Friday, January 10, 2014

The Cotton Kingdom: Slavery and Economics

The term "Cotton Kingdom" is attributed to Frederick Law Olmstead who produced a book of that name soon after the start of the Civil War. Olmstead meant the title to be a sardonic turn of the phrase "Cotton is King." Olmstead’s goal was to demonstrate that as an economic system, slave-dependent production of cotton had been disastrous for the South. 

Walter Johnson has produced a history of the lower Mississippi Valley from the time of the Louisiana Purchase to the beginning of the Civil War in River of Dark Dreams: Slavery and Empire in the Cotton Kingdom. Johnson corroborates Olmstead’s economic conclusion and also details the desires of the "rulers" of the "kingdom" to take their way of life and impose it as a slave "empire" throughout the Americas.

It is of interest to note the Southern response to their failed economic model and how the attitudes formed then continue to persist to the present day.

The subject here will be the economics of slavery. Other topics will be saved for a later day.

Johnson’s tale begins with the Louisiana Purchase which added rich agricultural areas to the west of the Mississippi River. Thomas Jefferson hoped that this land would become the home of generations of landowning farmers who would work the land themselves. Ever fearful of the possible consequences from a revolt by the large numbers of African slaves concentrated in Southern regions, it was assumed that the new areas available would allow the dissemination of existing slaves and slave owners into these new areas, thus diminishing this concern. Many hoped that the institution of slavery would fade away, but the opposite would occur as slavery became even more prominent.

The new lands were wooded and immersed in a fearsome climate. To be converted to efficient agricultural use, they would have to drained, cleared, and leveled. This required an enormous amount of physical labor—the kind of labor for which slavery was required. It should have been no surprise that those best able to make use of the land were those who already owned slaves. The region became dominated by large land owners with a need for ever greater numbers of blacks to work the land. The slave economy was not weakened, it was rejuvenated.

"The extension of slavery into the Mississippi Valley gave an institution that was in decline at the end of the eighteenth century new life in the nineteenth. In 1800, there were about 100,000 slaves living within the boundaries of the present-day states of Mississippi and Louisiana; in 1840, there were more than 250,000; in 1860, more than 750,000."

Those who owned the land made a decision that was smart in the short term and focused almost entirely on the production of cotton. New strains of the plant were being developed that were increasing yield and quality. The US South would come to dominate the world market.

"….estimated that the South in the 1850s was supplying about four-fifths of the world’s cotton—the bulk (about five-sixths) of its crop being shipped every year to Great Britain."

"For most of the period before the Civil War, the United States was the source of close to 80 percent of the cotton imported by British manufacturers. The fortunes of cotton planters in Louisiana and cotton brokers in Liverpool, of the plantations of the Mississippi Valley and the textile mills of Manchester, were tied together through the cotton trade—the largest single sector of the global economy in the first half of the nineteenth century."

Given this critical role in the world and national economies, the South should have been an area of widespread prosperity. On the contrary it was a land of a few wealthy people and wide-spread deprivation. There were a number of perversities in the slave-based system that would ultimately leave the region not only morally deficient, but unstable economically, ecologically, and socially.

On January 1, 1808, the importation of slaves by sea was abolished. This was the first time that such a law could be constitutionally implemented. It was driven by the dual desire to limit the concentration of African slaves and to diminish the viability of the slave-based economy. The opening of the Mississippi Valley to large-scale cotton production had the opposite effect and increased the demand for slaves. The only source of fresh slaves was by the internal market. Eventually, hundreds of thousands of slaves would be purchased from the "upper South" to work in the "lower South." This internal market raised the price of slaves and converted some areas into what might be referred to as slave farms where blacks were bred for sale rather than for work.

In a normal economic model capital and labor competed for the investment dollar. In the cotton economy, slaves represented both capital and labor. Ultimately, a slave could pick only so much cotton. If more cotton was to be produced, more slaves were needed. If the price of a slave went up then the price of cotton would have to rise or profits would be diminished.

The plantation owners could have taken a long-term point of view and bred enough slave children to keep the market price under control, but there was no long-term in the South. Johnson quotes M. W. Phillips a frequent pro-slavery scold.

"Phillips argued, the slaveholding South was diminishing the span of its own history. ‘Not one-fourth of the [slave] children born are raised, and not over two-thirds are born on the place, which under a different policy, might be expected….’I favour good and fair work, yet not overworked so as to tax the animal economy, that the woman cannot bear healthy children, nor should the father be overtaxed, that his vital powers be at all infringed upon’."

Johnson cannot verify the accuracy of the 75% child mortality rate, but if true, such a number would be outrageous. But why worry about such things when you are dealing with humans in an "animal economy."

It should not be forgotten that the Mississippi Valley was based not only on slave labor, but also on the principle of white supremacy. Slavery not only eliminated potential jobs that poor whites might have needed, but also, the dictates of white supremacy made labor that could be done by slaves inappropriate for whites. The desired way to "make it" in Southern society was to accumulate the wherewithal to acquire a slave. The lack of a broad-based economy and the rising price of slaves left non-slaveholders in a kind of limbo from which there was no apparent escape. Since these slaveless whites were the majority of the white population this left society in a rather unstable condition. Those with wealth worried not only about rebelliousness of slaves, but also about the reliability of their less-fortunate white neighbors.

