created by enslaving others), the rest of the world suffers from it.
The fact that slavery created huge social costs was so well understood as recently as the 1970s-80s that it rarely came up in the great slave debates of the era touched off by the publication of Robert Fogel and Stan Engerman’ s Time on the Cross( 1974). Instead, the debates centered on enslaver profitability and slave efficiency. Many historians were outraged to learn that Fogel, Engerman and other economic historians believed that slavery could be profitable and that in some situations, like on cotton plantations utilizing the gang system, slaves could be more efficient( more output from a given input) than free laborers. The economists eventually won the debate, and historians scampered off to study how slaves resisted their bondage.
Today, historians of capitalism, like Baptist, minimize the impact of slave resistance in order to maximize exploitation and hence profit and hence, in their minds, investment available to spark the Industrial Revolution. As Richard Sylla and other scholars have shown, however, America’ s economic growth spurt was not touched off by mid-19th century industrialization, but rather by the financial revolution masterminded by Alexander Hamilton in the 1780s and 1790s.
By the time Hamilton’ s reforms were made law, the new United States of America had a Constitution that was strong enough to create a government that was energetic enough to protect Americans from foes foreign and domestic, but yet internally checked enough to prevent tyranny. Aided by the Mint Act( which defined the US dollar unit of account in terms of gold and silver), funding and assumption of the Revolutionary War debt( which brought America and its constituent states out of bankruptcy), the Bank of the United States( which solidified the new nation’ s credit standing) and corporation formation( which allowed entrepreneurs excited by the new system of political economy to pool their resources to start banks, insurers, transportation infrastructure concerns, manufacturers, utility companies and even service companies), the US economy began to grow at modern rates starting in 1790, not the antebellum period.
The other major problem with the new history of capitalism’ s claim that slavery induced economic growth is that its
“ Desperate Conflict in a Barn,” an illustration of escaped slaves fighting for freedom, 1872.
adherents forgot about( or, more likely, never learned about) slavery’ s negative externalities. Throughout the 1850s and 1860s, writers like Cassius Clay, Hinton Helper and J. E. Cairnes catalogued the huge costs that slavery imposed on nonslaveholders. Their claims were so compelling that it gave rise to a second reason, after immorality, for abolishing slavery. Many Americans stirred against slavery for the first time not in response to a religious or humanitarian calling, but because they saw, for the first time, that enslavers
“ White Slavery in the East— Exposed for Sale,” 1875.
were stealing from everybody, not just their slaves.
To keep their slaves hard at work, enslavers had to enlist poor Southern whites to patrol at night, Northerners to return runaway slaves, Northern mail users to subsidize the US Postal Service( which ran a profit in the North but a deficit in the infrastructure-poor South) and Northern taxpayers to maintain armed services sufficient to put down slave rebellions and to win new territories for enslavers to master.
The New York Public Library The New York Public Library www. MoAF. org | Summer 2017 | FINANCIAL HISTORY 13