Slavery and Reparations

If one encounters the topic of reparations associated with slavery today, one will naturally assume that it is the descendants of slaves who are due any reparations that might be paid.  Believe it or not, that is an indication that significant progress has been made in race relations.  At the time when slavery was ended by the various countries that participated in the practice, the term reparations was only discussed as a means of compensating slave owners for the loss of their property.  The economics of slavery and its end are discussed by Thomas Piketty in his wide-ranging book Capital and Ideology.

The international slave trade ended over the period 1808 to 1815.  This should not be viewed as an indication of human progress.  Instead of working slaves until they died and buying a replacement, slave-owners discovered that it was more efficient to allow slaves to breed their own replacements. 

Slavery would be ended by the English in 1833 (with a ten-year transition period), by France in 1848, by the United States in 1865, and by Brazil in 1888.  Again, these transitions were based on economic concerns not moral issues.  The British and French had large slave populations on islands in the Americas where the slaves constituted up to 90% of the population.  Slavery ended when it no longer became possible to control the slaves with a handful of expats.  The threat of slave revolts was constant, and a Haiti (then Saint-Domingue) revolt resulted in abolition in 1794.  Slavery lasted longer in Brazil, but eventually it became uneconomic for the same reason. The United States was a special case where the practices of slave domination were stable and only war could force an end.

When slavery ended in France and England, the concern was that slaveowners be compensated for their loss of property.  The abolition of slavery also had to lead to conditions in which former slaveowners retained access to low-waged workers so thar further financial harm would not befall them.  Why was it that the notion that slaves should be compensated for their centuries of involuntary servitude never received serious consideration?

Much of the abolitionist activity leading to the ending of slavery was provided by Christians arguing that their religious beliefs demanded that end.  Unfortunately, just as many Christians were using their religious doctrines to justify slavery.  Slavery was common in the era when the Hebrew sacred documents were being produced, so it is not surprising that slavery would be viewed as acceptable by the Old Testament God of that era.

“In the eighteenth and nineteenth centuries, numerous Christian abolitionists tried to explain that Christian doctrine itself demanded an immediate end to slavery and that it was the advent of Christianity that had made ending ancient slavery possible.  Unfortunately, this argument was incorrect.  Any number of Christian bishoprics in Christian Europe owned slaves until at least the sixth or seventh century, and this hastened conversions and abetted Islam’s penetration into Spain in the eighth century.  Not until the year 1000 did slavery end in Western Europe, and it took several more centuries for serfdom to disappear, while in Orthodox Russia it lingered until the end of the nineteenth century.”

Christian abolitionist might have been fervent in their beliefs, but that did not mean that they viewed slaves of African descent as sufficiently human to justify integration into their white societies.  In the United States, even Lincoln favored sending freed slaves off to some place where they could live alone with their own kind.  This was not much of an issue for the English and the French because their slaves mostly lived far away from their homelands.  When Africans became numerous in their societies it would be people immigrating from their colonial holdings, not former slaves.  Rather than an upswelling of sympathy for the plight of the slaves, the ideology of the era, what Piketty refers to as proprietarian or that of an ownership society, focused on the presumed plight of the slaveowners.

“Ownership Society: A social order based on quasi-religious defense of property rights as the sine qua non of social and political stability.  Ownership societies flourished in Europe and the United States in the nineteenth and early twentieth centuries.”

There were also secular arguments in favor of slavery, viewing the institution as a prerequisite for the advancement of civilization.

“In these debates, many historians and scholars of the antiquity, noticeably in the German school, opposed the argument of Christian abolitionists on the ground that it was slavery that allowed the other classes of society to engage in the higher artistic and political pursuits that made ancient civilizations, especially Greece and Rome, great.  To oppose slavery then was tantamount to opposing civilization and settling for egalitarian mediocrity.”

This argument was waged in the context of the current era as well.  There was also the irresolvable argument as to whether wage labor could ever compete with slavery in terms of economic efficiency.  The tenacity with which slaveowners fought for not only property compensation but also legislation which would ensure that former slaves would continue to be required to provide low, below-market-wage labor suggests where their expectations resided.

Abolition passed in England in 1833.

“Parliament passed the Slavery Abolition Act in 1833, and between then and 1843 it was gradually put into effect, with complete indemnification of slaveowners.  No funds were appropriated to compensate slaves for the damages they or their ancestors had suffered, whether serious physical harm or mere loss of wages for centuries of unpaid labor.  Indeed, slaves were never compensated, not under this abolition law or any other.  To the contrary, as we will discover, former slaves, once emancipated, were obliged to sign relatively rigid and undercompensated long-term labor contracts, which left most of them in semi-forced labor for long periods after their official liberation.”

