A comment on this post suggests that slavery is, or was, somehow essential to capitalist development. This notion confuses historical happenstance with fundamentals. (Please, please do not cavil that my use of the term “historical happenstance” perhaps signals some secret indifference on my part to slavery. There’s no question that slavery is an utterly heinous institution, justifiable under no circumstances.)
Slavery and capitalism are opposites.
Here’s a column I wrote in 2005 challenging the notion that slavery is or ever was essential to capitalism. A nutgraf:
The fact is that slavery disappeared only as industrial capitalism emerged. And it disappeared first where industrial capitalism appeared first: Great Britain. This was no coincidence. Slavery was destroyed by capitalism.
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For some reason people confuse the mere existence of the profit motive or self-interest – a fundamental facet of human psychology – with the institution of capitalism. The pursuit of self-interest certainly gave rise to slavery… but then again, the pursuit of self-interest also gives rise to rape and theft. It’s hardly a refutation of capitalism.
Daniel: Well said. – Don
How do we separate capitalism from self-interest? Doesn’t self-interest fuel innovation, and in turn job creation etc?
Self-interest exists without capitalism. Capitalism aligns self-interest for mutual benefit better than most other ways of interacting.
I think PJ O’Rourke wrote that terrorism in Northern Ireland dropped with capitalism because capitalism changed self-interest from blowing each other up to taking care of your customers (or something like that).
Why does one want to enslave another? Answer, to use them for personal gain.
Why does one rape another? Answer, to use them for personal gain.
Why does one steal from another? Answer, to use them for personal gain.
I am sorry but I see no difference between the practical results of the words slavery, rape, or theft. Slavery is slavery whether it is a condition imposed on another for long periods, many minutes, or seconds.
In the T-Brazorian conservative world, slavery is the ultimate crime and time has nothing to do with its horror. It is what it is.
How anyone can connect that to the honest urge to expend effort in labors of self interest and self promotion is beyond me.
The nature of man is to maximize his desires, or self interest. This causes competition between men. Historically, nothing is immoral, per se, until human competition creates a compromise. The compromise established evolves to become custom, ideology, and morality. Therefore, slavery ends only when a competing power against slavery emerges. Slavery isn’t immoral, to everyone, until it no longer exists, or, more bluntly, until it is impossible to own slaves.
The pursuit of self interest in our modern economies is no different than the ancients employing slaves. If we employ labor at minimal costs does not suggest that we wouldn’t hire people for less money if we could. Essentially, when something can no longer be done because human opposition is powerful enough to oppose it, that thing is considered immoral, but never before.
So, the error in reasoning here is to apply a conception of modern morality to ancient times. Where slavery doesn’t exist, it is immoral and where it does exist, it isn’t. The moral dilemma is most acute when slavery is in the process of decline.
People often forget that the same Northerners who protested slavery were also using their poiltical muscle to economically enslave the Southerners by forcing them to purchase their manufactured goods because of the Tariffs they imposed on European imports.
If we should predict anything, it should be that “economic bigotry” in the form of the various protectionsim measures will someday be thought of with moral disdain, such as social bigotry is considered today. However, competition is not pure enough to establish the necessary “compromise” that will cause protectionism to melt away. The people hurt by protectionism aren’t politcally strong enough to be heard. Once they are, protectionism will end, and it will slowly begin to be thought af as “wrong” or “immoral”. 150 years from now, people in societies will look back at today and think that we’re immoral for allowing protectionist laws, which, upon moral analysis, amount to varying degrees of theft.
Interestingly, we speak of theft with considerable moral clarity while simultaneously basing our entire democratic apparatus on its foundation. This, in itself, proves that morality is based on existing institutions, and how old, non-existing institutions become thought of as immoral only after they are gone.
P.S. The pursuit of self-interest also gives rise to politics.
Which is, I hope you can concede, a more morally mixed bag than slavery, rape, and theft
Of course.
It is BECAUSE of self-interest that capitalism works.
Slavery is abhorrent on its face, but in comparison to free-markets and capitalism is grossly unproductive.
How many “slavemasters” had to be employed to ensure the labor was accomplished? How productive are people who are forced to labor? How much do they accomplish? (Answer: as little as necessary.)
