Quick Note on Slavery, Finance, Minsky, and the Panic of 1837

By Lambert Strether of .

I encountered on the Ferguson-focused portion of my Twitter list. We’ve been talking about the twin legacies of chattel slavery and the Civil War a lot, lately — appropriately, in view of current events, anniversaries, and the question of whether “debt slavery” is metaphorical or literal — but we rarely talk about the financial aspects of slavery. Baptist’s article illuminates that angle, so I thought I’d post some excerpts from it for the commentariat to discuss, focused on the life of one particular slaver, Jacob Bieller, and the zooming out.

Here we go. It’s long form, scholarly work, but none the worse for that:

Read casually through the pieces of paper that document Jacob Bieller’s life and enterprises, and this planter of Concordia Parish, Louisiana might look like someone who lived not just thousands, but millions of miles away from the center of international financial markets in the 1830s—and his business might seem even more distant in kind from the markets that worry us in our own day. Browse through the letters between Bieller and his son Joseph, the latter writing from the bank of Bayou Macon, thirty miles or so from Jacob’s own place on the Mississippi River. Joseph wrote his father in an untutored orthography, recounting the events of life on a cotton labor camp, or what contemporaries called a plantation: “I shall be short of corn,” or someone has found the body of the father of Enos, Bieller’s overseer, the old man having “drownded in Deer Drink.” The cyclical rhythm of forced agricultural labor thrummed onward—”I send you by Enos fifteen cotton pickers they are all I can spare. We have twelve thousand weight of cotton to pick yet from the appearance of the boals yet to open.” Always the urge to extract more product clashed with the objection of the enslaved to their condition: “I have had a verry sevear time among my negros at home. they have bin swinging my hogs and pigs. Harry & Roberson I caught. I stake Harry and gave him 175 lashes and Roberson 150. since that I found two hogs badly crippled.”

[I]t was the decisions and behavior of thousands of actors like Bieller that created a perfect financial storm [in the panic of 1837]: bringing an end to one kind of capitalist boom; destroying the confidence of the slaveholding class, impoverishing millions of workers and farmers who were linked to the global economy; demolishing the already disrupted lives of hundreds of thousands of people like Harry and Roberson.

In 1837 Bieller was 67 years old. He had grown up in South Carolina, where in the first few years of the nineteenth century he and his father took advantage of that state’s reopening of the African slave trade and speculated in survivors of the Middle Passage. In 1809, little more than a year after Congress closed the legal Atlantic slave trade, Bieller moved west. Driven in part by divorce from his first wife, but drawn by the opportunities for an entrepreneurial slave owner in the new cotton lands opening to the west, Bieller took his son Joseph and 27 enslaved African Americans and settled just up the Mississippi River from Natchez, on the Louisiana side.

The enslaved people that Bieller brought to Concordia Parish became the root of his fortune—as they and a million others like them would become the root of the prosperity of not just the antebellum southwestern states, but of the United States as a whole. And perhaps one could go further than the U.S. By the 1830s, the cotton that enslaved people grew in the new states and territories taken from Native Americans in the early nineteenth century was the most widely traded commodity in the world. Its sale underwrote investments in new forms of enterprise north of slavery. It was also the raw material of the industrial revolution.

When Jacob Bieller put his two dozen slaves to work growing and picking cotton, his whip was also driving the creation of a new, more complex, more dynamic world economy. In the lifetime between the ratification of the Constitution and the secession of the Confederacy, enslavers moved more than a million enslaved African Americans to cotton-growing areas taken by the new nation from their original inhabitants. Forced migrations and stolen labor yielded an astonishing increase in cotton production: from 1.2 million pounds in 1790 to 2.1 billion in 1859, and an incredible dominance over the international market—by the 1830s, 80% of the cotton used by the British textile industry came from the southern U.S.

We live today with the results of the long days that Bieller’s slaves sweated out in the field, but we also live in a world distantly shaped by the financial decisions of cotton entrepreneurs on both sides of the Atlantic—as well as by the forgetfulness of those who have not learned from their lessons of two centuries ago.

And — drumroll, please — here comes the finance part:

The mini-crash of 1824-26, like every financial panic, underlined the problem of systemic risk. The fact that the mid-decade’s outbreak of animal spirits did not end in full-scale economic disaster in the U.S. was a result, some believed, of the expanded ability of the Second Bank of the United States to regulate the level of systemic risk in the American economy. Under the direction of Nicholas Biddle the B.U.S. fulfilled many of the functions of a modern central bank. By forcing smaller, state-chartered banks to redeem their own credit in highly convertible currency, like gold dollars, British pounds, or banknotes of the B.U.S. itself, Biddle’s Bank kept a tight rein on those institutions. They could not issue too much credit. By making and by calling in its own loans, the B.U.S. also “curtailed” speculation on the part of private individuals. The B.U.S. ensured a level of systemic stability that in turn enabled individual market participants to devise workable strategies for hedging against individual counterparties. To avoid the possibility that they might be left holding the hot potato if cotton prices dropped suddenly, middlemen began insisting on shipping cotton bales on consignment. This meant that planters still owned their crop and bore much of the risk of a drop in price, up until one of the buyers working for the Manchester textile companies purchased it.

The Bank not only worked to prevent financial panics but to drive steady growth. As the single biggest lender in the economy, it lent directly to individual entrepreneurs—including enslavers like Jacob Bieller, who were always eager to buy more human capital whom they could put to work in the cotton fields of the southwest. “The US Bank and the Planters Bank at this place has thrown a large amt of cash into circulation,” wrote slave trader Isaac Franklin from Natchez in 1832. Franklin was the Sam Walton of the internal slave trade in the U.S., selling hundreds or even thousands of men and women in New Orleans and Natchez in a given year. In fact, by the early 1830s, the Natchez and New Orleans branches had lent out a full third of the capital of the B.U.S., much of it used to buy thousands of enslaved people from the Chesapeake, Kentucky, and North Carolina. Some of the lending was in the form of renewable “accommodation loans” to large-scale planters who were members of, or connected to, the clique of insiders who ran the B.U.S. branch and the series of state banks chartered by the Mississippi government. Even more of the lending was in the form of commercial credit to cotton buyers. This kept the price of cotton steady and, finding its way to the planters themselves, inspired Natchez-area enslavers to buy more of the people that Franklin and others were purchasing in the Chesapeake states and shipping to the Mississippi Valley.

While planters like Jacob Bieller waited for payment, merchants like the Natchez broker Alvarez Fisk, a Massachusetts-born man who funneled bank money to planters and cotton to Liverpool, lent them operating funds. But ultimately the entire structure was bottomed on, founded on, funded by the bodies of enslaved people: on the ability of slaveholders to extract cotton from them, and on the ability of slaveholders (or bankruptcy courts) to sell them to someone else who wanted to extract cotton. And the fact that cotton fields were the place where the margins of growth were created meant that they presented lenders with both needs and opportunities to hedge against the risk that individual counterparties would default.

So, hedging:

Even as cotton markets soared in the 1830s, Jacob Bieller, for instance, plunged into his own personal crash. His daughter by his second marriage eloped with an ambitious young local lawyer named Felix Bosworth. She was only fifteen or so, but it seems likely that Bieller’s wife, Nancy, encouraged the elopement because she quickly left home to join her daughter, and began divorce proceedings—claiming half of Bieller’s property. According to Nancy, not only had Jacob threatened to shoot her in 1827, but for years “he kept a concubine in their common dwelling & elsewhere, publicly and openly.” (The courts of Louisiana declined to rule on either charge when they eventually granted the couple a divorce. Jacob’s last will gave tacit freedom “to my slaves Mary Clarkson and her son Coulson, a boy something more than five years old, both bright mulattoes.”)

In a moment of despair, Jacob wrote on the cover of a family bible that his daughter’s elopement had “destroyed my welfare, family, and prospects.” But it was clear that the ultimate hedge for him, for Nancy, and for Alvarez Fisk and Isaac Franklin, was the relative liquidity of enslaved people. (Bieller had recently purchased dozens of additional slaves on credit from Isaac Franklin, paying more than $1,000 each, bringing his total number of captives to over eighty). All he and Nancy had to debate about was the method—he wanted to sell all those determined to be community rather than separate property, and divide the cash. She wanted to divide the men, women, and children up, “scattering them,” she wrote, intentionally. Enslaved people, Nancy said, were “susceptible to a division in kind without injury to us.” Or to a sale, so long as the system was not in crisis and there was a steady market, Jacob could have retorted.

For everyone who drew profit in the system, enslaved human beings were the ultimate hedge.

Back when I was living in Philly, my ultimate hedge was my laptop; I could take it to a pawnshop and then go blog at the computers in the public libary, and then get it back when a check came in. How much more convenient it would have been to own a slave!

So, you heard “hedge” and “liquidity” and thought “securitization,” right? You weren’t wrong. And something about what follows seems awfully familiar:

[E]nslavers had already—by the end of the 1820s—created a highly innovative alternative to the existing financial structure. The Consolidated Association of the Planters of Louisiana (despite its name, the “C.A.P.L.” was still a bank) created more leverage for enslavers at less cost, and on longer terms. It did so by securitizing slaves, hedging even more effectively against the individual investors’ losses—so long as the financial system itself did not fail. Here is how it worked: potential borrowers mortgaged slaves and cultivated land to the C.A.P.L., which entitled them to borrow up to half of the assessed value of their property from the C.A.P.L. in bank notes. To convince others to accept the notes thus disbursed at face value, the C.A.P.L. convinced the Louisiana legislature to back $2.5 million in bank bonds (due in ten to fifteen years, bearing five percent interest) with the “faith and credit” of the people of the state. The great British merchant bank Baring Brothers agreed to advance the C.A.P.L. the equivalent of $2.5 million in sterling bills, and market the bonds on European securities markets.

