The False Cause: Finding Capitalism and Big Government in the Antebellum South

By Casey Chalk
February 20, 2018

The United States witnessed a significant amount of discussion over the legacy of the Civil War in 2017, the vast majority of it perpetuated by growing societal angst over monuments honoring various “heroes” of the Confederacy. When reflecting on the pre-war and conflict periods of American history, there is a certain narrative that is often vocalized by those seeking to contextualize or defend certain facets of antebellum Southern society.

It goes something like this: for its many sins — much of which stem from its embrace of chattel slavery — the South retained and promoted many goods, such as its agrarian society, strong religious convictions, sense of community, and deep appreciation for tradition. The South, according to this story, was a thoroughly conservative, anti-industrial, and decentralized society.

A recent article in the Imaginative Conservative seeks to support this conception of Southern identity in its characterization of Black-White relations. The author, Vito Mussomeli, argues:

“... We need to accept something they [Blacks and Whites] knew: they always saw and accepted the humanity in each other. They lacked hatred for one another. Not in Virginia (nor the other Southern colonies) did the White people ever hate Black people. Their spiritual beliefs forbade it…. Unlike industrial societies scripted to impersonal finances and separate, interchangeable, disposable cogs of humanity, agrarian societies create a human bond tied to the rhythms of nature, a constant reminder that humanity and its endeavors require the favor of powers greater than money and machinery and even human aspiration.”

Perhaps there were some places in the South — reminiscent of Gone With The Windor some other “Lost Cause” tale — where such a paradigm existed, where Blacks and Whites enjoyed some level of spiritual harmony, and co-existed in pre-modern relationships that rejected the dehumanizing tendencies of the industrial revolution.

The historical work done by Elizabeth Fox-Genovese and Eugene Genovese in The Mind of the Master Class certainly demonstrates the moral and intellectual complexity of the slaveholding class, a group that contained many pious, honorable individuals who were opposed to some elements of capitalism. A recent book by Arizona State University historian and professor Calvin Schermerhorn, however, proves that any rendering of Southern history that emphasizes its traditionalist, agrarian, and limited government identity must account for the fact that a significant part of the region’s wealth was accumulated precisely through capitalism, federal assistance, and the appropriation of state-of-the art technologies. Moreover, The Business of Slavery and the Rise of American Capitalism (1815-1860)makes clear that the North — and many European countries — were intimately involved in the capitalist development of “The Old South.”

A South Reliant on Federal Help

Southern political culture was founded upon an ideology that appreciated a decentralized model of government, a nineteenth century version of subsidiarity, as the Old South’s flag-bearers claim. Ideologically or philosophically, maybe this was so; perhaps in some places such a political system was visible. Certainly not where King Cotton, or the other cash crop, sugar, reigned. As Schermerhorn demonstrates, “after 1815 the United States committed itself to advancing commercial agriculture that relied on bound labor.” Washington “practically emptied its treasury” in wars against Native American tribes that were expelled from the South, opening up new lands in Florida, Georgia, Alabama, and Mississippi for Southern slaveholders to grow cotton and sugar. Under President James K. Polk, himself a slave-owner with a large plantation in Mississippi, the United States provoked war with Mexico, again furthering slaveholding interests when Texas entered into the Union. Those familiar with the Missouri and 1850 Compromises know that slaveholders had their eyes on extending slavery’s reach across former Mexican territory: in addition to Texas, also New Mexico, Arizona, Colorado, and California. The US Government also funded roads and other “external improvements” like lighthouse construction and port dredging, which benefited the expansion of the slavery business.

Federal trade and fiscal policies also served slaveholding interests. Throughout this time period, federal tariff protections for domestic sugar lined the pockets of Southern planters and enabled them to compete on the international market with the superior sugar cultivated in Cuba. President Andrew Jackson’s opposition to the Second Bank of the United States — and support for state banking — provided significant investment opportunities for slaveholders. The US Government even awarded federal mail and army contracts to Southern steamship businesses that also bolstered the lucrative interstate slave trade, which moved thousands of Blacks from eastern states to cash crop plantations in Mississippi, Louisiana, and Texas. As Schermerhorn notes, “besides commodities, all steamers on domestic routes in the Gulf South carried enslaved people.” Alternatively, also to slaveholders’ benefit, the federal government largely kept it hands out of the profitable interstate slave trade, refusing to regulate or tax it.

A National (and International) Capitalist Network

Nor was the South a region financially independent of its northern neighbor, or even from international markets. Slaveholders drew immense investment from banking schemes that involved creditors in New York, Britain, and Europe. Schermerhorn explains: “Louisiana's sugar economy thrived on that foreign investment in property banks’ mortgaged-backed securities.” One Richmond-based merchant house deeply involved in the slave trade, Rogers and Harrison, maintained branches in Le Havre, London, New Orleans, and New York. The latter, and Liverpool, maintained the “strongest financial links in the chain of credits and debts responsible for slavery’s vitality.” One of the world’s most renowned banks, the British-owned Baring Brothers and Company, at one point bought $1.67 million worth of bonds linked to Southern slaveholders. During this period, credit “flowed into New Orleans from New York, London, and Amsterdam.” New York investors beginning the 1830s bought mortgage-backed Louisiana securities with impunity. The irony of this, given rising abolitionism in the North and the U.K., is striking, Schermerhorn observing, “while Britain curtailed chattel slavery on its imperial possessions in the Western Hemisphere, London’s premier merchant house marketed Louisiana bonds that expanded credit to American slaveholders.” By 1840, Louisiana had netted more bank money and credit from such places as England and Holland — as well domestically, sold by firms in Boston, New York, and Philadelphia — than “any other state in the Union.”

