Capitalism vs. Slavery

by | Aug 10, 2020 | History

Similarities between slavery and socialism, and indeed the aggressive anti-capitalist rhetoric of proslavery ideology, are seldom examined in the “New History of Capitalism” literature.

What is capitalism’s view toward slavery? It seems like a crazy question, but not so much actually, not in these times. So let us begin with the opening line of the first chapter of George Fitzhugh’s Sociology for the South, first published in 1854.

Political economy is the science of free society. 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, for they in fact assert that individuals and peoples prosper most when governed least.

Fizhugh’s point was to inveigh against economic freedom and in defense of slavery. His radical tract sought to make out an elaborate ideological case for slave labor and indeed all aspects of social ordering. Such a system, he announced, would resolve the posited state of perpetual conflict between labor and the owners of capital by supplanting it with the paternalistic hierarchy of slavery — a model he advocated not only for the plantations of the South but also for adaptation to the factories of the Northeast.

In total, Fitzhugh presented a horrifying vision of a national society reordered around the principle of chattel slavery. And as his introductory remarks announced, attainment of that society required the defeat of its remaining obstacle, the free market.

Although rightly rejected today, the Virginia-born Fitzhugh attained national prominence in the late antebellum period as one of the most widely read defenders of a slave-based economy. Charles Sumner called him a “leading writer among Slave-masters,” and his regular contributions to the pro-South magazine DeBow’s Review gained him a national readership in the 1850s.

In 1855 Fitzhugh embarked on a publicity tour of the Northeast, jousting with abolitionist Wendell Phillips in a series of back-to-back lectures on the slavery question. By 1861, he had added his voice to the cause of southern secessionism and began mapping out an elaborate slave-based industrialization policy for the Confederacy’s wartime economy.

Fitzhugh was also an avowed anti-capitalist. Slavery’s greatest threat came from the free market economic doctrines of Europe, which were “tainted with abolition, and at war with our institutions.” To survive, he declared, the South must “throw Adam Smith, Say, Ricardo & Co., in the fire.”

Such rhetoric presents an under-acknowledged conundrum for modern historians. It is academically trendy at the moment to depict plantation slavery as an integral component of American capitalism.

A multipart feature series in the New York Times advances this thesis, depicting modern free market capitalism as an inherently “racist” institution and a direct lineal descendant of plantation slavery, still exhibiting the brutality of that system. This characterization draws heavily from the so-called “New History of Capitalism” (NHC) — a genre of historical writing that swept through the academy in the last decade and that aggressively promotes the thesis that free market capitalism and slavery are inextricably linked.

Many leading examples of NHC scholarship in the academy today are plagued by shoddy economic analysis and documented misuse of historical evidence. These works often present historically implausible arguments, such as the notion that modern double-entry accounting emerged from plantation ledger books (the practice actually traces to the banking economies of Renaissance Italy), or that its use by slave owners is distinctively capitalistic (even the Soviets employed modern accounting practices, despite attempting to centrally plan their entire economy). Indeed, it was NHC historian Ed Baptist who produced an unambiguously false statistic purporting to show that cotton production accounted for a full half of the antebellum American economy (it actually comprised about 5 percent of GDP).

Despite the deep empirical and historical deficiencies of this literature, NHC arguments are still widely enlisted not only as historical analysis of slavery’s economics but as an ideological attack on modern capitalism itself. If capitalism is historically tainted by its links to slavery, they reason, then the effects of slavery’s stain persist in modern American capitalism today. In its most extreme iterations, these same historians then advocate a political reordering of the American economy to remove that stain. In other words, to reconcile our society to its history and atone for the sins of slavery, we must abandon what remains of American capitalism.

The NHC literature’s use of the term “capitalism” is plagued by its own definitional fluidity, which, at times, encompasses everything from laissez-faire non-intervention to protectionist mercantilism to state-ordered central planning. Most economic historians take care to differentiate between the features of these widely varying systems; however, the NHC literature has adopted a habit of simply relabeling everything as “capitalism.” A command-and-control wartime industrial policy thus becomes “war capitalism,” while a slave-oriented mercantilist regime of protective tariffs and industrial subsidies becomes “racial slave capitalism,” and so forth.

When brandished in modern politics, it quickly becomes clear that the same scholars have only one “capitalism” in mind. The NHC genre’s own economic inclinations veer unambiguously in a leftward direction, suggesting their real ire is toward the classical liberal free market variety of capitalism. Wealth redistribution, the nationalization of health care and other entire economic sectors, socialistic central planning of industries around labor activism, and even a plethora of climate change policies thereby become necessary acts of “social justice” to correct for capitalism’s supposed slavery-infused legacy.