The bonds effectively converted enslavers’ biggest investment—human beings, or “hands,” from Maryland and Virginia and North Carolina and Kentucky—into multiple streams of income
, all under their own control, since all borrowers were officially stockholders in the bank. The sale of the bonds created a pool of high-quality credit to be lent back to the planters at a rate significantly lower than the rate of return that they could expect that money to produce. That pool could be used for all sorts of income-generating purposes: buying more slaves (to produce more cotton and sugar and hence more income) or lending to other enslavers. Clever borrowers could pyramid their leverage even higher—by borrowing on the same collateral from multiple lenders, by also getting unsecured short-term commercial loans from the C.A.P.L., by purchasing new slaves with the money they borrowed and borrowing on them too. They had mortgaged their slaves—sometimes multiple times, and sometimes they even mortgaged fictitious slaves—but in contrast to what Walsh had to promise Nolte in 1824, this type of mortgage gave the enslaver tremendous margins, control, and flexibility. It was hard to imagine that such borrowers would be foreclosed, even if they fell behind on their payments. After all, the borrowers owned the bank.

You can see how “abolition” would threaten all that, and why Congress forbade petitions against slavery to be read into the record, and indeed made slavery on the floor of Congress. So then this happens: President Andrew Jackson — check your twenty dollar bill, if you have one — decides to nuke the Bank of the United States (and give the deposits to new banks owned by his buddies):

Between 1831 and 1834, for reasons about which historians have argued long and hard (without, alas, reaching consensus), President Andrew Jackson fought a brutal battle against the Second Bank of the United States. The Bank had pumped millions of dollars of loans into Mississippi and Louisiana in Jackson’s first term—almost half of the Bank’s total balance sheet was there by 1832—but it remained unpopular in the large sections of the southwest. Creditors are not always loved among those to whom they lend. Jackson vetoed the recharter of the B.U.S. in 1832, and won reelection that fall against a pro-Bank opponent. The next year, he ordered the transfer of the government’s deposits out of the Bank. Jackson claimed that by giving the B.U.S. effective control over the financial market, the federal government had made “the rich richer and the potent more powerful.” No doubt it had done so. But he distributed the deposits to a horde of so-called “pet banks”—state-chartered institutions that, at least initially, were run by his political allies—who in turn were often not members of the old cliques that had run the banks that the B.U.S. treated as favorites. In reaction, Biddle called in millions of dollars of loans, provoking a recession that began in late 1833. In early 1834, however, the B.U.S. had to concede and move on to doing business as a still large, but significantly shrunken ordinary bank. Now, nothing—no bank, no other institution—regulated the financial economy of the U.S.

Enter — second drumroll — de-regulation!

After 1832, the securitization, world-wide marketing, and multiple leveraging of enslaved people, pioneered by the C.A.P.L., proliferated. Across the southwest, cotton entrepreneurs created a series of banks, many of them far larger than the C.A.P.L. In 1832, the state of Louisiana chartered the Union Bank of Louisiana, which issued $7 million in state bonds. … And on and on, until, by 1836, New Orleans was, per resident, the U.S. city with the greatest density of bank capital—$64 million in all. Other states and territories in the area, self-consciously copying Louisiana, began to create new banks of their own, each one exploiting the loopholes of the now-unregulated system with innovative financial devices.

Armed with repeated infusions of new cash lent by banks who handed it out with little concern for whether or not mortgaged slaves had already been “hypothecated” [!!] —assigned to someone else as a hedge against loans—southwestern enslavers brought tens of thousands of additional slaves into the cotton states. Some of the purchasers were long-time residents in states like Louisiana, Alabama, and Mississippi. Some were new migrants fired by the “spirit of emigration,” the belief that “there is scarcely any other portion of the globe” that could permit “the slave holder or merchant of moderate capital” to convert said capital into a fortune. They calculated the money that they would make: from the labor of one “hand”—one enslaved person in a cotton field—”between three and four hundred dollars” a year, said one man who thought his expectations modest—”though some claim to make six or seven hundred dollars.” Not bad returns for an “asset” purchased for only two or three times that amount, which could also be mortgaged to produce multiple streams of income. So migrants and longterm residents alike trooped to the banks, mortgaged property (some of which, later critics would charge, did not even exist) and spent the credit they received. Huge amounts of money were shifted around: to slave traders, to the sellers of goods like food and cheap clothing, to slave owners in the Chesapeake who sold people to the southwest, to the banks in Virginia and elsewhere who took their slice of profit as the financiers of the domestic slave traders. By the time the decade was out, at least 250,000 enslaved men, women, and children had been shifted from the old terrain of slavery to the new. There they were set to work: clearing forests from which Native Americans had recently been evicted by Andrew Jackson’s policies; planting cotton seed; tilling it while the harvest neared.

A quarter million people were moved by force, sold, mortgaged, collateralized, securitized, sold again 3,000 miles from where they actually toiled.

And here — second drumroll, please — is the Minsky moment:

Each summer they learned how to pick the fields clean faster, at the end of a whip. From 1831 to 1837, cotton production almost doubled, from 300 million pounds to over 600 million. Too much was reaching Liverpool for Manchester to spin and weave, much less to sell to consumers in the form of cloth. Prices per pound at New Orleans, which had begun the boom in 1834 at eighteen cents, slipped to less than ten by late 1836. “Everybody is in debt neck over ears,” was the word from Alabama, but slave “traders are not discouraged”—many of their buyers believed that cotton prices would begin to climb again. They had no evidence to suggest a return to rising prices. Supply clearly exceeded demand. Yet here was the psychology, the animal spirits of the typical bubble at work, saying: this time is different. But as the slowing prices began to pinch, the Bank of England, alarmed at the outflow of capital to the U.S. in the form of securities purchases, cut its lending in the late summer of 1836. (At the about the same time, Andrew Jackson issued his Specie Circular, which slowed the purchases of public land, but appears to have had little effect on what transpired next in the cotton market.) Merchant firms subsequently began to call in their loans to each other.

In early 1837, a visitor to Florida, which was already—as it has ever been—one of the most bubble-prone and speculative parts of the U.S.—wrote that “there is great risk to the money lender and paper shaver—for the whole land, with very few exceptions, are all in debt for property and a fall in cotton must bring a crash with most tremendous consequences to all trades and pursuits.” Back in Britain, the crash had already begun. Three massive Liverpool and London firms, unable to meet their commercial debt because cotton prices had dropped, collapsed at the end of 1836. The tsunami rushed across the ocean to their trading partners in New Orleans. By late March each of the top ten cotton-buying firms there had collapsed.

All fall down (and it couldn’t happen to a nicer political economy):

Except for planters, who were mostly debtors, almost every market actor—cotton merchants, dry-goods merchants, Southern bankers, Northern bankers—now realized that they were both creditors and debtors. But as they scrambled to collect debts from others so that they could pay off their own, two things were happening. The first was that their individually rational pursuit of liquidity created the collectively irrational outcome of systemic failure. No one was able to pay debts, and so most buying and selling ground to a halt. An attempt to restart the system failed. A second, bigger crash in 1839 finished off many of the survivors of the 1837 panic. During those two years, meanwhile, a second consequence had emerged: the discovery that most of the debt owed by planters and those who dealt with them was “toxic,” to use a recent term. It was unpayable. The planters of Mississippi owed New Orleans banks alone $33 million, estimated one expert, and could not hope to net more than $10 million from their 1837 crop to pay off that debt. Nor could they sell off capital to raise cash because prices for slaves and land, the ultimate collateral in the system, had plummeted as the first wave of bankruptcy-driven sales tapped what little cash there was in the system. This meant that the financial system wasn’t just frozen, but that many creditors’ balance sheets were overwhelmed.

Not a liquidity crisis, but a solvency crisis. The slave banks get the State to bail them out:

After the cotton-brokerage and plantation-supply firms, the next to go were the southwestern banks, whose currency and credit became worthless. They were unable to continue to make coupon payments—interest installments on the bonds they had sold on far-off securities markets. Some might have been able to collect from their debtors by foreclosing mortgages on slaves and land, but, of course, the markets for those two assets had collapsed. Many slave owners had layered multiple mortgages on each slave, meanwhile, and were using political leverage to protect them from the consequences of their financial over-leverage. The ultimate expression of this practice was the repudiation of the government-backed bonds by the legislatures of several southwestern states and territories, most notably Mississippi and Florida—in effect, they toxified the bonds themselves, emancipating slave-owning debtors from the holders of slave-backed securities. The power of the state had created the securitized slave, and now the power of the state destroyed it, in order to protect that slave’s owner from his creditors.

So, in consequence of the Panic of 1837, slave owners can no longer finance their own banks in their own states, and that social function splits off and moves north, to Wall Street:

But not all debts could be repudiated. And many of the creditors were located in northern states. Their attempts to collect increasingly brought Southern planters to calculate the value of the Union. Nor could Southern entrepreneurs recapitalize their own institutions. After repudiation, outside investors were cautious about lending money to Southern institutions. In the 1830s it was still not clear where the center of gravity of the national financial economy was located—Philadelphia, home of the B.U.S., and New Orleans were both in contention. By the early 1840s, Wall Street and New York had emerged as the definitive victor. Slave owners continued to supply virtually all of the industrial world’s most important commodity, but the post-1837 inability of Southern planters to control their own financing or get the capital that would enable them to diversify led them to sacrifice massive skimmings of their profits to financial intermediaries and creditors. They sought greater revenues in the only ways that they could. The first was by making more and more cotton. They forced enslaved people to achieve an incredible intensity of labor, developed new kinds of seed, and expanded their acreage, but the increase in cotton production (which rose from 600 million pounds in 1837 to two billion in 1859) was more than the market could absorb. The price remained low in most years in comparison to historic levels.

