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Monday, August 19, 2019

No, Slave-Based Cotton Plantations Are Not the Model for “American Capitalism”

I do not have any position on the oft-debated question of media bias, whether towards the left, right, or center. Putting aside the question of any general ideological leanings in the press, Matthew Desmond’s contribution to the New York Times’ “1619 Project” seems determined to test the intellectual laziness of Times readers with anti-corporate cliches against “unbridled capitalism.”

Desmond’s thesis is that “American capitalism” is modeled after the slave-based cotton plantation. “The cotton plantation was America’s first big business, and the nation’s first corporate Big Brother was the overseer,” Desmond writes, and the “culture [that] would drive cotton production up to the Civil War…has been a defining characteristic of American capitalism ever since. It is the culture of acquiring wealth without working, growing at all costs, and abusing the powerless.” How are slave plantations the model for modern American business enterprises? Matthew Desmond observes that slave plantations were (1) often large-scale economic enterprises (2) that used new managerial and accounting techniques (3) and took advantage of scale economies (4) while speculating wildly on the rising value of cotton, and (5) tightly controlled their labor force. Since modern American business corporations also are large enterprises reaping scale economies with modern managerial techniques that engage in speculation and monitor their cubicle dwellers, it follows that the “brutality” of latter is modeled on the brutality of those cotton plantations, QED.

It seems trite to point out the glaringly obvious, but Desmond’s analogy ignores one distinction between slave-powered enterprises and a modern corporate employment: Slavery prohibited workers from quitting and moving to a new job. This ban on workers’ freedom to choose their work made slavery distinctive in the 19th century, not speculation in cotton and not Alfred Chandler’s “Visible Hand” management techniques. Nineteenth-century Americans moved a lot, seeking the best monetary and psychic returns on their labor by quitting their current job and migrating to more rewarding work. Slavery threatened this system of free labor not just by barring the movement of slaves but by threatening the mobility of whites with slave-based enterprises’ competition. The propagandists of slavery understood what Desmond chooses to ignore: George Fitzhugh’s Sociology for the South (1854) rooted its defense of slavery in an attack on Adam Smith’s theory of free labor.

How could the Times publish a piece that attacks American businesses enterprises as analogous to slave-based cotton plantations yet never mentions legal impediments to labor mobility of the defining feature of the latter? Only, I think, the publisher’s confidence that their readers’ intellectual laziness would allow them to overlook leaps of logic just so long as the essay delivered an apparently “Left” moral. By overlooking the actual mechanism by which slavery operated, however, Desmond also overlooks the moral and economic ambiguity of labor regulation that defies easy categorization as “Left” or “Right.”

Consider Desmond’s diagnosis of American capitalism as “uniquely severe and unbridled” because it lacks legal protections for “workers’ rights.” As evidence of this absence of protection, Desmond notes that, compared to most OECD nations, American law does not much regulate temp work very stringently: On a scale of regulatory stringency ranging from 5 (very strict) to 1 (very loose), the OECD rates America at 0.3. Desmond regards this lack of regulation as a sign that America has taken the “low-road approach to capitalism.”

Desmond never pauses to consider that regulations of labor markets might possibly be harmful to workers by impeding labor mobility and protecting incumbent employees from competition by the under- or unemployed. Sweden, after all, is not ordinarily considered to be a hellhole of worker exploitation, but its OECD rating for regulation of temp work is 1.2, not much higher than the USA’s 0.3 rating when compared to the OECD rating for that workers’ paradise, Brazil (4.1). (New Zealand, another deregulating government with a decent reputation for workers’ welfare, gets an 0.9 from the OECD).

The source of Sweden’s low ranking is no mystery: In the 1990s, the Swedes reduced regulation of the employment relationship to facilitate labor mobility. (Sweden famously lacks even a minimum wage, relying on collective bargaining and contracts to set the price of labor). The result, according to the OECD, was a boost in worker productivity.

Someone who took seriously slavery’s legal impediments to labor mobility would not have so uncritically embraced regulation of employment as an unadulterated boon for equality. Some regulations of labor markets, after all, protect incumbent workers who enjoy legal entitlements like licenses at the expense of competitors. Those rules earn rents for incumbent workers at the expense of the excluded. Jason Furman, the Obama Administration’s Chair of the Council of Economic Advisers, championed elimination of occupational licensing as a remedy for income inequality. David Schleicher has written a scathing indictment of the elaborate network of rules that prevent workers from migrating to cities where their labor would earn the highest wages, a network that include not only occupational licensing but also zoning rules that cut off the supply of new housing. Some economists believe that those zoning rules’ impediment to worker mobility is responsible for a large share of present inequality of wealth, by fencing workers into low-wage regions.

