A Comment on the New History of Capitalism

As recent discussions on this forum and in the broader academic literature illustrate, the economic dimensions of American slavery remain a lively area of scholarly investigation and debate. Much of the current debate revolves around an emergent historiographical school. Usually referred to as the “New History of Capitalism” (NHC), this school has produced a sizable body of research contending that the institution of slavery was a central building block of American capitalism. At the same time however, the NHC literature has come under intense criticism from economic historians who have long studied the same subject, and who question both its use of evidence and its conclusions.

I will preface this comment by acknowledging that I rank among the NHC’s critics. At the same time however, I approach the subject of slavery in my own work as someone who believes there is substantial room for dialogue between economists and historians, and laments the tendency of each discipline to silo itself. Economists bear some of the blame for this outcome, particularly as it applies to the high barriers imposed by the econometric techniques at the heart of their work. My comment here, however, will look at three areas where I believe the NHC literature has cluttered rather than advanced the discussion around this important subject.

I. The Definition Problem

As numerous other scholars have pointed out, much of the debate around the NHC literature stems from the issue of how it defines capitalism. While definitional disputes have a tendency to become bogged down in tedium, they have become an unavoidable feature of the NHC discussion on account of an intentional flexibility with how its scholars use and invoke the term. We see this practice openly acknowledged in an influential review essay by NHC scholar Seth Rockman, who declares that this new line of inquiry “has minimal investment in a fixed or theoretical definition of capitalism.” Rather than building outward from a conceptual commitment around a fixed term, he explains, NHC scholars are willing to “let capitalism float as a placeholder while they look for ground-level evidence of a system in operation.”

This fluid definitional approach might not be problematic in itself, except that it is invoked inconsistently throughout the NHC literature, including in ways that impede scholarly engagement with non-NHC interpretations of slavery’s economic dimensions. Indeed, Rockman himself sneaks in one such definitional commitment only seconds after stating this literature’s “disavowal of theoretical definitions” for the term by simply asserting that “the new scholarship recognizes slavery as integral, rather than oppositional, to capitalism.”

While such a proposition might be entertained as a testable hypothesis, the very process of doing so requires a stable definition of what exactly constitutes capitalism. The alternative is the bizarre circularity we often find in the NHC literature, where the concept of capitalism cannot be defined, and yet it is also axiomatically imbued with an interdependent – and indeed “integral” – connection to slavery.

By pairing a definitional non-commitment about “capitalism” with a definitional axiom where slavery is concerned, the NHC literature has created an unusual new and largely proprietary terminology for what are in fact long-acknowledged concepts in the external literature. A dizzying assortment of economic practices and policies thereby become “capitalism” and attached as such to slavery in the NHC framework, even though scholarly investigation of the same practices dates back decades, minus this definitional affiliation. In one prominent example NHC historian Sven Beckert affixes the term “war capitalism” to the symbiotic relationship between the plantation class and a quasi-nationalistic suite of public-sector support for slavery and slave-produced goods. Walter Johnson coins “racial slave capitalism” to describe similar features, and assert the originality of his own interpretation.

Yet far from novel conceptualizations, their respective terms are little more than rebranded monikers for economic arrangements that historians and economists alike have long approached and examined as a pro-slavery iteration of mercantilism: the coordinated use of subsidies, tariffs, transportation improvements, favorable financial regulations, and even industrial policy to support and expand slavery-produced goods into the global economy. Indeed, a posited historical shift from mercantilism to laissez-faire capitalism, emphasizing its effects upon slavery in the British empire, sits at the heart of Eric Williams’s 1944 book Capitalism and Slavery, as well as the extensive scholarly debate over his thesis.

While tracing the intricacies of that debate exceed our purposes here, it is sufficient to note that the relationship between slavery and mercantilism predated the NHC literature by the better part of a century. The mercantile discussion also carries direct antecedents from early American economic history, tracing to explicit pro-slavery iterations of this philosophical system in the writings of J.D.B. De Bow, David Christy, James Henry Hammond, and the nascent economic policy discussions of the Confederacy.

Unlike prior studies of this subject however, the NHC terminology adopts an excessive credulity for the empirical claims of the King Cotton theorists insofar as it largely assumes that such systems worked in practice as its antebellum expositors claimed. Single-product theories of 19th century American economic development permeate the NHC literature, situated primarily around slave-produced cotton (it warrants mention that a strong scholarly consensus among economists has long rejected single-product theories of development when applied to other industries).

