not. And I do see that “free labor” (not slavery, though some blog trolls from the right seem not be familiar with the term) was widely recognized as a vastly better input to nascent capitalism than was slavery, and indeed this recognition was one source of the political pressure leading to the Civil War. But if a very significant part of the “GDP” produced by both England and the northern U.S. ultimately sourced to the very efficient use of slave labor, that source has to be recognized in looking at the history of capitalism as much as does the evolution of the understanding of property rights, financial markets, and the importance of liberty. Certainly there is no implication that slavery would ever be beneficial, let alone necessary, for future development of capitalism, any more than organized crime is, in spite of the fact that both of these are major sources of economic activity in the developing world.

How can anyone take seriously the claim that slave labour was important to the early development and success of capitalism in the U.S. and UK?

Slave labour was always employed in American cotton production, yet it wasn’t economic on a large scale until Eli Whitney’s cotton gin.

Until that innovation in 1793, producing a bale of cotton required roughly 600 human labour hours. The gin reduced the number of labour hours required to roughly 12. That’s a 98% reduction in labour costs!!!

Any savings that may have been achieved by employing slaves in place of free labour in the production of cotton pales into insignificance when compared to the cost savings generated by the cotton gin. If every slave were manumitted and hired as an employee at a higher wage, capitalism would have continued apace. It can even be argued very strongly that this would have been a superior scenario for the United States, the American South and for modern Capitalism.

Harold,

It does seem that way, doesn’t it?

Whether or not slavery was important to early capitalism is a legitimate question. However, answering it with lazy ad hoc reasoning (it existed during the time of early capitalism, therefore it was clearly important to the development of capitalism) implies that they don’t really possess any intellectual curiosity about the issue. It’s just another opportunity to point to something bad but irrelevant to demonize capitalism.

I accept that capitalism might have come into existence by different means in different parts of the world and that slavery might have been instrumental in, say, America, but then the person pointing that out will have to explain how exactly slavery in America rather than, say, technological innovation gave rise to American Capitalism. Simply saying “well, it’s pretty clear it was because slaves were employed on large cotton plantations” isn’t going to be a sufficient answer for anyone above the age of 14.

Michael,

The plantation economy of the US south was capitalist and that economy was interconnect in numerous way with the northern capitalist economy and the English capitalist economy.

So what? that’s not an argument that slaves were necessary for capitalism to emerge and exist. That’s just an observation of historical fact. Large free labour farms also existed at the time, most of them more efficient than the vast majority of both slave and free labour farms. They were just as interconnected in the very same ways with the Northern and English Capitalist economies. Specifically slave labour was not necessary for any of these Capitalist institutions to emerge, exist and intertwine. That they co-existed does not mean that one caused the other.

slaves “were at one and the same time investments (purchased and then rented out as laborers), credit (used to secure loans), property, commodities and capital.”

That’s not an argument. That’s an observation of historical fact.

There is literally no arguments to address. At most what you present is ad hoc reasoning: because the institution of slavery still existed at the time modern industrial capitalism emerged and slaves were employed in some capitalist enterprises, slavery was key to modern industrial capitalism. The fact that two things exist together doesn’t prove that one caused the other or was even a key component. No argument is more feeble than a logical fallacy.

Oh, I see.

So what “michael” is saying is that when Sven Beckert and Seth Rockman title their Huffington Post essay “How Slavery Led to Modern Capitalism”, they don’t mean to claim that slavery actually led to modern capitalism.