The second method of enhancing revenues was by seeking new territory, both in order to add to the land under cultivation and with the hope of provoking a new boom. Unleashing the animal spirits of speculation in new territories had almost worked before, so why not try it again by acquiring California, Cuba, Mexico, or Kansas for slavery? The result of the commitment of political capital to that end, of course, was the Civil War, in which the consequences of the long-term financial difficulties of the cotton economy played a major role in Southern defeat.

“And the war came.”[1]

And yet in the end the reverberations set off by the leveraging of slavery’s inequities into further equity for those who exploited them were what brought the structure of real-life slavery crashing down.

So, yeah, of course the Civil War was about slavery. But you’ve got to follow the money to see why.

* * *

After I read this piece, it occurred to me — I’m just putting this idea down so that I don’t forget it — that we might think about wage labor as, in a way, “unbundling” slave labor.

Wage laborers don’t live in “labor camps” — er, “plantations” — and their bodies are not under control of their owners. They are, nonetheless, forced to work, not by the lash, but (as MMT teaches) by the requirement to pay taxes in the currency issued by the state, which can only be acquired through wage labor (modulo marginal exceptions like System D, alternative currencies, intentional communities or co-ops, etc.)

And while the wage laborer’s body is not owned, it is nonetheless actually and literally colonized by capital-seeking entities whose products actually and literally flow through the body[2]. See under [sips coffee] cigarettes, high fructose corn syrup, pharmaceuticals, and so on. I don’t want to make too much of this idea, and I’m most definitely not equating human sale with human rental, morally or systemically, but I think there’s some inquiry to be made here, and I’d welcome comments and sources from readers.

Notes
[1] Note lack of agency in that statement. We might note that airbrushes this history away (or at least omits it):

On the occasion corresponding to this four years ago all thoughts were anxiously directed to an impending civil war. All dreaded it, all sought to avert it. While the inaugural address was being delivered from this place, devoted altogether to saving the Union without war, insurgent agents were in the city seeking to destroy it without war–seeking to dissolve the Union and divide effects by negotiation. Both parties deprecated war, but one of them would make war rather than let the nation survive, and the other would accept war rather than let it perish, and the war came.

Ka-ching….

[2] :

I’d been paid again, and my debt had increased by eight dollars. I tormented myself by wondering where the money went, but I knew. I came off shift dehydrated, as they wanted me to be. I got a squirt of Popsie from the fountain by punching my combination — twenty five cents checked off my payroll. The squirt wasn’t quite enough so I had another — fifty cents. Dinner was drab as usual; I couldn’t face more than a bite or two of Chicken Little. Later I was hungry and there was the canteen where I got Crunchies on easy credit. The Crunchies kicked off withdrawal symptoms that could be quelled only by another two squirts of Popsie from the fountain. And Popsie kicked off withdrawal symptoms that could only be quelled by smoking Starr Cigarettes, which made you hungry for Crunchies. Had Fowler Schocken [the ad agency] thought of it in these terms when he organized Starrzelius Verily, the first spherical trust? Popsie to Crunchies to Starrs to Popsie?

That “Popsie to Crunchies to Starrs to Popsie” circuit is impressive, no?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

117 comments

    1. Steve H.

      so i thought, ‘what about the previous big war in America…’

      “The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.” – Benjamin Franklin

      1. NotTimothyGeithner

        Also the English tea sucked compared to Dutch competitors. The colonists didn’t dump good tea. The UK wasn’t involved heavily in India yet.

        1. sufferin'succotash

          Britain’s East India Company was so heavily involved in India that a famine in Bengal in 1770 (coupled with the Company’s own inability to keep its employees from fleecing the Indians) left the Company virtually bankrupt. The company was also so deeply embedded in Britain’s political establishment that it was–to coin a phrase–Too Big To Fail. The deal which granted the EIC a monopoly to market its tea in the 13 Colonies was actually part of a bailout engineered by King George’s Prime Minister Lord North. Priorities. Saving the Company was considered more important than appeasing the colonists. The rest, as we see in the History Biz, is history.

  1. ambrit

    The parallels with the fracking ‘boom’ are almost exact. Which leads one to fear greatly for the fracking “blow off,” when it happens. I can almost see the same dynamic beginning to take hold in the Medical Industrial Complex. New, and generally more expensive, forms of ‘treatment’ are daily arriving. The increases in medical ‘efficiency’ are often marginal at best. The cost to benefit ratio squeezes shut. As long as the government keeps underwriting these ‘improvements’ without imposing rational standards regarding improved outcomes, the end is clear.
    Wage slavery can be adequately described as a passive aggressive form of legal slavery. The ‘owner’ class cannot tie one up and administer ‘correction’ as in days of yore, but it can allow one to die sooner from malnutrition, poor healthcare, and other forms of “benign neglect.”

    1. vidimi

      spot on with the fracking, but the medical biz seems to be going in the opposite direction. you would need an oversupply causing prices to crash, and i don’t see that happening anytime soon.

      1. ambrit

        I’m flying by ‘the seat of my pants’ on this, so please bear with me.
        The argument that medicine is an endlessly fungible class of “products” can be made. Cancers proliferate, personal lifestyle fubars explode endlessly, new “diseases” are ‘discovered’ every day, each and every one of which will have its’ own suite of “treatments.” Thus, demand can be created almost at will. The limiting factor will be the resources made available for said ‘treatments.’ That is why I mentioned “improved outcomes” in my first comment. Without imposed limits, the field can expand forever. Where old demand dries up, new demand will be created. All that is required under the present regime is a revenue stream to exploit. Through Medicare, Medicade, the V. A., and now Heritagefoundationcare, the government has guaranteed the funding. As I see it, the new limiting factor will be the ability of society to fund the medical endeavour. There are two dooms possible here. One dire outcome is what I see us as heading for; the segregation of medical care by wealth classes. The other fell possibility is the collapse of the social contract, with the attendant withdrawal of funding for “superfluous” needs, like public health. It is quite possible to imagine both cases occurring simultaneously. I can well imagine a neo-feudal (let us not quibble about this term today,) future where doctors are available only to the wealthy and powerful. The problem here is that modern medicine is a large scale group project. No power elite, no matter how wealthy or powerful can fund this level of work alone. If the elites do get their return to the Golden Age of Capitalism, they will have to do it with a significantly lower complexity of medical care.
        It is not so much a case of “Supply and Demand” as it is a case of “Supply and Command.”

  2. paul

    Nice to see the space merchants get a mention, Take a look at Clifford d Simak’s ‘ They walk like men’. Though even pulpier in style, it is perhaps more moving, families living in cars because everything has been brought up and shut down by the aliens reviled across the universe as the ‘realtors’ . Their method being simple counterfeiting.
    That generation, kornbluth being the funniest, greatest and saddest were one of America’s greatest gifts to the world.
    Carel Capek held his own,un-remembered own in Europe though.

    1. Vatch

      The Space Merchants is available in a nice from the . The book has acid free paper, sewn binding, and three other novels by different authors. Sorry, I know this reads like an advertisement, but I think people should be aware of the nice books that they can get from this .

  3. James Levy

    Although I have a few quibbles with the presentation, this is why economic history, rather than “academic” economics, is so vital and important. Problem is, according to the last set of stats I saw from the American Historical Association (of which I am a member) Economic History was even more meagerly represented in the academy than my own field (military history), and that’s saying something. You have to wonder just what a Krugman or a Friedman would make of actual history like this–hash, one suspects, after they cherry-pick their way through it looking for signs and portents of their favorite “models” while dismissing or discounting anything that didn’t fit the program (the way the intelligence was fixed to fit the policy in the Downing Street Memos).

    Would that Economists would just admit their limitations, but we’ll see pigs fly before that happens.

  4. JB

    Dr. Baptist’s book, “The Half Has Never Been Told: Slavery and the Making of American Capitalism”,
    is a tremendously important book.

  5. tim s

    Sure, you can bend all of the inextricable facts around to come up with the oh-so-grandiose statement that the Civil War was fought to erase that Southern abomination of slavery, but in doing so, it shows that that same statement made as it typically is with the head held high and chest puffed out is really just BS and an obfuscation. The reality is that the northerners in power at the time couldn’t care less about the morality of slavery or give a rats-arse about the black people, pretty much as they don’t now, if judged by actions rather than words. The PTB fought the CW only when the south tried to secede, in which case, they really fought the war to MAINTAIN the privilege that they had with the existing institution of slavery. The morality claim was propoganda, and perhaps a convenient way to look good to the abolitionists who they could expect to win over to their favor in fighting a war that might be otherwise opposed.

    Talk is cheap. Besides, it seems that most of our wars in the empire era are billed to the masses as some sort of moral war, but on deeper inspection it becomes obvious that they are anything but.

      1. tim s

        It looks that this post was a follow-up to the post a few days ago, which had a somewhat heated comment section at times. The tone, even the title, implied once again that the good north defeated the evil south (no, of course the south wasn’t mentioned in the title, but it didn’t need to be since there was only one side that was defeated), and that the war was about the evil that is slavery. This article today paints it to be much more about economics, but hey, lets call it about slavery (morality) anyway.

        1. Lambert Strether Post author

          ” The tone, even the title, implied once again that the good north defeated the evil south”

          Do you find it hard to walk with that chip on your shoulder?