Acceptance of this claim, in turn, allows for a largely pejorative deployment of the new terminology so as to fuse slavery’s economic system onto the modern concept of “capitalism,” and particularly its free-market or laissez-faire philosophical iterations. Beckert thus characterizes New World economic development as a slavery-driven “wave of expropriation of labor and land…testifying to capitalism’s illiberal origins.” Matthew Desmond goes even further in his NHC-inspired essay for the New York Times’ 1619 Project, characterizing modern American economy as a “racist capitalism” that was “founded on the lowest road there is,” its wealth irredeemably infused with the brutality of the plantation system. The result, then, is a constructed terminology that does more to affirm the NHC’s own thesis than to provide a common point of analysis for other scholars.

II. Capitalism as Intellectual History

Herein lies another peril of “capitalism’s” definitional fluidity, and with it the basis of my second criticism. For all the energy it expends on asserting a link between slavery and modern American capitalism, the NHC literature has largely neglected the intellectual history of the same concept. Defenders of this literature will likely attempt to justify the oversight as introducing an outside dimension to their analysis of capitalism, yet the study of the past does not lend itself to neatly parsing a capitalist economic system from how historical participants in that system saw and understood themselves. A “history of capitalism” without an intellectual history of how capitalism was perceived and understood is therefore bound to produce an incomplete picture.

In the case of the NHC literature, this oversight has led to a bizarre string of fundamentally ahistorical inferences that not only institutionally imbue capitalism with slavery, but also posit a historical antipathy between capitalism and abolitionism. We find this latter supposition asserted directly in a recent work by historian Manisha Sinha, invoking the conclusions of the NHC literature in the process: “If slavery is capitalism, as the currently fashionable historical interpretation has it, the movement to abolish it is, at the very least, its obverse.” If we turn to the intellectual history of capitalism however, Sinha’s sweeping claim is not only unsupported – it collides directly with the richly documented historical partnership between anti-slavery political activism and the intellectual underpinnings of what we now refer to as capitalist or free-market economic philosophy.

Anti-slavery thought provided a not-insubstantial undercurrent to the voluminous works of Adam Smith, whose 1776 book The Wealth of Nations is widely considered to mark the origins of a cohesive market-capitalist economic philosophy. In fact, Smith’s book presented an early economic argument against slavery in the form of a biting attack on British colonialism and the mercantilist philosophy that undergirded it at the time. Smith’s other writings dug more deeply into the brutal mechanisms that sustained slavery, ultimately concluding that its continuance relied upon the slaveowners’ political capture of parliaments and legislatures, thereby securing it subsidies and political protection. “The persons who make all the laws in that country are persons who have slaves themselves,” he argued in an earlier lecture. “[W]hatever laws are made with regard to slaves are intended to strengthen the authority of the masters and reduce the slaves to a more absolute subjection.”

Smith’s academic treatises would directly shape antislavery thought over the next 80 years, often pairing it to the philosophy of free-market liberalism that we now associate with capitalist economic doctrine. This Smithian variant of antislavery thought occupied a prominent position in the political movement of Richard Cobden, whose transatlantic crusading for free trade also brought him into direct philosophical kinship with American abolitionists including Charles Sumner and Frederick Douglass. Smith’s heirs and followers also included the abolitionist economists John Stuart Mill and J.E. Cairnes, as well as the lesser-known American journalist William Leggett, who promoted a political merging between the abolitionist cause and radical laissez-faire doctrine after breaking away from Jacksonian populism over slavery in the 1830s.

By the eve of the American Civil War, a two-part philosophy of free-markets and abolitionism saw the terms linked together as part of a common individualist liberal philosophy, and not just among their “capitalist” intellectual adherents. The political merging of the two causes provided the primary irritation of a notorious but influential 1849 essay by the Scottish philosopher Thomas Carlyle. An ardent critic of British emancipation a decade and a half earlier, Carlyle assailed the “dismal science” of economics, which claims to find “the secret of this universe in ‘supply and demand’ and reduces the duty of human governors to that of letting man alone.” The occasion for his grievance however was the burgeoning political alliance between free-market thought and British abolitionist philanthropy, which had been “led by any sacred cause of black emancipation, or the like, to fall in love and make a wedding of it.”

Carlyle’s bromide found an immediate audience in the American South following its reprint in De Bow’s Review in 1850. Over the next decade, American theorists such as George Fitzhugh would adapt Carlyle’s arguments into a thoroughgoing anti-capitalist philosophy. “Political economy is the science of free society,” Fitzhugh would write in the opening line of his 1851 treatise in support of slavery, Sociology for the South. “Its theory and its history alike establish this position. Its fundamental maxim Laissez-faire and “Pas trop gouverner,” are at war with all kinds of slavery.” To survive this capitalist attack, he would continue in an 1857 tract, the South must “avow her change of policy and opinion, and to throw Adam Smith, Say, Ricardo & Co., in the fire.”

