By Eric Herschthal
Capitalism in the U.S. owes much of its start to slavery, which in turn owed much of its success to government handouts.
Perhaps the most durable myth about slavery is that it was utterly incompatible with capitalism. Well before historians in the twentieth century began legitimating the idea, abolitionists suggested the disconnect themselves. In Uncle Tom’s Cabin, Harriet Beecher Stowe portrayed slave-traders as underfinanced, disreputable fools—the furthest thing from competent, successful businessmen. Even Karl Marx, no friend of capitalism, believed that wage labor would destroy slavery. But in recent years, scholars have begun to demolish this myth, arguing not only that slavery was compatible with capitalism, but that the emergence of modern capitalism made slavery’s growth possible.
The Business of Slavery and the Rise of American Capitalism, 1815-1860 establishes its author, Calvin Schermerhorn, as among the best practitioners within this new group of historians. While Walter Johnson, Seth Rockman, Edward Baptist, and Sven Beckert have recently made the same core argument, Schermerhorn exposes the links between capitalism and slavery with remarkable clarity, economy, and force. By focusing on the most successful firms involved in the domestic slave trade, Schermerhorn shows how the building blocks of modern capitalism—from innovations in marketing and technology, to the development of sophisticated financial instruments—fueled slavery’s expansion throughout the South. The possibility of bloodless abstraction is saved by his emphasis on the devastating human cost.
The closing of the African slave trade in 1807 posed a major challenge to slavery’s expansion. Yet it wasn’t a challenge that creative entrepreneurs could not overcome. Schermerhorn shows how one slave trader, Austin Woolfolk, turned this setback into an opportunity, becoming extraordinarily rich in the process. Based in Baltimore, Woolfolk saw that slaveholders in Maryland and bordering states were desperate to get rid of excess slaves. He also knew that would-be planters in the lower South—Louisiana, especially—were hungry for them. But sellers and buyers had no way of communicating with each other; there was no Craigslist.