The decision to focus all effort on cotton produced a number of unfortunate side effects. Planting the same crop over and over depletes the soil and makes it less productive. One could respond by fertilizing the soil or by clearing and planting more land. The latter was the chosen solution. The fertilizer at the time was manure. To obtain large amounts of manure requires keeping sufficient animals for production. Keeping livestock requires labor and land that would deduct from that available for cotton. Given that a return on investment in slaves was required, producing cotton was the most efficient way to gain it.

This unswerving focus on cotton production left an economy in which there were a few rich people while the rest were either poor or were condemned to consumption of only what was necessary to keep them alive and working. The South was effective at generating cotton but it produced almost nothing else. It couldn’t feed or clothe itself and had to import from the North everything it needed.

"…. ‘the South’ provided two-thirds of the nation’s exports, but consumed only one-tenth of its imports."

Much of the wealth that could have been returned to the South if it had a more self-contained economy was siphoned off by the North as it imported goods and resold them to the South at a profit.

The shallow economy of the South was based on credit. Crops came in once a year. Until that time credit was required to cover expenses. There was little resident capital to compete with the New York banks in covering this credit requirement. In addition, most Mississippi Valley cotton ended up being shipped to Great Britain by way of New York rather than directly from New Orleans where it had originally accumulated. A boat carrying cotton to Liverpool from New Orleans would likely return with an empty hold because there was little market for import goods. This raised the cost of direct shipping. The cheaper credit and the frequent transport of goods from New York and back made it cheaper and quicker to convey cotton to New York first. But this service came at a cost.

"Contemporary estimates were that the shippers, insurers, bankers, and merchants of New York received forty cents of every dollar spent in the cotton market."

And how did the South respond to the defects of its economy and its society? They reaffirmed the inevitability of white supremacy and black African slavery, and blamed their problems on others.

Southern dogma persisted in equating slavery with labor and Southern slaves with Northern immigrants.

"….the difference between the labor supply of the South and that of the North was simply that ‘one comes under the head of importation, the other under the head of immigration.’ The bogus use of the category of ‘labor’ to blur the distinction between slave labor and wage labor—between importation and immigration—had a long history in pro-slavery ideology. By the late 1850s, the assertion that workers in the U.S. North or in Great Britain were ‘wage slaves’ or ‘white slaves,’ and comparison of their wretched living conditions to the (supposedly) easy lives lived by black slaves in the Americas, was a standard way to show up industrial capitalist notions of ‘freedom,’ abolitionist hypocrisy, the inevitable degradation of whites without slaves, and so on."

It was important to maintain the myth that black Africans were designed by nature to be white men’s slaves. The counterexample—the one that left them sleeping uneasily at night—was the successful slave rebellion that led to creation of Haiti as an independent nation. It was necessary that a narrative be formed that assigned responsibility for this event not to the will or intelligence of the slaves, but to the weakness and muddled policies of the European nations. It was only in the US that the proper Anglo-Saxon dominance continued to be maintained.

"….they refused to believe, or at least to say that they believed, that slaves—slaves like their slaves—could plan something like the Haitian Revolution. Rather, they projected an apparently more comfortable history of imperial rivalry onto the hemispheric history of black revolt. It was not so much the slaves’ own ideas of right and revolution that were at stake in the events called slave revolts, as the ideas and actions of the (white, European) rivals of the United States: the virulent democratizing revolutionizing of the misguided French; the cynical, incendiary slave importing and free-person arming of the puny Spanish; and especially the abolitionist philanthropy of the sickly, feminized English."

There was a vocal minority that sensibly claimed the way to greater economic growth and self-sufficiency was by creating a more balanced Southern economy. That line of thought would lose out to a competing point of view that held that the South’s problems arose from the actions of the federal government. They believed it was federal favoritism to Northern interests that was responsible for the lack of imports coming in through their own port of New Orleans rather than simple market dynamics.

"As the historian Brian Schoen has recently shown, they were specifically concerned with three aspects of federal trade regulation, which they believed redistributed wealth and trade from South to North: federal tariffs that protected Northern manufacturers from European competition and thus raised prices for those who purchased manufactured goods; duties on foreign shipping that supported domestic shipping by keeping ‘foreign’ ships out of the coastal trade….; and federal spending on maritime improvements in the North and bounties paid to New England cod fishermen—expenditures that used tax revenue to support a localized sector of the economy."

A report issued by the Southern Commercial Convention in 1837 summarizes the view that persisted up to the Civil War.

"It may not be disguised, however, that this extraordinary and unequal state of our commercial relations, had its origin, more in the fiscal operations of the Federal Government, than in any supposed deficiency in the industry and enterprise of our citizens…."

The favored solution to the social instability that had developed between slaveholding and non-slaveholding whites included a reopening of the slave trade so that slaves would fall in price and be affordable by all whites. This new cadre of slave owners would need land to work. That would be provided by bringing the benefits of white (Anglo-Saxon) supremacy to areas in the Caribbean and South and Central America—a form of lebensraum for white supremacists.

"The slave trade was the vehicle for a full-spectrum fantasy of slaveholding dominance, the promise of white patriarchy and pro-slavery empire embodied in African slaves. All white men might become masters; all white women—their white women—might become ladies; Africans might be civilized; and ‘the South’ would fracture the seemingly fixed limits of pro-slavery geography and rework them into an empire of unimaginable riches."

It is stunning to realize how little these attitudes have changed over the last 150 years. The Southern states continue to be dominated by a white, mostly Anglo-Saxon elite. Labor is still viewed as a non-elite activity not worthy of wage, safety, or health protections. And the federal government continues to be viewed as a source of the South’s problems.


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