THE CAPITAL THAT MADE CAPITALISM

Did slaves get our economy to where it is today?

This post is a response to an assignment in my “History of Capitalism” course at Louisiana Tech University.  I hope you find this analysis of Julia Ott’s essay, “Slaves: The Capital that Made Capitalism” interesting.

Ott’s article makes the case that slavery was a significant factor in developing capitalism in America and the world.  In fact, she calls slaves “the capital that made capitalism.”

According to Ott, slaves were essential for the “industrious revolution” and the subsequent “industrial revolution.” The Industrial Revolution was the result of surplus money and crops, leading to the development of new technology. But before the Industrial Revolution was an Industrious Revolution, a period of tremendous desire for more goods. During the Industrious Revolution, the demand for goods increased, but supply did not rise as quickly. These included goods like tobacco, coffee, chocolate, sugar, and tea.  Ott calls these “drug foods” since their new consumers developed a craving, or addiction if you will, to these new luxuries that quickly became “necessities.”

During the Industrious Revolution, Europeans worked harder to be able to afford these drug foods in the 16^th Century, which paved the way for the Industrial Revolution of the 18^th and 19^th Centuries.

But Ott notes the demand for these products is only part of how the Industrious Revolution and the subsequent Industrial Revolution came about. Essential to these economic developments, according to Ott, was new capital in the form of slaves.

Ott explains that trading in slaves and the goods they produced led to the development of modern finance and new industrial activities. Transoceanic trading networks, banks, and insurance services rose from the international slave trade. The capital derived from these endeavors financed British industries such as gun and metal manufacturing, sugar refinement, rum distillation, and the creation of cotton products.  The effect of slavery on the development of capitalism went far beyond what the individual slave did in a cotton field.

Cotton, in fact, became the world’s most significant crop, and slavery was the most efficient capital to produce it. The number of slaves in America grew to increase cotton production. In the early 1800s, cotton was the world’s number one traded good.  The export of cotton to Britain and other nations was imperative to obtain the products and credit needed from abroad.

Slaves picking cotton.

Not only did cotton, through slave labor, develop a wealthy South, according to Ott, it also developing an industrial complex in the North. Northerners participated in the slave trade, transported products created by slaves, created mills to refine those products, and used those profits to invest in other industries.

Ott concludes the essay with the statement that slavery “set capitalism in motion and sustained capital accumulation for three centuries.” Slavery may have given capitalism a “jump start” but other factors have since have attributed to its advancement.

I disagree with the notion that slavery, which ended 150 years ago, is responsible for where our economy stands today. Too many other factors have influenced our economy in the intervening years. In the U.S., the Civil War, Reconstruction, and the Great Depression destroyed the capital Ott says was in the hands of rich Southerners. World War II brought prosperity to many due to the manufacture of war materiel.  Technology developments in one year in recent decades make the entire Industrial Revolution look like the Stone Age. New products and services are developed every day. Communication is instantaneous, prompting constant changes, including growth, in our world economy.  

We would not be far off the mark to call technology the drug of choice today, although Ott’s drug foods are still extremely popular. Many who read this post consider their daily latte, expresso, or frappe essential to life. Millions are attached to cell phones as if they were life support machines that must be monitored constantly. There is more computer capability within a modern cell phone than in the Apollo spaceships that took American astronauts to the moon in the 60s and 70s. Such advancements, considering the size of the world economy today, have the ability to influence capitalistic societies practically overnight. According to Angus Maddison in his book The World Economy, in the last half century, the world economy performed better than at any time in the past. 

Slavery certainly played a role in the development of capitalism. Slaves were chattel, much like money itself, and served as the resource to grow one's finances. But world events, technological advances, and the ingenuity of the capitalist now overshadow slavery's influence on the current status of capitalism and the world economy.