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That Idea That Slavery Built America Is A Bit Too Marxist To Be True

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In among those arguments in favour of reparations for slavery is the idea that slavery is what actually built America therefore large amounts should be paid to the descendants of those who did the building. It is true that black familial wealth is generally lower than white and so let’s have some repayment to those who actually built that economic pile, eh?

This strikes as being a bit too Marxist to be true. Not in the sense of being a bit too Soviet and communist, but Marxian, in that it concentrates much too much on capital. One number I’ve seen floating around is that 40% of all American capital was actually the value of those slaves. As economic growth depends upon capital therefore 40% truly belongs to those whose labour was exporopriated from them.

Well, yeeees.

Except that’s the unfortunate Marxism there. Yes, economic growth does depend, in part, upon capital. Primitive capital accumulation is a thing, as is that idea of falling profit margins and so on. But it is an error to say that’s all it’s about.

That being what I mean by it being a Marxist error, perhaps too much emphasis upon the volume of capital to the idiocy of insisting that it’s all and only about that accumulation of capital.

A more modern economics would point out that we humans get richer by increasing productivity. One manner of which is to add more capital to labour – so accumulation of capital does indeed work. The two man potato operation does indeed become more efficient by the addition of the second spade, the doubling of the capital being applied. And again more efficient by 50 such patches being treated by the specialised tractor, seed drill, harvesting machine and so on.

OK, there’s some truth to more capital making the world wealthier. But it is only some truth. There’s also that increase in productivity through advancing technology. Knowing how to build the tractor, breeding up the potatoes and so on.

More formally we talk about the Solow Residual. This is the increase in production that comes from no addition in capital and or labour. That is, the increase in productivity after we’ve included the effects of capital accumulation and deployment.

It’s certainly true – OK, it’s the generally accepted truth – that increases in that Solow bit were vastly more important in 20th century economic growth than more capital was. I think I’d argue that the second half of the 19th went the same way. It’s advancing technology that was important in raising living standards, increasing growth, not just capital accumulation.

Sure, we can look at “capital” in the economy and see that it rises. But don’t forget much of that is the value we’re ascribing – through that dread financialisation – to those advances in technology. Someone invents the new furnace, technological advance, and by the time he’s built it and run it he’s floated the company, the valuation of those shares being now capital. But that’s not accumulated capital at all, that’s created.

So, that initial claim about slavery having produced the wealth of the nation doesn’t work out. Because if it’s technological advance that creates the wealth then the expropriation of the slaves’ labour to accumulate capital isn’t the cause of the growth.

Thus, even if it’s true that slaves were 40% of antebellum capital that doesn’t mean descendants should have 40% of today.

At which point we have a useful proof of the importance of slave capital . Stick with that it was 40% of all US capital in 1860. That’s a claim that’s made out there at times after all.

OK, in 1865 slaves were 0% of US capital. Not so much the war but the Emancipation Proclamation destroyed, entirely and wholly, that 40% of US capital. Change the numbers as you wish, the point is the same whether slaves were 1% or 100% of American capital. That capital all got destroyed in those 5 years.

The American economy continued to grow in the late 1860s. Off into the 1870s and so on. In fact it never stopped doing so. Therefore the slave capital couldn’t have been the unique part juicing that process. In fact, if growth continued, even accelerated (as it did), then the slave capital can;t even have been an important part of the system because destroying it didn’t even slow down, let alone halt, the growth.

This being the real point here. Yes, Marxists do like to insist that it is the accumulation of capital which produces growth. This transfers over to the slavery argument where people look at that capital – number of slaves times price of slave – and insist that US growth came from that capital. Which was, obviously, expropriated from those slaves. But when that capital was destroyed the growth continued. So, that capital cannot have been the source of the growth, can it?

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9 COMMENTS

  1. When the poor inherit the earth, it’ll take seven days for the rich to get it back again. There’s a presupposition that inherited capital stays inherited. In real life this does not appear to be true. Yes, there is a correlation between socioeconomic status and heredity. At the risk of attracting great wrath, I suggest that the heredity creates the SES through the mechanism of IQ. The offspring create their own capital and affluence.