We therefore arrive at the curious position wherein “atonement” for slavery, as presented by the NHC historians, involves politically repudiating the same free market doctrines that Fitzhugh deemed the greatest danger to slavery itself in the decade before the Civil War.

Returning to Fitzhugh’s defense of slavery, we find deep similarities to anti-capitalist rhetoric today. The economic doctrines of laissez-faire, he wrote in 1857, foster “a system of unmitigated selfishness.” They subject nominally free labor to the “despotism of capital” wherein the capitalist class extracts an “exploitation of skill” from wage laborers, as found in the difference between the value of what they create and the much lower compensation they receive.

As Fitzhugh argued, by way of the example of a wealthy acquaintance who had “ceased work” and lived off of his fortune, the capitalist’s “capital was but the accumulation of the results of their labor; for common labor creates all capital.” He then succinctly explained the result by noting “the capitalist, living on his income, gives nothing to his subjects. He lives by mere exploitation.” As Fitzhugh continued:

It is the interest of the capitalist and the skillful to allow free laborers the least possible portion of the fruits of their own labor; for all capital is created by labor, and the smaller the allowance of the free laborer, the greater the gains of his employer. To treat free laborers badly and unfairly, is universally inculcated as a moral duty, and the selfishness of man’s nature prompts him to the most rigorous performance of this cannibalish duty. We appeal to political economy; the ethical, social, political and economic philosophy of free society, to prove the truth of our doctrines. As an ethical and social guide, that philosophy teaches, that social, individual and national competition, is a moral duty, and we have attempted to prove all competition is but the effort to enslave others, without being encumbered with their support.

The difference between the value of the laborer’s product and this substantially lower wage, Fitzhugh explained, provided a measure of the exploited share of his work.

If this line of reasoning sounds familiar, it is due to a very real parallel between Fitzhugh’s formulation of the capital–labor relationship and that of another famous contemporary. Fitzhugh had effectively worked out the Marxian theory of “surplus value” over a decade before the publication of Marx’s own Capital (1867), and derived it from the same sweeping indictment of the free-labor capitalism.

The two thinkers would only diverge in their next steps, the prescriptive solution. Whereas Marx rejected chattel slavery and extrapolated a long historical march to an eventual socialist reordering through revolutionary upheaval, Fitzhugh saw a readily available alternative. “Slavery is a form, and the very best form, of socialism,” he explained. Wage labor, he predicted, would be forever insufficient to meet the needs of the laborer due to deprivation of his products from his skill. Slavery, to Fitzhugh’s convenience, could step in and fill the gap through the paternalistic provision of necessities for the enslaved, allegedly removing the “greed” of wage exploitation from the process.

Since slaves became the charge of the slave master and were placed under his care for food and shelter, Fitzhugh reasoned that “slaves consume more of the results of their own labor than laborers at the North.” Plantation slavery, according to this contorted line of thinking, thereby mitigated the “exploitation” of wage labor capitalism and returned a greater portion of the posited surplus value. In the Marxian counterpart, a socialist state fulfills a similar function.

Fitzhugh’s eccentric extrapolation from what are essentially Marxian doctrines has the effect of turning Marx’s own untenable “solution” to capital ownership on its head. But the two thinkers unite in their grievances: a shared enmity toward market capitalism, and a desire to cast free market allocation of resources aside through coercive social reordering to achieve their respective ideal societies — mass enslavement or global communism.

These similarities between Fitzhugh and socialism, and indeed the aggressive anti-capitalist rhetoric of proslavery ideology, are seldom examined in the NHC literature. In its quest to politically tar modern capitalism with the horrors of slavery, these historians have adopted a practice of evidentiary negligence that conveniently excludes the explicit anti-capitalist ideological tenets of the very same slave system that they rebrand as a foundation of the modern capitalist economy .

Fitzhugh was not alone in adopting and adapting anti-capitalist ideology to the defense of slavery. Indeed, he heavily extrapolated it from Thomas Carlyle’s own racist attacks upon the “dismal science” of economics on account of its close historical ties to abolitionism. That these proslavery thinkers found a parallel rationale in socialism and deployed it to attack a common enemy of free markets, irrespective of their otherwise-divergent claims, is indicative of a shared illiberalism between the two. In practice, unfortunately, the immiserating historical records of each reveal that the only remaining distinction between their political outcomes consists of the choice between the slavery of the plantation and the slavery of the gulag.

Made available by the American Institute for Economic Research. Visit their website at

Phil Magness is a Senior Research Fellow at the American Institute for Economic Research. He is the author of numerous works on economic history, taxation, economic inequality, the history of slavery, and education policy in the United States.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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