While Fitzhugh’s radicalism and eccentricities have long made him a difficult figure to fully contextualize, there can be little doubt that the Carlylean pairing of free-market doctrine and abolitionism diffused into mainstream pro-slavery arguments of the late-antebellum period. Consider the prefatory note that South Carolina politician William Grayson published in 1855 to accompany his popular pro-slavery poem “The Hireling and the Slave.” Slavery’s economics, he explained, “draws the relation closer between master and servant” and in so doing “removes what Stuart Mill” described as the tension between capital and labor in the market system alternative. A similar anti-capitalist tone echoes throughout James Henry Hammond’s influential “mudsill” speech of 1858, which espoused a hierarchical economic ordering of society built atop a foundation of slavery that obviated the market-driven competition of free labor.

These and similar perceptions of a growing rift between slavery and capitalism, or at least its free-market intellectual derivatives, came to dominate Southern economic debates on the eve of the Civil War, and yet they are largely missing from the NHC literature and accompanying discussions today. Caitlyn Rosenthal’s contribution to the series on this blog, while helpful in clarifying other dimensions of the debate around the NHC, reveals the danger of this specific oversight. Rosenthal writes that “Slaveholders did not see abolition as the triumph of the free market — they saw it as the expropriation of their property and they argued that it infringed on their rights to buy and sell that property as they pleased.”

It would be difficult to sustain this point in the words of Carlyle, Fitzhugh, De Bow, and numerous other pro-slavery theorists who openly identified abolitionism as a free market cause. Carlyle would return to the subject in 1867 to assess “the wreck of your Niagara plunge” – a post-slavery world characterized by “unlimited free trade” and “cheap and nasty” capitalist commodification. Such a world, he predicted in a brazen white supremacist framing, would soon expose emancipation as a folly by thrusting “three million Blacks, men and brothers…into the career of improvement” that would result in their being “improved off the face of the earth in a generation or two.” At least in Carlyle’s mind, abolition represented a triumph of free markets, but only a temporary one that would eventually succumb to the racial hierarchy – and even racial extermination – that he believed to be a natural order of the world.

While we need not assume that such beliefs represented a single universal attitude among enslavers and their intellectual supporters, they nonetheless reveal a significant and influential anti-capitalist ideology that took root within pro-slavery theory in the decades before the Civil War. By essentially ignoring this ideological development, the NHC literature proposes an economic interpretation of slavery that many slave owners themselves would have considered entirely anathema to their institution and beliefs about its economic operation. Just the same, the NHC literature struggles to account for the frequent mid-19th century pairing of abolitionism with free trade and laissez-faire economic beliefs. Absent a more substantive effort to address and account for these tensions, the NHC’s depiction of capitalism is at best grossly deficient in its assessment of the intellectual context around its subject matter and, more likely, advancing a narrative at direct odds with a substantial body of evidence.

III. How Novel is the “New” History of Capitalism?

My concluding criticism of NHC scholarship shifts the focus of attention from its theses to a more fundamental problem of its integration into the broader literature on slavery’s economics. Since bursting onto the scene in the early 2010s, NHC scholars have repeatedly touted their own novelty – of telling stories that had “never been told” and of redirecting historical examinations of slavery toward economic subjects that had long been neglected by the profession.

There’s a small kernel of truth in the story. Traditional historians have shied away from the heavily quantitative “cliometric” turn in economic history dating to the 1970s, noting both the methodological barriers it imposes and the associated tendency to neglect the qualitative evidence found in traditional archival sources. That noted, the NHC literature is often guilty of not only neglecting the economic literature on slavery from outside of its own ranks – it frequently misrepresents that same literature, and does so to embarrassing results.

A symptomatic example may be found in the work of NHC scholar Ed Baptist, who dismisses earlier histories for embracing the claim that slavery “was less efficient than free labor” – “a point of dogma that most historians and economists have accepted.” Even a cursory review of the economic literature would have quickly revealed however that Baptist’s assessment is almost three quarters of a century out of date.

The questions of slavery’s economic efficiency, and associated investigations of its profitability, have been the dominant theme of the cliometric literature since Alfred Conrad and John Meyer raised them in a seminal article in 1958. Contrary to Baptist’s characterization though, Conrad and Meyer concluded that slavery was indeed profitable to plantation owners, and that this profitability reflected some degree of slavery’s relative efficiency that would have likely sustained it economically for many decades beyond the Civil War if left to its own devices. Conrad and Meyer’s study initiated a line of investigation that has since blossomed into hundreds of articles and books, investigating that very subject and generally favoring their initial findings albeit with important caveats about the institutional conditions that sustained the slave system’s profitability.

