Slavery and capitalism in nineteenth-century American economic development

Slavery and Capitalism in Nineteenth Century United States

Development of Capitalism in the North

In the period between 1800 and 1850, the North and the South developed two separate and distinct economies. Spurred by the British naval blockade during the War of 1812, America was forced to develop an industrial base. Foodstuffs for the war economy and munitions to supply the army lead to the formation of capitalism. Following the war, there was a great demand for American agricultural products in war-torn Europe. In 1816, a tariff on imports helped further spur industrialization and the market economy. Capitalism developed in America because of the war and the shift to industrialization. It developed in the North, because it could not develop in the South.

By 1820, a major shift was underway in the labor pool. Property ownership and the economic independence it brought had always been an American virtue but increasingly, workers were needed to fuel the industrial base. A class of workers emerged who sold their services for pay. As immigration increased, more and more of these new Americans found their way into the factories of the North, increasing the population base.

In the South, the economy was quite different. There was no true market economy where workers competed with one another and sold their services in the open market. Almost all white citizens were landowners, or worked on rented land. The slaves provided the labor force for the plantations, as the South became an economy based almost entirely upon a single product - cotton. New immigrants tended to settle in the North, as they felt quite unwelcome in the pro-slavery South and the jobs were in the North. In the South, there was no large class of workers toiling in factories because there were few factories. The capitalist economy of the North did not develop in the South because slavery was particularly unsuited for providing a labor pool for industry, unlike its use in agriculture.

Slavery's Contradiction with Capitalism Leads to the Civil War

The North and the South were two different economies. In the North, an industrial base had developed, fueled by demand for American goods in Europe, high import tariffs and the War of 1812. New immigrants increasingly provided the labor pool for this economy. As a result, a class of citizens developed who sold their services for compensation, as opposed to owning their own land.

In the South, there was no labor class. The economy was based almost entirely on cotton and there was little industry. Slaves provided the labor pool on these cotton plantations. As long as slavery existed, the South could not develop a labor pool. This led to antagonism between workers and slave owners. The South had the attitude of, "why buy the cow when you can get the milk for free" with regard to employing workers. This was in conflict with the worker class whose status would be diminished should they be forced to complete with slaves.

Prior to 1830, the United States had been able to manage the issue of slavery through a combination of compromise and avoidance. This issue had been a contentious one from the early days of the republic, almost threatening to derail the Constitutional Convention. The issue was tabled by providing a twenty year period in which Congress could not ban slavery. The Missouri Compromise in 1820 again allowed the nation to manage the issue without confronting it. New states coming into the Union were admitted two at a time - one Slave and one Free.

A decade later, however, this management strategy began to unravel. North and South were at odds over import tariffs. The North favored them to protect their industrial base and the South opposed them because they had no industrial base and were consumers of many of these goods. They were reluctant to pay for protection of the North's economy.

In the 1840s the United States started on a path of expansion, fueled by the concept of Manifest Destiny, and spurred primarily by the American victory in the Mexican War. As part of the settlement with Mexico, the United States had acquired a huge amount of territory which would later become New Mexico, Arizona and California. Because of the nature of the land and the climate in this area, cotton would be impractical and slavery would never take hold. In the Northwest, the Oregon territory was acquired, providing further land for new states.

In the South, these new states were seen as a threat to the way of life should they come into the Union as Free states. Slavery needed to expand to new territory if it was to continue to survive. In the North, people of all classes wanted no new Slave states. Potential settlers saw this new land as an opportunity to obtain land of their own and workers did not want to compete with slaves. Business owners and industrialists saw the west as markets for their goods and they also wanted Free states in the West to support them in increasing the power of the federal government to promote the national economy.

As the national economy developed, the North began to promote the expansion of the power of the federal government. When the economy had been primarily agrarian, the individual states could provide all the support necessary. However, as the economy in the North became increasingly industrial, the services needed were different, and could only be provided by a strong central government. By the 1850s, most in the North were demanding federal subsidies to railroads, a new national banking system, a homestead act, federal subsidies for establishment of agricultural and technical colleges, and high tariffs. This was an agenda in which the South had no interest and no need. It would impose a severe burden on the South in the form of taxes and would further propel the North ahead of the South, both politically and economically.

As the country expanded, the South continued to become more and more isolated. The Kansas-Nebraska Act had been an attempt to expand slavery into these new states, by allowing the new states to decide for themselves whether they would be Free or Slave. Despite an attempt by the South to fix the vote in Kansas by moving pro-slavery settlers into the territory, the sentiment proved to be overwhelmingly anti-slavery. Most of the land west of Texas and North of Missouri was unsuitable for growing cotton, and without cotton there was virtually no need for slavery. The South was in the position of trying to create Slave states that would support the South in Congress, but in which there would be no slavery.

In the 1850s, distrust between the North and the South increased. This made compromise impossible. The South saw an abolitionist plot in every action by the North. They were frustrated by the North's unwillingness to cooperate on the issue of returning runaway slaves. The raids by John Brown contributed to their paranoia. In the North, the Dred Scott decision confirmed that the United States Supreme Court was on the side of the South. Democrats occupied the White House from 1853 to 1861 and the South dominated the Democratic Party. Anti-slavery forces in the North looked to Congress as their only ally.

The passage of the Kansas-Nebraska Act destroyed the Second Party system of Whigs and Democrats that had existed from the mid 1830s through 1854. Congress, in passing this legislation, had divided not along party lines, but by North and South, with southern Whigs and Democrats supporting it and northern Whigs and Democrats opposed. In the Presidential election of 1856, a new party emerged - the Republican Party. This new party identified itself with an anti-slavery platform and although it did not elect its candidate, John Fremont, to the Presidency, it made the election close by capturing most of the northern states. In the 1860 election, the Republicans nominated Abraham Lincoln and the Democrats nominated Stephen Douglas. However, the southern Democrats, meeting in Richmond, nominated John Breckinridge, a states rights proponent and adopted a pro-slavery platform. This effectively left two parties, Republican and Democrat.

Northerners - Anti-slavery but not Abolitionists

White northerners of all classes were opposed to slavery, but were overwhelmingly not abolitionists. Only about one percent of the white population would have called for an end to slavery by 1850. In the 1840s, the term anti-slavery came to mean opposition to expansion of slavery, but not abolition in states where it already existed.

White northern workers viewed slaves as a threat. How could they sell their services for wages when slaves worked for free? Equating them with slaves also diminished their social standing. White capitalists were opposed to slavery because they saw that the capital resources devoted to slavery could be better used elsewhere. Northerners of all classes wanted the western states to be Free because they needed the support of the west in expanding the power of the federal government, something that would not happen if the western states became Slave states.

Most northerners realized that the South would never give up slavery willingly. They knew that unless the South would accept an arrangement to pay for slaves (which would have been very costly), it would take armed conflict to remove slavery, and they were unwilling to resort to that. They just did not want to pay the costs necessary to end slavery. The North also had a vested interest in continuing slavery in the South. The cotton plantations provided ample amounts of cheap cotton for northern mills. Without slavery, this might not have been available, and northern industrialists would have had to look elsewhere for more costly alternatives. Northern wage earners also feared that the end of slavery in the South would mean a large influx of southern blacks to northern cities (which did eventually happen), providing competition for jobs and lowering wages. Farmers also were opposed to ending slavery. They did not want to compete with blacks for free land. So, while northerners did not want to see slavery expanded any further, they also did not want it to go away.