I think the conflation of the two concepts has everything to do with our being so far removed from slavery as a reality – and a general lack of introspection on the part of most people with regard to their operative motives.
The pursuit of self-interest certainly gave rise to slavery… but then again, the pursuit of self-interest also gives rise to rape and theft. It’s hardly a refutation of capitalism.
In all of these cases negative outcomes are highlighted. It is worth pointing out that self interest also leads to positive outcomes:
“Self-interest is not myopic selfishness. It is whatever it is that interests the participants, whatever they value, whatever goals they pursue. The scientist seeking to advance the frontiers of his discipline, the missionary seeking to convert infidels to the true faith, the philanthropist seeking to bring comfort to the needy – all are pursuing their interests, as they see them, as they judge them by their own values.”
– Milton Friedman
Ditto with the profit motive.
Well of course – I figured the default assumption was that the pursuit of self-interest was a good thing.
The mistake that Don is highlighting that people often make is that simply the pursuit of self-interest is the same thing as the free coordination of self-interst by individuals engaged in exchange. It’s not the same thing.
It is hardly a default assumption. For a very large number of people, the default assumption is that altruism is rightly the basis for right action.
On this blog I hope it is! I guess even here there are a few exceptions.
Anyways – rest assured, I agree
Contrary to common opinion, Carlyle gave economist the moniker “dismal science” not because of Malthus but because J. S, Mill and other economist (Wilberforce’s cousin being one) opposed slaverly.
“To answer these questions, we need look no further than the essay in which Thomas Carlyle first labeled economics the “dismal science”. The essay, which was the opening salvo in a battle that raged over the next fifty years, was entitled “An Occasional discourse on the Negro Question.” First published in 1849, it contains the following paragraph:
Truly, my philanthropic friends, Exeter Hall Philanthropy is wonderful; and the Social Science—not a “gay science,” but a rueful—which finds the secret of this universe in “supply-and-demand,” and reduces the duty of human governors to that of letting men alone, is also wonderful. Not a “gay science,” I should say, like some we have heard of; no, a dreary, desolate, and indeed quite abject and distressing one; what we might call, by way of eminence, the dismal science. These two, Exeter Hall Philanthropy and the Dismal Science, led by any sacred cause of Black Emancipation, or the like, to fall in love and make a wedding of it,—will give birth to progenies and prodigies; dark extensive moon-calves, unnameable abortions, wide-coiled monstrosities, such as the world has not seen hitherto!3″
http://www.econlib.org/library/Columns/LevyPeartdismal.html
Milton Friedman had a brilliant summary of this and colonization:
http://www.youtube.com/watch?v=4xeebU8VhmY
The socialists would like it believed that slavery was essential to capitalism, but Mr. Boudreaux is correct that capitalism served to undermine slavery. Over time, slave labor wasn’t as cheap as free labor because the slaves had to be maintained after work hours.
That said, moralizing today about yesterday’s slavery is easy to do. If you go back to ancient societies, virtually all labor was done by slaves. Was that immoral too? Would Mr. Boudreaux, having lived back then, still have maintained his moral position that he holds now. It’s doubtful.
One thing hasn’t changed from then until now–and that is the general human desire to maximize his profits and minimize losses. If that means buying products made with third world labor costs. so be it, we don’t care. The spontaneous order that will lift the third world out of poverty does not come about because idealists decide to pay more for products because they’re made with higher wage rates, but through the greed, selfishness and absence of morality(relatively speaking) of the masses who don’t care about the labor associated with the products they buy, but, nonetheless, contribute to a raise in labor rates by the unintended increase in demand for third world labor.
Slavery doesn’t exist because it is immoral. It only became thought of as immoral as it declined in usefulness to the majorities in societies employing it.
Well put. To be clear, I’m not sure Don was arguing for the moral superiority of capitalism, only against the depravity of capitalism alleged by its critics who assign it responsibility for slavery.
http://mises.org/story/2529
Adam Smith himself discussed the institution of slavery in Wealth of Nations. Since capitalism runs, at its heart, on the profit motive, there is a fundamental conflict between its ethos and the practice of slavery. In addition to the significant moral problems inherent in holding another human being as chattel, a slave is motivated to work as little as possible and to consume as much as possible. After all, he is oppressed and experiences none of the benefit of his labor.