          1. tim s

            Your one-liner’s don’t help your cause. I don’t have a chip on my shoulder. I’m not one with confederate blood or history, being of German immigrants to Texas in the late 1800’s. Lest you think that my ancestors came to a hotbed of southern sentiment, read the 2nd paragraph here under . I was raised with rather liberal sentiments in Austin and largely maintain those to this day.

            You, however, seem to have something on your shoulder that must be maintained for some reason. I too was raised being told that the war was about slavery, but then I was also told that we (the US) were always the good guys in all of the other wars, like saving Europe from the Nazi’s just for goodness sake. There seemed to be no end to the benefit the world saw from our existence, according to our legend. But, turns out that we really are no different from the many different civilizations throughout history, as our current situation shows. Do you need to feel that you are a part of a morally superior people for your self worth? It’s not necessary. It sucks to realize that you are just another member of the common human race if your whole life you’ve thought of it otherwise, but hey, life goes on. Being good as a person and trying to influence others is all that one can do – and I see that you do that and respect that a great deal.

            We in the US are not a moral force in the world. The north is not a moral force in the US. All wars are fought for other reasons, and they always seem to boil down to the self-interest of the PTB, for at least millennia now. Any commoner who benefitted by a fortunate alignment with the PTB’s interest really just got lucky at that time. In this case, the slaves benefitted by the need for the North to cripple the defeated South by taking away their main strength. Look around – abolition of “legal slavery” can be celebrated with blinders on only when seeing that the descendants of slaves still suffer repression as they do, no less in the north than the south, and that there are many other forms of slavery, and that these are not necessarily regional.

            1. alex morfesis

              hmmm what if the south succeeded because of a cotton bubble that burst and the norths attempts at forcing the british to pay more by pushing up tariffs…

              there was a cotton bubble in 1859 and 1860…it burst and the north wanted to force prices up with tariffs and bringing the actual cotton works to the US instead of letting the british make all the profits on the more finished products…

              the south wanted to not share with the north and decided to try to keep all the money from cotton by going their own way…

              killing off slavery was a price the russians put on lincoln to gain their support…

              but compared to the rest of the world, america does have the high moral ground…that is until kennedy lost control of his government in september and october of 1963 with all the coups going on around him across the world without his authorization. Iraq, Cyprus, Yemen, Vietnam, and a half a dozen others all turned in the few weeks before that fateful day the week before thanksgiving…

                1. alex morfesis

                  its late…ugh…
                  I should have just turned in happy about the mets win…
                  oh well…
                  its not what you are asking for exactly…but it should loop back to what i am saying…lincoln was personally an abolitionist but he thought if he did not push manumission into the discussion, he could draw the south back into the union…he would have traded putting things back the way they were in 1858 and left slavery in place for another decade if it meant getting back the union without further bloodshed…the south left, they were not pushed out by the north and there was no pending emancipation proclamation that was about to be signed by lincoln the day after his inauguration…

                  1. alex morfesis

                    also, the american ambasador to russia, the kentucky abolitionist, muhammad ali…oops, I mean casscius clay, came back and basically said to get russian help, lincoln would need to abolish slavery, as the russians had killed off serfdom (at least on paper)…

                    it is clay who insisted he got lincoln to kill off slavery…

                    the great russian naval fleet that went to san francisco and new york harbors in september and october of 1863 was part of the deal…

                  2. Lambert Strether Post author

                    1) One thing I didn’t realize until I read Baptist’s article was how threatening abolition was financially to the slave-owners. Even the threat of non-expansion to new states could have decreased the value of their investments. I’ve always heard the “slavery would have died out by itself” phrased in terms of soil exhaustion or lack of productivity (clearly the slaveowners themselves did not believe the latter). But I’ve never heard the gradualist argument put in terms of crashing asset values. Which is a long-winded way of saying that perhaps Lincoln’s putting the Union first had something to be said for it, gradualist though it was.

                    2) As far as “killing off slavery was a price the russians put on lincoln to gain their support”, this is the closest I can come, though I might have missed something, since the hour is late and the article is long:

                    On September 22, 1862, Lincoln used the Confederate repulse at Antietam to issue a warning that slavery would be abolished in areas still engaged in rebellion against the United States on January 1, 1863. The Russian Tsar Alexander II had liberated the 23 million serfs of the Russian Empire in 1861, so this underlined the nature of the US-Russian convergence as a force for human freedom. This imminent Emancipation Proclamation was also an important political factor in slowing Anglo-French meddling, but it would not have been decisive by itself.

            2. Lambert Strether Post author

              You’ve noticed the name of the blog? “Cfdtrade”? It’s a finance blog. I found it fascinating to discover that the panic of 1837 had such clear parallels to the crash of 2008, as the embedded commentary shows. If I have a “cause,” that’s it. That’s evident in the title and the embedded commentary. Your comments confuse the thesis that the war was “about slavery” with the idea that the war was “about slavery because slavery is evil.” (Had I wished to write on the latter thesis, I would have gone into the interesting history of abolition, instead of going into the financial structures that supported slavery — down to hypothecation).

              That said, if we must debate the thesis that “we really are no different,” that’s hooey, plain and simple. Human rental is less than ideal, but it’s a civilizational advance over human sale. I prefer to give some credit to the political system (the Union) that helped bring that advance about, and I prefer to deprecate the political system (the Confederacy) that resisted it.

              1. Roger Bigod

                There’s a distinction between deprecating a political system and gloating over moral (and military) superiority, aka in sports terminology “rubbing it in”. Despite your obvious good intentions, some of your comments come across as personally antagonistic.

                  1. Roger Bigod

                    Thank you for a novel and unexpected experience. It isn’t every day that I’m outed for being a cryptoslaver.

        2. Min

          The South started the Civil War, and they thought that it was about slavery. They said so, too.

          Look it up.

          1. sufferin'succotash

            Of course it wasn’t about slavery! Look at all those Northern states which seceded from the Union!
            Um, wait…

          2. Knute Rife

            All the Sons of the South commenting here ought to put down their Moonlight and Magnolias propaganda and read the Southern papers from 1856-1860 (Reports on Fire-Eater rallies aren’t hard to find.) and the actual declarations of secession.

        3. jsn

          That the days traders backed their MBS with the bleeding hands and backs of living men and women makes them a bit worse than todays financial sociopaths, though if you track your supply chains far enough in our globally integrated system, there may actually be no difference at all.

          That the southern slave owners were intent on territorially and demographically expanding their bloody system makes them, and only them, monsters (at least in that particular).

          While the era’s capitalists bear the same ethical burden (what we owe one another through our systems) as the slave drivers, the moral burden (what we owe one another personally) of putting to lash those in your company qualifies a character I ask if you would like?

          It isn’t about North or South or their respective cultures, it is about humane or inhumane. Alas, the latter is all to common, all to human.

    1. FederalismForever

      @ tim s. You wrote: “The PTB fought the CW only when the south tried to secede, in which case, they really fought the war to MAINTAIN the privilege that they had with the existing institution of slavery.” Wrong. The reason the South seceded when it did was that the 1860 election results marked the first time that the Slave Power did not control EITHER the House of Representatives or the Presidency at the same time in many decades. This meant that anti-slavery forces could now vote to raise and support an army – again, something that hadn’t happened in many decades. The South was alarmed at the support Fremont received in 1856, and was even more alarmed in 1858 when the new Republican party won enough seats in the House to essentially achieve a deadlock with the Democrats. But it wasn’t until the 1860 election that the South was faced with the prospect of an anti-slavery President and House combined at the same time, and therefore able to raise and support an army. With that combo in place, they didn’t even wait until Lincoln was inaugurated to announce they were leaving.

      One other thing: if you’re a PTB enjoying profits traceable to a slave system, the last thing you would do to preserve your status and your profits would be to launch a devastating war against that system.

      1. tim s

        and they didn’t until the south planned to secede. If the war itself, as claimed, was truly about slavery, and not self interest in all of its various forms, they would have conducted a moral war prior to secession. But that did not happen.

        I’m not saying that slavery wasn’t a major issue of the time. I’m saying that the civil war was about much more than slavery. It sounds fine and moral and makes some feel good to do so, but I just don’t see it. If it were about love and justice for our fellow man and one region is superior morally to another, explain why conditions throughout the US for the general populations is just not really that different. Are the relationships between the ghettos and uptown in philadelphia really any different than they are now in Georgia? Do the northern police love the poor man of color more than their counterparts in the south? Show me the love at the NYPD and I’ll start to believe that maybe it was moral outrage over slavery by north that was the true cause of the war.

        1. Lambert Strether Post author

          Certainly the abolitionists were motivated by “moral outrage.” That said, the focus of the post is on financial factors. I don’t know why you are so concerned to disprove a thesis that the post does not put forward.

          Personally, I’m amazed to get a result that the Panic of 1837 was so similar to the bubble of 2007-2008 — complete with Minsky moment. It’s a topic that’s highly suitable for a financial blog. The moral equivalence of the South (I prefer to say the Confederacy since clearly all Southerners did not support the vile institution slavery, unlike the Confederate state) and the North (I prefer to say the Union, since Wall Street, for example, leaned toward the Confederacy out of pecuniary interest) and the North is certainly a topic of concern to some, but of secondary concern both to this post, and the blog. In fact, this thread verges on trolling.

