Racial Capitalism: How Slavery Shaped American Economics and Capitalist Structure and became the Precursor of the Civil War
Introduction
It was William Henry Seward’s (1858) belief that “the very constitution of the Democratic party commits it to execute all the designs of the slaveholders, whatever they may be.” In other words, the Democrats of the 19th century were firmly in the pocket of slave owners—agents of the slave system. Seward represented the Republican Party and viewed the upcoming election as one that would alter the course of history—as one that would finally bring about a solution to the moral problem of slavery. However, Seward gave a typically political and simplistic account of the conflict among labor, ownership of the means of production, freedom and social mobility. The reality of capitalist structures and racial capitalism in the US was complex and complicated as much by inconsistencies in the North as by continued injustices in the South during Reconstruction. One of the clearest depictions of the reality of the situation comes from Berlin et al. (1986), who state that “central to all the unresolved questions—and to the agenda of Reconstruction—was the conflict over the meaning of free labor” (109). This paper will explain why the meaning of free labor was so integral to the issue of racial capitalism and how slavery shaped the economics of the USA, capitalist structures and inevitably led to the outbreak of Civil War.
What Slavery Represented
Slavery represented the gulf between labor and capital, as Berlin et al. (1986) point out. The owners of the means of production in the South could utilize slave labor to increase profits for themselves. It is little different from what multinational corporations do today in obtaining cheap labor from third world countries. Notions of freedom and free labor were as conflicting and different in the 19th century as they are today. What remained an uncontested fact was that the separation between labor and capital was nowhere more pronounced than in slavery.
As Edward Delony pointed out in 1858, “the policy of the increase of negro labor to supply the present and growing deficiency of that species of labor in the more Southern States, the only kind that can ever be stable and profitable, or that can effectually develop their resources and increase their wealth and prosperity, is now assuming that position and grave importance which it is entitled to, and which demands the deliberate consideration of the Southern people.” Delony’s report was meant to justify the importation of slave labor into Louisiana. The gist of the justification was that it would be the only type of labor that would allow the state to make the kind of profit it sought and to flourish. In other words, it was a way to maintain the gulf between labor and capital. The immorality of slavery did not enter into the equation—and it only did so for abolitionists. For those who profited from it, slavery represented a way to maintain capital structures. Racial capitalism was the main shaper of American economics and the fact that the South profited so significantly from it while Northern industry did not was a major factor in the build-up to civil war.
The Issue of Slavery in the West
The issue of whether slavery would be permitted in the West was one that exacerbated an already tense debate between the abolitionists and those who wanted to retain the structures of racial capitalism. None of the great compromises of the 19th century had helped to settle the matter—neither the Missouri Compromise nor the Compromise of 1850. The Kansas-Nebraska Act was its own political mess, and the question of who would control the destiny of the West remained up in the air, with Democrats believing Republicans were out to destroy their political power, as James Henry Hammond laid out in his speech on the admission of Kansas to the Union under the Lecompton Constitution in 1858. Republicans won the election, which infuriated Democrats and led directly to the secession of Southern states.
Lincoln identified the problem tersely in his 1861 inaugural speech: “One section of our country believes slavery is right and ought to be extended, while the other believes it is wrong and ought not to be extended. This is the only substantial dispute.” However, in Lincoln’s mind the real question was whether one half of the country had the right to secede from the other. It was not slavery itself that led to the war but rather the seceding states refusing the governmental system of checks and balances, extolled by Lincoln in the same speech, as the main factor in the outbreak of war. Lincoln sought to reassert through the Union Army the right of the central government to implement its system of checks and balances upon even those states that no longer wanted to be part of that Union.
Implicit in Lincoln’s view was, again, one more notion of free labor. As Berlin et al. (1986) explain, none of these notions of free labor at the time were consistent with one another. Free labor to one man or group or region meant something quite different from another. To a Southern slave owner, free labor meant slave labor. To a free man in the North, who owned his own business free labor meant the freedom to labor for one’s own profit. To others it meant the freedom to choose for whom one wanted to work. To Lincoln it meant the freedom of the Union to assert its system of checks and balances on all the states, whether they liked it or not.
Yet if slavery was morally wrong in the South, the enslavement of the Southern States to the will of the Union should have been viewed as equally morally wrong. Slavery was the assertion of another’s will over one’s own life. Here was Lincoln asserting that the central government had the will and right and power to assert itself over the will of the states’ affairs. Lincoln was advocating a type of political enslavement over the seceding states. As the representative leader of the Union, he saw the issue as one in which the South had no right to come out from under the will of the federal government’s system of checks and balances. In short, Lincoln’s argument could be explained this way: the Southern states had no more right to self-determination than did the black slaves owned by Southern slave owners. But if the Union wanted to end slavery, it could have easily done so by allowing the Southern slave owning states to secede: there would be an end to slavery in the Union.
The issue was not slavery: it was the structures of capitalism. The federal government wanted to maintain its own power structure over the states, and it would enforce that structure with the lash if necessary; thus, the Civil War came about.
