a lesser-known but equally clear and durable influence of slavery on US capitalism

Another article from Jacobin magazine worth your reading.

The #1619 Project is important for reminding us that while racism is as American as apple pie, its reflexive relationship to modern US capitalism is no less foundational. Modern slavery is most evident in human trafficking, but the structural constraints are as important, as we see in the regulatory and fiscal race to the bottom in the current historical circumstances.

But in truth there need be no mystery. For there are straightforward ways that slavery clearly influenced the development of American capitalism — ways that don’t require us to pad the numbers or believe in ghosts. The first and most obvious one is the legacy of anti-black racism that is powerfully described in other contributors to the 1619 Project. That legacy undoubtedly divided the American labor movement, weakened progressive political alliances, and undermined the provision of public goods (see for instance the excellent pieces by Kevin Kruse and Jeneen Interlandi in the same issue of the New York Times Magazine).

“Einhorn’s point is not that the framers were all proslavery … nor that they intended to produce a capitalist paradise of unfettered accumulation. Her point is that in making certain concessions to the slave-owners the framers unintentionally generated those conditions.”The argument is that the need to protect slavery developed into a system with “strong property protections and weak regulatory and taxing power” with implications that have stayed with us in terms of how our institutions work.In this case it shows how the 1619 project, like all writing and especially popular commentary, is at its best a piece of an iterative conversation not a final summative statement ending all discussion.So if you read 1619 and missed this piece, read it. If you didn’t read 1619, go do that first huh?

There is also a lesser-known but equally clear and durable influence of slavery evidenced in the work of legal and institutional historians that Desmond neglects, such as David Waldstreicher and Robin Einhorn. These historians point out that a major effect of slavery on US economic development came through its foundational influence on America’s legal and political institutions.

[…]

This division of federal and state power over slave property is not just manifest in now-dormant articles of the constitution dealing with slavery. It imbues all parts of the constitution and arguably lent to the American state system its distinctive form, which combines strong property protections with weak regulatory and fiscal powers (the introduction of a federal income tax in 1913 required a constitutional amendment).

Apologists for this system call it “competitive federalism.” The fugitive slave act and the commerce clause restricted the domestic power of the federal government — the most powerful entity in the state system — to protecting large merchants and enforcing property claims across state lines, i.e., ensuring the mobility of capital. Its powers to tax, spend, and interfere with the interests of the wealthy (e.g., through regulating banks or providing debt relief) were explicitly curtailed. Even the legal scholar Richard Epstein, a libertarian champion of competitive federalism, acknowledges that “it’s quite clear that the cause of limited government was advanced by the institution of slavery.”

In principle the states were left to regulate and tax as they liked, but their practical ability to do so was constrained by federally mandated capital mobility. This created a fiscal and regulatory race to the bottom, as the wealthy could force relatively weak state legislatures to compete for their investments — just as city and state governments prostrate themselves before Amazon and Boeing today. The infamous Dred Scott case was itself a matter of the federal judiciary protecting capital mobility (in that case the right of slave-owners to move through the territories with their slaves) and Robin Einhorn points out that the same principle was at work in later judicial interpretations of the Fourteenth Amendment that allowed federal courts to strike down state-level labor regulations.

Einhorn’s point is not that the framers were all proslavery (they were not) nor that they intended to produce a capitalist paradise of unfettered accumulation. Her point is that in making certain concessions to the slave-owners the framers unintentionally generated those conditions. Slave-owners were particularly afraid of allowing democratic control over property because they were literally afraid of their property. They were haunted by the threat of slave insurrections, as well as foreign armies turning their slaves into enemy soldiers through offers of freedom (as the British had recently done). Einhorn concludes that “if property rights have enjoyed unusual sanctity in the United States, it may be because this nation was founded in a political situation in which the owners of one very significant form of property thought their holdings were insecure.

The resulting balance of strong property protections and weak regulatory and taxing power may or may not have been conducive to economic growth (that’s for economic historians to figure out). But there is no doubt that it helped shift American capitalism onto the low road. In addition to the profound effect of slavery on America’s enduring racial inequality, slavery’s legacy for American capitalism may thus be found more in the structural constraints on US politics than in its direct contributions to the nineteenth-century American economy.

jacobinmag.com/…

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