The North and Europe didn’t just fund the economic interests of slaveholders in the western states of the South — it also built the machinery necessary for slavery’s expansion there. Shipyards in Connecticut and New York built the ships — often fitted with the latest technology — that served the interstate slave trade, transporting Blacks from places like Virginia and the Carolinas into the Deep South, often in terrible conditions that resulted in the deaths of many slaves. An entire fleet of New York-built steamships were required to support the massive influx of free and enslaved immigrants to Texas in the 1850s. This made a lot of Yankees wealthy: “New York credit boosted cotton production, and city merchants took commissions, insurance premiums, and loan interest form the agricultural export trade to Britain and Europe.” Texas, in Schermerhorn’s estimation, became an “economic suburb” of New York City in the 1850s. Cotton exports out of places like Texas and Louisiana, meanwhile, went through the North, through such entrepots as New York and Philadelphia, on their way to European markets. British banks, meanwhile, also helped with Southern infrastructure, such as financing a Virginia rail line used to transport slaves for sale. Railroads revolutionized the interstate slave trade, allowing buyers to travel across the South in mere days to purchase enslaved people.

In Case We Need to Be Reminded, Slavery Was Brutal

In contrast to Mussomeli’s glowing portrayal of slaveholder-slave relationships, we should also remind ourselves of what exactly slavery, particularly manifested in the profitable interstate slave-trading industry, was like. Slavery in the United States, enshrined even in the founding documents of our country, make clear that slaves were explicitly viewed as property. Property is something one may value — we will expend significant time and energy to protect and preserve those things we own and treasure. However, when our possessions become a financial burden, a liability, or when they become old or of marginal utility, we dispense with them. So was it with slaves in the antebellum South.

Many indebted slaveholders — including those in northern states like Delaware — liquidated their slaves in the early decades of the nineteenth century, selling them off to traders eager to make a fortune off of cash crops in the Deep South. This often meant breaking apart slave families. Apparently those owners across the Chesapeake region didn’t “love” their slaves that much! Slaves were forcibly transported by road or by ship, often enduring terrible dietary and living conditions that killed many. A significant selection of primary historical documents prove that slavers and those involved in the trade often sexually abused their “property,” and that many slave-owners looked for attractive Black females who could become their sex slaves. Even if one survived the trip, death might soon follow anyway — those bound on sugar plantations died in such large numbers that the industry was sustained not by reproduction but by resupply via the interstate slave trade. As Schermerhorn argues, “misery, trauma, death, and social destruction were the great human externalities of slavery’s capitalism.”

Let’s Not Make the South Into Something It Wasn’t

The South is a beautiful place, with a rich, complex tradition, that includes a wonderfully diverse number of cultures and subcultures. Its history, despite its egregious sins, is addictively interesting and even at times inspiring. It is fine and appropriate to sing its glories in song or verse — but we do it no favors by whitewashing its past and appending a ridiculous, pyrite veneer, as many proponents of the Lost Cause movement have done. The South, contrary to streams of thought still popular in American society, was not fundamentally anti-capitalist or anti-government. As Schermerhorn’s work, and that of many others, has shown, the region was heavily dependent on the US Government, Northern and European capital, and Western technological innovation — all of which buttressed a thriving slave industry. Contrary to other popular perceptions of the South, reinforced by certain readings of Alexis de Tocqueville’s comparison of Ohio and Kentucky, it was not a fundamentally traditionalist society whose dependence on enslaved labor would inevitably lead it into decline. It was a wealthy and thoroughly-capitalist American province experiencing dramatic growth. Indeed, at the outset of the Civil War, slavery and its accompanying industries were booming in places like Texas.

Nor, alternatively, was the South sufficiently self-sufficient to be an independent nation, charting its own traditionalist, anti-government course. As Schermerhorn concludes, “secessionists strained and broke the supply chains that sustained their fortunes and spurned a federal republic that had supported their interests for seven decades.” Slaveholding secessionists “ignored the fact that cotton fortunes ran through banks and warehouses in places like New york City… The South’s self-sufficient localism was a fiction belied by connections forged in the slavery business.” Once the war started, the interstate slave trade suffered significant disruptions. Northern capitalists, in turn, could no longer extend resources to their former commercial allies. “In forming a country free of vocal critics, Confederates also formed one that was nearly free of viable creditors.” After 1861, foreign investment declined precipitously.

As much as the cultural currents of 2018 require us to return to the Civil War — and the accompanying antebellum South — we should seek to apply a critical eye to any narrative that prioritizes sentimentalist nostalgia over historical truth. Whatever the Antebellum South was, whatever inherent goods it sought to preserve or perpetuate, it was a society ineradicably linked to its northern neighbor. This entailed characteristics we’ve often considered anathema to the Old South — aggressive capitalism, technological advancement, and big government intervention. Alternatively, the North was no morally progressive, freedom-loving utopia of abolitionist fervor, but a region full of enterprising businessmen willing to sacrifice whatever moral scruples they possessed if it meant scoring a profit. Which, whether we’re talking North or South, suggests we haven’t come nearly as far as we often like to think.

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