“Concretely, the British government agreed to pay slaveholders an indemnity roughly equal to the market value of their stock of slaves….Some 20 million pounds sterling, or 5 percent of the UK’s national income at the time, was paid to some 4,000 slaveowners.  If the British government had decided in 2018 to spend a similar portion of national income, it would have had to disburse 120 billion euros….The expenditure was financed by a corresponding increase of public debt, which was repaid by British taxpayers; in practice this meant mostly modest or average families, in view of the highly regressive tax system in force at the time…”

The French would arrive at a similar decision when they finally abolished slavery in 1848.  They also ignored any consideration of slaves as being owed compensation; rather they considered explicit compensation schemes in which the slaves, as beneficiaries of abolition, should provide undercompensated labor to pay for all or part of the reparations for the slaveowners.  Ultimately, the final bill resulted in compensation paid by taxpayers, but with the establishment of a regime of semi-forced labor as in the British case.

Slavery in the United States produced a much more complex situation.  While other countries had slave colonies that were profitable additions to their larger national economies, slavery and the cotton that could be produced by it were fundamental to the health of the US economy.  By the advent of the Civil War, the US was producing 75% of the world’s cotton, and 75% of the material that fueled the textile factories of Europe.

“As Sven Beckert has recently shown, it was this ‘empire of cotton,’ intimately associated with slave plantations, that was the heart of the industrial revolution and more generally of the economic domination of Europe and the United States.  In the eighteenth and early nineteenth centuries, the British and French were still uncertain about what they might sell to the rest of the world…”

Economic domination of a nation requires extraction from that nation of a resource that can be used to produce a value-added product that can be sold back to that nation at a profit.  Britain had a balance of payments issue with China because Chinese products such as tea were highly valued while little of English manufacture was considered of value by the Chinese.  Britain’s solution was to become a nation of drug dealers.  They would go to war with China to force it to allow the import of opium produced in its colonies.  Such was free trade in the British empire.  Cotton would finally allow them to produce something worth buying—or in some cases, a product they could force people to buy.

“…but the transcontinental organization of the empire of cotton enabled them to establish their control over global textile production, radically increasing its scale and ultimately flooding the planet’s textile markets during the second half of the nineteenth century.

Cotton consisted of 60% of US exports.  Cotton was so profitable in the deep south that its cultivation superseded any attempt to have a more diverse economy.  In cotton country almost all goods had to be imported from somewhere.  The high tariffs the nation maintained on imported goods from abroad meant that the cotton profits went to supporting agricultural development in the US heartlands and financial and manufacturing prowess in New England.  Slave-produced cotton exports subsidized the development of the US into a broad-based economic power.

Lincoln began his presidency hoping to contain slavery in the current slave states and begin an extended process of emancipation with compensation paid to slaveowners.  Slavery in the South was a stable, moneymaking operation.  The ratio of slaves to whites in those states was large, as much as 50-60% in some cases, but not near the 80-90% that led to threatening slave revolts in the West Indies.  The system could go on indefinitely.  And if compensation was to be paid to owners at market value, the costs would have been prohibitive, much larger than those incurred by England and France.

“Recent research has shown that in 1860, the market value of slaves exceeded 250 percent of the annual income of the southern states, and came close to 100 percent of the annual income of all the states.”

“In the South, the market value of all slaves exceeded the value of all other private property (land, buildings, and equipment).”

Piketty views it as highly unlikely that either side would ever have agreed to emancipation with compensation.  To put the costs in perspective, he compares the cost of compensation with the costs of waging five years of bloody warfare.

“Note…that the debt contracted during the Civil War—the first major federal debt in US history, stemming from the mobilization, upkeep, and arming of more than 2 million Union soldiers for five years—amounted to $2.3 billion in 1865, or roughly 30 percent of US national income, which at the time seemed a gigantic amount…It would have taken three or four times the cost of the war itself to compensate former slaveowners at market prices.”

One should note that a combination of legal and cultural discrimination has tended to relegate the descendants of those slaves to lower wage areas of our economy to this day—similar to the British and French schemes but lasting much longer.

Abolition by war left avoided the issue of reparations for slaveowners and, ultimately, nothing would be provided for the slaves as well.

“Early in 1865, Union military authorities had hinted to emancipated slaves that they would receive ‘forty acres and a mule’ when the war was over; had this program been adopted nationwide, it would have amounted to a large-scale agrarian redistribution.  No law to compensate slaves was adopted by Congress, and the ‘forty acres and a mule’ slogan became a symbol of Yankee deception and hypocrisy.”

One might think, given the contributions of the slaves to the economic development of their country, that some kind of financial thank you could be provided.  Piketty points out that Japanese Americans were ultimately provided a cash payment and offered an apology for their incarceration during World War II.  But the Japanese did not experience the residual racial bias that Mexicans and Blacks endure.  Between one and two million Hispanics, many of them US citizens, were illegally deported (mainly from California) during the depression in what Piketty describes as “anti-foreigner pogroms.”  This racial bias is unlikely to disappear any time soon.

Neither descendants of slaves nor Hispanics are likely to ever receive any direct compensation from the US.  Perhaps the best that can be hoped for is that they, and everyone else, never again have to labor away at poverty-level wages.  It is time for the social contract in the US to include a redistribution plan that allows everyone a life of dignity.  Increasing economic inequality slows economic activity; decreasing inequality increases economic activity.

It can be done.  And it should be done.