Someone who took labor mobility seriously might conceivably draw a loose (albeit hyperbolic) analogy between 19th century law of slavery and the zoning and occupational rules that fence workers into low-wage areas. Whatever the force of Desmond’s indictment of modern business, however, it gains nothing from his oddly analogizing modern corporate employment to a nineteenth labor system that, far from being “unbridled” in its “capitalism,” relied on elaborate rules and state violence to harness Black labor to the cotton field.

Posted by Rick Hills on August 19, 2019 at 02:25 PM | Permalink

Comments

Incidentally, when we think of slavery in the U.S., we should not forget the “how the North promoted, prolonged, and profited from slavery,” the subtitle of an important book, Complicity (2005), by Anne Farrow, Joel Lang, and Jenifer Frank.

Posted by: Patrick S. O'Donnell | Aug 19, 2019 7:51:52 PM

What remains true is that cotton (along with sugar and several other agricultural commodities) in particular and slavery in general are critical to the origins, growth, and consolidation of capitalism in both Europe but especially the New World (see Eric Williams, Sidney W. Mintz, Robin Blackburn, Sven Beckert, and Edward E. Baptist, for example). As Marx said, “The fact that we now not only call the plantation owners in America capitalists, but that they ARE capitalists, is based on their existence as anomalies within a world market based on free labour.”

Posted by: Patrick S. O'Donnell | Aug 19, 2019 7:19:21 PM

Just illustrations:

"55 companies with top-notch wellness programs"

Here:

https://www.monster.com/career-advice/article/healthcare-companies-with-wellness-programs-0916

And about well known phenomenon of human hunters(or " head hunters " for attracting employees to competitors)here:


"What incentives are your competitors offering?"

Here:

https://www.hcamag.com/au/specialisation/employee-engagement/what-incentives-are-your-competitors-offering/145327

Thanks

Posted by: El roam | Aug 19, 2019 7:12:36 PM

By the way, one may read about job mobility, here in that post ( here at PrawfsBlawg ) of Orly Lobel:

https://prawfsblawg.blogs.com/prawfsblawg/2018/02/anti-competitive-job-markets-and-wage-fixing-in-academia-and-the-au-pair-industries.html

I shall put some more , maybe later..... Thanks

Posted by: El roam | Aug 19, 2019 6:10:18 PM

Thanks, Steve, for the reminder of Desmond’s past good work. Postscript: My own favorite analysis of the 19th century cotton industry is Gene Dattel’s Cotton and Race in the Making of America: The Human Costs of Economic Power, which scrupulously documents thethe planters’ dependence on the legally enforced monopsony over their labor force conferred not only by slavery but also post-Reconstruction state law. There may be industries today that enjoy such a legally protected monopsony over their workers’ time, but I doubt that they are typical of very many corporations in America today.

Posted by: Rick Hills | Aug 19, 2019 5:47:12 PM

Desmond won a Pulitzer Prize for "Evicted," his ethnography on evictions in Milwaukee. I use his book -- which was extremely well researched and fact-checked -- as my example of "how to do it right."

In this case, however, I agree with Rick that he got it mostly wrong. There was a relationship between slavery and capitalism, of course. It was made profitable by the weaving, finance, shipping, and insurance industries, but the structure itself was not capitalist, as Rick well explains.

Note that the Republican slogan in the presidential campaign of 1856 was "Free Soil, Free Labor, Free Speech, Free Men, and Fremont."

Posted by: Steven Lubet | Aug 19, 2019 5:03:39 PM

Important issue. But, it is really baseless to claim that thing about " slave based cotton model " in connection with abuse of big corporations. But either to claim that the distinction is the ability of workers to quit and moving from current job, to a better one:

For, if the slavery has been abolished, and even forced labor, all, by the thirteenth amendment, here I quote:

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Then how could it matter ? It couldn't exist. For, this is the meaning of being slave. So, neither capitalism, nor socialism.If already, On the contrary :

What characterizes big corporations, is the will and ability to invest, whatever it takes, for gaining the best staff, the utmost brilliant minds, and seducing them with the finest conditions, to "stay put " and hold their positions. While mobility, is causing many times, harm to them and to capitalism. For, they are constantly attempted to leave, take with them skills acquired, take with them intellectual property, and move away, causing waste of energy and resources.

For the rest, we won't stay young simply....

Thanks

Posted by: El roam | Aug 19, 2019 4:55:53 PM

Yes. Thank you for this. The article contains some interesting historical tidbits but its thesis is way off.

Posted by: Michael Mannheimer | Aug 19, 2019 4:16:02 PM

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