The Role of Racial Capitalism, Slavery and Capital Structures
Racial capitalism was the system employed in the South. Slavery enabled the owners of the means of production to profit. That profit filtered into the Union as a whole in the form of taxes, trade, interstate commerce, and so on. The Union thus benefited from the role that racial capitalism played as well—and so long as the Southern states were willing to abide by the checks and balances implemented by the federal government, the Union was willing to permit slavery to go on in the Southern states. Abolitionists and Republicans vying for power in the West infuriated Democrats who believed the Mason-Dixon Line should extend out West as well. When Democrats suspected Republicans of trying to subvert their own capital structures, they rebelled and seceded. Hammond’s speech in 1858 was a portend of things to come.
This secession would not do for Republican or Union interests, as without the Southern States and the income generated by them the Union would be hurt economically. Thus, the seceding states had to be brought to heel. Lincoln identified slavery as the bone of contention—but in reality the actual bone of contention between the federal government and the seceding states was power—i.e., who had power over whom. The federal government wanted to maintain power over all the states—not just the northern ones. It could appeal to the injustice of slavery as a way to get support from northerners for a war against the South.
Lincoln had no plans to end racial capitalism, however. Even the Emancipation Proclamation did not end slavery outright. Rather, it was a way to further undermine the competitive advantage of the South and prevent it from obtaining allies abroad. Indeed, the establishment of Jim Crow and the Black Codes throughout the South after the war showed well enough how little interest there was in ending any real injustice in the Southern states. After the war, Lincoln even had the temerity to hope for a peaceful and positive reconciliation between the North and the South, appealing to Christian virtue as a means of patching up the differences, as though they really were only superficial after all. Lincoln’s 2nd Inaugural Address is steeped in Christian rhetoric—ironic, considering he presided over the bloodiest war on North American soil in all history.
At that point, the South had been brought back into subjugation under the federal government’s own system of checks and balances. It was really no different from when a fugitive slave would be captured and returned to chains.
Slavery would be abolished by Congress shortly thereafter, but this would essentially be a nail in the coffin of Southern autonomy. The spirit of the South would be killed, just as though a slave were being broken so that it would from that point on be pliable for the master. Racial capitalism would not end—it would continue under the auspices of sharecropper agreements, Jim Crow, Plessy v. Ferguson, and so on. Blacks would continue to be exploited and even are to this day, as they are by the prison industrial complex whereby private for-profit prisons collude with the justice system and American corporations to keep blacks disproportionately imprisoned so that their labor can be farmed out to big business for pennies on the dollar—as activist Angela Davis has famously argued for years.
Thus, racial capitalism is still in play, and the structures of capitalism remain—just in different ways. Slavery played a part in the lead-up to the Civil War, as Republicans used it as a way to politically out-maneuver Democrats, especially when it came to the fate of the West. However, the real issue was the question of whether the South would maintain power over its own capital structures or whether the federal government would be the power at the top.
Slaves made it so that the South was profitable—but the Union profited from that system, even as abolitionists who benefited from the Union objected to the means by which the Union accrued its wealth. When the South objected to Republican interference in the aims of Democrats who sought to maintain the Mason-Dixon Line out West and thereby maintain the capital structures and system of racial capitalism employed in the South, the federal government took notice. A Republican president was elected in 1860 and the South promptly seceded from the Union, believing it had the right to self-determination. The South did not want the federal government defining free labor for it. It wanted to define it for itself. The gulf between labor and ownership was the issue. The federal government wanted to maintain its ownership over the capital structures of America. The South wanted to maintain its power over racial capitalism. The two were at a crossroads—and war broke out as neither wished to yield to the other in 1861.
Conclusion
What did it mean to enjoy free labor in the 19th century? To different parties it meant different things. To Southern slave owners it meant having the ability to profit from slave labor. To the federal government, it meant having the ability to benefit from the slave system without having to endorse the immorality of slavery. To abolitionists it meant blacks being able to work for themselves. These conflicting viewpoints came to a head mid-century as the nation expanded westward and politicians on both sides of the aisle attempted to use the issue of slavery as a means of maintaining or obtaining political control over the government. Republicans used the issue of abolitionism to subvert Democratic power, and Democrats used the issue of slavery to allege that their party was being victimized by a tyrannical central government. Both parties benefited from racial capitalism; both used the capital structures that had bolstered the US economy up to that point for their own ends. The Civil War was about who would control the future of the capital structures—the South or the federal government.
Bibliography
Berlin, Ira, Steven Hahn, Steven F. Miller, Joseph P. Reidy, and Leslie S. Rowland. "The terrain of freedom: The struggle over the meaning of free labor in the US South." In History Workshop Journal, vol. 22, no. 1, pp. 108-130. Oxford University Press, 1986.
Delony, Edward. “The South Demands More Negro Labor.” De Bow’s Review, 1858: 491-506.
Hammond, James Henry. "Speech of Hon. James H. Hammond, of South Carolina, On the Admission of Kansas, Under the Lecompton Constitution: Delivered in the Senate of the United States, March 4, 1858," Washington, D. C., 1858.
Lincoln, Abraham. “First Inaugural Speech.” 1861.
Lincoln, Abraham. “Second Inaugural Speech.” 1865.
Seward, William Henry. “On the Irrepressible Conflict.” New York History Net, 1858.
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