We need not rehash the cliometric literature over slavery here save to note that it is voluminous. The late Richard Sutch provided a lengthy review essay that covers the major works, including the decades-long debate over Robert Fogel and Stanley Engerman’s Time on the Cross. While Sutch himself became a constructive critic of Fogel and Engerman’s empirics, he noted with lament in 2018 that the NHC literature has thus far bypassed this discussion entirely. Rockman and Beckert, he observed, “dismiss their own neglect [of the cliometric literature] with a single sentence.” While doing so “freed them to contribute to and celebrate an alternative economic history of slavery and American economic development,” it led the nascent NHC literature into a succession of avoidable and embarrassing mistakes.

Stanley Engerman, though often at odds with Sutch in the finer particulars of the cliometric debates, reached a similar conclusion in his own assessment of recent works by Baptist and fellow NHC scholar Calvin Schermerhorn. In steering away from the cliometric evidence and extolling their own novelty, the NHC literature has stumbled its way into a number of economic conclusions that are, frankly, unsustainable in evidence.

Baptist’s book contains one of the more notorious examples in the form of a passage where he purports to calculate the percentage of antebellum GDP that derived from cotton production. By tracing and adding up all of the intermediary steps of shipping, processing, and financing the cotton trade, he ultimately concludes that the slave-produced staple accounted for a full half of American economic output in the 1830s. Baptist’s finding, however, is an unambiguous accounting error – a product of double and triple counting the steps of production, whereas GDP by definition only measures the finished good (an accurate accounting places the antebellum cotton industry closer to about 5% of GDP – a sizable and important but far from dominant industry). Although the error reveals an elementary misunderstanding of economic methodology, Baptist’s faulty statistic has nonetheless entered into mainstream historical discussion as if it was an established fact.

Similar factual and evidentiary shortcomings afflict the more complex theses of the NHC literature in its treatment of slavery’s economics. Recent critical studies by Alan Olmstead, Paul Rhode, and Gavin Wright, among others, extend beyond simple interpretive disputes that arise from differing research methodologies. They document tangible factual errors and misuse of evidence in leading NHC works by Baptist, Beckert, Johnson and others – many of which could have been avoided by a more conscientious effort to engage with prior literature on slavery’s economics. The NHC literature’s errors include the blatant misreading of data from plantation records, unsupported statistical inferences about the antebellum cotton sector’s growth, repetition of single-industry supply chain fallacies, and even hyperbolic absurdities, such as Baptist’s claim that slave-produced cotton broke the western world out of a 10,000 year Malthusian trap of recurring starvation.

Tellingly, the neglect of cliometrics and other evidence from economics is not the only historiographical oversight of the NHC literature. Although its contributors have made a habit of presenting themselves as having revived an allegedly neglected line of inquiry from Eric Williams’s work in the 1940s, H. Rueben Neptune has convincingly demonstrated that the leading NHC contributions only superficially engage with the particulars of Williams’s arguments.

The implicit faults revealed by this neglect could be pressed even further into scholarship around Williams’s argument, itself framed as a provocative critique of capitalism from an overtly Marxian perspective. Despite sharing some ideological affinity with Williams’s anti-capitalist position, the NHC literature veers close to inverting one of the central claims of his thesis. Williams held that abolitionism arose not from humanitarian motives but rather baser capitalist pressures in response to the economic decline of the British West Indies. That position is, at minimum, in underacknowledged tension with the depiction of slavery as an “integral” and symbiotic component of 19^th century capitalism itself. And yet far from a recent rediscovery, the Williams thesis was actually a longstanding point of contention in the pre-NHC literature (raised as recently as 2012 in an exchange between David Brion Davis and Barbara L. Solow, two eminent historians of slavery from the prior generation).

These and similar oversights not only function to inflate the novelty of the NHC literature’s claims – they reveal a recurring pattern of inattention to prior works on slavery’s economics and a derivative string of avoidable mistakes arising from the same. Although this conclusion is admittedly harsh, it also points to a likely source of the present impasse between the NHC literature and other scholarly investigations of slavery’s economics. Far from illuminating neglected dimensions of the subject or bridging the gap between economic and social history, the NHC currently risks a further retreat into its own self-referential echo chamber. If it does not substantively engage with the growing scrutiny of its claims from other lines of inquiry and other academic fields, the result will be a permanently siloed historiography – perhaps influential for the passing moment, but ultimately its own impediment to a better understanding of slavery’s economics.