    Tribal societies tend to suffer IQ-wise from the daisy-cutting effect. The smartest members who are potential rivals for chieftainship tend to come to unhappy ends, perhaps before they have had the chance to pass on the smart gene and perhaps because the sitting chieftain thinks it wisest to eliminate the whole bloodline. From where I sit at my computer at home I can see the Northcliff mountain where Msilikatse encouraged pretenders to learn to fly. Shaka and Cetshwayo had their own leadership contest settling methods. At the risk of attracting great wrath, I suggest that this custom was a contributor to IQ differences on aggregate between African tribesmen and European settlers. Europeans had a subtler way of doing it. The most intelligent were sent off to the church to take vows of celibacy.

    So, what about the 40%? I struggle to think how this could have been calculated, but if that slavery wealth had been equally shared out at the time, it would in the interim have become as thoroughly diffused as the original health-giving component in a homeopathic remedy. Tim help me out: I think it’s reversion to the mean?

    • You make me wonder whether the increased IQ of the Chinese is attributable to the examination system. If you passed those arcane and pointless tests, you got a job in the bureaucracy and thus the chance to support one or two or three wives.

      You may wonder why the Chinese didn’t therefore produce the industrial revolution. I’d argue that the imperial system of government was even worse than the present communist regime. Yes, really. Of course one may also argue about how relevant the ability to pass arcane tests is to actual problem solving ability.

      But when I think of American capital, I think of all those indentured whites who were so wickedly exploited. Clearly since they constituted a larger portion of the populace, they contributed more than the blacks, and should thus get more of the loot. I feel this argument makes at least as much sense as the one about giving most of it to the blacks.

      • Maybe passing exams. getting the credentials to join bureaucracy, a seat on the gravy train, was enough for a comfortable life. Not unlike some of our own comfortable elites who are very ‘green’ on the assumption that any reduction in living standards will be for other people. No need for the fruits of an industrial revolution we have everything we need. Now the Chinese are in a position to appropriate the benefits of an industrial revolution created elsewhere, and the West shows every sign of sinking into a swamp on the Chinese model

        • Yeah, djc. I think your explanation for the lack of a Chinese industrial revolution is better than mine. Though I’d still argue that the Chinese imperial system stank compared to 16th and 17th century England.

          • Of course it did, hence why England in the next two centuries could advance and China didn’t. A couple of centuries of Industrial Revolution and Britain could afford its very own mandarin class.

  2. May I suggest that there is a failure to distinguish human capital from physical capital.
    Pre emancipation 40% of the physical capital consisted of slaves, the human capital of the free population was what it was.
    At emancipation that part of the physical capital that had been slaves was simultaneously converted to human capital and restored to its rightful owners, the ex slaves. The human capital of the already free remained what it was.
    Thus there was no loss of capital from the emancipation.
    If course much capital, both physical and human, was expended in the war itself.

  3. In the time of slavery the free North was much wealthier than the slave South; so the wealth of current day USA did not occur from slavery. In the UK although some got very wealthy through slavery the country as a whole got wealthy through trade, industry and innovation.

  4. If anything, I’d say it’s oil that built the USA, not slavery. I don’t know if that affected taxes or whatever, but just being near to where it’s produced rather than shipping it back in the 1900s would have given a price advantage to everyone local, wouldn’t it? You just have to compare levels of car ownership in the USA with the UK at the same time.

    • You have a point, but I’d argue that you also need the social system to take advantage of the advantage. Russia had easy access to oil in the 1900’s, and indeed so did Romania. (You do use an ‘o’ not a ‘u’ these days don’t’ you?)

      You could also look at the Middle East. Plenty of very rich people there I’ll admit, but not on the level of the US.

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expunct

in British English
expunct (ɪkˈspʌŋkt)
VERB (transitive)
1. to delete or erase; blot out; obliterate
2. to wipe out or destroy

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