        2. FederalismForever

          @tim s. Impossible. How would they have funded such a war? With all due respect, you need to look more closely at how the Civil War was financed. It was only when (i) the Republicans won a large majority in 1860, (ii) were seated as the 37th Congress in early 1861, followed by (iii) all of the representatives of the Deep South leaving D.C. to join the new Confederate government (thereby removing any possibility of them voting against any and all military and tax raising measures presented in Congress from that point onwards) that the North gained the capacity to enact the sharp tax increases passed by this 37th Congress to support the massive navy and military buildup needed to invade and blockade the South. They also gained the power to pass legislation aiding Treasury Secretary Chase’s greenback issuance program. There was no way they could do either of those things until they gained control of both the House and the Presidency, which didn’t happen until 1861.

          Much of the North – especially New England and Ohio – really was motivated by moral considerations. Much of the rest of the North would move in that direction as the War went on. How else can you explain the passage of the 13th, 14th, and 15th Amendments (over three separate Congresses, note), the Civil Rights Act, the anti-KKK Act, and repeatedly passing legislation over President Johnson’s veto? How do you explain the massive electoral defeat suffered by Andrew Johnson in 1866? This was a thorough repudiation of Johnson and a vote of confidence in the Radical Republican agenda.

        3. Min

          tim s,

          You write as though the Civil War was fought because the North decided to attack the South, the only question being the motivation behind that attack. The South attacked the North, and their stated reasons were clear, the main one being the defense of slavery, “our peculiar institution”, because slavery was the basis of Southern society.

    2. Code Name D

      Free markets do not permit slavery to exist. (Because – markets.) Slavery had to be imposed onto the south by the federal government through regulation in order to rob the people through taxation. The southern plantation owners actually lost money through their slave labor force. The southern states that rebelled in order to secure their stolen liberties, freedoms, and to restore a true free market economy. Once this was done, slavery would simply fade away because it was so costly. No. Really. The south fought to free the slaves. They actually won the civil war. But the government started the KKK movement to discredit the southern people by tying them to indifference and racism.

      No. I am not making this up. This revisionist history appears to be held by many free-market Libertarians who are so desperate to wave away the contradictions found in their free market ideology.

  6. Kyle

    “So, yeah, of course the Civil War was about slavery.”

    Not solely. Breaking the issues down to the individual factions and specific interests we find a minimum of four factions with the specific interests associated w/ each. From the viewpoint of the slave, and of course their descendents, the whole of the complex commerce of textile manufacturing from the growing of cotton to it’s final retail sale was anathema. For them the specific focal interest was the issue of slavery itself. For the aristocrats of the mercantile North and the aristocratic South the issues were profits of commerce vs. the resource industry of each respectively. That of the English manufacturers, profitable supply. Certainly the moral arguments of the abolitionists existed at that time. The economic interests at that time, however, can be seen to have prevailed as they do in our day.

    The mercantile interests of the North sought, in the same manner as the mercantile interests of England prior to the Revolutionary war through the East India Trading Company shifting taxes to the Colonies, to capture the markets of the resource oriented South through political influence of US Tariffs. Such influence gained them increased profits against the decreased profits of the South. The strategies of mercantile interests of England prior to the Revolutionary War and the mercantile interests of the US mercantile North prior to the Civil War were the same, resulting in wars of independence from captured governments (Declaration of Independence/Secession). Expansion of slavery to the territories or it’s prohibition can be seen as wrangling for future power as both the centers of aristocracy turned to polity as a means of resolution to their problems.

    As well, in both the Revolutionary War and the Civil War, for the general populace of both sides, it was a rich man’s war and a poor man’s fight. How much the use of the abolitionists moral arguments were a matter of political issue wedging hasn’t been well explored. But I imagine that then as today they were something that was well at hand. Lincoln definitely asserted that to save the Union he would “free all the slaves, free some of them or free none of them.” There again, we have slavery used as a wedge issue as well as a strategic maneuver. Regardless, the descendents of slaves certainly have a valid viewpoint. In the same situation, wouldn’t we all, being considered by the aristocracy as the lesser interests in the halls of power. Aristocracy vs. aristocracy vs. the common man.

    1. Lambert Strether Post author

      “profits of commerce vs. the resource industry.” And if you follow the money, you will see that the immense profits from slavery — as well as the cotton used in British mills that the British could never have produced themselves — undergirded both of those two “factors.”

      “Solely” is a straw man. I stand by the statement “the Civil War was about slavery.” Please read the post.

              1. tim s

                almost as big as your ego. Your response to Kyle’s initial post here is reprehensile. It was well thought out, it seemed (certainly better than anything I wrote), and worthy of a better response than you gave. Rather than giving any refutation of any of his points, you just wave your hand, throw out straw man, and dismiss it, and then insult him.

                Act professionally. Any one of us may be right or wrong and we can all expand our understanding, including yourself, although I don’t see much evidence that you would agree with the latter.

                I will still come to this site because it is still highly educational, and will continue to support it as well, but I am very disappointed at how some of the threads take on such condescending, negative vibes that run off good contributors, and how frequently your comments are a part of that.

                1. Lambert Strether Post author

                  Pointing out a straw man is reprehensible? Seems odd. As for the rest of the thread, “tit for tat” is a perfectly valid strategy. “You win” is snark; it got back the snark that it earned (and “professional” grade, at that.) It was also a response to the content of the comment, and not, as your own comment is, an ad hominem.

                  1. tim s

                    as a stand in host on a blog as good as this, I’d hope for better than tit-for-tat strategy on your part to avoid downward spirals in the comments, which is the curse of many a blog. I see his “you win” comment as an acknowledgement that with such an initial short response such as yours to his effort, any further attempt to prove a point would be pointless. If you had provided any rubbuttal of substance he would likely not have replied at he did. It’d difficult to know such things online, as it is hard to squeeze sugar from the phone, but knowing that this is the possibility should cause a professional not to assume a “tat” and send out a “tit”.

                    Ad hominem? no, it was an honest criticism without malice. Take from it what you will. I wish it were different.

                    1. micky9finger

                      What shite!
                      What a waste.
                      There is a lot of emotion about slavery especially when you read Baptist’s book. In the book he, may be, goes more into the “methods” used to increase productivity ,that is beatings and constant threat of the lash.
                      To contemplate the incredible financial ediface built on the foundation of slavery bogles. Also as is implied by other comenters
                      Let’s not forget the workers in the mills in England.
                      I think Lambert has the right idea to see this huge financial bubble of liers loans, extremely over leveraged loans, securitization, and banks and banker chicanery is very much like the recent GFC bubble. All the same things seemed to happen. Except this time not on the scarred,bloody,backs of slaves.
                      Baptist’s point is that the industrial revolution was fueled by cotton and slavery and our current wealth rests on that foundation. Of course there will be a lot of emotion connected to that idea.
                      – OK I give up there is a gremlin taking over my typing

                    2. Yves Smith

                      I only saw this now. tim s, you were utterly out of line, straw manning the post and projecting your ‘tude onto Lambert. You go into moderation. Frankly, Lambert cut you way more slack that you deserved.

                  2. tim s

                    I do not claim to be an expert on the civil war or any other periods, and cannot always see right through others arguments, and for any errors I have made with these posts, I do apologize.

                    I do stand by some of the points I have tried to make tonight, and regret where I may have missed the mark.

                2. vidimi

                  kyle’s post was thoughtful but it showed that he didn’t bother to read the whole post. therefore, it was a non-rebuttal and lambert simply treated it as such.

                  1. Kyle

                    Well, believe it or not, I actually read the whole post, vidimi.

                    I simply believe that to say the CW was caused by slavery completely ignores the other major factors in play, most of which I wrote about were economic. Why would one want to ignore major factors? Where Lambert was drawing economic parallels, my comment did too, although in other directions.

                    Believe this though, I have no concept of what the term “snarky” even means. Lambert appears to know all about it and even claims his “professionalism” within whatever that domain is. tim s remark was correct – “he would likely not have replied at he did.” The initial response gave such short shrift to any argument I made that I saw no reason to further waste my time. The handwriting was obviously on the wall and I am not given to head-butting walls.

                    1. Yves Smith

                      Kyle,

                      If you actually did read the post, you’ve just confessed to straw manning. And your claim not to be invested in your views is obviously false given the insistence of your comments.

                    2. bob

                      I do love how these threads bring out the neo-confederates to “educate” everyone on just how super complicated the civil war was. There’s never much “education”, just ways of breaking down the politics of slavery. Which is saying, in way too many words- SLAVERY, writ large.

                      Ron Paul 2020…and beyond…

                    3. vidimi

                      i’m feeling generous, so here’s a hint: at no point did lambert make the claim that there were no factors other than slavery in the CW.

                  2. tim s

                    Kyle’s post appeared, especially since he quoted Lambert’s final statement in the post, to be a reaction to this statement and how it came across, which is exactly how I took it, which appeared “snarky” (yes, I too had to look it up). If it weren’t for this statement, I wouldn’t have posted in the 1st place, and likely Kyle would not have either. I hope that the great people running this site can be sensitive to such things. It set me off, for which I’ve apologized for my part. It did not need to happen in the 1st place.

                    1. Lambert Strether Post author

                      Following Kyles comment and my response, the sequence: “Never mind Lambert, you win.” -> “The passive- aggressive discussion is over in Links, today. See the last one.” -> “No thank you, I have no interest in the discussion” -> “It’s a big Internet.” -> “almost as big as your ego…” and (elsewhere) “Jesus Christ! The two of you are on drugs or something.” Since today is my day to kind, I won’t even throw a flag for insulting the moderators (both me and, far more importantly, Yves).

                      So.