You could say the same of a horse. You just don’t. I doubt that human nature responds to slavery this way as fundamentally as you assume, and Capitalism doesn’t rule out human slavery fundamentally any more than it rules out owning horses fundamentally.
I agree that a slave is oppressed, but this “oppression” is an ideological assumption of mine, reflecting my libertarian values, not a definitive or historical observation about Capitalism. Historically, “Capitalism” is an invention not of Adam Smith (who never uses the term) but of Marxists and others who invented the term to describe a straw man they enjoyed debating.
Saying that Capitalism has nothing to do with slavery is nonsense historically, because the term itself is invented by people emphasizing this association. I don’t much associate my libertarian values with “Capitalism” for this reason. I prefer “market economics” or “classically liberal economics”.
I sometimes hear that bogus correlation as well. Even more common, when one defends the idea of secession and/or states’ rights, it is often assumed and/or charged that one is a defender of slavery. Very frustrating.
if slavery were essential to capitalism it would have to be repeatedly resurected in order to restart progress. slavery ended as a consequence of the progress brought about by capitalism. as a consequence of the end of slavery, the progress brought about by capitalism exploded.
Capitalism is a systematic governance of productive resources (capital). Individual proprietors (capitalists) hold capital, are entitled to its marginal value and may exchange it for other capital in a market.
Labor is a productive resource. Slavery is part of Capitalism insofar as one individual may hold another individual’s labor (all of it over a lifetime), is entitled to its marginal value and may exchange this title in a market.
If this proprietor is also entitled to the labor of a slave’s children, then hereditary slavery also plays a part in Capitalism.
Slavery is not the opposite of Capitalism in this sense, but hereditary slavery is no longer part of U.S. Capitalism, because it’s constitutionally prohibited here. Slavery more generally is prohibited by personal bankruptcy standards.
“Slavery is the opposite of Capitalism” is an ideological statement constructed by someone who likes Capitalism but doesn’t like Slavery.
Then, by your argument, had the southern states been allowed to secede, would slavery have naturally disappeared? This is what the Austrians propose, no?
I don’t know, obviously, but I think slavery would have disappeared in the CSA without the Civil War, possibly within the nineteenth century, and it might have disappeared even sooner, without secession or a war, if Congress had devised some scheme for compensating slaveholders for their losses, as the fifth amendment anticipates.
You can think what you like of slavery, but slaveholders paid for the slaves they held, and they weren’t about to free them without compensation. In some cases, slaves secured the slaveholder’s debts, so the holders weren’t entitled to free their slaves, as in Jefferson’s case.
One thing where we completely see eye to eye is that capitalism is for free-thinkers who follow self-interest, and it should be inherently corrosive to slavery in that sense.
I do have a doubt though…not every member of a capitalist system is an innovator. Of the people who are merely following orders in a factory, or a manufacturing plant, wouldn’t it be more profitable if they are paid almost nothing, made to work long hours without questioning orders, completely subjugated by their bosses?
I am in no way advocating slavery. So please spare me the admonishments. I am only asking an academic question. I would highly appreciate someone clarifying my doubts.
No. Even non-innovators are consumers who make choices in the marketplace. The more money and leisure workers have the more opportunities for other more innovative types to satisfy their needs/wants profitably.
I am not so sure that your analysis is correct. Hitler showed in WW11 that slave labor could build V-1 rockets. It worked and he had a better use of the non-slaves as cannon fodder.
It is probably more modern capitalism, with its emphasis on continued improvements and innovations, that made slave labor totally economically non-viable. You can put a gun to a mans head and force him to “plow that field” or “turn that lathe”, but if you try to force him to “create the new i-pod”, he will spend most of his energies trying to figure out how to foul things up.
This shift towards continual improvement and innovation in the world economy not only makes slave labor uneconomical and non-competitive, it is making old style restrictive unions non-competitive. Perhaps the same forces that make slavery non-competitive is making the UAW, USW etc. non-competitive and they will only survive, like slavery, in pockets where they are protected from true capitalist economic competition.
Slave labour under Hitler was still low productivity. Requires high security to prevent sabotage, rebellion etc. Thus, security personnel that could have been deployed elsewhere were employed securing the slaves. The West and the Soviets employed women to free up men for combat. A better solution.
