The country is once again called upon to come to terms with its slave past, a call that has aggravated the deep polarization into which we have descended. For many decades, economic historians have grappled with economic dimensions of slavery, addressing such questions as: Was slavery profitable? Was slave labor as productive as free labor? What were the implications of slavery for regional growth and development?
In a recent essay in the Journal of Economic Perspectives, I recount what economic historians have learned from six decades of research. That survey addressed such issues as interregional trade, the geography of settlement under alternative labor regimes, and the origins of regional conflict and Civil War. This brief article will focus on the role of slavery in the surge of nineteenth-century United States growth. To be clear, economics has no shortcut answers to profound questions of historic injustice and moral responsibility. But it might help to ground the debates in a fuller understanding of the historical record.
The question that has been strenuously debated is whether slavery, integral to commerce during colonial times, was also central to the acceleration of national economic growth during the first half of the nineteenth century. An insurgency known as the New History of Capitalism claims that such a connection is self-evident. Historians Sven Beckert and Seth Rockman assert “the impossibility of understanding the nation’s spectacular pattern of economic development without situating slavery front and center.… During the eighty years between the American Revolution and the Civil War, slavery was indispensable to the economic development of the United States.” Despite the rhetorical fanfare, this proposition has been rejected by virtually every economic historian who has examined the issue. What accounts for this disciplinary divergence?
The question that has been strenuously debated is whether slavery, integral to commerce during colonial times, was also central to the acceleration of national economic growth during the first half of the nineteenth century.
First, some background. Before the American Revolution, slavery was legal and practiced in all the British colonies of the New World. The largest mainland concentrations were in the tobacco regions of Maryland and Virginia, but the institution was also significant in fertile areas of the Middle Atlantic, and in New York City, where more than 40 percent of the households held at least one enslaved person. Overall, however, mainland North America was peripheral to the larger Atlantic slave trade. Data from the Trans-Atlantic Slave Trade Database indicate that no more than 3.6 percent of coerced African migrants came to North America, prior to the Anglo-American closure of the trade in 1807.
Nonetheless, slave-based commerce was vital for these colonies. Not only was slave-grown tobacco the largest mainland export, but the British Caribbean was the largest trading partner for the northeastern colonies. To feed enslaved people on the islands, the Middle Atlantic shipped grain products, beef, and pork, while New England sent fish, whale products and lumber. In addition, two-thirds of New England’s “invisible” earnings—shipping services, warehousing, shipbuilding, and finance—arose from Caribbean commerce. Merchants enriched by this trade sometimes used their wealth to found universities. Historian Craig Steven Wilder shows that the first five colleges in British America were major beneficiaries of the slave trade and slavery.
Not long after its new Constitution, the new nation had a new cash crop: cotton. A prime area of contention has been the nature of the link between cotton and slavery. The rise of the Cotton South was unquestionably part of national growth acceleration, but unlike sugar, cotton had no intrinsic technological or geographical links to slavery as a labor system. Had slavery been abolished in 1790 under the new Constitution—an unlikely counterfactual event, but perhaps an informative thought experiment—the cotton-focused region might have developed under a family-farm regime similar to that of the Old Northwest: Ohio, Indiana, Illinois, Michigan, and Wisconsin. The persistence and expansion of slavery in the South does not imply that it was driven by economic imperatives, but instead offers an example of what economic historians call “path dependence”: in these areas, slavery was a “pre-existing condition,” as owners actively searched for profitable new ways to deploy their “assets.”
The persistence and expansion of slavery in the South does not imply that it was driven by economic imperatives, but instead offers an example of what economic historians call “path dependence.”
The larger point is that whether slave or free, the Cotton South was neither an integral component of nor an essential contributor to accelerated growth elsewhere in the country. In the wake of the American Revolution, the states of the northeast abolished slavery—an unintended but nonetheless historic consequence of political independence—and extended this proscription westward under the Northwest Ordinance of 1787. Free family farmers moved rapidly into newly opened areas, migration closely linked to investments in transportation infrastructure: first turnpikes, then canals, and finally railroads. Coalitions of urban merchants and landowners pushed infrastructure projects, eager to increase the value of their property.
One major breakthrough was the Erie Canal, approved by the New York state legislature in 1817 at the urging of Governor DeWitt Clinton, who had been mayor of New York City and member of its canal commission from 1810 to 1824. Its bonds eagerly purchased by European investors, the canal was a dramatic success, spawning a host of imitators and channeling commerce and migration decisively along east-west lines.
Fledgling American manufacturers found their most inviting markets in the prospering farm areas and growing cities of the free states. Public schools proliferated, creating one of the first mass-educated populations in the world. But not in the South. Because they possessed “captive labor,” migrating planters saw no need to recruit labor for land-clearing and other farm-building tasks. Because the economic value of enslaved people as property was largely independent of local development, planters were much less inclined to form coalitions to promote transportation investments and encourage settlement. Thus, the slave states did not comprise a major market for either western farm products or northeastern manufactured goods.
To be clear: slave labor was arduous and brutal, and slave plantations were highly successful as cotton producers. Migration into the lush soils of Mississippi and Louisiana increased productivity, augmented by new yield-increasing cotton varieties. But economic development in the slave South lagged behind that of the free states, as the region neglected infrastructure, declined to recruit immigrants, and underinvested in schools—not only for the enslaved, for whom literacy constituted a threat to the regime, but for much of the free population. Slavery generated great wealth, but the main beneficiaries were the enslavers, not the other members of Southern society.
Economic development in the slave South lagged behind that of the free states, as the region neglected infrastructure, declined to recruit immigrants, and underinvested in schools … Slavery generated great wealth, but the main beneficiaries were the enslavers, not the other members of Southern society.
The grain of truth in the New History of Capitalism is that many free-state businesses freely transacted with slaveholders, some providing vital services that facilitated the operation of the slave system. New York steamship companies competed vigorously for the Texas slave trade. During the boom decade of the 1830s, the Natchez (Mississippi) branch of the Bank of the United States offered accommodation loans to planters so lavishly that the bank found itself in possession of numerous slaves and several plantations after the financial collapse of 1839. These and others were clearly complicit in the perpetuation and expansion of slavery. Such complicity surely deserves moral rebuke, but it is very different from the claim that slavery was the driving force behind the acceleration of national economic growth.
A final note: The historical interpretation sketched here has no direct bearing on the debate over reparations or other proposed responses to racial injustice in U.S. history. The direct gains from slavery were largely captured by owners, but responsibility for this state of affairs is national, beginning with the Constitution of 1789, reaffirmed by the Reconstruction Amendments that followed the Civil War. The promise of this “new birth of freedom” has yet to be fully realized.