                      * * *

                      For those who read the post in its entirety, this passage (underlined in the orginal):

                      In the 1830s it was still not clear where the center of gravity of the national financial economy was located—Philadelphia, home of the B.U.S., and New Orleans were both in contention. By the early 1840s, Wall Street and New York had emerged as the definitive victor. Slave owners continued to supply virtually all of the industrial world’s most important commodity, but the post-1837 inability of Southern planters to control their own financing or get the capital that would enable them to diversify led them to sacrifice massive skimmings of their profits to financial intermediaries and creditors.

                      should at once have disposed of the idea that the premise of the post was the moral superiority of the “North” (I prefer to say the “Union”) over the “South” (I prefer to say the “Confederacy”). We can have that discussion, of course, but it has little to with the main point of the post, which is — fittingly, this being a finance blog — about finance. The whole moral superiority thread was a huge distraction and a disservice to those readers who missed the clear comparisons between the Panic of 1837 and the Crash of 2007 – 2008.

                      And for those who at least read the end of the post:

                      The second method of enhancing revenues was by seeking new territory, both in order to add to the land under cultivation and with the hope of provoking a new boom. Unleashing the animal spirits of speculation in new territories had almost worked before, so why not try it again by acquiring California, Cuba, Mexico, or Kansas for slavery? The result of the commitment of political capital to that end, of course, was the Civil War, in which the consequences of the long-term financial difficulties of the cotton economy played a major role in Southern defeat.

                      “And the war came.”[1]

                      And yet in the end the reverberations set off by the leveraging of slavery’s inequities into further equity for those who exploited them were what brought the structure of real-life slavery crashing down.

                      So, yeah, of course the Civil War was about slavery. But you’ve got to follow the money to see why.

                      Which, of course, the whole moral superiority thread obscured as well. “About slavery” is a perfectly reasonable short hand of “in the end the reverberations set off by the leveraging of slavery’s inequities into further equity … brought the structure of real-life slavery crashing down.”

                3. Yves Smith

                  Oh, please. Kyle straw manned Lambert, as did you. He then pretends not to care as a way of having the last word, and Lambert tells him, more politely that I would have, that if he feels that way, he should read another site. Kyle then behaves true to form (as in showing his need to one-up Lambert) by again trying a comeback.

                  You are cut of precisely the same cloth, trying to pretend you have the moral high ground when you engage in persistent dishonest argumentation, including straw manning and “any stick to beat a dog” tactics.

                  1. Kyle

                    Oh, but this – http://cfdtrade.info/2015/04/quick-note-slavery-finance-minsky-panic-1837.html#comment-2431646 is ok. Nothing having been said about it.

                    Like I said, it’s drugs…..or something.

                    I’ve never seen people so relentlessly, almost manically go after someone unless something is terribly, terribly, terribly wrong. Not even mentioning the mischaracterizations of actions and motive.

                    With that, I give you what you have been seeking all along. Goodbye. Your problem, whatever that may be, is not worth my time

                    1. Yves Smith

                      Kyle,

                      If you think your comment in that thread puts you in good stead, you are sorely mistaken. Your comments have ranged from, as Lambert pointed out, passive aggressive to overly nasty, and thin to non-existent on reasoning to boot. We have clearly stated comments policies and you have been persistently and flagrantly in violation of them. And then, to add insult to injury, in a classic case of projection, you try to charge us with being out of line. Sorry, the other regular members of the commentariat see you and TimS as out of line.

                  2. tim s

                    Yves,

                    I’m glad that you are still commenting on this thread, and I hope that you come back to it one more time.

                    I have been troubled by how this thread progressed, and had a realization last night that made things much clearer to me. I was confused by some terminology used by Lambert, such as his claimed “strategy”. I didn’t know there was a strategy in these discussions. Then I realized that, by using such terms as straw man, ad hominem, etc, that it looked to me that you and Lambert come at these discussions from a debate/logic mindset, from which it appears you both have training, and that any violation of the rules of debate is swiftly called out. I have had no experience or training in formal debate, so was not thinking or writing from that frame of mind. To me, our headbutting is the result of us thinking that the other is speaking the same language, but are really not. I am, if anything, a philosopher/historian/psylogist jack-of-all-trades-master-of-none type and we were really two sides separated by a common language, as the saying goes. I hope that you agree with me so far.

                    Kyle and I were debating a single summary phrase, “so, yeah, of course the civil war was about slavery”, not the whole article. It appears that Lambert and you expected that the article was to be discussed and not a single phrase, and that by not doing so was a violation of the rules to be called out as such. I would suggest that there was nothing wrong with our focus since neither one of us had an issue with the article itself, so our two sides diverge significantly from that point. In educating myself about the rules of debate, I ran across a term “false dichotomy” , which is an informal fallacy consisting of a supposed dichotomy which fails one or both of the conditions. I say that Lamberts summary line was similar to this, but even more than a reduction to at dichotomy, went even further to make it a “false mono-otomy” (for lack of better words), which if a false dichotomy is against the rules, than a false mono-otomy takes that even further. We deemed that unacceptable and responded as such.

                    Another term I ran across learning about debate rules is needling, which is a deliberate attempt to provoke an opponent to anger. I’m not able to find as much information about this as some of the other debate terms, so you will excuse me if calling this a debate term is not 100% correct. However, some of the responses by Lambert, if not actually intended to be needling, certainly looked to be just that. Phrases such as “it’s a big internet” can easily be translated as “don’t let the door hit you on the way out”, which is exactly how it registered with me. In my mind, this was an unwarranted insult that could not pass, even though not directed specifically at me, so I responded (as I learn now) with the ad hominem about Lamberts ego. I apologize(d) for this, but feel it was provoked. If these claimed “needles” were not what I take them to be, please let me know what they are and how they fit into a productive discussion.

                    1. Lambert Strether Post author

                      “It appears that Lambert and you expected that the article was to be discussed and not a single phrase.”

                      Yes, you are expected to read the whole post. This isn’t . Especially since the phrase in question was a short-hand summary for the thesis of the post. In fact, let me quote it in context:

                      So, yeah, of course the Civil War was about slavery. But you’ve got to follow the money to see why.

                      (My underlining.) You are also expected, when reacting to a sentence, to at least read the entire paragraph in which it occurs; the word “But” is a signal that the preceding sentence is being qualified in some way.

                    2. Yves Smith

                      You seem to think that making logically sound arguments is an unreasonable demand. If you had bothered familiarizing yourself with this site. you would know that our core mission is to promote critical thinking. Terms like “straw manning” are not unique to debate; debate uses them because they are classic concepts derived from Greek rhetoric and logic. And we state explicitly in our Policies section that persistent bad faith argumentation (and cherry picking and straw manning are bad faith argumentation) are grounds for banning.

  7. susan the other

    Great editorial Lambert. And just imagine what the robot trade is gonna do. This history puts the lie to Wall Street’s “Oh gosh, we didn’t know housing was a bubble” Because they clearly did know. Right down to the word “hypothecation.”

  8. susan the other

    Those clever southerners, owning their own banks and writing their own rules, while all the time using the national currency. Think we otta maybe restrict that little pass-time of all our finest, most upstanding citizens?

  9. Roquentin

    “And yet in the end the reverberations set off by the leveraging of slavery’s inequities into further equity for those who exploited them were what brought the structure of real-life slavery crashing down”

    Made me think of this famous quote: “What the bourgeoisie therefore produces, above all, are its own grave-diggers”

  10. [email protected]

    One of the questions I’ve had about the Civil War is why the northerner elites wanted to fight it. Sure, the plantation owners had their fortunes in it, and so didn’t want to part with it, but the northerners? They were making a bundle too, so why throw that away?

    Fact of the matter is that the Northerners simply did not like the southern elites. Really did not like them. Thought they were effete snobs. Bastards. You name it. They hated them. They hated doing business with them. So when the South challenge them to war? The contest was on.

    Oddly enough, the southern elites still have the same problem. Like then, people today just don’t like them. And now we can see why.

    1. sufferin'succotash

      Britain’s East India Company was so heavily involved in India that a famine in Bengal in 1770 (coupled with the Company’s own inability to keep its employees from fleecing the Indians) left the Company virtually bankrupt. The company was also so deeply embedded in Britain’s political establishment that it was–to coin a phrase–Too Big To Fail. The deal which granted the EIC a monopoly to market its tea in the 13 Colonies was actually part of a bailout engineered by King George’s Prime Minister Lord North. Priorities. Saving the Company was considered more important than appeasing the colonists. The rest, as we see in the History Biz, is history.

      1. Lambert Strether Post author

        If there’s a real historian in the house they’ll correct me, but I seem to remember that EIC monopoly prices on tea made the incentives very great for smuggling, that that British tea smugglers in the 18th century used all the techniques of American drug smugglers in the 20th century (at least on the Atlantic Coast) — down to “mother ships” off shore! Another example of “history does not repeat but it rhymes,” but the beat of the line is often financial….

    2. Greenbacker

      Because they got in the way of industrialization and were “messing around” with foreigners in Europe and brought “Europe” controlled Wall Street to financial fore. Men like MVB were outright British Symps with August Belmont in the southern Democrats back pocket. The destruction of the National Bank set industrialization back for decades to what it could have been. It was why a hardline federalist(in the Franklin, Washington,Hamilton tradition) like Lincoln was elected, the greenbacks come into being and the South saw no other recourse but war because they knew Lincoln would box them in and did armburns to they gave up. The North had had enough of the games.

      Now, sure, the “North” gave in. Wall Street and the North would “shake hands” during the war, the National Banking System would come into focus and the pathway toward the modern banking system. The Civil War had a similar effect WWII had in completely transforming the economy going into the future. Capitalists were given ranging powers and the South came into the fold after the North ended Reconstruction with Jim Crow.

      I always thought Lincoln was the one major chance to break from the money power, but he gave in because he was part of them. Just like EVERY politician is part of them today no matter what system they “prescribe”.