What is the name of the law which states when someone brings up Hitler in a discussion forum the discussion degenerates and ends? Hitler was not a capitalist. The name of his party was National Socialist.
Reduction Ad Hitlerum, Reduction Ad Nazium or simply, playing the Nazi card. You are right, Nazis were socialists.
Godwin’s law. But I didn’t start this just pointed out that slave labour has externalities that inevitably render it lower productivity than free labour.
Since when is industrial production the same thing as capitalism?
You don’t even have to go that far, though. There was industrial slavery in the U.S.. It never quite took off, but it thrived in some areas.
On a slightly different vein… About 20 years ago at the University of Delaware I took a course taught (and still taught) by Farley Grubb called “The Economics of Colonial America”.
The most surprising finding was contrary to the conventional wisdom that the South needed slavery to grow. Where the south used slavery as its main driver for labor, the North used indentured servitude, which turned out to be less expensive. Bottom line was that while IS lost each worker (and some land) after a set period, land was so plentiful and cheap it was less expensive than slavery. Slaves were expensive to buy, and the owners were forced to pick up all of their expenses.
Putting the obvious moral implications aside, the South should have eschewed slavery and followed the model used by the North.
That’s just what Helper argued in The Impending Crisis of the South before secession.
I’ve often thought that Eli Whitney Jr. didn’t get enough credit for ending slavery in the U.S.
I don’t follow. Eli Whitney’s cotton gin made slavery much more profitable by creating a cheap industrial means for processing cotton. This increased the demand for picked cotton, which still had to be picked by hand.
After watching “The Killing Fields” last night, I was reminded that there have been plenty of examples of slavery in communist systems as well.
Thomas Sowell said that capitalism with its emphasis on individual rights and liberties was the cause of its decline. Before capitalism enlighten cultures such as Greek and Roman culture and many others thought that there was nothing wrong with slavery. Just like many see nothing immoral with abortion..
Actually there are Libertarians who argue there is at least one form of agreeable slavery: debt slavery. But then you could dicker over ‘tax slavery’ and ‘wage slavery’. What too of the claim that a free worker’s standard of living could in fact be no better then slave’s? A slave owner had a financial interest in keeping a slave alive and healthy enough to a day’s work but an employer has no such interest a free worker. Not to mention competition in labouring work should mean wages ought to fall down to a minimum (supply and demand). On the other hand, the Souterners were so livid at the thought of being forced to end slavery that they believed the Declaration of Independence ought to be scrapped if it meant the black people have to be free too.
I am not convinced. The comment you referenced in your post did not so much suggest that slavery was essential to capitalism, but rather noted that slavery was a big part of the cotton trade in the 1700s and 1800s. Capitalism, as it was practiced then, surely did not destroy slavery for the couple hundred years it was profitable to be in the slavery business.
So, slavery destroyed by capitalism? I do not think so. It was destroyed, at least in America, by war. Also, so what if it ended in Great Britain when Great Britain was buying the products of slavery from her colonies?
Capitalism is great, do not get me wrong. Still, one loses credibility in attributing anything and everything that is good as a result of it.
It is amazing that so many believe capitalism is freedom and liberty. It is not. Capitalism can exist in any form where people trade something, even slaves. And by the nature of the relationships developed in capitalism, master and slave we are always moving toward crony capitalism putting us back into the old master and slave relationships. And I mean master and slave as cultural superior and inferior. You can read this attitude over the web, even in many or your own comments. Liberty does not care if a man is lazy, dumb, smart, decent or rich.
Maybe you folks are confusing liberty with capitalism. Please stop doing so, capitalism is not liberty as they can exist without each other.
I recently found someone who explained such ideas in a similar fashion far better than I can in this comment.
http://www.tbns.net/kelly/articles/art39.html
” . . . a general lack of introspection on the part of most people with regard to their operative motives.”
I suspect the line of thinking which connects the two is rarely, “I wonder what were the root causes of slavery?” to which the answer is capitalism, but rather, “Capitalism is evil — I am sure it is responsible for the institution of slavery.”
Actually, it sounds more like it is the fallacy of the non-conjoined middle.
Capitalism is an expression of selfishness.
Slavery is an expression of selfishness.
Snakes eat eggs.
I eat eggs.
Ergo, I am a snake.