    3. sufferin'succotash

      Given the indecision pervading in the North in the winter of 1861 it seems that the region’s elites were not at all certain about whether to fight. Certainly there was no great enthusiasm for war in commercial centers like New York which stood to lose in case of a conflict with the Confederacy. In fact, New York’s Mayor Fernando Wood actually floated the notion of having NYC secede from the Union so it could continue to profit from trade with the South. It was really Fort Sumter which Changed Everything. Southerners opening fire on the Stars & Stripes was truly a transformational moment for public opinion in the North, elite as well as popular.

      1. NotTimothyGeithner

        The local governments and economy of the South were really different, and I don’t think we today grasp how bizarre it was. It was feudal. Many of the 1770s Southern rebels went belly up because their banks and money were in London and their descendants weren’t the elite in 1860. The bonds of Jefferson and Adams weren’t there.

        Letting the South leave wasn’t such a crazy idea in 1860, the immorality of slavery besides. After Fort Sumter, all bets were off.

        1. jsn

          Feudal doesn’t really capture it. You should read Baptists’ “The Half Has Never Been Told” from which these texts appear to been taken. You will be amazed by just how capitalistic and “modern” in a particular sense it was. Modern in that, outside the economic transaction, there was no perceived moral obligation: slave descriptions of how they were worked was pure Tailorist analysis driven by the whip where the cogs were actual humans denied any of the considerations due their species forced to innovate to save their actual skin.

          Feudalism only blundered into this level of cruelty in its most barbaric moments of conquest, lacking the infrastructure and moral perversity to support this level of exploitation as an ongoing system. The forced labor south achieved its wealth systematically, innovating through terror day after day for a hundred years increasing cotton yield by many orders of magnitude. Nothing even close ever happened in a feudal society, the scales are simply incommensurate and the structure of cotton production to industrial except its machines were systematically de-humanized humans.

      2. H. Alexander Ivey

        Hum, kind-of reminds me of Pearl Harbour. Yes, that was a surprise attack, but an attack none the less. That is a key point to remember about Western folk. They don’t take kindly to an attack. They will fight back, economics be damn.

    4. Lee

      Many white Southerners hated them too. The book, Fall of the House of Dixie, goes into this at some length.

      Some 300,000 Southern whites fought for the Union Army. Add to that some 200,000 Southern blacks who served in the “Army of Northern Aggression” and you might say Southerners were in large part responsible for the South’s defeat.

      1. Lambert Strether Post author

        :

        The Fall of the House of Dixie brilliantly displays how the institution of slavery played the central role, first in the creation and then in the destruction of the Confederacy–and with it slavery itself.

        From Bookist’s review:

        Levine presents compelling evidence to counter revisionist arguments concerning the role of slavery in the South. He asserts that the entire edifice of Southern society was based upon the “peculiar institution” and the racial assumptions used to justify it. He effectively demolishes the mythology of a passive, even content slave population and illustrates how the maintenance of slavery depended on the threat and often the use of violence. Levine also acknowledges schisms in Southern society between the planter elite and the nonslaveholding majority. Once the military conflict began, the pillars of Southern society slowly eroded as men left the farms and plantations to fight and slaves refused to work and often fled into the arms of approaching Union forces.

        So remind me what all this discussion is about? It verges on trollery.

        1. Lee

          I found the book quite illuminating, even inspiring. As for much of the above commentary, I only scanned it and decided much of it was above my head, too deep, or otherwise beyond the pedestrian intellectual paths I typically tread.

  11. sd

    Observation. Bubbles seem to have at their basis the idea of income with little self effort. Sit back and the money just rolls in. It feels today like Business (and I use that term loosely to cover diverse industries) has created a financial bubble on the idea that little work need be done to see huge rewards. It’s repeating all over the world, this theme. It’s global. It’s across all sectors and societies. Everyone thinks they should make a killing just for being.

    This mindset has developed in to a global bubble of irrational self entitlement.

  12. uughhhh

    I admit I’ve only scanned the above, and the prior Lambert civil war/slavery post.

    am I correct in assuming that there is still trying to be a case made that northerners in their own investor passive aggresive manner are still trying to make the case the case that northerners weren’t every bit as rascist when they were allowed to pull it off?

    sorry for not doing my reading but that’s what it scans as, and most people don’t have time on their side and therefore are forced to scan.

    1. Lambert Strether Post author

      No. Adding, and not “still.” Please do your reading; that way you won’t have to rely on the knee-jerk responses of others who don’t read the posts either.

  13. VietnamVet

    The cotton bubble blows. Cotton never sells again at a pre-bubble price. Further expansion out west is blocked. Unrepayable debts are owed by the Southern Elite that must be repaid to Northerners. Wealth is tied to a human commodity whose sale is prohibited in the North. Cultures north and south are different. A civil war is inevitable. The Southern Elite can bank on fellow citizens coming to the defense of their States from the invasion by the Northerners. The Northern Elite have a problem after the defeat at Bull Run. They need to build a people’s army to invade and conquer the South to keep the Union intact. The Gettysburg Address spells out the justification simply and poetically. It bears repeating on Abraham Lincoln’s death 150 years ago today:

    “Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated can long endure. We are met on a great battlefield of that war. We have come to dedicate a portion of that field as a final resting-place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But in a larger sense, we cannot dedicate, we cannot consecrate, we cannot hallow this ground. The brave men, living and dead who struggled here have consecrated it far above our poor power to add or detract. The world will little note nor long remember what we say here, but it can never forget what they did here. It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us–that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion–that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth.”

  14. Jacob

    “And while the wage laborer’s body is not owned, it is nonetheless actually and literally colonized by capital-seeking entities whose products actually and literally flow through the body[2].”

    The worker’s mind is also colonized, which is probably more important to understand than the concept of the colonized body. Workers internalize the ideas put forth via religion, education, propaganda, cinema and other art forms, historical accounts, commercialism and all the other cultural products which are designed to “colonize” worker’s minds.

  15. wanderingmind

    I have been lately thinking about slavery as a form of debt, after reading David Graeber’s book, “Debt, the First 5,000 Years,” in which he gives the ancient world’s rationale for slavery as the conqueror sparing the life of some of the conquered, who are thereafter considered “indebted” to the conqueror because they literally owe the conqueror their lives.

    American slavery’s variation on that theme is captured in the post – slaves were collateral for debt incurred by the slaveholder and were monetized through the “magic of the markets” – i.e. they were thinking property. However, that can also be interpreted as slaves themselves being indebted. The price of freedom for a slave was a market price and some in fact purchased their freedom by earning and keeping wages.

    The civil war, seen through this lens, was a bloody bankruptcy proceeding in which all debts of all slaves were discharged. However, their creditors/former owners, never accepted the discharge of those debts and almost immediately sought to reimpose them. The post civil war struggle between former slave and former master resulted in the sharecropping system, which not coincidentally was a system in which the sharecropper became increasingly indebted to the landowner/operator of the store which advanced supplies and other goods to the sharecropper. By the end of the 19th century, then, the former slaves (or many of them) found themselves indebted once again.

    Although I have no idea to what extent those who participated in the “great migration” out of the South in the early to mid-twentieth century did so to escape indebtedness, it would be interesting to do some kind of study on this. Assuming that the new arrivals to the cities of the North, like Chicago and Detroit, were able to leave the debts they had accumulated in the South behind, they were nonetheless faced with the need to take on new debt in the North, a process which we can easily trace through the present to the predatory lending which fell most heavily on black and hispanic homeowners.

    So, I present this debt-centered narrative as a way to connect the slave past to the Mortgage Backed Security present. All dependent, of course, on some Ph.D. candidate doing the research to verify the role of debt in the Great Migration which, if accurate, will no doubt bring said Ph.D. candidate fame and fortune.

    Your welcome.

  16. kristiina

    Late to this, absolutely spanking brilliant!! And as with the best kind of writing, the comments reveal and clarify much about their writers. I am also starting to see and appreciate the moderation. What a giant task, thank you for that!

    You’all know that idea often used in sci-fi, the aliens/nasties/whatever colonising humans? Very persistent, it seems, and I’ve just been thinking about that whole phenomenon lately. Lambert seems to be of the opinion that it is improvement to have the enslavement done by chemicals and/or propaganda rather than by violent means. The more refined enslavement seems to lead to a greater amount of subjects being willing slaves, happy in their position. And also the chain of reasoning from depression into structural enslavement is too long. So I don’t know if I can agree.

    I am not a christian, but can’t help pointing out the way out of slavery/addiction/suffering as modeled by the one called Jesus. Take the pain. Let that desire&craving crucify you. Do not harden against it, let the pain run its’ course. This part of the teaching seems to have few takers, tough. And of course, all of the western culture is actually an edifice to hide/escape/insulate from all and any pain. If hiding and escape requires foisting the pain to someone else, we will invent a “them” who need to suffer. Even torture – when suffering has become so vast, that only the inflicting of suffering onto another is loud enough to drown the suffering of precious me.

    1. Eclair

      Kristiina, your mind wanders down into some dark hallways.

      “If hiding and escape requires foisting the pain to someone else, we will invent a “them” who need to suffer. Even torture – when suffering has become so vast, that only the inflicting of suffering onto another is loud enough to drown the suffering of precious me.”

      A friend recently asked, regarding the effects of Denver’s “Urban Camping Ban” prohibiting. among other things, homeless people from sleeping in public while covered against the cold, “How can you hate someone so much that you want to see them die?”

      And, the other night, watching films made when the Allies ‘liberated’ the Nazi concentration camps, the same question arose. But, your observation makes sense: when we hurt so much within ourselves, we can obtain relief only by inflicting that suffering onto ‘the other.’

      1. Kristiina

        Hmm…torturers suffer too…that is a bit too nice…I’d say torturers go to extremes trying to control and exercise power. The ultimate effort to defeat our powerlessness. And a complete waste, too. The thousand year Reich did not last ten years.

  17. vidimi

    great post, thanks for putting this up, lambert.

    strange to see so many approaching it with a chip on their shoulders, dismissing it a priori as a north vs south superiority contest.

    1. kristiina

      I think it has to do with this: a core wound is touched -> a human will recoil& invent ways to avoid facing/seeing the core wound. Pain-avoidance in action. It is a sort of “entourage” of truth, the going-off of all kinds of pet peeves/autonomous complexes. Geiger counter indicating that we are approaching the heart of matter.

      1. vidimi

        you are right, and people react defensively whenever their beliefs are challenged, but why are they taught to cherish a sanitized history and defend it so?

  18. Noni Mausa

    The essence of slavery is the co-opting of another’s energy, and from this we can see that slavery exists on a sliding scale. At our most equal, we all depend on each other’s shared efforts to create prosperity. At our least equal, we have the antebellum south.

    Now, a la Laffer, it might be argued that there is a curve whose greatest profitability (to the controllers, not the population in general,) lies somewhere between the extremes of shared versus unshared prosperity. As the old office pinup said, “We’re not slaves here. Slaves have to be fed.” But free range citizens can be induced, persuaded, to supply their own labour not at cost (food, clothing, shelter, education) but BELOW cost. (Low Wages Cost U.S. Taxpayers $152.8 Billion Each Year in Public Support for Working Families – )

    Noni

  19. nat scientist

    John Muir noted that “When we try to pick anything by itself, we find it connected to everything else in the Universe”. When we look for something for Free, we find slavery somewhere in the loop. When empathy breaks out, it all becomes clear.

  20. words

    Anyone have a map of current African American Heritaged Population per state, as compared with the National Average?

  21. ewmayer

    Nice piece, and a fabulous article by Dr. Baptist. I will make my commentary about just one snip that especially lit up my irony detectors:

    …by the 1830s, 80% of the cotton used by the British textile industry came from the southern U.S.

    This point is deeply ironic in light of the Brits’ often expressing pride in the notion that they Note one particularly ludicrous claim repeated by the foregoing wikiarticle:

    Richardson (1998) finds [West Indian historian Eric] Williams’s claims regarding the Industrial Revolution are exaggerated, for profits from the slave trade amounted to less than 1% of domestic investment in Britain. Richardson further challenges claims (by African scholars) that the slave trade caused widespread depopulation and economic distress in Africa—indeed that it caused the “underdevelopment” of Africa. Admitting the horrible suffering of slaves, he notes that many Africans benefited directly, because the first stage of the trade was always firmly in the hands of Africans. European slave ships waited at ports to purchase cargoes of people who were captured in the hinterland by African dealers and tribal leaders. Richardson finds that the “terms of trade” (how much the ship owners paid for the slave cargo) moved heavily in favor of the Africans after about 1750. That is, indigenous elites inside West and Central Africa made large and growing profits from slavery, thus increasing their wealth and power.[26]

    Economic historian Stanley Engerman finds that even without subtracting the associated costs of the slave trade (e.g., shipping costs, slave mortality, mortality of British people in Africa, defense costs) or reinvestment of profits back into the slave trade, the total profits from the slave trade and of West Indian plantations amounted to less than 5% of the British economy during any year of the Industrial Revolution.[27] Engerman’s 5% figure gives as much as possible in terms of benefit of the doubt to the Williams argument, not solely because it does not take into account the associated costs of the slave trade to Britain, but also because it carries the full-employment assumption from economics and holds the gross value of slave trade profits as a direct contribution to Britain’s national income.[27]
    The massive flaw in the “insignificant component of the British economy” arguments is that it ignores economic contributions due to the exploitation of slaves elsewhere than the British Empire. For eaxmple in the growing of the cotton subsequently processed in British textile mills. As the Wikiarticle on notes, “Textiles were the dominant industry of the Industrial Revolution in terms of employment, value of output and capital invested”, so 80% of the stock for the British textile industry coming from slave plantations in the U.S. surely underpinned a hell of a lot more than 5% (or the even more ludicrous 1% figure of Richardson) of the British economy of the day.

    Despite their domestic legal (and later historiographic) fig-leafery in this regard, the Brits continued to benefit hugely from slavery in their former North American colony, and of course they didn’t classify Dickensian exploitation of the laboring classes – including young children – as slavery, nor the odious exploitation of the “free peoples” in their far-flung colonial empire. Of course the slavery-profiteers in the northern US were no less execrably hypocritical, as several other readers note above.

  22. ewmayer

    Nice piece, and a fabulous article by Dr. Baptist. I will make my commentary about just one snip that especially lit up my irony detectors —

    …by the 1830s, 80% of the cotton used by the British textile industry came from the southern U.S.

    This point is deeply ironic in light of the Brits’ often expressing pride in the notion that they Note one particularly ludicrous claim repeated by the foregoing wikiarticle:

    Richardson (1998) finds [West Indian historian Eric] Williams’s claims regarding the Industrial Revolution are exaggerated, for profits from the slave trade amounted to less than 1% of domestic investment in Britain. Richardson further challenges claims (by African scholars) that the slave trade caused widespread depopulation and economic distress in Africa—indeed that it caused the “underdevelopment” of Africa. Admitting the horrible suffering of slaves, he notes that many Africans benefited directly, because the first stage of the trade was always firmly in the hands of Africans. European slave ships waited at ports to purchase cargoes of people who were captured in the hinterland by African dealers and tribal leaders. Richardson finds that the “terms of trade” (how much the ship owners paid for the slave cargo) moved heavily in favor of the Africans after about 1750. That is, indigenous elites inside West and Central Africa made large and growing profits from slavery, thus increasing their wealth and power.[26]

    Economic historian Stanley Engerman finds that even without subtracting the associated costs of the slave trade (e.g., shipping costs, slave mortality, mortality of British people in Africa, defense costs) or reinvestment of profits back into the slave trade, the total profits from the slave trade and of West Indian plantations amounted to less than 5% of the British economy during any year of the Industrial Revolution.[27] Engerman’s 5% figure gives as much as possible in terms of benefit of the doubt to the Williams argument, not solely because it does not take into account the associated costs of the slave trade to Britain, but also because it carries the full-employment assumption from economics and holds the gross value of slave trade profits as a direct contribution to Britain’s national income.[27]
    The massive flaw in the “insignificant component of the British economy” arguments is that it ignores economic contributions due to the exploitation of slaves elsewhere than the British Empire. For eaxmple in the growing of the cotton subsequently processed in British textile mills. As the Wikiarticle on notes, “Textiles were the dominant industry of the Industrial Revolution in terms of employment, value of output and capital invested”, so 80% of the stock for the British textile industry coming from slave plantations in the U.S. surely underpinned a hell of a lot more than 5% (or the even more ludicrous 1% figure of Richardson) of the British economy of the day.

    Despite their domestic legal (and later historiographic) fig-leafery in this regard, the Brits continued to benefit hugely from slavery in their former North American colony, and of course they didn’t classify Dickensian exploitation of the laboring classes – including young children – as slavery, nor the odious exploitation of the “free peoples” in their far-flung colonial empire. Of course the slavery-profiteers in the northern US were no less execrably hypocritical, as several other readers note above.

  23. craazyman

    The Last Word

    This post is quite good actually. It’s a lot better than I thought it would be, at first, just from the title and author in the context of this particular theme at hand.

    I thought it would be a tendentiously tortured exercise in white liberal guilt trip Jungian shadow projection finger wagging and hand wringing with an almost unbearably nauseating sentimentality and a distended and protruding pity for dead people gone for over 150 years now.

    Can somebody hand wring and finger wag simultaneously? That’s hard to believe. How can somebody’s hands be that talented when a person so doing (and it insn’t being done in this quite good post, just to rreaffirm my point) it can probably hardly walk and chew gum in the intellectual sphere of rellentlessly insightful analytical excavation? It takes all their concentration, a person who hand wrings and finger waggs, so that everything else that might be illuminated with insight just explode like a pinata hit with a baseballl bat and falls in 1000 pieces scattered across a linoleum floor in an unstructured chaotic mess.

    But it wasn’t any of those things! Actually, it’s quite well done. Very well done. There’s no need for commenters to head butt each other like drunken frat guys at 11 pm on a Saturday night. There’s not a lot of dignity in that after age 25. You guys, I mean really, time to put on a sport jacket and some nice shoes and converse as inteelectuals in sober tones with careful articulation and precise phrasings. Not flaccid phrasings and limp logic that only display an embarrasing case of soft-headed ED — Editoial Dysfunnction. You want to avoid ED even in the peanut gallery. People might remember when you couldn’t get it up enough to make sense. hahahahah sorry, just crakin myself up

  24. words

    There’s no need for commenters to head butt each other like drunken frat guys at 11 pm on a Saturday night

    it’s Friday, and no later than 9:57 PM, all across the North American Continent now, craazyman, jus sayin.

  25. tim s

    Yves, I’m posting here because I see no option to reply above. Regardless of whatever you decide, I respect you a great deal and am happy to support what you are doing here. It is invaluable and I wish you all the best.

  26. Myers

    A family emergency has prevented me from getting back on this until now.
    Just wanted to say thanks Lambert, for posting this. Absolutely fascinating perspective.
    The more things change the more they stay the same, I guess.

Comments are closed.